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Explainer: Democratic Senator Manchin upends Biden’s hope to reshape economy

By Jarrett Renshaw

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Explainer: Democratic Senator Manchin upends Biden's hope to reshape economy
© Reuters. U.S. Senator Joe Manchin (D-WV) participates in a discussion with billionaire philanthropist David Rubenstein, President of The Economic Club of Washington in Washington, U.S., October 26, 2021. REUTERS/Leah Millis

By Jarrett Renshaw

(Reuters) – Democratic Senator Joe Manchin has leveraged his party’s slim majority in Congress to reshape President Joe Biden’s spending bill, slashing its initial price tag of $3.5 trillion and blocking policy proposals on climate and social programs.

In a 50-50 Senate where all Republicans oppose the spending plan, Democrats can only pass it if every one of their members signs on and Vice President Kamala Harris casts a tie-breaking vote.

That means the party has no choice but to bend to Manchin’s will if they want the bill to pass. He has used that clout to knock down key parts of the package.

Manchin hails from West Virginia, a heavily Republican, sparsely populated coal- and natural gas-producing state that sits at or near the bottom of U.S. health, education and infrastructure rankings.

The founder and partial owner of a private coal brokerage, Enersystems, Manchin has been reluctant to rein in fossil fuels, complicating Democratic efforts to combat climate change.

He has also opposed the expansion of many social programs. At the center of the political stage, Manchin has outlined his philosophy this week with reporters, at the Economic Club of Washington and in the halls of Congress.

Here is a list of the issues where Manchin has pushed back against Biden’s plans.

PAID FAMILY LEAVE AND CHILDCARE

Biden wanted to provide Americans 12 weeks of paid family leave for new parents, caretakers of ill family members and those with serious medical conditions, compensating them for up to $4,000 in wages a month.

Manchin has signaled he opposes the measure, forcing Democrats to consider paring it down to four weeks or scrapping it altogether. It would represent a significant blow to Biden.

Asked on Tuesday whether he had concerns about the paid leave proposal, Manchin said: “I’m concerned about an awful lot of things.”

He does support a push for universal pre-kindergarten education. “I’m for pre-K. Whatever it costs,” he said on Monday night. “We can do that.” He said he had pushed to ensure that faith-based groups can also provide childcare.

Manchin said he told Biden: “I believe that government should be your partner and not your provider.”

MEDICARE EXPANSION

Democrats want to expand the Medicare healthcare program for seniors to cover dental, hearing and vision and also extend Medicare-style insurance benefits to low-income people in states that did not expand Medicaid coverage under the Affordable Care Act, better known as Obamacare.

Manchin opposes both measures, saying the federal government cannot afford to provide added benefits like dental and that Medicare faces insolvency by 2026 even without the added benefits.

“You’ve got to stabilize that first before you look at basically expansion. So if we’re not being fiscally responsible, that’s a concern,” Manchin said.

CLEAN ELECTRICITY PERFORMANCE PROGRAM

Democrats wanted to reward power utilities for investing in renewable energy such as wind and solar and fine those that do not. It was considered critical in order for Biden to achieve his goal of cutting U.S. emissions by about 50% by 2030.

Manchin has killed the proposal, arguing it would unfairly punish utility companies that are already making the transition. It would also help move power plants away from coal, a major industry in West Virginia.

“It makes no sense to me at all for us to take billions of dollars and pay utilities for what they’re going to do as the market transitions,” Manchin told CNN in September.

METHANE FEE

Manchin also opposes a proposal to tax U.S. oil and gas producers for methane emissions above a certain threshold.

The greenhouse gas methane is considered the biggest cause of climate change after carbon dioxide.

STEPPED UP IRS ENFORCEMENT

Manchin criticized a proposal to force banks to report more account information to the Internal Revenue Service, complicating Democratic efforts to step up tax enforcement on higher earners as a way to raise hundreds of billions of dollars for their social spending bill.

The Democratic proposal would require banks to report to the IRS any accounts that see activity in excess of $10,000 a year, excluding wages.

Manchin said on Tuesday that he thinks the proposal will not go through. “Do you understand how messed up that is?” he said he told Biden. “This cannot happen. It’s screwed up.”

ADDITIONAL ELECTRIC-VEHICLE FUNDING

Manchin supported a measure in a separate bipartisan infrastructure bill that would provide $7.5 billion to help build a nationwide charging network for electric vehicles.

But he now says that is enough, potentially dashing Democratic hopes of providing billions more in funding.

“I said I’m having a hard time with that. I don’t remember the federal government building filling stations when Henry Ford invented the Model T,” Manchin said on Tuesday.

Commodities

OPEC+ weighs output policy amid oil price slide, Omicron fears

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OPEC+ weighs output policy amid oil price slide, Omicron fears
© Reuters. FILE PHOTO: A 3D printed oil pump jack is seen in front of displayed stock graph and Opec logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration

By Ahmad Ghaddar, Alex Lawler and Olesya Astakhova

LONDON/MOSCOW (Reuters) -OPEC and its allies will decide on Thursday whether to release more oil into the market or restrain supply amid big gyrations in crude prices, a U.S. release from oil reserves and fears about the new Omicron coronavirus variant.

Oil prices tumbled to near $70 a barrel on Tuesday, down from three-year highs above $86 in October. Prices posted their biggest monthly decline in November since the start of the pandemic, as the new variant raised fears of a glut. [O/R]

Benchmark was trading around $72 on Wednesday.

OPEC and its allies have been at odds with the United States, which has asked the group to raise output to help the global economy. Producers said they didn’t want to hamper a fragile energy industry recovery with a new glut.

“In these uncertain times, it is imperative that we – together with the non-OPEC countries … – remain prudent in our approach and prepared to be proactive as market conditions warrant,” Diamantino Pedro Azevedo, Angola’s energy minister and rotating OPEC president, said in an opening address to OPEC.

Wednesday’s meeting of ministers from the Organization of the Petroleum Exporting Countries ended without any recommendation on output policy, three OPEC sources said.

On Thursday, the OPEC+ alliance, which includes Russia and other producers, will likely take a policy decision.

Russia and Saudi Arabia, the biggest OPEC+ producers, said ahead of this week’s meetings that there was no need for a knee-jerk reaction to amend policy. Iraq said OPEC+ was expected to extend existing output policy in the short term.

MUTED IMPACT

Since August, the group has been adding an additional 400,000 barrels per day (bpd) of output to global supply, as it gradually winds down record cuts agreed in 2020, when demand cratered because of the pandemic.

“Generally, the impact of Omicron seems to be jet-fuel related for now, particularly in Africa and Europe,” OPEC+ said in a report before the meeting.

Many countries have barred travellers from southern Africa and some European states have imposed new coronavirus restrictions.

“Transportation fuel demand within Europe might be also affected,” the report said, adding more data on the severity of Omicron shall be available in two weeks.

Goldman Sachs (NYSE:) said the oil price slide had been excessive, with the market now pricing in a seven million bpd hit to demand. Rystad Energy said another wave of lockdowns could result in a three million bpd demand loss in the first quarter.

Even before concerns about Omicron emerged, OPEC+ had been weighing the effects of last week’s announcement by the United States and other major consumers to release emergency crude reserves to temper energy prices.

OPEC+ forecast a three million bpd surplus in the first quarter of 2022 after the release of reserves, up from 2.3 million bpd previously.

But the report said the impact from the release would be muted as some countries made it voluntary and the duration was uncertain.

The Biden administration could adjust the timing of the release if prices drop substantially, U.S. Deputy Energy Secretary David Turk told Reuters on Wednesday.

OPEC+ has been gradually scaling back last year’s record output cuts of 10 million bpd, equivalent to about 10% of global supply. About 3.8 million bpd of cuts are still in place.

But OPEC’s November oil output has again undershot the level planned, as some OPEC producers have struggled to hike output.

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Halliburton says not buying Exxon stake in Iraqi oilfield

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Halliburton says not buying Exxon stake in Iraqi oilfield
© Reuters. FILE PHOTO: A member of security foreign personnel walks with an Exxon’s foreign staff of the West Qurna-1 oilfield, which is operated by ExxonMobil, during the opening ceremony near Basra, Iraq June 17, 2019. REUTERS/Essam Al-Sudani

2/2

By Aref Mohammed

BASRA, Iraq (Reuters) -Halliburton has not proposed buying Exxon Mobil (NYSE:)’s stake in Iraq’s West Qurna 1 oilfield, a spokesperson for the U.S. oil services company said on Wednesday, denying comments from a senior official from Iraq’s Basra Oil Co. (BOC).

“We are not buying an oil field and are not partnering to buy an oil field. We do not typically discuss commercial terms for bids or tenders, but in this case we want to be clear that we are not buying any fields,” said Halliburton (NYSE:) spokesperson Emily Mir.

Hassan Mohammed, deputy BOC manager in charge of oilfields and licensing rounds affairs, earlier told a press conference that Halliburton had submitted a proposal to buy Exxon’s stake in the southern West Qurna 1 field

He added, however, that the Iraqi government’s preferred option was for BOC itself to buy Exxon’s stake in the field.

Iraq said in April that Exxon was seeking to sell its 32.7% stake in West Qurna 1, and that the oil ministry had started discussions over a possible deal.

Separately, Iraq will start work to maintain and upgrade its key undersea oil exports pipelines and its two onshore ports that will help boost export capacity to six million barrels per day (bpd) in 2025 from 3.2 million bpd currently, Ahmed Fadhil, deputy BOC manager in charge of oil exports facilities upgrading operations told Reuters.

Fadhil said bids had been completed to invite foreign services companies to compete to build two undersea 48-inch oil exports pipelines to replace existing outdated lines.

Construction work to build the two lines to ship to the Basra offshore terminal is expected to start in the second quarter of 2022 and the new undersea lines are expected to be operational in mid 2024, said Fadhil.

A third undersea pipeline is under construction currently and is expected to be completed in mid 2023. The three export lines have a combined capacity to export three million bpd.

Iraq has also awarded a deal to a Russian company to assess damages and start repair works on another 42-inch undersea export pipe which transport crude oil to its Khor al-Amaya terminal, one of its two southern offshore oil export terminals, said Fadhil, without naming the company.

Loading operations have been halted at Khor al-Amaya since 2017 when the pipeline suffered ruptures and leakages, and had to be shut.

Maintenance operations are expected to be completed to bring back crude loading operations at Khor al-Amaya by the end of 2022, with initial capacity to pump 400,000 bpd, said Fadhil.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Commodities

U.S. could tweak timing of oil stockpile release if prices fall -official

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U.S. could change timing of oil stockpile release if prices drop -official
© Reuters. FILE PHOTO: The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. REUTERS/Adrees Latif

By Timothy Gardner

WASHINGTON (Reuters) -The Biden administration could adjust the timing of its planned release of strategic stockpiles if global energy prices drop substantially, U.S. Deputy Energy Secretary David Turk told Reuters on Wednesday.

Turk, speaking in a video interview for the Reuters Next conference https://reutersevents.com/events/next to be broadcast later on Wednesday, added that other consumer nations that had agreed to release strategic reserves in concert with the United States to tame prices could also adjust their timing if needed.

“I think each country will make decisions based on what’s useful and good for their consumers and based on where the price is,” he said.

The administration of President Joe Biden had announced last month https://www.reuters.com/markets/commodities/us-set-unveil-emergency-oil-release-bid-fight-high-prices-2021-11-23 that it would release 50 million barrels from the U.S. Strategic Petroleum Reserve, alongside smaller releases from China, India, Japan, South Korea and Britain, to help lower consumer energy costs.

The unusual agreement was designed to tame soaring energy prices after the OPEC producer group and its allies rebuffed repeated requests from Washington and other consumer nations to pump more quickly to match rising demand as the world began to exit the pandemic.

Oil prices have since declined, however, amid worries that the new Omicron variant https://www.reuters.com/business/healthcare-pharmaceuticals/omicron-variant-could-outcompete-delta-south-african-disease-expert-says-2021-11-30 of the coronavirus will spread and trigger extensive lockdowns, reducing global energy demand.

“The president gave us flexibility,” Turk said about the U.S. planned release of strategic stockpiles.

“So if the price of oil goes down significantly, if the pain at the pump that is currently being experienced by consumers around our country, and around the world as well, dissipates for whatever reason, then we use the tools differently,” he said.

“The metric of success for any policy from our end related to these issues is what is the price at the pump? … not whether we get 50 million barrels out as quickly as we possibly can,” he said.

Turk added that the White House was still studying proposals from some of Biden’s fellow Democratic lawmakers to ban crude oil exports to keep prices down, saying it remained among the range of tools the administration could eventually use.

“We’ve certainly heard from members of Congress who feel both ways on this issue,” he said. “And so we’re putting together all that analysis, all that information to inform decision making by our secretary and ultimately by the president.”

To watch the Reuters Next conference please register here https://reutersevents.com/events/next/

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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