Nearly 60% of US to experience drought this year – National & International News – MON 21Mar2022

Nearly 60% of US to experience drought this year. What is the answer for high gas prices? Plane carrying 132 crashes in China; cause a mystery.

NATIONAL NEWS

Nearly 60% of US to experience drought this year

The National Weather Service is predicting that nearly 60% of the continental US will experience drought conditions this year. Jon Gottschalck of the NWS’s Climate Prediction Center says “this is the largest drought coverage we’ve seen in the U.S. since 2013”. Drought conditions are expected to worsen from the spring and into the summer of 2022.

Western states have been experiencing persistent drought conditions since 2020. A study published in February declared that the Southwestern US in particular is experiencing a “megadrought”, in which drought conditions persist for 20 years or more. Data from tree rings suggest this is the worst drought in this part of the world in at least 1,200 years. The megadrought is partly attributable to normal weather cycles, but scientists say that climate change accounts for about 19% of its severity and duration.

The generally arid Southwest is not the only part of the country experiencing the drought. Drought conditions are now spreading to cover much of the Plains and the normally lush Lower Mississippi Valley.

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What is the answer for high gas prices?

Even before war broke out in the Ukraine, a post-pandemic rise in demand was already driving up gas prices. With the war its related sanctions, oil producers and importers are now charging even more based on the “fear premium”. This is essentially speculation about the fear that oil supplies will be more scarce in future.

Despite this speculation, along with supply constraints and logistical problems, large oil companies are making near-record profits. This is not a secret, in fact many executives have bragged about it in shareholder meetings. By passing on the higher costs of the fear premium and supply hiccups on to consumers, oil companies are able to increase their profit margins.

Improving relations and lifting sanctions on oil-rich countries like Venezuela and Iran may help increase global supply in the long run. But with mid-terms on the horizon, US officials are looking for shorter term solutions to decrease the pain voters feel at the pump.

Gas tax holidays or windfall tax?

Some federal and state politicians have proposed gas tax holidays or vouchers for drivers. It is true that this would provide consumers with some relief. However, the tax break would disproportionately benefit wealthier consumers. The effect it would have on the budgets of middle- and working-class drivers who are already tightening their belts is minimal. It also would only drive demand up, thus maintaining an incentive for oil companies to keep prices high.

The other remedy on the table is a windfall tax to directly directly discourage corporate profiteering. Democrats in the House of Representatives have proposed such a tax. The legislation would require oil companies producing or importing at least 300,000 barrels of oil per day to pay a per-barrel tax amounting to half the difference between today’s average barrel price and the average price between 2015 and 2019. From the money raised, the government would then pay out quarterly rebates to individuals earning less than $75,000 or couples earning $150,000.

Some who oppose a windfall tax on corporate profits claim it would push oil companies to sell less gas. This seems improbable, as that would essentially assumes oil companies would cut off their noses to spite their faces. However, there would be nothing to stop oil companies from raising gas prices even higher to maintain their profits.

Neither a tax holiday nor a windfall tax is likely to address the core problems. They do nothing to bring down demand. Nor can they constructively discourage corporate profiteering without hurting consumers.

Vote with your wallet

Ultimately, consumers have more power to influence gas prices and punish corporate profiteering than the government. It’s a cliché at this point, but the answer is driving less, carpooling more, and driving more fuel-efficient vehicles. This way, consumers can drive down demand and make it less profitable for the big oil companies to charge higher prices. Click here for some other handy pointers for coping with inflation.

INTERNATIONAL NEWS

Plane carrying 132 crashes in China

A Boeing 737-800 operated by China Eastern Airlines as Flight MU5735 has crashed into remote hills in the southern province of Guanxi. The plane burst into flames upon impact. There are as yet no indications that any of the 132 people aboard survived. More than 600 rescue workers are at the site of the crash.

It’s not clear what caused the plane to crash. There is a terrifying video circulating online that purports to show the plane nosediving into the ground. The recovered flight data suggests that the plane went down rapidly, losing 20,000 feet in altitude in just over 2 minutes. The flight was travelling from Kunming in Yunnan province (west of Guanxi) to Guanzhou in Guangdong province (east of Guanxi). The plane went down during the mid-point of its flight after attaining its cruising altitude, which is unusual. At this stage, the auto-pilot is typically engaged.

One expert has speculated that the plane might have plane lost power suddenly. Even a momentary loss in power would have disengaged the autopilot. Even if power was restored quickly, the pilots would have had only seconds to correct before the plane was in freefall.

China Eastern Airlines has grounded every Boeing 737-800 in its fleet as a precaution. These planes generally have a good safety record and the one that crashed had only been in service for about 7 years. The 737-800 is the predecessor to the 737 Max which was involved in two deadly crashes in Indonesia and Ethiopia.

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