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Happy Friday!
And thanks for tuning into another edition of the Economic Perspective! This week we are covering topics like Hurricane Francine's impact on the Gulf Coast energy industry, investments in sustainable forests, the Federal Reserve's potential plans to lower interest rates, and ammonia-based fuel used in shipping. Our data visualization covers an increase in 401(k) value.
We hope you enjoy the read and let us know what you think! Feel free to share and stay tuned for the next Economic Perspective. If you’d like to view previous editions please click here, or to subscribe please click here!
Thank you and have a great weekend!
US Gulf Coast Energy Facilities Hit by Storm Francine
Energy facilities along the Gulf Coast have scaled back operations and evacuated some production sites prior to Francine making landfall. 39% of crude production and 49% of natural gas production has been reduced. Hurricane Francine has likely disrupted 1.5 million barrels of US oil production, and several ports on the coast have remained closed or are operating with restrictions. These closures came as Hurricane Francine strengthened into a Cat 2 hurricane despite weakening back to a tropical storm. The U.S. Gulf accounts for 15% of domestic oil production and 2% of natural gas production. Read More about what ports have remained closed and their capacity here.
TotalEnergies to Invest $100m in U.S. Sustainable Forestry
TotalEnergies SE is investing $100 million in sustainable forestry in North America through a partnership with Anew Climate and Aurora Sustainable Lands. The investment will support 20 carbon projects across 300,000 hectares in 10 U.S. states, focusing on protecting forests, adopting sustainable management practices, and enhancing carbon storage. The projects aim to preserve carbon sinks, improve water and soil quality, and protect biodiversity. TotalEnergies will use the carbon credits generated to offset some of its direct emissions. The initiative aligns with U.S. Voluntary Carbon Markets guidelines and underscores TotalEnergies’ commitment to carbon neutrality and environmental protection. Read more here.
Importance of Cover Crop Usage
A recent article from AgWeb showcases the numerous benefits that come from cover cropping from personal accounts of farmers in various locations across the country. Cover cropping is the practice of planting to cover the soil, and rather than for harvesting, to improve soil health in off season or rotation period. This farming technique reduces fertilizer application and herbicide use for weed control, increases organic matter within the soil, and other benefits that reduce costly farming inputs. Read more about it here.
Severe Weather Causes Billions of Dollars in Gobal Economic Losses
According to a research study by Dr. Berkay Akaypi, a professor at the University of Florida, it was discovered that an increase in extreme heat and severe droughts cuts off about 0.2% of a country’s GDP. The number of days that have mild temperatures is decreased by climate change. Akaypi and Bellon performed an analysis that included billions of weather observations across hundreds of countries over a 40-year stretch. A machine learning algorithm was used to identify which factors correlated with economic growth or contraction. It was noted by the economists that as more countries industrialize, the effects of severe weather could decrease over time as developed nations are less vulnerable to severe weather and more adaptable. Read more here
Fed to Cut Rates by 25 Basis Points on Sept. 18, Twice More in 2024
The Federal Reserve is planning to cut interest rates by 25 basis standard points as inflation approaches the Fed’s 2% target and some signs of an economic slowdown. Economists have argued that the reductions in borrowing costs will be aimed at reducing the amount of policy restriction rather than a focus on a response to an ailing economy. Unemployment is expected to remain at around 4.2% through the end of 2026 while personal consumption expenditures are expected to hit 2%, which is the Fed’s preferred gauge. Read More.
Norwegian and Finnish Companies to Run Vessel on Ammonia by 2026
Norwegian shipowner Eidesvik and Finnish engine manufacturer Wartsilla have signed a contract to make a platform supply vessel that can run on ammonia fuel. This would be the world’s first emission-free supply vessel. This comes at a time when the shipping industry has been looking for alternative fuel options to help lower emissions. As the shipping industry continues to test ammonia fueling and other options, they hope to find better options for longer voyages that are more fuel intensive. Hydrogen also remains an option for use, but more development will be needed. Read More..
Data Visualization of the Week
U.S. Food Insecurity on the Rise
In 2023, 401(k) account balances bounced back to their highest level in nearly two years. During 2022, 401(k) accounts took a steep decline due to market volatility. In the last year, they have begun to bounce back due to a higher rate in people saving and less people taking loans out on their accounts to free up cash. As individuals stay the course and think long-term, these continued actions of saving their money account for the rise in 401(k) millionaires to rise so much in 2023. Average contribution rates sit at 13.9%, which is just below the suggested savings rate of 15%. Read More.
Click the visual below for more information.
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