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There’s a price shocker coming at the pumps.
The U.S. inflation rate is at its highest level in 40 years and shows no signs of slowing down, new data revealed on Wednesday.
The Consumer Price Index rose by 0.5 per cent in December alone, the U.S. Bureau of Labor Statistics reported, enough to push the annual inflation rate to seven per cent for the first time since 1982.
The figure was in line with what economists were expecting, but up from the previous 40-year high of 6.8 per cent in November.
Higher prices for shelter and for used cars and trucks were the largest contributors to the increase. Prices for used vehicles went up by more than 37 per cent last year. Prices are up mostly because a global shortage of semiconductor microchips has slashed the number of new cars that can be produced, which has caused many buyers to scramble to find used ones instead.
After being a major contributor to the upside for several months, energy prices decreased by 0.4 per cent in the month, as the price of gasoline and natural gas both came down from highs. On an annual basis, however, energy prices are up by about 29 per cent, and gasoline in particular has increased by almost 50 per cent.
The high inflation rate presents a conundrum for policy-makers at the U.S. Federal Reserve, who are bent on keeping interest rates low to help stimulate the economy due to the COVID-19 pandemic. But all that cheap lending is causing the price of just about everything to jump.
Sal Guatieri, a senior economist and director at BMO Capital Markets, said Wednesday’s numbers were a harsh reminder to the Fed and everyone else of the threat that inflation poses. “Yesterday, [Fed] chair [Jerome] Powell warned that high inflation is a severe threat to the recovery and that the Fed would need to act to prevent it from becoming entrenched,” he said.
Economists expect the U.S. central bank will have to raise its benchmark interest rate as much as four times this year.
“He really didn’t need to remind anyone that the economy no longer needs aggressive stimulus, and today’s report will only reinforce the view that the Fed might have fallen well behind the curve and may need to catch up in a hurry,” Guatieri said.
TD Bank senior economist and director Leslie Preston said while the figures are eye-poppingly high now, consumers should brace themselves for even higher numbers in the months ahead.
“Buckle up,” she said. “After reaching new highs, core inflation is likely to get even higher in the first quarter of 2022 on a year-on-year basis as price levels are compared to relative weakness in early 2021.”
Preston added that “we expect rate hikes are not very far behind.”
Google has fired 28 employees after a number of staffers protested the company’s cloud contract with the Israeli government.
The workers were terminated after staging protests inside Google’s offices in New York and Sunnyvale, California, per CNN.
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In a statement, Google’s parent company Alphabet said that “physically impeding other employees’ work and preventing them from accessing our facilities is a clear violation of our policies, and completely unacceptable behavior.”
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The protests were organized by the No Tech For Apartheid campaign and protesters held signs that read “No More Genocide For Profit” and “We Stand with Palestinian, Arab and Muslim Googlers.”
The company said it would continue to investigate and take action as needed, reports The Guardian.
The protesters say that Project Nimbus, a $1.2 billion contract granted to Google and Amazon.com in 2021, provides cloud services to the Israeli government and aids in the creation of military applications.
A form letter on the campaign’s website demands that Amazon CEO Andy Jassy, Amazon Web Services CEO Adam Selipsky, Google CEO Sundar Pichai and Google Cloud CEO Thomas Kurian “end all ties with Israeli apartheid and cut the Project Nimbus contract.”
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Google says the Nimbus contract “is not directed at highly sensitive, classified, or military workloads relevant to weapons or intelligence services.” It added that Google Cloud “supports numerous governments around the world, including the Israeli government.”
“We have been very clear that the Nimbus contract is for workloads running on our commercial cloud by Israeli government ministries, who agree to comply with our Terms of Service and Acceptable Use Policy.”
The No Tech for Apartheid campaign called the firings a “flagrant act of retaliation” and a “clear indication that Google values its $1.2 billion contract with the genocidal Israeli government and military more than its own workers.”
The campaign added that some of the individuals fired did not directly participate in the protests.
Despite what its critics allege, Israel has attempted to warn and shield civilians as the IDF hunts the Hamas terrorists who hid themselves among Gaza’s civilian population and infrastructure after the group’s October 7 attack. As well, critics who call Israel an apartheid state ignore the freedoms enjoyed by the democratic country’s Arab citizens, who play major roles in business, the judiciary and even the Knesset.
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Gas prices have not been this high since August 2022
There’s a price shocker coming at the pumps.
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Gas in Ontario, including the GTA, will go up 14 cents a litre overnight for customers filling up on Thursday, says Dan McTeague, the president of Canadians for Affordable Energy.
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“So going from $1.65.9 (per litre) going to $1.79.9,” said McTeague adding the increase will affect the entire province except for northwestern Ontario, which gets its prices from the prairies market.
“That’s the highest level since August, 2022, almost two years ago,” he added.
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McTeague said the reason for the price hike is that stations are switching over to summer-blend gasoline.
“Around this time of year prices go up to reflect the new blend of gasoline, which is more expensive to make,” he explained. “Butane is used in the winter, for gasoline, whereas in the summer it’s alkyaltes. Alkyaltes are extremely expensive.”
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“In the winter you want your ignition to start quickly in cold temperatures, you uses volatile butane. You take that out in the summer. That’s a big difference. This is going to be around for awhile and it could get higher,” McTeague said.
McTeague also blamed the rise in gas prices in Canada on the carbon tax increase, the rising price of oil, and the weak Canadian dollar.
“It just makes a bad situation worse,” he said. “It’s just another brick in the wall, another load on the camel’s bank. The cost of denying our resources, blocking pipelines, is one of the most significant reasons why the Canadian dollar is so weak.”
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CALGARY — A wildfire in west-central Alberta that was sparked by a natural gas pipeline rupture is under control, but an investigation into what caused the pipeline to break could take months or even years.
As of Wednesday morning, there was very little fire activity left in Yellowhead County, where a 10-hectare fire burned on Tuesday about 40 kilometres northwest of Edson.
“But for it to be considered extinguished, we’re going to have to hot spot,” said Caroline Charbonneau, area information co-ordinator with Alberta Forestry and Parks.
“That means we’ll have to dig into the ground, look and feel for hot spots, and then douse it with water. And that could take several days.”
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The fire on Tuesday, which occurred as much of Alberta is dealing with extremely dry early spring conditions, was sparked when a natural gas pipeline owned by TC Energy Corp. ruptured.
There were no injuries, and the fire was never a threat to any surrounding communities. The affected pipeline segment was isolated and shut in and there is no more gas leaking from the pipeline.
The Canada Energy Regulator had inspectors on site Wednesday to monitor the company’s response and the Transportation Safety Board is investigating the incident.
According to CER, there have been 12 natural gas pipeline ruptures in Canada since 2008, and Tuesday’s incident near Edson was the first rupture on that particular pipeline within that time period.
The 36-inch diameter pipe that ruptured is part of TC Energy’s NGTL pipeline system, which transports natural gas from Alberta and northeast B.C. to domestic and export markets. The system spans 24,631 kilometres and connects with TC Energy’s Canadian Mainline system, Foothills system and other third-party pipelines.
The NGTL pipeline system is like a web made up of different lines that have been developed in stages.
In 2022, there was a rupture on a separate part of the system that resulted in an explosion and fire near Fox Creek, Alta. There were no injuries.
A TSB investigation into that incident took more than 14 months, and concluded that the pipeline ruptured due to reduced pipe wall strength caused by external corrosion.
While the primary risk of a crude oil pipeline leak is an oil spill that harms the local ecosystem, natural gas pipeline ruptures can and do result in fires or explosions, said Bill Caram, executive director of the Pipeline Safety Trust, a U.S.-based non-profit organization.
“The chances are extremely high that a molecule of natural gas that enters a pipeline will go through that pipeline without a failure. Pipelines are quite safe, and when you look at incident rates compared to other modes of transportation like rail or truck, they are much less likely to have a failure,” Caram said.
“But what you don’t get a sense of by looking at the risks of pipelines in that way is how catastrophic a failure can be when it does happen.”
According to the TSB, there were 19 recorded incidences of fires related to pipelines in Canada between 2012 and 2022.
The TSB’s most recent report on pipeline transportation safety in Canada states that in 2022 there were 100 companies transporting either oil or gas or both in the federally regulated pipeline system, which includes approximately 19,950 km of oil pipelines and approximately 48,700 km of natural gas pipelines.
That year, there were 67 pipeline transportation accidents and incidents on federally regulated pipeline systems, according to the report.
That number was well below the 10-year average of 112 occurrences, and was also the lowest number of occurrences since 2019, when 52 pipeline accidents or incidents were recorded by the TSB.
The TSB defines a pipeline “accident” as an incident that results in a person being injured or killed, a fire or explosion, or significant damage to the pipeline affecting its operation.
Less severe pipeline events that involve the uncontrolled release of a commodity or a precautionary or emergency shutdown are classified by the TSB as “incidents.”
There have been no fatal accidents directly resulting from the operation of a federally regulated pipeline system since the inception of the TSB in 1990.
This report by The Canadian Press was first published April 17, 2024.
Companies in this story: (TSX:TRP)
Amanda Stephenson, The Canadian Press
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