Despite occasional cold snaps, the US generally has experienced higher-than-average temperatures so far this winter. But during the first week of the New Year, meteorologists at AccuWeather.com forecast waves of frigid air from the North Pole may move south across North America by mid-January, producing much lower temperatures and spurring demand for natural gas and heating oil from the Mississippi Valley to the East Coast.
They reported a phenomenon known as sudden stratospheric warming recently occurred in the arctic region, 6-30 miles above ground. That in turn forced a buildup of cold air in the lowest layer of the atmosphere that is expected to drive south soon. "The problem is the exact timing and location of the emergence of this cold air is uncertain," AccuWeather.com reported.
Members of AccuWeather.com—s long-range forecasting team expect cold air to spread from central Canada from Jan. 7 through much of this month. This "brutal" cold push could arrive "in one big blast." However, AccuWeather.com forecasters said, "It is more likely the cold will advance along in waves of progressively colder air with each wave driving farther south and east."
The cold front initially "may seem to be run-of-the-mill or even delayed." But once it starts, AccuWeather.com reported, "It may run for quite a while with progressively colder and colder waves of air" and accompanying storms that could disrupt energy production, transportation, and generation while increasing demand.
Cooling economy?
Meanwhile, initial euphoria over Congressional agreement on a national budget New Year—s Day cooled quickly in energy and equity markets where investors are still concerned about their economic futures.
"By itself, the [budget] package raises little revenue, creates new cliffs, leaves hard choices for the future, and by separating revenue and spending debates may make the next showdown over the debt limit more difficult to resolve," said Robert Kahn, the Steven A. Tananbaum senior fellow for international economics at Washington, DC-based Council on Foreign Relations, a nonprofit think-tank specializing in US foreign policy and international affairs. Kahn is an expert in international economics.
Whether the budget agreement proves a progressive step in addressing long-term fiscal problems or is simply further evidence of dysfunctional government, Kahn said, "Uncertainty around fiscal policy seems here to stay."
He said, "While the political debate has focused on the historic nature of the tax increases, at the core this is a deal to not raise taxes. Compared with 2012 policies, gross tax revenue totals $620 billion over 10 years, and the deficit is reduced by $650 billion. While these are big numbers, they are small relative to the roughly $4 trillion in new deficits produced by the package compared with what would have happened if we went off the cliff."
The new financial crisis is the debt ceiling—"a cliff we had hoped could be avoided but was left unaddressed in this deal," said Kahn. The US Department of the Treasury announced the debt limit was reached at yearend 2012, but a series of financial maneuvers will postpone the problem into February.
Kahn expects "another down-to-the-wire negotiation with an immense amount at stake." He said, "When both sides think they have the leverage, deals are hard to come by. Further, with key tax elements now addressed, it may be harder to agree to the tradeoffs necessary to bridge these views."
He observed, "Governing by deadline is a terrible way of doing business. [It] leads to bad policy at home [and] weakens our status abroad. This deal avoids hard choices and ensures continued policy uncertainty that will be a drag on the economy. It produces a small amount of revenue and makes permanent tax rates that are too low for the long term. For all these negatives, give this deal a grade of incomplete."
Sam Fletcher | Senior Writer
I'm third-generation blue-collar oil field worker, born in the great East Texas Field and completed high school in the Permian Basin of West Texas where I spent a couple of summers hustling jugs and loading shot holes on seismic crews. My family was oil field trash back when it was an insult instead of a brag on a bumper sticker. I enlisted in the US Army in 1961-1964 looking for a way out of a life of stoop-labor in the oil patch. I didn't succeed then, but a few years later when they passed a new GI Bill for Vietnam veterans, they backdated it to cover my period of enlistment and finally gave me the means to attend college. I'd wanted a career in journalism since my junior year in high school when I was editor of the school newspaper. I financed my college education with the GI bill, parttime work, and a few scholarships and earned a bachelor's degree and later a master's degree in mass communication at Texas Tech University. I worked some years on Texas daily newspapers and even taught journalism a couple of semesters at a junior college in San Antonio before joining the metropolitan Houston Post in 1973. In 1977 I became the energy reporter for the paper, primarily because I was the only writer who'd ever broke a sweat in sight of an oil rig. I covered the oil patch through its biggest boom in the 1970s, its worst depression in the 1980s, and its subsequent rise from the ashes as the industry reinvented itself yet again. When the Post folded in 1995, I made the switch to oil industry publications. At the start of the new century, I joined the Oil & Gas Journal, long the "Bible" of the oil industry. I've been writing about the oil and gas industry's successes and setbacks for a long time, and I've loved every minute of it.
