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Workers during the production process of pipes at the Nord Stream 2 facility at Mukran on Ruegen Islandon in Sassnitz, Germany.
Carsten Koall | Getty Images

WASHINGTON – The United States and Germany reached an agreement to allow completion of the $11 billion Nord Stream 2 pipeline, a thorny, long-standing point of contention between the otherwise stalwart allies.

The agreement reached between Washington and Berlin, which was announced on Wednesday, aims to invest more than 200 million euros in energy security in Ukraine as well as sustainable energy across Europe.

“Should Russia attempt to use energy as a weapon or commit further aggressive acts against Ukraine, Germany will take action at the national level and press for effective measures at the European level, including sanctions to limit Russian export capabilities to Europe in the energy sector,” a senior State Department official said on a call with reporters on Wednesday.

The senior State Department official, who requested anonymity in order to discuss the agreement candidly, added that the U.S. will retain the prerogative of levying sanctions, as well, in the case if Russia uses energy as a tool of coercion.

The official said the United States and Germany are “resolutely committed to the sovereignty and territorial integrity” of Ukraine and therefore, consulted closely with Kyiv on this matter.

The unease surrounding the nearly complete Nord Stream 2 project, a sprawling undersea pipeline that will pump Russian gas directly into Germany, stems from Moscow’s history of using the energy sector to gain leverage over Russia’s neighbors, namely Ukraine.

When completed, the undersea pipeline will span 764 miles from Russia to Germany, making it one of the longest offshore gas pipelines in the world. Last month, the Kremlin said that only 62 miles of Nord Stream 2 were left to build.

In May, the United States waived sanctions on the Swiss-based company Nord Stream 2 AG, which is running the pipeline project, and its German chief executive. The waiver gave Berlin and Washington three more months to reach an agreement on Nord Stream 2.

The agreement comes on the heels of German Chancellor Angela Merkel’s visit to the White House, the first by a European leader since Biden took office and likely her last trip to Washington after nearly 16 years at the helm of Europe’s largest economy.

Merkel, the first woman to lead Germany, has previously said she will step down after the September national elections.

During a joint press conference at the White House, Merkel pledged to take a tough stance against Russia if Moscow misused the energy sector for political gains.

On Wednesday, the White House announced that Biden will host Ukrainian President Volodymyr Zelenskyy next month.

Ahead of the July 15 meeting, Biden administration officials and representatives from Germany told CNBC that the leaders of the world’s largest and fourth-largest economies were anxious to rebuild a frayed transatlantic relationship.

A handout photo provided by the German Government Press Office of German Chancellor Angela Merkel and U.S. President Joe Biden stand in the White House with a view of the Washington Monument on July 15, 2021 in Washington, DC.
Guido Bergmann | Handout | Getty Images News | Getty Images

“Obviously, over the past years, we had a number of fits and starts in the bilateral relationship,” said a senior German government official, who requested anonymity in order to speak candidly about Merkel’s agenda.

“The entire focus was on issues where we disagreed,” the official said, adding that sometimes “allies were seen as foes.”

Throughout his administration, former President Donald Trump frequently dressed down allies and often singled out Merkel’s Germany for being “delinquent in their payments” to NATO.

Last year, Trump approved a plan that would remove 9,500 U.S. troops stationed in Germany to other countries, another blow to the transatlantic relationship.

“The U.S.-German relationship was heavily negatively impacted during the Trump administration. So, there was no question that the relationship had to be renewed rebuilt, etcetera,” explained Jenik Radon, adjunct professor at Columbia University’s School of Public and International Affairs.

Radon, a legal scholar who has worked in more than 70 countries on energy issues, spoke to the complex nature of global energy deals.

The Nord Stream 2 pipeline aims to double the volume of natural gas exported directly to Germany via a network beneath the Baltic Sea, bypassing an existing route through Ukraine.

“Once you try to deliver gas or oil through a pipeline through transit countries, you always put yourself in a predicament because you have a third party that is also involved,” said Randon.

“It’s not just the seller, it’s not just the buyer, there’s also the transit one, but you have no absolute control over that third country,” he said, adding that “doing transit deals are among the most difficult.”

Workers are seen at the construction site of the Nord Stream 2 gas pipeline, near the town of Kingisepp, Leningrad region, Russia, June 5, 2019.
Anton Vaganov | Reuters

Experts on the region see the undersea pipeline as a form of Russian aggression toward Ukraine.

“By eliminating Ukraine as a transit country, Russia can deny it the benefits that come from having gas delivered across its territory,” explained Stephen Sestanovich, senior fellow for Russian and Eurasian studies at the Council on Foreign Relations.

There are two elements to the issue that people often mix up, he added, pointing to Russia’s ability to use natural gas as a political weapon against Ukraine as well as its ability to hurt Ukraine’s economy.

“That’s why the Biden administration has focused on trying to limit or compensate for any economic hit — and it wants a firm German buy-in on that goal,” he said.

However, Russia’s grip over American allies has weakened somewhat due to shifts in energy markets, according to Sestanovich.

“In the years that Nord Stream 2 has been discussed and now all but finished, energy markets have changed, and it’s become much harder for Russia to hold European countries hostage — there are just too many alternative sources of energy,” he said. “The image we have of Russia with a political stranglehold on our allies is becoming outdated.”

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Ford Mustang Mach-E to lose EV tax credit

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Ford Mustang Mach-E to lose EV tax credit

If you are thinking about buying Ford’s electric Mustang Mach-E, you may want to do so before the end of the year. Ford expects the Mach-E will no longer qualify for the federal EV tax credit.

Ford Mach-E will no longer qualify for the EV tax credit

The Inflation Reduction Act (IRA) is due for drastric changes at the end of the year that will affect which EVs will qualify for the tax credit.

Starting on January 1, more restrictions will be put into place. EVs with battery components from a “foreign entity of concern,” including China will lose a portion of the tax credit.

In 2025, the rules will get even tighter. The changes are designed to promote manufacturing in the US while building up a reliable EV supply chain network.

Ford expects to be among several automakers with EVs losing access. Tesla has already said its Model 3 RWD and Long Range will lose $3,750, starting January 1. Meanwhile, it will still qualify for the other $3,750.

In a bulletin sent to dealers (via CarsDirect), Ford said it expects the changes to impact the Mustang Mach-E. Although Ford is “awaiting finalized requirements,” given what we know, “it is unlikely that any Mustang Mach-Es will qualify” beginning the first of the year.

Ford-Mach-E-tax-credit
2023 Ford Mustang Mach-E (Source: Ford)

The company didn’t explain why the Mach-E will no longer qualify for the EV tax credit, but it’s likely due to the CATL-supplied LFP batteries.

Qualified customers are still eligible for a $3,750 credit, “making this an excellent motivator to purchase before the end of the year,” Ford added.

Ford-mach-e-tax-credit
2023 Ford Mustang Mach-E (Source: Ford)

Shoppers can still take advantage of the full $7,500 tax credit through leasing. Meanwhile, Ford didn’t indicate the Lightning would be impacted by the changes.

Ford’s electric truck had its best sales month ever in November. All F-150 Lightning trims, except the Platinum version, qualify for up to $7,500 in savings. The Platinum model is excluded as it exceeds the IRA’s $80K cutoff.

Ready to make a move and save on Ford’s electric vehicles while you still can? You can use our links below to find great deals at a dealership near you today.

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The US’s first utility-scale offshore wind farm delivers its first power

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The US's first utility-scale offshore wind farm delivers its first power

New York’s South Fork Wind has become the first utility-scale offshore wind farm to generate power in the US.

The first operational wind turbine at South Fork Wind sent clean power to Long Island today. The project has completed the installation of two turbines around 35 miles off Montauk, with all 12 SG 11-200 DD Siemens Gamesa turbines expected to be installed by early 2024. 

The energy produced is being sold to the Long Island Power Authority under the terms of a 20-year agreement.

Stephanie McClellan, executive director at offshore wind nonprofit Turn Forward, said:

The generation of power from South Fork Wind  is an incredible moment in the American clean energy story and for the Long Island communities that will benefit from this project for decades to come.

The 130-megawatt (MW) South Fork Wind will be the US’s first completed utility-scale wind farm in federal waters.

Danish renewables giant Ørsted is jointly developing the offshore wind farm with Boston-based energy provider Eversource. South Fork Wind’s first offshore wind turbine foundation was installed at the end of June, and its first US-built offshore substation was completed at the end of July.

South Fork Wind will produce enough clean energy to power 70,000 homes in New York. It will deliver clean energy directly to the electric grid in East Hampton via a single transmission line installed in March.

It will eliminate up to 6 million tons of carbon emissions, or the equivalent of taking 60,000 cars off the road annually over a 25-year period. 

Read more: The US’s largest offshore wind farm just got the green light

Photo: South Fork Wind


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U.S. crude drops below $70 per barrel, gas prices fall to 11-month low

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U.S. crude drops below  per barrel, gas prices fall to 11-month low

Gas prices at a Shell gas station in Washington, DC, US, on Tuesday, Nov. 28, 2023.

Al Drago | Bloomberg | Getty Images

U.S. crude declined nearly 4% on Wednesday with retail gasoline prices hitting the lowest point since January ahead of the holiday shopping and travel season.

The West Texas Intermediate contract for January fell $2.80, or 3.87%, to $69.52 a barrel, while the Brent contract for February declined $2.68, or 3.47%, to $74.52 a barrel.

U.S. crude and the global benchmark have hit their lowest levels since June, despite efforts by OPEC+ to boost prices by promising to slash supply in the first quarter of 2024.

Prices at the pump in the U.S., meanwhile, have followed oil prices lower to hit $3.22 a gallon on average as of Wednesday, the lowest price since Jan. 3, according to AAA.

Oil prices have been on a steep downward trajectory from September highs as nations outside OPEC+, particularly the U.S., pump crude at breakneck clip and worries grow about the Chinese economy.

Moody’s on Tuesday downgraded its outlook for China’s government credit raging to negative from stable.

U.S. crude inventories fell by 4.6 million barrels for the week ending Dec. 1 and gasoline supplied to the market increased by 260,000 barrels per day, according to the Energy Information Agency.

Falling inventories and rising gasoline deliveries implies higher demand, which would typically boost oil prices. Pessimism about the economic outlook in China, however, appeared to be weighing heavier on crude prices.

Oil traders have also been skeptical OPEC+, which includes OPEC members and its allies like Russia, will deliver on supply cuts of 2.2 million bpd in the first quarter next year.

Several OPEC+ members announced the voluntary cuts last week after the group failed to reach a unanimous agreement on production targets.

Saudi Energy Minister Price Abdulaziz bin Salman and Russian Deputy Prime Minister Alexander Novak sough to assure the market this week that they could extend or even deepen the promised cuts.

Tamas Varga, an analyst with PVM Oil Associates, said those reassurances have “fallen to deaf ears.”

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