Video: Vietnam Orders Salvage of Sunken Ship After Rescuing Crew

Vietnamese coastal cargo ship rolled on its side and sunk (Vietnam MRCC)

PUBLISHED JUN 23, 2022 5:47 PM BY THE MARITIME EXECUTIVE

 

The Vietnamese Maritime Search and Rescue Coordination Center is reporting the successful rescue of 10 people from a coastal cargo ship that sank near the northern port of Hai Pong on June 22. Due to the nature of the area where the ship went down, the authorities are reporting that they have ordered the owners to come up with a salvage plan as well as to deal with the oil aboard the vessel before it leaks.

A 13-year-old general cargo ship, the Nam Thinh 126 had loaded a cargo consisting of 1,800 tons of stone and bales in the southern port of Quy Nhon. According to reports the vessel which was 259 feet long and 1,983 dwt was operating with a crew of eight and also two passengers from the owner’s company.

They reached the anchorage at Hai Pong, but shortly after midnight on June 22 called the MRCC reporting that the vessel had tilted in heavy seas. The captain was requesting an urgent rescue reporting that he was ordering everyone into the vessel’s raft. The reports indicated the vessel was rolling in heavy seas likely indicating that its cargo shifted causing the severe list.

 

 

Vietnamese officials indicated that a search was undertaken saying that the passengers and crew were rescued from their raft at mid-day. The video shows people on the deck, possibly after they were rescued from the raft. 

The crew told the authorities that they had closed and locked the fuel values before abandoning ship. However, they were reporting that the vessel had 150 tons of fuel oil and three tons of diesel on board leading to fears of environmental pollution. 

The Nam Thinh126 sank approximately 2.5 nautical miles south of the channel with the authorities saying it was imperative to have a plan to salvage the ship to ensure the safety of the navigation channels. In addition, they have ordered the owner to come up with a plan to drain the oil from the vessel before it leaks.

Video: Indian Coast Guard Rescues Crew from Sinking Cargo Ship

Princess Miral was sinking by the stern when the crew abandon ship (Indian Coast Guard)

PUBLISHED JUN 22, 2022 7:28 PM BY THE MARITIME EXECUTIVE

 

The Indian Coast Guard is hailing its efforts in what it calls a “prompt and swift Search and Rescue (SAR) Mission” saving the lives of 15 Syrian seafarers after they abandon their sinking cargo ship. They were all successfully recovered from lifeboats and lift rafts despite what the Coast Guard termed difficult conditions.

The circumstances leading up to the rescue are confused with some reports suggesting the vessel, a 32-year-old general cargo ship sailing under the flag of Belize suffered a mechanical failure while other reports suggested it possibly was intentionally grounded. The Indian Coast Guard reported receiving a distress call on June 21 with the crew telling them that they were preparing to abandon the vessel named Princess Miral.

 

Crew was rescued from the lifeboats and rafts (Indian Coast Guard)

 

The 7,000 dwt general cargo ship had loaded a cargo of 8,000 tonnes of steel coil in China in May. It had stopped at the Port Klang anchorage at the beginning of June and earlier this week was located off the coast of India. It anchored north of New Mangalore, India on June 18 but later appears to have repositioned to the south of the port city. The vessel had been sailing to the Suez Canal where it was scheduled to transit at the beginning of July on its way to Lebanon. 

After grounding the vessel reported hull breaches which were causing ingress of water into the holds. Pictures released by the Indian Coast Guard however show the vessel sinking by the stern.

 

 

Commander S B Venkatesh of the Indian Coast Guard told The Times of India, “In my 30 plus years in service, this was the darnedest mission undertaken in rescuing mariners. The successful operation reaffirms the Coast Guard’s capabilities.”

Two Indian Coast Guard vessels, the Vikram and Amartya were dispatched in response to the distress call. The crew was rescued from the boats and transferred to shore where they are currently being interviewed to determine more of the circumstances leading up to the emergency. It is unclear if the vessel remains afloat on a reef or if it went down after the rescue.

Video: Emergency Response for Listing Car Carrier Taking on Water 

Salvage operations are underway to stabilize the listing vessel (Gorodsochi/Telegram)

PUBLISHED JUN 20, 2022 1:42 PM BY THE MARITIME EXECUTIVE

 

 

Salvage and dewatering efforts are underway for a Cameroon-flagged ro-ro car carrier, the Linder Bulut,  that began taking on water near the Russian port of Tuapse on the northeastern shore of the Black Sea.  Russian officials are reporting that the situation is stable and that they have been able to reduce the list by approximately two degrees.

The 22-year-old vessel, which is operating transporting cargoes across the Black Sea, was arriving at the Russian port on June 18 on its regular run from Samsun, Turkey. It was reportedly carrying a cargo of refrigerated fruits and vegetables. Reports indicate that the 4,500 dwt vessel, which is 465 feet long, is regularly crossing the Black Sea from Turkey to Russia.

Saturday evening as the vessel was approaching the entrance to the Russian port, the captain contacted the local marine rescue service and port officials requesting assistance. A statement from the Russian marine rescue service, Rosmorrechflot, said the captain reported a malfunction in the ballast water system which was causing the vessel to take on water. The crew was attempting repairs but the captain feared the vessel would capsize. He requested tugs to assist in either docking or grounding the vessel to prevent the vessel from listing further. 

 

 

 

Eyewitnesses posted images to social media showing the vessel with a significant list to starboard. The Russian emergency rescue vessel came alongside and decided to ground the vessel while also providing additional pump capacity to dewater the ship. They grounded the vessel Saturday evening but later suspended the pumping operation overnight. By Sunday, they were reporting that water had reached the engine room of the vessel.

Divers on Sunday inspected the hull reporting that there were several holes that required repair. An emergency boom was also strung around the vessel but officials reported no oil leaks. At its worst point officials said the vessel had a 15 degree to list, but at the last report they had been successful in reducing it to 13.3 degrees. They reported that there were no injuries among the 28 crewmembers aboard. The vessel is currently about 800 feet offshore and once it is stabilized the plan is to move it to a dock in the port.

 

Firefighters Battle Cargo Fire on Bulker Docked in Belgium

Firefighters are battling a stubborn cargo fire aboard a bulker in the port of Ghent (Brandweerzone Centrum)

PUBLISHED JUN 24, 2022 12:46 PM BY THE MARITIME EXECUTIVE

 

Firefighters in Belgium are struggling to put out a stubborn cargo fire on a bulker docked at the port of Ghent. They expect the fire will burn for at least 24 hours and possibly longer while warning residents and drivers to be cautious due to the thick smoke in the area.

The bulker Lowlands Mimosa is docked at the Sifferdok in Ghent. The 63,939 dwt vessel is managed by CLdN Cobelfret and reported loaded with a cargo of scrap metal. The bulker is 655 feet long and registered in Panama.

The local fire brigade received reports of the cargo fire at around 11:00 p.m. Thursday, June 23. Arriving at the port they found large quantities of smoke billowing from the hold of the vessel blanketing the port and spreading into the surrounding area. Warnings were issued for drivers to proceed with caution on local roads as well as for residents to close their windows due to the level of smoke.

The crew of the vessel had attempted to fight the fire before calling for assistance. One crewmember was taken to a local hospital suffering from smoke inhalation. 

Firefighters reported that their work was being complicated by the position of the cargo in two holds aboard the ship. They were concerned with the vessel’s stability with a spokesperson reporting that they were pumping water on the fire but being forced to stop to pump water out of the ship’s holds as well. 

By Friday morning, the firefighters were reporting that they believed the fire was under control and they had brought in a crane to begin removing the scrap metal to the dock as part of the fire fighting effort. Two firefighters have received minor injuries and were also taken to the local hospital.

Cargo Ship Captain Swims to Save Unusual “Passenger”

Cargo ship Gry Maritha had some excitement when a "passenger" went overboard and the captain dove in to save the animal (Nilfanion/Wikimedia UK)

PUBLISHED JUN 21, 2022 8:37 PM BY THE MARITIME EXECUTIVE

 

It is not very often that you hear a tale about a captain that dives overboard to rescue one of his wayward “passengers” from the sea, but the BBC is reporting just such a tale today. What’s more, the passengers were the four-legged kind but both owner and captain feared the creature might not be able to swim leaving little choice but to stage the unusual rescue.

Tom Sexton took command of the small cargo ship the Gry Maritha in April after the vessel’s senior captain retired in the spring after 22 years with the Isles of Scilly Steamship Company. Just a small 123- foot knockabout built in 1981, the 590 ton vessel provides a vital, year-round freight service between Penzance in Cornwall in the UK and 36 miles to St. Mary’s in the Isles of Scilly. She is equipped to carry palletized cargo and bulk fuel plus she has a deck crane which enables the ship to carry large goods up to a maximum weight of six tons, including vehicles and machinery.

Last week during one of her regular runs she boarded two unusual passengers, meerkats that were being transported by their owner on their way to a zoo in Axminster, Devon, England. Named Doris and Boris, the animals which weigh less than two pounds were caged for the trip from the Isles of Scilly. Some how when they were arriving in Penzance, the animals got free and were running around the deck of the little cargo ship. 

 

 

The crew was able to catch Doris, but much to the dismay of their owner, Boris decided to make a break for it and went over the side of the ship down 10 feet into the harbor. Owner Stephen Griffin told the BBC that he did not think the meerkat could swim, but Captain Sexton said he saw the animal swimming about but realized it had no way to get back aboard the ship.

Sexton quickly changed into a pair of boardshorts and put on a pair of gloves to prevent the animal from biting and he dove in after his wayward passenger. At the same time, the crew tied a cage to a rope and lowered it over the side. Recounting his tale to the BBC, Sexton said it was "easier" than he thought it would be, saying that the animal "was quite glad" to be caught and back on dry ground.

The captain laughs it off going back to his job of moving vital supplies to the islands, but you have to assume he had some fun in the pub recounting the day the meerkats took a cruise on his ship.

 

Top photo by Nilfanion/Wikimedia UK -- (CC BY-SA 4.0)

Opinion: Some W. African Fishing Deals Appear to be "Lose-Lose"

Agreements allowing foreign vessels to fish in the waters of West African states look to be bad deals for both host countries and foreign companies.

Trawler off Ghana (EJF)

PUBLISHED JUN 24, 2022 6:58 PM BY CHINA DIALOGUE OCEAN

 

Some of humanity’s largest impacts on the oceans have come from the widespread industrialization of fishing practices during the 20th century. While the rate of this growth in fishing pressure has since slowed in the northern, temperate waters of higher income countries where it originated, it is still increasing throughout the tropics. This is driven largely by foreign, “distant-water” fleets, mostly comprised of vessels registered under a small number of flags – including China, South Korea and Spain.

In the national waters where most fishing occurs, distant-water fleets can only operate legally with the authorization of coastal and island governments, for example via licensing arrangements or government-to-government access agreements. One region where these arrangements are particularly prevalent is along the coast of West Africa, home to productive fishing grounds that have traditionally been an important source of food, jobs and trade.

Many West African governments negotiate agreements with the respective governments representing distant-water fleets, or directly license the fleets to fish in their waters in exchange for public revenues (including licence fees). But over time, the operations of these fleets have come to be associated with a range of negative environmental and social impacts in the region, including overfishing, conflict and competition with local small-scale fisheries, and incidents of illegal fishing.

As academics (and practitioners), we at Duke University’s Nicholas Institute for Environmental Policy Solutions wanted to ask: putting aside all the negative social and environmental impacts and just looking at the economic benefits, is this “trade for fishing services” a good deal for West African governments?  What are the economic benefits generated for these countries by distant-water fleets, and where are they going? Our hope was – and is – that answering these questions could help the region’s coastal governments better assess if these deals have provided the intended benefits, and/or if there may be alternatives they could consider. 

To answer these questions, we took a snapshot from 2017 of one of the largest distant-water fleets in West African waters: coastal bottom trawlers registered or largely owned in China that are licensed to fish in the waters of Guinea-Bissau, Guinea, Sierra Leone, Liberia and Ghana.

Several years ago, we published a first study that looked at the state of these fisheries in 2015, though the picture was fairly unclear due to limited data. Our subsequent study benefits from much more data, including satellite-based data of vessel movements and interviews with captains about fishing costs, although it is important to acknowledge that we still had some data gaps that we filled with estimates.  So the picture remains fuzzy – but is hopefully getting clearer with each study. 

For these five countries, the size and distribution of the economic benefits suggests that it was either a bad deal for both parties, or at least for the coastal governments.

In Sierra Leone, Liberia and Ghana, the fleet generated little to no net economic benefits for either the fishing companies or the coastal governments (though it is also worth noting that Liberia licensed relatively little trawling in 2017); in Ghana, the fishing companies took 84 percent of the relatively low benefits (the amount was estimated as a range from low to high, with the higher end being $7.7 million).

Although no economic benefits were estimated in Sierra Leone, the government received just over $2 million in licence fees; estimates suggest that the fishing companies lost money, where costs exceeded revenues. Further north in Guinea and Guinea-Bissau, more significant economic benefits were estimated – as much as $31 million and $38 million respectively – but almost all were taken by the foreign fishing companies (86 and 93 percent respectively).

This suggests that the distant-water fleet, in this instance registered or largely owned in China, is not generating much economic benefit for the coastal states of West Africa. Those countries may want to take a hard look at the terms of the deals and perhaps rethink them. For example, they may look alternatively to increase access fees, prioritise local small-scale fleets, and/or limit industrial fishing. At the same time, the fishing companies may need to think critically about how viable these operations are, particularly in places like Sierra Leone, where they appear to have lost money in 2017

So while much has been written about the environmental and social impacts of distant-water fleets, in the case of West Africa and the China-registered coastal bottom trawler fleet, the economics of some of these deals seem to be a lose-lose for all concerned. In others, they are a loss for the coastal states, at least.

In the more southerly states of West Africa where the economic benefits were estimated to be lower or negative, this trend may be reflective of fisheries overexploitation – potentially driven by fishing subsidies. Going forward, then, one might expect the economic prospects to be dim, if industrial fishing is not reduced.

For the more northern states, the best route to managing fisheries sustainably is to prevent overexploitation, rather than have to reverse it. These governments should maintain fishing limits consistent with the best available information on the stocks. If our estimates from 2017 were correct and the same patterns hold, the coastal governments may at least wish to negotiate a bigger piece of the economic pie.

John Virdin is director of the Ocean and Coastal Policy Program at the Nicholas Institute for Environmental Policy Solutions, Duke University.

This article appears courtesy of China Dialogue Ocean and may be found in its original form here.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

Advocates want more than 'rainbow washing' from Corporate Pride campaigns

Adena Ali, The Canadian Press

Toronto-based graphic designer Dylan Horner is shown in this undated handout photo. 

Horner says a lot of the marketing campaigns he's come across during Pride month make him cringe. , 

THE CANADIAN PRESS/HO-Dylan Horner

Toronto-based graphic designer Dylan Horner says a lot of the marketing campaigns he comes across during Pride month make him cringe.

Throughout June, advertisements from brands featuring Pride imagery appear on televisions, billboards and especially social media feeds. Companies ranging from local businesses to multinational corporations drop new Pride-themed products and add touches of rainbow decor to their logos, all in the name of LGBTQ allyship. 

But if the policies, products and political activities of a company during the other 11 months of the year don't line up with its colourful advertising during Pride month, they are increasingly likely to be called out for "rainbow washing" – public displays of support for the LGBTQ community that are temporary and not backed up by action.

"When companies try to push their own agenda while including the community, those are the (campaigns) that make me mad," says Horner, who is gay. 

But his feelings on the matter aren't black and white. He believes there is value in marketing and advertising campaigns during Pride month, especially if there is nuance, noting that the visibility is particularly helpful for individuals who might live in rural areas, feel alone or aren't entirely comfortable with who they are yet.

Horner is not alone in finding the issue nuanced.

"I think that sponsorships from mega companies can often be beneficial to queer creators, and financial backing in that regard can often propel us to the next level," drag performer Kendall Gender says. "I do, however, (have) an issue when (sponsorships are) inauthentic."

Gender is working with Canadian cosmetics company Annabelle on a Pride collection and campaign this year. Annabelle says monetary donations will be made to Rainbow Railroad, an organization that helps LGBTQ people escape violence and persecution in their home countries.

Marketing industry watchers agree authenticity matters and that Pride month campaigns can serve a positive purpose, but there needs to be substance behind them.

Scott Knox is the founding president of PrideAM, an organization working to ensure LGBTQ people are more visible at marketing agencies and that portrayals of the community in advertising are not one-dimensional.

He finds that Canada's advertising industry tends to do a better job compared to other markets he's worked in when it comes to ensuring authentic LGBTQ representation and around Pride month specifically.

"In Canada, we are part of the fabric of how brands talk to (consumers) and sell products" all year round, he says.

At the same time, he says big businesses need to reflect on whether they actually value the LGBTQ community or are just trying to cash in when Pride month rolls around, illustrating his point with the example of a hypothetical business adding rainbows to a branch of its operations located in Toronto's Gay Village during Pride month, but not at any other location and at no other time.

"They are safely in the space of the community, but will they do something in another country, in another city, at a different time of the year other than Pride month?" he says.

Craig Pike, owner of Craig's Cookies, points to a level of shallowness and lack of understanding on the part of some bigger organizations that he's come across. He says they have been coming to his small business, which has a location in Toronto's Gay Village, for free cookies for their Pride campaigns rather than paying for them.

"We have been approached by banks, hotels and other huge food brands asking us to donate cookies for their Pride events," he says. "In my opinion, if you want to support small queer businesses during Pride, put your money where your mouth is."

The cookie business makes its own efforts all year round by hiring diverse groups of employees that best represent the people it bakes for, ensuring it is always visibly queer and learning how it can do better for marginalized individuals within the broader LGBTQ community.

For bigger businesses, there are some easy actions that can be implemented at the policy and system level long before Pride month that represent tangible support for the LGBTQ community, says Feminuity co-founder and CEO Sarah Saska. Feminuity helps organizations improve their diversity and inclusion efforts.

She emphasizes the importance of setting up data collection tools for customers and employees that aren't limited to gender and sexuality so there is a better understanding of who people are and what they need, and to help the company determine whether its products are inclusive.

Another example is around benefits, in particular, working with health and benefit providers to expand insurance to cover gender-affirming medical care for transgender and non-binary people. Making sure dress codes are not gendered is another easy starting point, she adds.

This is just a start, of course. Saska says consulting with the LGBTQ community to see what other actions are beneficial and whether or not plans a business has are actually useful, needed or helpful, can go a long way.

At the end of the day, Horner believes being a progressive company goes beyond a checklist to satisfy during Pride month.

"Being progressive is a way of being. If you really want to do something you’ll just do it," he says.

Collision tech conference kicks off in Toronto amid industry downturn, layoffs

Tara Deschamps, The Canadian Pres

Collision tech conference attendees filtering through the doors of a Toronto convention centre on Tuesday faced a scene that looked a lot like the pre-pandemic event, but an uneasy atmosphere hung over the crowd.

For many, it was their first large-scale conference since COVID-19 cancelled gatherings more than two years ago and it came as the global tech community is facing a downturn.

Homegrown startups -- Wealthsimple, Thinkific Labs Inc. and Goodfood Market Corp. -- and international businesses -- Netflix, Klarna and Cameo -- laid off workers in recent weeks, while many more have frozen hiring.

The measures are meant to insulate businesses from the fading exuberance around tech stocks, including several which have plummeted significantly from their COVID-19 highs.

"The global venture capital market is really at a pivotal moment after coming off of 2021, where there was record deal value, record exit value generated and record fundraising," said Kyle Stanford, a senior venture capital analyst at data company PitchBook.

"We are really sitting at a market, where we are looking at increasing inflation, high interest rates, geopolitical tensions, which are going to put a lot of pressure on the market."

Thoughts like Stanford'sdominated chatter around Collision's booths and stages, where more than 600 speakers, including former Google CEO Eric Schmidt and basketball star Carmelo Anthony, will appear before the four-day conference once dubbed the "Olympics of tech" wraps on Thursday.

The travelling conference made its Toronto debut in 2019 and was expected to remain in the city for two more years, but when the health crisis materialized, Collision moved online. It has since committed to remaining in Toronto until 2023.

While local mask and vaccine passport mandates were dropped in time for the sold-out event, Collision CEO Paddy Cosgrave anticipated many would forgo handshakes and take advantage of an expanded event space, including a new outdoor area with meeting spots.

"There's so many tables being put down, we had trouble finding enough tables," he said, in an interview Saturday.

The affable Irishman's seen many of Collision's 35,000 attendees skip the conference's talks to spend more time networking, but expected the opposite this year because people are "hungry" to make sense of "frightening" economic headwinds.

Venture capitalists, who raised massive amounts of money and seemed like "the masters of the universe" with 20 or 30 times the returns, are now being forced to mark down their funds, he said.

"It's just unbelievable, so what does that all mean for the wider sector?" he said. "Is this a good time to start a company? Is this a bad time to be raising? Is it a good time to be an investor?"

The cryptocurrency industry is also under pressure. Earlier this year, the price of Bitcoin sank to its lowest level since 2020 and stablecoin TerraUSD was embroiled in lawsuits, erasing an estimated $40 billion in investor funds.

At least eight cryptocurrency companies, including embattled lending platform Celsius, dropped out of Collision in the last three days, Cosgrave said on Saturday.

"Part of the reason is we said, `look there are major, serious questions. We want to put them to you on stage,"' said Cosgrave.

"None of them have said, `Oh, no, I don't want to be asked the serious questions,' but … things have suddenly come up … Crypto's leading lights are unwilling to answer tough questions. They're just running for the hills."

 Also missing from Collision's stages is Shopify Inc., the Ottawa e-commerce giant whose CEO Tobi Lutke appeared at the conference's first Toronto edition.

"Lots of journalists say, `Oh, what do you think that means?' Look, just draw your own conclusions," said Cosgrave. "Personally, I think it's understandably (about) who's going to give them an easy time right now."

Amid a broad market selloff that has particularly weighed on the tech sector, the price of Shopify's stock has sunk more than 70 per cent since its late 2021 peak of $2,228.73.

Despite the absences and downturn chatter, many were still optimistic about both the tech and crypto industries at-large, and were letting that feeling guide their investments.

At a booth highlighting the tech sector in York Region, an area just north of Toronto, about $250 million in business investment announcements are expected to be made during Collision, leading to an estimated 800 local tech jobs.

"We are living in different times right now, but ... if angels are hearing from an amazing entrepreneur or a team about an amazing innovation, that is globally scalable, that can have huge impact, then we are all ears no matter what is happening," said Katie Salem, executive director at York Angel Investors.

Christophe Bourque of White Star Capital, which has invested in Borrowell, Dialogue and Dollar Shave Club, shared Salem's sentiments.Earlier in the day, he said he remains "a big believer" in the crypto industry's long-term longevity.

He reminded audiences that, "This is not the first downturn we have seen and this is not the last."

Clean energy spend falls short of climate goals, IEA says

Laura Hurst, Bloomberg News

Investments into renewable power, energy efficiency and electric vehicles are set to make up the bulk of spending on energy this year, but still won’t be enough for the world to achieve net-zero carbon emissions over the next three decades, according to the International Energy Agency.

The IEA expects spending on clean energy to exceed US$1.4 trillion this year, accounting for almost three-quarters of overall investment, according to a report published on Wednesday. The average annual growth rate has accelerated to 12 per cent since 2020, compared with 2 per cent in the five years following the 2015 Paris climate accord.

“The rise is good, but not strong enough to lift us from the strong energy crisis we have and to prepare us for a better climate future,” IEA Executive Director Fatih Birol said in a press conference.
It’s also “well short of what is required to hit international climate goals,” the Paris-based Agency said.

“Without a massive surge in spending on efficiency, electrification and low-carbon supply, rising global demand for energy services will simply not be met in a sustainable way.”

Overall investments in all forms of energy including fossil fuels in recent years has been too low, feeding the current global crisis, the IEA said. Russia’s invasion of Ukraine and its impact on oil and gas supplies and prices has simply “added another layer of expectation and uncertainty to the picture.”

While total energy investment is set to rise 8 per cent this year, half of that increase will be eaten up by growing costs linked to supply-chain pressures, shortages in specialized labor and higher prices for construction materials such as steel and cement. Clean energy will also be hit by higher costs, with solar panels and wind turbines up around 10 per cent to 20 per cent from 2020
levels, the IEA said.

The Agency also found that almost all the growth in clean energy investment came from advanced economies and China. “In the rest of the world, clean energy investments are more or less flat since the year 2015,” Birol said.

China has continued to lead the way in green investments, with spending last year of US$380 billion. The European Union was the next biggest spender last year at US$260 billion, while the US followed at US$215 billion, according to the IEA. While solar accounted for most new investments, offshore wind had a record year in 2021, with more than 20 gigawatts of power commissioned and around US$40 billion of expenditure.

 

SKY-HIGH PRICES

The war in Ukraine has spurred the EU to reduce its reliance on Russian oil and gas in the long run. In the short- term, however, the world is seeing some countries increase fossil fuel investments amid historically high prices, the IEA said. That includes the expansion of coal in some emerging Asian economies. 

Still, aggregate investment in oil, gas, coal and low-carbon fuels remains below pre-pandemic levels. Fossil fuel spending is almost 30 per cent below where it was when the Paris agreement was signed. The IEA estimates that global oil and gas producers’ net income will double this year to an unprecedented

US$4 trillion. But despite “sky-high” fuel prices, companies are taking a more cautious approach to big capital commitments due to policy uncertainty and financing costs. 

Oil and gas firms are only spending 5 per cent of their capital expenditure on clean energy technologies, while the remainder continues to be funneled into traditional fossil fuel investments, Birol said. Tight supplies caused investment into coal to rise 10 per cent year on year in 2021 to US$105 billion, and the industry is set for another 10 per cent increase in 2022. The rise comes despite an agreement in climate talks in Glasgow last year to phase out the fuel.

“The lasting solutions to today’s crisis lie in speeding up clean energy transitions via greater investment in efficiency, clean electricity and a range of clean fuels,” the agency said.

Canadian job vacancies hit record high of nearly 1M in first quarter

Adena Ali, The Canadian Press

Job vacancies reached a record quarterly high of nearly one million in the first three months of 2022, continuing a trend started in the first quarter of 2016.

Statistics Canada data shows the number of job vacancies increased 2.7 per cent from the previous peak in the fourth quarter as the pool of unemployed workers shrunk to half the level in the first quarter of 2021.

Vacancies in the health care and social assistance sector reached a record high of 136,800, up five per cent from the peak of three months earlier and up 90.9 per cent compared with the first quarter of 2020, before the COVID-19 pandemic pummeled the economy.

Nurse aide positions, in addition to registered nurses and licensed practical nurses accounted for 67.7 per cent of the overall vacancies in the health sector compared to the first quarter of 2020.

Employers in the construction industry also found it challenging to fill jobs in the first quarter, as 81,500 positions were vacant, up 7.1 per cent compared with the fourth quarter of 2021, and more than double the number observed in the first quarter of 2020.

Helper and labourer job vacancies soared 97 per cent and vacant carpenter positions were up 149.1 per cent compared to the first quarter of 2020.

Job vacancies continued to reach record highs in the manufacturing and retail trade sectors as well, up 5.3 per cent and 12.8 per cent, respectively, compared with the fourth quarter of 2021.

On a seasonally adjusted basis, job vacancies increased in Newfoundland and Labrador by 12.6 per cent, New Brunswick by 8.7 per cent, Manitoba by 5.1 per cent, and Ontario by 3.1 per cent compared to the fourth quarter of 2021. Job vacancies were little changed in other provinces.

CIBC's deputy chief economist Benjamin Tal doesn't see the job vacancy situation improving notably anytime soon. 

"Wages will have to rise and working conditions will need to improve in order to attract people back," he said.

Average hourly wages of all employees rose three per cent from a year earlier, while the Consumer Price Index increased 5.8 per cent during that period, according to Statistics Canada.

BMO economist and macro strategist Benjamin Reitzes explains that Canadian workers are likely to see further wage increases across industries, not just in one or two.

"We've seen some upward pressure on wages but nothing too substantial just yet and that could be taste of what's to come in the months ahead," he said.

However, there could be a cool off in pay boosts later in the year, Reitzes notes.

"But we're not there just yet," he said.

There is evidence that the economy is already starting to slow as real estate prices fall, the stock market faces volatility and the technology sector cuts jobs, amid the backdrop of persistent inflation and rising interest rates.

Statistics Canada will release its latest reading on inflation Wednesday. BMO says the annual inflation rate could hit 7.4 per cent, up from 6.8 per cent in April.

Canada posts fastest first-quarter gain in population since 1990

Randy Thanthong-Knight, Bloomberg News

Canada’s population grew at the fastest rate for the first quarter since 1990 thanks to continued immigration.

The number of people living in Canada rose by 0.3 per cent, or 127,978, to 38.7 million in the first three months of 2022, according to Statistics Canada estimates released Wednesday in Ottawa. The report showed accelerating gains following a slow-growth period in 2020 as the COVID-19 pandemic began.

The majority of the gains came from international migration, which remains driver of population and labor growth in Canada. The country welcomed 113,699 immigrants in the first quarter, the highest number in any first quarter since quarterly data became available in 1946.

Canada’s biggest province, Ontario, also reached a milestone, with its population surpassing 15 million for the first time.

With an aging workforce and a record number of job vacancies, robust immigration will be “even more critical to the labor market,” the statistics agency said. 

Prime Minister Justin Trudeau’s government has set an ambitious plan to bring in more than 1.3 million newcomers over the next three years to support the country’s post-pandemic growth. Last year, Canada welcomed more than 405,000 new residents, the largest single-year increase in its history.

Here’s more new data on Canada’s immigration and labor supply from Statistics Canada:

• In the 2010s, immigrant workers accounted for 84 per cent of the growth in the total labor force and 55 per cent of the growth in the high- and medium-skilled jobs. They also offset a decline in lower-skilled jobs among Canada-born workers
• Since 2010, the shares of new and recent immigrants grew the fastest in transportation and warehousing, professional services, and accommodation and food services
• In 2021, recent immigrants, who were in Canada 10 years or shorter, made up 8 per cent of the total employed labor force
• Canada is increasingly reliant on temporary foreign workers to fill labor gaps, with the number increasing to 777,000 in 2021 from 111,000 in 2000
• About a quarter of temporary foreign workers who arrived in Canada in the late 2000s and early 2010s became permanent residents within five years after obtaining their first work permit
• Lower-skilled temporary foreign workers tended to have higher rates of transition to permanent residency as compared with their higher-skilled counterparts
• A third of international students who arrived in the late 2000s and early 2010s became permanent residents within 10 years

Private equity faces 'crisis of value' over inflated prices

Will Louch and Dani Burger, Bloomberg News

Private owners of assets face a “crisis of value”, after years of prices being driven higher by rock-bottom interest rates, according to two senior private equity figures.

“Right now in the private markets it has been a crisis of value,” Gabriel Caillaux, head of General Atlantic’s business in EMEA, said in a Bloomberg TV interview at the SuperReturn conference for investors in Berlin. “The excesses happened because valuations ran up and you had a whole new set of actors that came in who made the deal cycle a little bit too accelerated.”

Some deals have been mis-priced because of the sustained period of low interest rates, particularly in health and technology, Scott Kleinman, co-president of Apollo Global Management Inc. said. 

“When interest rates went to zero and stayed there for 14 years, it allowed for prices to go higher and higher in the public markets and the private markets,” Kleinmain said, also in a Bloomberg TV interview alongside the conference. 

“You’ve seen the S&P down 20 per cent, the Nasdaq down 30 per cent, some tech companies down 50 per cent, 70 per cent-plus,” Kleinman said.  “It doesn’t mean these are bad companies, it just means that the starting point of the valuations didn’t make a whole lot of sense.”

Private equity has been among the biggest winners in finance over the past decade as investors have deployed hundreds of billions of dollars into the asset class in a search for yield. The influx of capital combined with readily available leverage led to a deal-making frenzy and forced asset prices to record highs. 

With rising interest rates and the increasing likelihood of a recession, high prices paid previously for assets are likely to start eating into returns.

“I do think private valuations will fall,” Kleinman said. “The private equity industry has to return back capital to investors. The prevailing market prices when you go to sell those companies will determine what that shake out looks like.”

The tougher economy will also make it more difficult for private-equity firms to sell their assets or list them on public stock exchanges in the near term as investors adjust pricing expectations, according to Nikos Stathopoulos, a partner at BC Partners. 

“Everyone is in a bit of a wait-and-see mode to see what impact this will have, mainly on valuations,” Stathopoulos added in a separate Bloomberg TV interview. “As in everything you have to adjust the valuation expectations of the buyers and the sellers and they have to converge at some point and that sometimes takes time.”

 

'INDISCRIMINATE SELLING'

A correction to reflect the worsening economic outlook is creating opportunities for some investors in the private capital industry.

“A lot of this reset is incredibly healthy and provides a lot of opportunity,” Caillaux said. “The sell down has been completely indiscriminate to the quality of the business.”

For Apollo, as the market starts to reprice, deal flow is likely to improve as more companies consider going private as volatility increases, according to Kleinman. 

In addition, a potential recession is prompting some companies to look to sell non-core parts of their businesses to shore up their balance sheets, Kleinman added.

Ghost of Keystone XL haunts U.S. as drivers feel pain at the pump

Michelle Zadikian, BNN Bloomberg

As North Americans continue to feel pain at the pump from surging gasoline prices, the issue of energy security and how to bring down the rising cost of living is front and centre for government officials in Canada and the U.S.

However, for the Biden administration, the decision to quash the Keystone XL pipeline project continues to be a key talking point more than a year after the U.S. President effectively killed the project.

Deputy Prime Minister Chrystia Freeland confirmed in a joint press conference with U.S. Treasury Secretary Janet Yellen on Monday that she brought up the cancellation of Keystone XL once again with her American counterpart.

“The Canadian position on Keystone is unchanged. It's something we bring up whenever we have these meetings, and I did today,” Freeland said.

The two high-ranking government officials met in Toronto to discuss how they could tackle runaway inflation through more resilient supply chains, including on the energy front.

Yellen said a revival of the Keystone XL project would be up to U.S. President Joe Biden to consider, but said even if it was restarted, it wouldn’t be much help to the current record-high gas prices drivers are grappling with.

“Even if it were allowed, (it) would take years to come into completion. So I don't see it as a short-term measure to address the current situation. And longer term, we remain committed to our climate change objectives,” Yellen said.

As part of one of his first major decisions in office, President Biden revoked a key permit for Keystone XL, which would have drastically increased the flow of crude from Alberta to refineries on the Gulf Coast.

While Freeland raised the oil pipeline project with Yellen, she also touted the federal government’s fight against climate change as being a top priority, and how Canada needs to walk the line between the two seemingly-conflicting concerns.

“We are very like-minded with this U.S. administration when it comes to the need to walk and chew gum on energy right now,” she said.

“Obviously, we need to focus on the short-term energy needs of North America, of the fact that Canadians and Americans are feeling real pain at the pumps, and also the real challenges when it comes to energy security that our European partners are facing.”

“Canada -- as an energy producer -- we take our responsibility to our allies really seriously. And so we are working hard to increase production,” she added.