The Morning Jolt


The Growing China Threat

Volunteers in protective suits disinfect a railway station as the country is hit by an outbreak of the new coronavirus in Changsha, Hunan Province, China, February 4, 2020. (cnsphoto via Reuters)

On the menu today: Forget about the documentarian who said “workers of the world unite” during the Oscars ceremony. Heck, even forget about the New Hampshire primary for a moment — there will be plenty of that in the Corner — and let’s start off the week with three huge news stories that are just under the radar but have huge ramifications: the impact of the coronavirus, the accelerating bonanza in the U.S. energy industries and the one glaring exception, and the potential dangers of private location-data tracking. Trust me, this will be one of those newsletters you end up forwarding to people with “Did you see this?”

Are You Dependent upon China for Your Prescription Drugs or Your Doctor’s Equipment?

Allow me to offer you the least-noticed, most-terrifying headlines of the past week that escaped almost everyone’s attention, from an essay over at NBC News: “Coronavirus tests U.S. medical system’s unhealthy reliance on China for drugs, supplies.”

Tim Morrison, a senior fellow at the Hudson Institute, points out that even if most of us in the United States are at very low risk for contracting the coronavirus, our ability to get health care may be impacted by the ongoing fight against it in China:

Everything from antibiotics to chemotherapy drugs, from antidepressants to Alzheimer’s medications to treatments for HIV/AIDS, are frequently produced by Chinese manufacturers. What’s more, the most effective breathing masks and the bulk of other personal protective equipment — key to containing the spread of coronavirus and protecting health care workers — and even the basic syringe are largely made in China. The basic building blocks of U.S. health care are now under Xi’s control.

As Rosemary Gibson, author and health care expert noted, the United States does not produce its own penicillin anymore — the last U.S. based penicillin production facility closed in 2004. Of course, antibiotics may not do any good against the coronavirus, but they may be needed to deal with a related sickness, just as flu often leads to respiratory infections.

Lest you think this is just some nervous Nellie at some think tank, the good news is the federal government is noticing this potential problem. The bad news is, the federal government concurs this is a potential problem.

New FDA commissioner Stephen Hahn said no shortages of drugs or devices in the U.S. have been reported, but acknowledged, “the situation is fluid.” And concern is being voiced on both sides of the aisle and in the White House.

“There is emerging, and I think correct, issues about … how much we rely on production in China for basic drugs and all kinds of medical supplies,” said Rep. Greg Walden, the House Energy and Commerce ranking Republican, earlier this week

Rep. Anna Eshoo (D-Calif.), chairwoman of the House Energy and Commerce Health Subcommittee, said Thursday evening that China’s control of the global supply of many pharmaceutical ingredients is keeping her up at night. She complained she’s not getting answers from U.S. officials on what overseas factories may be shut down amid quarantines.

Ready for a great irony? U.S. medical-device and pharmaceutical companies had to start thinking about their supply chains running through China in recent years because of the Trump administration’s trade war and tariffs — although in many cases, they either passed along the costs to customers or lobbied to get their particular devices exempted from the tariffs. “The U.S. imported about $5 billion worth of medical equipment from China before the trade war began. Trump’s tariffs now cover about 20 percent of those imports, but that is less than were initially targeted because the Advance Medical Technology Association, also known as AdvaMed, successfully lobbied to get many items removed before tariffs were imposed.”

At first glance that $5 billion figure doesn’t look terrible, as total U.S. spending on medical devices is in the neighborhood of $173 billion. Being cut off from about 2.8 percent of the total supply of devices used in the U.S. is not good but sounds manageable. (Then again, if it’s your medical device or prescription drug that you can’t get, this is a catastrophe.)

But some of the current comments from people who track this stuff are chilling:

 “Because China produces such a large proportion of the US’ drugs and medical supplies—especially personal protective equipment (like masks, gowns and gloves) that are used by hospital caregivers to protect themselves and their patients from infection — our members have expressed concern that the already fragile supply chain will break with the worsening conditions in China,” Tom Nickels, executive vice president of the American Hospital Association, wrote by email. “The AHA and hospitals are working with the appropriate emergency preparedness officials at the Department of Health and Human Services to keep them informed about the potential impact that worsening shortages could have.”

“All over the country, our members are talking to their supply chain managers, who are calling in additional masks and respirators to make stockpiles,” agrees Connie Steed, a South Carolina nurse who is president of the Association for Professionals in Infection Control and Epidemiology. If shortages occur — and she emphasized that she isn’t aware of any yet — hospitals would have to think through what they could sacrifice, from postponing elective surgeries to asking workers to wash and reuse their gear.”

Keep an eye on this sort of thing. The daily obsession with whatever President Trump tweeted each day means a lot of important issues slip under the radar.

To repeat a question from January 30: “Just how much interaction in trade and travel do we want to have with a secretive, powerful, chronically dishonest authoritarian regime that apparently will regularly face viral outbreaks?

Great News for the U.S. Energy Industry, with One Glaring Exception

Richard Meyer spotlights the latest “Short Term Energy Outlook” report from the U.S. Energy Information Agency, and it’s mostly really good news — with one glaring catch.

The big headline: Even under the big bad President Donald Trump, American carbon emissions are declining, and surprisingly rapidly: “After decreasing by 2.1 percent in 2019, EIA forecasts that energy-related carbon dioxide (CO2) emissions will decrease by 2 percent in 2020 and by 1.5 percent in 2021. Declining emissions reflect forecast declines in total U.S. energy consumption combined with assumptions of relatively normal weather. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.” According to the U.S. Census Bureau, we added an estimated 1.5 million Americans during that time.

The data indicates the United States continues to become an energy superpower; this country has exported more total crude oil and petroleum products than it has imported since September. EIA forecasts that the U.S. will be a net exporter of total crude oil and petroleum products by 800,000 barrels per day in 2020 and by 1.4 million barrels per day in 2021.

As for American sources of energy, natural gas-fired power plants are projected to “remain relatively steady at around 37 or 38 percent,” renewables such as solar and wind hit 17 percent last year, should go up to 19 percent this year, and 22 percent next year. Nuclear power’s share of U.S. energy production will decline very slightly.

But here’s the one glaring catch: The share of U.S. energy produced by coal will drop, and administration promises to save the jobs of coal workers are probably swimming against the stream: “U.S. coal production will total 597 million short tons (MMst) in 2020, down 93 MMst (14 percent) from 2019, as a result of declining domestic demand for coal in the electric power sector and lower demand for U.S. exports. EIA expects that coal production will again fall by 16 MMst (3 percent) in 2021 as export demand stabilizes and declines in U.S. power sector demand slow.”

This may be moot; coal miners may love the fact that Trump recognizes them, appreciates them, and doesn’t cast them as the villains in the climate-change story. But in the long term, coal is just not as competitive as other potential options for energy.

Your Data Location Is for Sale

Finally, in the “stories that didn’t get anywhere near enough attention,” know that the apps you download to your phone are constantly providing your location to location data companies, who can then sell that data to whomever is willing to buy it.

As the New York Times laid out in an extensive report in December, these companies are “quietly collecting precise movements using software slipped onto mobile phone apps. You’ve probably never heard of most of the companies — and yet to anyone who has access to this data, your life is an open book. They can see the places you go every moment of the day, whom you meet with or spend the night with, where you pray, whether you visit a methadone clinic, a psychiatrist’s office or a massage parlor.”

The data is allegedly anonymous, but think about it: If someone matched your phone to your home address overnight and where you work during the workday, how hard would it be to determine that phone was yours?

Do you think that maybe this would be an issue for anyone who parks in, say, the parking lots of the Pentagon, White House, Central Intelligence Agency, National Security Agency at Fort Meade, the NORAD Command Bunker in Colorado Springs, Lawrence Livermore National Laboratory, or any other secure government facility? (Even if personnel keep their cell phones in their cars, someone with access to the data would know employees’ home address, the route of their commute, and everywhere they go when they’re not at work. This amounts to a “how to find people who know valuable classified information” guidebook for foreign intelligence services. (The only silver lining is that I assume we can do the same things to other countries.)

Even for those who don’t handle classified information, do you think you could learn sensitive information about people by tracking their movements to doctors, oncology specialists, psychologists, marital therapists, casinos, hotels and motels, places of known drug-dealing, and so on?

This data is already being used by Immigration and Customs Enforcement and Customs and Border Protection. You never consented to the government tracking your phone, but you didn’t have to; all you had to do was consent to a private company collecting the data . . . and they can then sell it to the government.

ADDENDUM: Great news, environmentalists. State governments have decided you ought to pay more in taxes and fees. Electric cars don’t use gasoline, meaning the owners don’t pay gasoline taxes. A majority of U.S. states now impose special fees on gas-free cars, SUVs, and trucks. Starting in July, California will charge $100 per vehicle, Alabama and Ohio charge $200, and Illinois hiked theirs from $35 to $238 in multiple fees.

Electric cars cost more to buy and to insure; besides the sense of being green, one of the selling points was that you could save money in the long run by not having to pay for gas. State governments are doing their part, bit by bit, to whittle down that advantage.

Welcome to the tax-hating dark side, electric car drivers.


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