Daily SA: U.S. military “too slow” in competition – Forward Observer

Daily SA: U.S. military “too slow” in competition

Good morning. Here’s your Daily Situational Awareness for Tuesday, 14 September 2021. You can receive this briefing by email by signing up at https://forwardobserver.com/daily-sa

TODAY’S BRIEFING:

  • More new taxes from Congress
  • Oil loses demand
  • Trucking industry divided
  • U.S. military “too slow” in competition
  • Hundreds of pilots leave Atlas Air

SITUATIONAL AWARENESS

TAXES: The House Ways and Means Committee introduced a provision to their tax plan that would increase the tax rate for individuals earning over $400,000 to 39.6% from its current 37%, enacted in 2017 by President Donald Trump. Among other provisions, including a change to the way capital gains are taxed, the tax plan introduced by Democrats is expected to raise more than $2.2 trillion in the next 10 years and according to House Democrats, will offset some of the $3.5 trillion they want to include in the budget bill. -T.W (Analyst Comment: The changing estimates on revenue will continue until legislation is finally negotiated and passed, which is likely in the House next week. The Congressional Budget Office routinely overestimates deficit amounts as proposed appropriations don’t always match actual allocations.- D.M.)

OIL: London research firm IHS Markit expects that global demand for crude oil will increase until 2033 before it begins to decline. The new estimate is 4 years shorter than previous expectations and includes the forecast that oil demand will peak at 81 million barrels per day. With green energy solutions beginning to evolve and introduce themselves more prominently, demand for oil is predicted to be below 2019 levels by 2050. For prices, IHS estimates that oil will support a break-even price at $50 by 2040. (AC: Oil is currently experiencing a demand of close to 100 million barrels per day and is expected to decrease over the last quarter of 2021. Estimates for demand have decreased over the past month, with OPEC anticipating an average demand of 100 million barrels per day for Q4, a slight decrease from last month’s 110 million barrel per day estimates. -T.W.)

TRUCKING: The American Trucking Association (ATA) responded to President Biden’s medical mandates saying the rules are difficult to enforce in many industries like trucking. ATA President Chris Spear asked, “If these mandates are designed to protect Americans, then why the discriminatory 100-employee threshold, picking winners and losers for both employees and employers?” The first emergency temporary standard issued in decades by OSHA was part of ongoing “stakeholder meetings” going back about six months. (AC: Use of little known rule provisions and legal hurdling is an increasingly common tactic used by the government to impose medical mandates. The next expected mandate is for domestic air and rail travel, which public officials are increasingly alluding to in media appearances. – D.M.)

DEFENSE: The Vice Chairman of the Joint Chiefs, General John Hyten said U.S. military modernization efforts are occurring too slowly. “The downside is, we’re still moving unbelievably slow,” Hyten said. “We’re so bureaucratic and we’re so risk averse.” He notes that public reports of Chinese missile silo construction are less concerning than Beijing’s willingness to use existing capabilities before the U.S. achieves its modernization goals in the next 15 years. (AC: China’s rapid improvements are a frequent topic of conversation on Capitol Hill, but that is typically the extent of the U.S. response. Bureaucratic burdens continue to stymie effective modernization efforts from the procurement processes to individual warfighter training. -D.M.

SHIPPING: Atlas Airlines is hemorrhaging pilots after union negotiations failed to support the pilot’s terms to improve retention. Viewed by many as a “place to train, not have a career,” Atlas is expected to lose 25% of its pilots this year. Their main customers are DHL and Amazon, meaning a further reduction in air freight capacity is inbound. The airline’s recruitment programs are attempting to preserve around 10-12% of the losses, but the reputational impact of unfavorable union negotiations is likely to drive pilots to other airlines. (AC: Beyond storms and other logistics backlogs, the windfall profits of carriers this year are not unnoticed by the transportation and logistics workforce. Potential strikes in either air freight or trucking would have devastating consequences on retailers and consumers as product availability across sectors remains limited. – D.M.)

HAZARDS WARNING

HURRICANE SEASON: Tropical Storm Nicholas will bring heavy rainfall and winds from the upper Texas coast, across Louisiana, southern Mississippi, and southern Alabama throughout the week. Significant rainfall amounts are expected to cause urban and river flooding across the region. Storm surge inundation is ongoing from Sargent to Sabine Pass. According to the National Hurricane Center, the gradual development of a tropical storm in the mid-Atlantic is expected this week.

In today’s Early Warning, Dustin looks at Germany’s role in renewed Great Power Competition. Upgrade your Situational Awareness to Early Warning here: https://forwardobserver.com/subscribe

Mike Shelby is a former Intelligence NCO and contractor. He's now the CEO of Forward Observer.

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