reality is only those delusions that we have in common...

Saturday, July 15, 2017

week ending Jul 15

Central banks are ending policies like QE – but they'll be backRoubini -- Financial markets are starting to get rattled by the winding-down of unconventional monetary policies in many advanced economies. As the last few monetary-policy cycles have shown, even if the Fed can get the equilibrium rate back to 3% before the next recession hits, it still will not have enough room to maneuver effectively. Interest-rate cuts will run into the zero lower bound before they can have a meaningful impact on the economy. And when that happens, the Fed and other major central banks will be left with just four options, each with its own costs and benefits.  First, central banks could restore quantitative- or credit-easing policies, by purchasing long-term government bonds or private assets to increase liquidity and encourage lending. But by vastly expanding central banks’ balance sheets, QE is hardly costless or risk-free. Second, central banks could return to negative policy rates, as the ECB, BOJ, SNB, and some other central banks have done, in addition to quantitative and credit easing, in recent years. But negative interest rates impose costs on savers and banks, which are then passed on to customers. Third, central banks could change their target rate of inflation from 2% to, say, 4%. The Fed and other central banks are informally exploring this option now, because it could increase the equilibrium interest rate to 5-6%, and reduce the risk of hitting the zero lower bound in another recession.  Yet this option is controversial for a few reasons. Central banks are already struggling to achieve a 2% inflation rate. To reach a target of 4% inflation, they might have to implement even more unconventional monetary policies over an even longer period of time. Moreover, central banks should not assume that revising inflation expectations from 2% to 4% would go smoothly. When inflation was allowed to drift from 2% to 4% in the 1970s, inflation expectations became unanchored altogether, and price growth far exceeded 4%.  The last option for central banks is to lower the inflation target from 2% to, say, 0%, as the Bank for International Settlements has advised. A lower inflation target would alleviate the need for unconventional policies when rates are close to 0% and inflation is still below 2%.

How the Fed Changes the Size of Its Balance Sheet - NY Fed - The size of the Federal Reserve’s balance sheet increased greatly between 2009 and 2014 owing to large-scale asset purchases. The balance sheet has stayed at a high level since then through the ongoing reinvestment of principal repayments on securities that the Fed holds. When the Federal Open Market Committee (FOMC) decides to reduce the size of the Fed’s balance sheet, it is expected to do so by gradually reducing the pace of reinvestments, as outlined in the June 2017 addendum to the FOMC’s Policy Normalization Principles and Plans. How do asset purchases increase the size of the Fed’s balance sheet? And how would reducing reinvestments reduce the size of the balance sheet? In this post, we answer these questions by describing the mechanics of the Fed’s balance sheet. In our next post, we will describe the balance sheet mechanics with respect to agency mortgage-backed securities (MBS).  We start by describing simplified balance sheets for the Fed, the Treasury, the banking sector, and the nonbank public. The exhibit below omits a number of items that we would expect to find on these balance sheets, to enable us to focus on the elements that are essential for understanding the mechanics related to the Fed’s actions.

 How the Fed Changes the Size of Its Balance Sheet: The Case of Mortgage-Backed Securities – NY Fed - In our previous post, we considered balance sheet mechanics related to the Federal Reserve’s purchase and redemption of Treasury securities. These mechanics are fairly straightforward and help to illustrate the basic relationships among actors in the financial system. Here, we turn to transactions involving agency mortgage-backed securities (MBS), which are somewhat more complicated. We focus particularly on what happens when households pay down their mortgages, either through regular monthly amortizations or a large payment covering some or all of the outstanding balance, as might occur with a refinancing.  As we did in our previous post, we start with a set of simplified balance sheets, shown in the next exhibit. Three of the balance sheets are for the same actors as before: the Fed, the banking sector, and the public.  We replace the balance sheet of the Treasury, which we won’t need to look at, with the balance sheet of an issuer of MBS. The MBS issuer could be one of two government-sponsored enterprises—Fannie Mae and Freddie Mac—or the government corporation Ginnie Mae. All three are agencies that guarantee the MBS into which individual mortgages are pooled. For simplicity, we will refer to these institutions as “MBS issuers” in this post.

A Whole New Section on Policy Rules in Fed’s Report - John Taylor -- The Federal Reserve Board’s semi-annual Monetary Policy Report issued by Chair Janet Yellen last Friday contains a whole new section called “Monetary Policy Rules and Their Role in the Federal Reserve’s Policy Process.” The section contains new information and is well worth reading. Below is an excerpt which first lists three “key principles of good monetary policy” that the Fed says are incorporated into policy rules; it then lists five policy rules, including the Taylor rule and four variations on that rule that the Fed uses, with helpful references in notes which are also excerpted below.  The three principles sound quite reasonable: on the third–called the “Taylor Principle” by Mike Woodford and others–the Fed is quite specific in that it gives the numerical range for the response of the policy rate–the federal finds rate–to the inflation rate. The policy instrument is not mentioned specifically for the other two principles More information, including some algebra, is given in Figure A which is reproduced below. It is good that one of the five policy rules–which the Fed calls the “Taylor (1993) rule, adjusted”–is based on the important 2000 research paper by David Reifschneider and John Williams on the zero lower bound which I have written about here. Note that the Fed describes these rules using the unemployment rate rather than real GDP, relying on an empirical connection between the real GDP/potential GDP gap and the unemployment rate (Okun’s law). Note that what the Fed calls the “balanced-approach rule” is the Taylor rule with a different coefficient on the cyclical variable.

40% Of The Fed's Interest On Excess Reserves Is Paid To Foreign Banks --Even as both the Fed and Wall Street are gripped by a raging debate over when, how and how much the Fed should shrink its balance sheet, most appear to be ignoring the $2.1 trillion elephant in the room: the fact that not only is every incremental increase in the Fed Funds rate also an increase in the Interest On Excess Reserves, or IOER, currently at 1.25%), but that the direct recipient of this explicit Fed subsidy are a substantial number of foreign banks.Here are the numbers:

  • as of the week of July 5, there were $2.1 trillion in excess reserves, the largest liability by far on the Fed's $4.5 trillion balance sheet (currency in circulation is the other major component and amounts to $1.5 trillion).
  • as of the latest Fed rate hike, IOER is 1.25%

Putting these together, means that as of this moment, assuming no more rate changes, Janet Yellen will pay out $27 billion in interest on reserves parked with the Fed every year.This much is known. What is less known, however, is the holding composition of these reserves, i.e., which banks have parked these $2.1 trillion in reserves with the Fed. Courtesy of the Fed's H.8 statement, however, we can quickly figure out.Recall that as we showed first all the way back in 2011, the total cash on the books of commercial banks with operations in the US tracks the Fed's excess reserves almost dollar for dollar. More importantly, the number is broken down by small and large domestic banks, as well as international banks. It is the last number that is of biggest interest, because now that Congress is finally scrutinizing the $4.5 trillion elephant in the room, i.e., the Fed's balance sheet, it may be interested to know that approximately 40%, or $838 billion as of the latest weekly data, in reserves parked at the Fed belongs to foreign banks.

 Sources: Cohn is Trump’s top candidate to replace Yellen at Fed - President Donald Trump is increasingly unlikely to nominate Federal Reserve Chair Janet Yellen next year for a second term, four people close to the process said. National Economic Council Director Gary Cohn is now the leading candidate to succeed Yellen as the world’s most important central banker, these people said. Yellen begins two days of congressional testimony on Wednesday, and her own future in the job may come up in questioning.If Trump taps Cohn for the Fed, it could enrage economic nationalists in the White House and some staunchly conservative Republicans on Capitol Hill who don’t like the former Goldman Sachs president’s background as a Democrat who generally favors free trade. And it would spur a backlash from progressive lawmakers who have blasted the president for picking multiple Goldman alums to run economic policy. But sources on Capitol Hill and inside the White House and the Treasury Department said that, at least as of now, if Cohn decides he wants the job, he is likely to get it. “It’s Gary’s if he wants it, and I think he wants it,” one Republican close to the selection process said. A senior congressional GOP aide said that while a few Senate Republicans might express reservations about Cohn, he would probably receive widespread support. “He would be easily confirmed," this person said. "Most of our conservative members like him." Cohn would be the first Fed chair in four decades who isn’t an economist, the last being G. William Miller, who held the job for a little over a year under President Jimmy Carter. Another front-runner for the top job at the central bank, former Fed governor Kevin Warsh, also has industry experience and, though he is an academic, does not hold a Ph.D. in economics. 

 Yellen: Semiannual Monetary Policy Report to the Congress - Excerpts from prepared statement from Fed Chair Janet Yellen: Semiannual Monetary Policy Report to the Congress: The Committee continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time to achieve and maintain maximum employment and stable prices. That expectation is based on our view that the federal funds rate remains somewhat below its neutral level--that is, the level of the federal funds rate that is neither expansionary nor contractionary and keeps the economy operating on an even keel. Because the neutral rate is currently quite low by historical standards, the federal funds rate would not have to rise all that much further to get to a neutral policy stance. But because we also anticipate that the factors that are currently holding down the neutral rate will diminish somewhat over time, additional gradual rate hikes are likely to be appropriate over the next few years to sustain the economic expansion and return inflation to our 2 percent goal. Even so, the Committee continues to anticipate that the longer-run neutral level of the federal funds rate is likely to remain below levels that prevailed in previous decades.  And on the balance sheet:  Let me now turn to our balance sheet. Last month the FOMC augmented its Policy Normalization Principles and Plans by providing additional details on the process that  we will follow in normalizing the size of our balance sheet. The Committee intends to gradually reduce the Federal Reserve's securities holdings by decreasing its reinvestment of the principal payments it receives from the securities held in the System Open Market Account. Specifically, such payments will be reinvested only to the extent that they exceed gradually rising caps. Initially, these caps will be set at relatively low levels to limit the volume of securities that private investors will have to absorb. The Committee currently expects that, provided the economy evolves broadly as anticipated, it will likely begin to implement the program this year.

Yellen's surprise comments jolt bond market: The bond market's rally picked up steam when Fed Chair Janet Yellen's testimony was taken to mean the central bank won't be hiking rates all that much. The gains started Tuesday with the surprise release of Donald Trump Jr.'s emails on his meeting with a Russian lawyer that suggested the Russian government supported his father's campaign. The testimony released for Yellen's appearance before a House committee Wednesday morning highlighted that the Federal Reserve believes it is not that far from the neutral rate. While some strategists said the comments were not particularly new, Fed Governor Lael Brainard discussed the issue Tuesday and the market took her commentary as highly dovish. The neutral rate is the level where the Fed's benchmark rate does not either boost or hold back the economy. "That's what the market thinks, but I think that's flawed thinking. Everything she's said before is boilerplate on the neutral rates," said George Goncalves, head of fixed income strategy at Nomura. "I feel like there's some extrapolation from Brainard's comment yesterday. People were thinking she's confirming what Brainard said. That's wrong, in my thinking. ... The Fed still thinks they're not at neutral and they'll be heading toward it. On top of that, they think it will rise further." Economists at Goldman Sachs, however, did see the comment as slightly dovish since Yellen confirmed she expects the neutral rate to rise but stay below historic levels.

Goldman Revises Its Fed Rate Hike Odds After Latest Disappointing Data --After Yellen's unexpectedly dovish Congressional testimony on Wednesday, Goldman's chief economist, Jan Hatzius, who previously was especially bullish on the US economy and expected as many as 4 rate hikes in 2017, took an axe to its tightening forecast, and noting Janet's latest commentary, said "in our view, this reduces the probability of a July announcement and raises the likelihood of a September announcement. As a result, we now think that there is a 10% (vs. 20% previously) probability that the next rate hike will come in September, a 5% probability that it will come in November, and a 55% (vs. 50% previously) probability that it will come in December. Cumulatively, this implies a 70% probability (vs. 75% previously) of at least three hikes this year."Fast forward two days, when after today's latest batch of poor economic data, in which both core CPI and retail sales missed, Goldman has again cut its rate hike forecast, and is on the verge of saying that another rate hike in 2017 is basically a coin toss. This is what Goldman said moments ago: Core CPI inflation was lower than expected for the fourth consecutive month, though the year-over-year rate remained stable and prices in the large and persistent shelter and healthcare services categories both accelerated. Retail sales were weak – with an outright decline in the key control gauge that was four tenths below expectations – reflecting relatively broad-based softness. We adjusted down our Fed odds accordingly. We now believe there is a 5% probability that the next rate hike will come in September, a 5% probability that it will come in November, and a 50% probability that it will come in December (a 60% cumulative probability of at least three hikes this year). Even with its latest bearish relent, Goldman still remains well above the market, which as we showed earlier expects just over 30 bps of tightening from now until December 2018...

The Fed Gets Optimistic About Inflation - Narayana Kocherlakota - Federal Reserve policy makers have been saying for some time that low inflation is attributable to temporary forces that will disappear in the next two to three years. But recently the Fed’s own staff has also projected such a rapid return of inflation to the central bank’s target of 2 percent. This more optimistic forecast puts a key question before policy makers: Shouldn’t they be willing to aim even higher?The Fed formally adopted a 2 percent inflation target in 2012. Inflation has been undershooting ever since. Neither the committee nor the public should be surprised by this. The Fed’s monetary policy meeting minutes (released three weeks after every meeting) show that its own staff has consistently predicted that, over their two- to three-year forecast horizon, policy choices would lead inflation to undershoot the target. To give some feel for what I mean, here are the staff inflation outlooks from the June meetings in from 2012 to 2016 as documented in the minutes. (For those who are interested: I have written a more complete chronology here.)

  • June 2012: Subdued through 2014
  • June 2013: Relatively subdued through 2015
  • June 2014: Below 2 percent during the next few years
  • June 2015: Inflation below 2 percent through 2016 and 2017 1
  • June 2016: Slightly below 2 percent in 2018

The staff has been sending a consistent public message: They didn’t see the Fed’s expected actions as being sufficiently stimulative to get inflation back to 2 percent within two to three years. (By way of contrast, the Bank of Canada -- operating in what many might view as a more challenging monetary policy environment -- typically aims to return inflation to its target within six to eight quarters.) Why the Fed made these hawkish choices -- including a variety of tightening moves from June 2013 on -- seems to me to be an important question for the public’s representatives in Congress to be asking.

Key Measures Show Inflation mostly below 2% in June -- The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.1% (1.1% annualized rate) in June. The 16% trimmed-mean Consumer Price Index also rose 0.1% (0.9% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report.  Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers was unchanged (-0.3% annualized rate) in June. The CPI less food and energy rose 0.1% (1.4% annualized rate) on a seasonally adjusted basis. Note: The Cleveland Fed released the median CPI details for June here. Motor fuel declined 29% in June annualized. This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.2%, the trimmed-mean CPI rose 1.9%, and the CPI less food and energy rose 1.7%. Core PCE is for May and increased 1.4% year-over-year. On a monthly basis, median CPI was at 1.1% annualized, trimmed-mean CPI was at 0.9% annualized, and core CPI was at 1.4% annualized. Using these measures, inflation was soft again in June.  Overall these measures are mostly below the Fed's 2% target  (Median CPI is slightly above).

Fed's Beige Book: "Slight to Moderate "expansion, Labor markets "Tightened Further" -- Fed's Beige Book "This report was prepared at the Federal Reserve Bank of Kansas City based on information collected on or before June 30, 2017." Economic activity expanded across all twelve Federal Reserve Districts in June, with the pace of growth ranging from slight to moderate. In addition, the majority of Districts expected modest to moderate gains in the months ahead. Consumer spending appears to be rising across a majority of Districts, led by increases in nonauto retail sales and tourism. However, many Districts noted some softening in consumer spending, particularly in auto sales which declined in half of the Districts. Manufacturing and nonfinancial services activity continued to grow, with most Districts reporting modest to moderate gains since the last report. Loan demand was steady to increasing in most Districts. Residential and nonresidential construction activity was flat to expanding in most Districts. Most Districts cited low home inventory levels in certain market segments which were constraining home sales in many areas. .. Employment across most of the nation maintained a modest to moderate pace of expansion, although the Atlanta and St. Louis Districts noted flat employment levels. Labor markets tightened further for both low- and high-skilled positions, particularly in the construction and IT sectors. Contacts across a broad range of industries reported a shortage of qualified workers which had limited hiring. Wages continued to grow at a modest to moderate pace in most Districts, and many firms attributed these wage gains to tighter labor market conditions. Wage pressures generally trended with employment conditions, and rising wage pressures were noted among both low- and high-skilled positions. A few Districts also reported rising costs of benefits and variable pay.

Fed's Beige Book Warns Of Declining Auto Sales, Sees Rising Benefit Costs Limiting Wages --While the Fed's traditionally drab Beige Book is routinely ignored by the market, especially on blockbuster days like today when Janet Yellen turns dovish again and then speaks for nearly 4 hours in the Senate, this time there were several notable highlights in the just released July edition, not least of all the apparent downgrade of the low end of overall economic activity, which for the first time described the pace of growth as "slight to moderate" versus its staple "modest to moderate." Of note, while the Fed described consumer spending as "rising across a majority of Districts, led by increases in non-auto retail sales and tourism" it did caution that there appears to be "some softening in consumer spending, particularly in auto sales which declined in half of the Districts." Ironically, contrary to what the Fed reports every week in its H.8 statement where C&I loan growth is virtually unchanged on an annual basis, it said that "loan demand was steady to increasing in most Districts." Perhaps in poke at Trump's plans to revitalize the coal industry, the Fed also remarked that "coal production remained sluggish although higher than year-ago levels." Discussing the most sensitive topic for the Fed, employment and wages, the Beige Book noted that while "most of the nation maintained a modest to moderate pace of expansion, although the Atlanta and St. Louis Districts noted flat employment levels." On the whole, however, labor markets tightened further, particularly in the construction and IT sectors. The Fed also observed that there were reports of a shortage of qualified workers across a broad range of industries "which had limited hiring." Apparently, it has still not dawned on anyone that one can overcome such shortages by raising wages.

2Q17 GDP Now Forecast For 2.6% --   -- Latest forecast: 2.6 percent — July 11, 2017.The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.6 percent on July 11, down from 2.7 percent on July 6. The forecast of second-quarter real GDP growth fell 0.2 percentage points to 2.5 percent after Friday's employment release from the U.S. Bureau of Labor Statistics. The model's estimate of the dynamic factor for June—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—decreased from 1.08 to 0.34. The forecast of the contribution of inventory investment to second-quarter real GDP growth increased from 0.57 to 0.61 percentage points after this morning's wholesale trade report from the U.S. Census Bureau.

Q2 GDP Forecasts: Moving on Down -- From the Altanta Fed: GDPNow The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.4 percent on July 14, down from 2.6 percent on July 11. The forecast of second-quarter real personal consumption expenditures growth declined from 3.1 percent to 2.9 percent after this morning's retail sales report from the U.S. Census Bureau and this morning's Consumer Price Index release from the U.S. Bureau of Labor Statistics. From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 1.9% for 2017:Q2 and 1.8% for 2017:Q3.From Merrill Lynch: Core retail sales disappointed for a third straight month, declining 0.1% mom in June after no growth in May. Expectations were for a strong 0.3% acceleration. ... The industrial production report later in the day revealed no change in utilities production, was below our assumption and suggests weaker utilities consumption. On balance, these data sliced 0.3pp from 2Q GDP tracking, bringing us down to 1.9% qoq saar.   CR Note: Looks like real GDP growth will be around 2% in Q2.

Three of four original long leading indicators now negative  -- Three of four original long leading indicators no: It was one year ago last week that the 10 year Treasury hit an all time low. Although they came close, mortgage rates did not participate in that new low. They last hit a new low 4 years ago, in 2013: Which means that it is time to stop counting bond yields as either a positive, or even a neutral. Unless and until Treasuries fall below 2%, or mortgage rates make a new low, the long leading indicator of interest rates must be counted as a negative. In so doing, they join corporate profits deflated by unit labor costs as the second long leading indicator to flip: Housing permits last made a high back in January, and the less volatile single family permits in February: Because they tend to follow interest rates, I suspect they will stay at this neutral to negative level, if not head slightly lower, in the immediate future, The final of Prof. Geoffrey Moore's original long leading indicators, real money supply, is still positive, although both real M1 and real M2 (minus 2.5%) are decelerating: Real M1 has a ways to go before turning neutral, let alone negative, but if M2 were to remain at its recent nominal level over the next month, there is an excellent chance that it too would turn neutral. Not every indicator has turned neutral or negative, but in general the suite of medium to long leading indicators is weakening. Although I won't show the graphs, other longer leading series like the Chicago Adjusted Financial Conditions Index, real retail sales per capita, and the Labor Market Conditions Index, while positive, are not far from the levels at which they would be neutrals or negatives. Only the yield curve, on the back of increasing long rates, has turned more positive:

Forecast of weak economic growth raises big questions about Trump’s populist agenda – WaPo - President Trump’s budget would not add to economic growth or eliminate the deficit in coming years, the nonpartisan Congressional Budget Office said Thursday, casting doubt on a plan the White House has touted as central to achieving the president’s domestic agenda.The CBO projected that the economy would grow at only 1.9 percent under the White House’s plan — far below the 3 percent goal the administration continued to outline as recently as Thursday. It also warned that contrary to White House claims that deep cuts to the safety net in the budget would lead to a financial surplus in a decade, the deficit would actually be $720 billion.The report was one of several big questions that emerged Thursday about whether Trump would be able to deliver on the central promises of his populist agenda for governing.He had pledged to replace President Barack Obama’s Affordable Care Act with a better policy that guaranteed “insurance for everybody.” But Republican Senate leaders on Thursday were advancing a proposal — its fate uncertain — that would still swell the nation’s ranks of the uninsured by tens of millions. Trump also faced questions about whether he would follow through on repeated promises to stop foreign competitors from “killing our companies and our workers” by dumping steel at ultra-cheap prices onto the global market — and he repeated to reporters traveling on Air Force One during his trip to France that “it’ll stop.” Yet he has been promising action for weeks, and Commerce Secretary Wilbur Ross would only tell a meeting of senators on Thursday that he planned to provide options to Trump soon. Trump’s combination of setbacks and delays on key policy initiatives highlight how the president is struggling to advance a populist vision of governing in a Republican Party that historically has not been receptive to such an approach. With his budget and health care, Trump is falling in line with some of his party’s most conservative voices, even if the policies threaten to harm many of the working-class voters who elected him.

CBO and OMB Agree: Federal Spending Will Top $4T for First Time This Year - Both the Congressional Budget Office and the White House Office of Management and Budget project that federal spending will top $4 trillion for the first time in fiscal 2017, which began on Oct. 1, 2016 and will end on Sept. 30. In its “Update to the Budget and Economic Outlook: 2017 to 2027” published last week, CBO projected that total federal spending in fiscal 2017 will hit $4,008,000,000,000. That is up from the approximately $3,853,000,000,000 that CBO and OMB say the federal government spent in fiscal 2016. In President Donald Trump’s fiscal 2018 budget proposal, the OMB estimates that federal spending in fiscal 2017 will hit $4,062,000,000,000. The $4,008,000,000,000 the CBO estimates the federal government will spend this fiscal year equals $33,805 for each of the 118,562,000 households the Census Bureau estimated were in the United States as of March.

CBO Scores Trump Budget Shrinking US Deficit By Half By 2027 -- There's good news.. and bad news. CBO has just released its 'score' of President Trump's proposed budget, noting that the plan would shrink the deficit by a half from their baseline by 2017 (good news). However, even accepting Trump's dynamic scoring and 5% growth expectations, CBO is unable to balance the budget and Yellen's recent "US debt is unsustainable" warning seems ever more prescient. Trump's budget would shrink notably from the CBO baseline... According to CBO’s estimates, the deficit would fall from the $693 billion projected for 2017 to $593 billion in 2018 under the President’s proposals. After that, the deficit would generally rise, totaling $720 billion in 2027. The cumulative deficit over the 2018–2027 period would total $6.8 trillion. Measured as a percentage of output, the deficit would decline from 3.6 percent of GDP in 2017 to 2.6 percent at the end of the period. The deficit would average 2.9 percent through 2027. (The average deficit over the past 50?years has equaled 2.8 percent of GDP.) Those estimates exclude any macroeconomic feedback effects. This is still a big deficit, and coming a day after Janet Yellen warned that the US debt situation was unsustainable, it seems more prescient than ever to focus on spending cuts. There is some other good news (if you buy it). By the end of the coming decade, debt held by the public would total 80 percent of GDP: 11 percentage points below the debt-to-GDP ratio projected in CBO's baseline.  But as CBO notes, this is due to the administration's hopeful growth estimates... "The deficits that CBO estimates would occur under the President’s proposals are larger than those estimated by the Administration. Nearly all of that difference arises because the Administration projects higher revenue collections—stemming mainly from a projection of faster economic growth"The deficit reduction under the President’s proposals would stem from lower spending. The 10-year decrease of $4.2 trillion (or 8 percent) from amounts in CBO’s baseline would result from the following changes: A decrease of $2.0 trillion in mandatory spending (which is spending for programs generally governed by provisions of permanent law), including a $1.9 trillion reduction in spending for health care, as well as cuts to income security programs and student loans; A decrease of $1.9 trillion in discretionary outlays (which result from funding provided or controlled by annual appropriation acts) stemming from substantial reductions in nondefense discretionary spending and from sharply lower outlays for military operations and related activities in Afghanistan and elsewhere(known as overseas contingency operations, or OCO); and A decrease of $0.3 trillion in net interest costs because of lower deficits.

An Analysis of the President’s 2018 Budget (PDF) CBO

The deficits generated by Trump’s budget are much bigger than CBO’s estimates --Jared Bernstein -- The figure below, from Senate Budget Committee staffer Bobby Kogan, shows four different estimates of projected budget deficits as shares of GDP:

  • –The lowest line is the administration’s own estimate, showing how if you buy their numbers–and if you do, I’ve got a bridge to sell you–the budget balances by 2027.
  • –The next line up is from today’s CBO release of their analysis of President’s budget. Note that CBO must adhere to claims that tax cuts will be paid for, even if there’s no credible plan to do so.
  • –The next line is CBO’s baseline, or the path they believe the deficit will follow if we stick to current law.
  • –The top line is the most important. It’s the deficit as a share of GDP under the far more credible assumption that team Trump fails to pay for their tax cuts (using Tax Policy Center static estimates of the cost of their tax cuts, with interest costs added; ftr, TPC’s dynamic score line looks the same).

The administration gets to balance in part by assuming economic growth rates about 50% higher than CBO’s (~3 vs. ~2 percent), which spins off  over $3 trillion in revenue that the budget agency wisely does not count (the admin also cuts trillions in spending on programs like Medicaid, nutritional assistance, education, and income security). As mentioned, the CBO must follow the administration’s “set of principles to guide deficit-neutral reform of the tax system,” or what budget wonks call “the magic asterisk.” The claim is that they’ll figure out some way to offset the costs of their tax cuts, so no need to add those pesky costs to projected deficits. If you share my “yeah, right” response to that claim, then the yellow line’s the one for you.

The Budget Deficit under Trump, Excluding Unicorn Effects -- Menzie Chinn --The CBO has just released an assessment of the President’s budget proposal. Balancing the budget looks unrealistic, even given massively sweeping (and unrealistic) spending cuts.  Here are the projected budget balances, under CBO baseline (blue), as claimed in the Budget submitted by the White House (red), and as assessed by the CBO (green).Normalized by GDP under baseline CBO projections: There is a lot of wishful thinking in the President’s budget. Consider a decomposition of the differences in estimates. Figure 3 shows that Economic assumptions account for the majority of the difference in estimated deficits, particuarly true in the out years (FY2020 and onward). Of the economic differences, the bulk shows up in revenues — the Administration assumes much faster income growth and hence tax revenue growth. One could argue that the President’s proposals would accelerate GDP growth. CBO has taken this point into consideration, specifically with respect to increased government saving leading to feedback effects.Such economic effects would feed back into the budget and make deficits smaller than they would otherwise be. Taking into account the smaller deficits under the Presi­dent’s budget, CBO estimates that the effects of that eco­nomic feedback would further reduce deficits by roughly $160 billion over the 2018-2027 period.16 During those years, deficits would be lower by an average of about 0.1 percent of GDP because of the feedback…The other effects arising from deregulation, health care reform, etc., were deemed too difficult to judge given the insufficiently detailed nature of the Administration’s proposals.  In other words, a plausible increase in growth is unlikely to make the deficit shrink in the way the Administration has asserted; see today’s Econofact post on the subject.

Trump wall moves to center of shutdown fight | TheHill: Two House conservatives on Monday warned that the government could shut down if a spending bill does not include money to fund President Trump’s wall along the Mexican border. Rep. Mark Meadows (R-N.C.), chairman of the conservative House Freedom Caucus, even said he believed that Trump would veto a spending measure that did not include money for the wall. “My conversations with the president have led me to believe that there is nothing less than a full and total commitment on his part to only sign into law a funding bill that actually allows for us to start construction of a border wall on our southern border,” Meadows told Breitbart News. He said there was “nothing more critical that has to be funded than funding the border wall.” Earlier on Monday, Rep. Mo Brooks Mo (R-Ala.) vowed to “fight every spending bill that doesn’t fund that wall” in a new advertisement for his Senate campaign. “And if I have to filibuster on the Senate floor, I’ll even read the King James Bible until the wall is funded,” Brooks said in the ad. Brooks threatened to go up against GOP colleagues who block funding for the border wall. “We’re going to build that wall, or you’ll know the name of every Republican who surrenders to the Democrats to break my filibuster. I give you my word, and I don’t give my word lightly,” he continued. When Congress passed a funding bill in May to keep the government operating through the end of the current fiscal year running through September, money for the wall was not included, despite demands by Trump. The funding bill did, however, allocate $1.5 billion to border security. 

 Steve King: Build border wall with funds from Planned Parenthood, food stamps | TheHill: Rep. Steve King (R-Iowa) is calling for using federal funding for Planned Parenthood and food stamps to help pay for President Trump’s southern border wall, the Washington Examiner reported Wednesday. On Tuesday, the House Appropriations Committee introduced a spending bill that would allocate $1.6 billion toward building the wall separating the U.S. from Mexico. The funding is part of the total $13.8 billion for Customs and Border Protection. King said he supports the spending measure, but he would prefer an additional $5 billion for the wall — and suggested taking the extra funding from Planned Parenthood and federal welfare programs. “I would find half of a billion dollars of that right out of Planned Parenthood's budget," he told the Examiner. "And the rest of it could come out of food stamps and the entitlements that are being spread out for people that haven't worked in three generations." "We've got to put America back to work, this administration will do it," King said. A spokeswoman for Planned Parenthood said the group “receives federal funding the same way as every other hospital or community health care provider: through Medicaid reimbursements,” adding that King’s comments make no sense. “For Rep. Steve King to propose using Medicaid reimbursements to pay for a border wall is nonsensical and cruel. Blocking individuals on Medicaid from going to Planned Parenthood for preventive care will result in people losing access to care,” Erica Sackin said. King went on that he believes the border wall would create millions of new jobs and reduce the amount of public assistance people would need. 

Putin and Trump stage-manage a win-win meeting - From the start, the “positive chemistry” in the Mother of All Sit-Downs was a given. The format – with only the four principals, Vladimir Putin, Donald Trump, Secretary of State Rex Tillerson, Foreign Minister Sergey Lavrov, and two translators – prevented any leaks. What was originally scheduled for 35 minutes went on for 2 hours and 16 minutes, and not even an impromptu appearance by First Lady Melania Trump – they were late for the Elbphilharmonie pomp and circumstance – managed to stop the flow.They needed to deliver. They needed headlines. They got plenty. Including a possible first step at real cooperation; a ceasefire deal in southwestern Syria. Yet the real headline is that diplomacy beats demonization.   Still, from the toxic, overwhelmingly Russophobic Beltway point of view, that dystopia masquerading as a summit – the actual G-20 – was a mere backdrop; the only thing that mattered in this parallel G-2 was confirmation of an obsessive narrative; Russian interfered in the US elections.Spin City gave us slightly conflicting views. Tillerson admitted “intractable” differences but stressed Trump was “rightly focused on how do we move forward”, while an uncharacteristically irritable Lavrov said Trump had accepted Putin’s denial, adding what is, in fact, the real clincher; Putin wants proof and evidence of Russian interference.

Putin eyes new era of cooperation under Trump (AFP) - President Vladimir Putin said Saturday that he expects Russian-US cooperation will improve under Donald Trump and that the American president is "very different" in real life compared to on TV.The comments came a day after the pair held their first face-to-face meeting, an encounter eagerly awaited in the wake of allegations that Russia had a hand in Trump's surprise election victory last year.  "The Trump that you see on TV is very different than the real Trump," Putin told reporters in Hamburg, Germany where the talks took place on the sidelines of the G20 summit. "He perfectly understands whom he is talking to and answers questions quickly. I think personal relations were established." Putin said he was positive about repairing US-Russian relations, which plunged to depths not seen since the Cold War under Trump's predecessor Barack Obama.  "There is every reason to believe that we will be able to at least partially re-establish the level of cooperation that we need," Putin told a news conference. "I very much hope (for an improvement in relations) and it seems to me that some basis for this has already been created," Putin said.The Russian strongman said that in particular, the Trump administration appeared to be less rigid on the war on Syria, where Moscow and Washington back opposing sides."It seems to me that the US position (on Syria) has become more pragmatic. There is a comprehension that if we combine our efforts, we can achieve a lot," Putin said.

Putin: Trump On TV Is Different From The One In Real Life -- Following President Trump's earlier comments that his "meeting with Putin was tremendous," the Russian President set an optimistic tone for future US relations, remarking that the Donald Trump seen on television is different from the one in real life, adding that "as for personal relations, I think that they are established." In his 25 minute press conference, Putin carefully touched on all the talking-point 'tape-bomb gotchas' expressing hope for Syria, explaining his views on the Russia-meddling accusations, and cycbersecurity... The Hill reports that Putin reiterated that there is no reason to believe that Russia meddled in the US electoral process in 2016, and made it clear that he feels the president believes him...“He [Trump] asked many questions on that subject. I answered those questions as best I could. I think he took it into consideration and agreed with me, but you should really ask him how he feels about it." After his meeting with the US leader in Hamburg, he felt like relations between the two countries could at least partially be restored.  “As for personal relations, I think that they are established,” Putin said of his meeting with Trump.“I think that if we continue building our relations like during our conversation yesterday, there are grounds to believe that we’ll be able to – at least partially – restore the level of cooperation that we need,” Putin said. Regarding cybersecurity, RT reports the Russian leader said that he and Trump “agreed that there should never be a situation of uncertainty, especially in the future, in this sphere.” “The US president and I agreed that we’ll create a working group and work together on how to jointly monitor security in cyberspace, how to ensure unconditional compliance with international legal norms, and how to prevent interference in internal affairs of foreign countries,” Putin said. “If we manage to organize this work – and I have no reasons to doubt that – then there will be no more speculation on this topic [of Russia meddling],” he added.

"Dumbest Idea I've Ever Heard" - Republicans Blast Trump Idea For "Cyber Security Unit" With Putin --  While the avalanche of Leftist furore over the fact that President Trump did not wrestle Putin to the ground, make him admit that he is responsible for Hillary not getting elected, and that he is 'not my president' was to be expected - no matter what occurred during the meeting between the two world leaders; it is the Republicans that have come outswinging in the last 24 hours against the idea of any rapprochement  - specifically discussions around a joint cyber security unit... "Putin & I discussed forming an impenetrable Cyber Security unit so that election hacking, & many other negative things, will be guarded and safe,"he said following their talks at a summit of the Group of 20 nations in Hamburg, Germany.And today, as Reuters reports, Republican Senators Lindsey Graham, an influential South Carolina Republican who is a member of the Senate Armed Services Committee, and Marco Rubio of Florida, who opposed Trump for their party's presidential nomination, blasted the idea.Rubio, on Twitter, said: "Partnering with Putin on a 'Cyber Security Unit' is akin to partnering with (Syrian President Bashar al) Assad on a 'Chemical Weapons Unit'." But it was Graham that really let loose on NBC News' 'Meet the Press'... (via The Hill)“When it comes to Russia I am dumbfounded, I am disappointed, and at the end of the day he’s hurting his presidency by not embracing the fact that Putin is a bad guy,”“He is literally the only person I know of who doesn’t believe Russia attacked our election in 2016,” Graham said of Trump, who has said that “nobody really knows” whether the Russians were behind attempts to hack the 2016 presidential election.Graham stressed that there is no evidence the Russian meddling influenced the vote, but he said that by denying the conclusion of U.S. intelligence agencies, Trump “throws our intelligence communities under the bus." (full video interview)

Trump backtracks on cyber unit with Russia after harsh criticism | Reuters: U.S. President Donald Trump on Sunday backtracked on his push for a cyber security unit with Russia, tweeting that he did not think it could happen, hours after his proposal was harshly criticized by Republicans who said Moscow could not be trusted. Trump said on Twitter early on Sunday that he and Russian President Vladimir Putin discussed on Friday forming "an impenetrable Cyber Security unit" to address issues like the risk of cyber meddling in elections. The idea appeared to be a political non-starter. It was immediately scorned by several of Trump's fellow Republicans, who questioned why the United States would work with Russia after Moscow's alleged meddling in the 2016 U.S. election.But Trump returned to Twitter on Sunday to play down the idea, which arose at his talks with Putin at a summit of the Group of 20 nations in Hamburg, Germany. "The fact that President Putin and I discussed a Cyber Security unit doesn't mean I think it can happen. It can't," Trump said on Twitter. "It's not the dumbest idea I have ever heard but it's pretty close," Senator Lindsey Graham of South Carolina told NBC's "Meet the Press" program. Ash Carter, who was U.S. defense secretary until the end of former Democratic President Barack Obama's administration in January, told CNN flatly: "This is like the guy who robbed your house proposing a working group on burglary." Trump's advisers, including Secretary of State Rex Tillerson and Treasury Secretary Steve Mnuchin, had recently sought to explain Trump's cyber push. Mnuchin said on Saturday that Trump and Putin had agreed to create "a cyber unit to make sure that there was absolutely no interference whatsoever, that they would work on cyber security together."

Trump Cannot Improve Relations With Russia When Trump’s Government and the US Media Oppose Improved Relations - Paul Craig Roberts -- I am afraid that The Saker and Finian Cunningham are correct. Nothing can come of Trump’s meeting with Putin, because, as Cunningham puts it, “Trump doesn’t have freedom or real power. The real power brokers in the US will ensure that the Russophobia campaign continues, with more spurious allegations of Moscow interfering to subvert Western democracies. Trump will continue to live under a cloud of media-driven suspicions. And thus the agenda of regime change against Syria and confrontation with Russia will also continue. Trump’s personal opinions on these matters and towards Vladimir Putin are negligible—indeed dispensable by the deep powers-that-be.”  Cunningham points out that instead of lauding the meeting as the beginning of the process to defuse the high tensions between the two major nuclear powers, the US media denounced Trump for being civil to Putin in the meeting. What is missing from the media in the entirety of the Western world and perhaps also in Russia is the awareness that the dangerous tensions are orchestrated not only by Hillary and the Democratic National Committee, the neoconservatives, the US military/security complex, and the presstitutes, but also by President Trump’s own appointees. Trump’s own ambassador to the UN, Nikki Haley, and Trump’s own Secretary of State, Rex Tillerson, sound exactly like Hillary Clinton, the Democratic National Committee, the neoconservatives, the Washington Post, the New York Times, CNN and the rest of the totally discredited presstitute media that is committed to raising tensions between the US and Russia to the point of nuclear war. On the same day that President Donald Trump said “it is time to move forward in working constructively with Russia,” and the day after he said “I had a tremendous meeting yesterday with President Putin,” the ignorant, stupid, Nikki Haley, who Trump appointed as US UN Ambassador, publicly contradicted her president, forcefully stating: “we can’t trust Russia and we won’t ever trust Russia.”  The ignorant stupid Haley is still in office, a perfect demonstration of Trump’s powerlessness.  The ignorant stupid Haley has gone far beyond Obama’s crazed UN Ambassador, neocon Samantha Power in doing everything in her power to ruin the prospect of normal relations between the two major nuclear powers. Why does Nikki Haley work in favor of a confrontation between nuclear powers that would destroy all life on earth? What is wrong with Nikki Haley? Is she demented? Has she lost her mind, assuming she ever had one?

Trump keeps it friendly with Xi at G20 on North Korea threat | Reuters: U.S. President Donald Trump took a conciliatory tone on Saturday at a meeting with Chinese President Xi Jinping where the leaders agreed to keep working on two pressing issues: the nuclear threat posed by North Korea and bilateral trade irritants. Trump campaigned in last year's presidential election on cracking down on China for its trade practices, but he softened his rhetoric after taking office, saying he wanted to work with China on the nuclear issue. When the two leaders first met in April at Trump's Florida resort, they appeared to hit it off. Trump called Xi a "good man" as he urged him to use Beijing's economic clout to force North Korea to curb its nuclear weapons program. Lately, Trump has expressed some impatience on China's role in North Korea - particularly after Pyongyang launched an intercontinental ballistic missile that some experts believe could have the range to reach Alaska, and parts of the U.S. West Coast. His administration made new arms sales to Taiwan, imposed sanctions on two Chinese citizens and a shipping company and put China on a global human trafficking list. It also accused a Chinese bank of laundering money for Pyongyang. The White House is also debating trade actions against Beijing, including tariffs on its steel exports and a few days before the G20 talks, Trump complained that trade between China and North Korea had grown.But he showed none of that impatience on Saturday, when the leaders met at the invitation of Xi at the tail end of the G20 in Germany. "It's an honor to have you as a friend," Trump told Xi, telling him he appreciated actions he had already taken on North Korea. "As far as North Korea is concerned, we will have, eventually, success. It may take longer than I'd like. It may take longer than you'd like. But there will be success in the end one way or the other," Trump said. 

It Gets Worse: Ivanka Trump Takes Her Father’s Seat in Meeting of World Leaders - When President Donald Trump decided on Saturday to skip part of a discussion about what the leaders of the world’s 20 largest economies could do to help Africans improve their lives at home — rather than risk them by migrating to Europe — there was no shortage of cabinet members who could have taken his seat between China’s President, Xi Jinping, and the United Kingdom’s Prime Minister Theresa May. The American delegation to the Group of 20 conference in Hamburg, Germany includes Secretary of State Rex Tillerson, who is fourth in line for the presidency, as well as Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and National Security Adviser H.R. McMaster. That Trump chose, instead, to seat his daughter, Ivanka, alongside the other 19 heads of state, was perhaps the most stunning illustration to date that he sees a complete lack of experience in affairs of state as no barrier at all to treating her as his de facto vice president. The first daughter’s presence at the main table was confirmed in a photograph shared on Twitter — and later deleted from the social network — by Svetlana Lukash, Russian President Vladimir Putin’s representative to the G20. The image shows that German Chancellor Angela Merkel and Turkey’s President Recip Tayyip Erdogan were seated close by during the first daughter’s cameo.  A White House official tried to play down the incident, telling Agence France-Presse that Ivanka had just “briefly joined the main table when the President had to step out.” However, an official who was in the room told Bloomberg News that she had taken Trump’s place on at least two separate occasions.

Merkel defends Ivanka Trump sitting in at G-20 meeting | TheHill: German Chancellor Angela Merkel on Saturday defended President Trump’s daughter Ivanka for briefly sitting in for her father during a Group of 20 summit meeting in Germany. Merkel, who served as the host leader of this year's summit, said at a news conference that it was up to individual nations to decide who represented them, Bloomberg reported. "The delegations themselves decide, should the president not be present for a meeting, who will then take over and sit in the chair,” Merkel said, according to the report. “Ivanka Trump was part and parcel of the American delegation, so that is something that other delegations also do. It’s very well known that she works at the White House and is also engaged in certain initiatives.” A photo of the first daughter sitting beside British Prime Minister Theresa May and Chinese President Xi Jinping surfaced on Twitter, drawing some criticism, including from aides to former President Barack Obama. Cabinet officials typically replace the president at high-level sessions when a stand-in is needed. Ivanka serves as an unpaid adviser to her father in the White House. “Ivanka was sitting in the back and then briefly joined the main table when the president had to step out,” a White House official said in response to the photo.

Trump’s behavior is the biggest threat to U.S. national security - Larry Summers -  Confusing civility with comity is a grave mistake in human or international relations. Yes, the Group of 20 summit issued a common communique after the leaders’ meeting. Some see this as an indication that some normality is being restored in international relations between the United States and other countries. The truth is that at no previous G-20 did the possibility occur to anyone that a common statement might not be agreed to by all participants. Rather than considering agreement on a communique as an achievement, it is more honest and accurate to see its content as a confirmation of the breakdown of international order that many have feared since Donald Trump’s election. And the president’s behavior in and around the summit was unsettling to U.S. allies and confirmed the fears of those who believe that his conduct is currently the greatest threat to American national security.  Trump’s rhetoric has rejected the concept of global community and expressed a strong belief that the United States should seek better deals rather than stronger institutions and systems. It has become clear that Trump’s actions will match his rhetoric. The United States is now isolated globally on the question of how to deal with the grave long-run security threat of climate change. It has forced the G-20 to back way off of commitments to reject protectionism. And in part because of U.S. attitudes, the G-20 was mute on international migration at a time when refugee issues are more serious than at any moment in the past 50 years. All of this is troubling enough. The elephant in the room, however, is the president’s character and likely behavior in the difficult times that come during any presidential term. Biographer Robert Caro has observed that power may or may not corrupt but it always reveals. Trump has yet to experience a period of economic difficulty or international economic crisis. He has not yet had to make a major military decision in a time of crisis. Yet his behavior has been, to put it mildly, erratic.

Tillerson Travels to Kuwait in Hopes of Brokering Qatar Deal - U.S. Secretary of State Rex Tillerson travels to Kuwait Monday to try to help broker a deal between Qatar and its Gulf neighbors. Kuwait has tried to mediate a resolution between the small monarchy on the Arabian Peninsula and its neighbors, but has been unsuccessful so far. Tillerson met with top Qatari and Kuwaiti officials late last month in an effort to end the escalating standoff, but he is apparently taking a more hands-on role in the negotiations with his trip to Kuwait. The secretary of state has emphasized the need for all parties to exercise restraint to allow for productive diplomatic discussions.Saudi Arabia, Bahrain, the United Arab Emirates and Egypt have imposed trade and diplomatic embargoes on Qatar. The Saudi-led group has suspended all relations with Qatar and has accused the oil-rich nation of supporting extremist groups and destabilizing the region, claims Qatar has denied. The Gulf states have also shown no willingness to ease their 13-point list of demands, which includes calls for Qatar to downgrade its relations with Iran and close the Qatari-state-funded Al-Jazeera news network. “We believe that this could potentially drag on for weeks. It could drag on for months,” State Department spokeswoman Heather Nauert said last week, about the row among the Gulf states. After his first trip abroad to Saudi Arabia, U.S. President Donald Trump, weighed in on the Qatar crisis, albeit in a way that contrasted his views with those of his secretary of state. “The nation of Qatar unfortunately has historically been a funder of terrorism at a very high level,” Trump said last month, “and in the wake of that GCC [Gulf Cooperation Council] nations came together and spoke to me about confronting Qatar over its behavior.” 

Tillerson to Tour Gulf Capitals as U.S. Seeks to End Spat -- Secretary of State Rex Tillerson is in Kuwait, Qatar and Saudi Arabia this week to meet with Gulf leaders as the U.S. seeks to help end a standoff that pits key U.S. allies against one another. Tillerson will shuttle between Persian Gulf capitals from Monday to Thursday, U.S. State Department spokesman R.C. Hammond said. The diplomacy is part of a bid by the top U.S. diplomat to bridge the differences between Qatar and the four-nation Saudi bloc that has isolated it, Hammond said. “We’ve had one round of exchanges and dialogue and didn’t advance the ball," Hammond said. “We will work with Kuwait and see if we can hash out a different strategy." Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic and transport links with Qatar, the world’s biggest exporter of liquefied natural gas, on June 5. The alliance accuses Qatar of destabilizing the region by supporting proxies of Shiite-dominant Iran as well as Sunni extremists, charges the sheikdom has denied. The Gulf flare-up has put the U.S. in a difficult position. It’s allied with nations on both sides of the dispute. Qatar hosts the regional headquarters for the U.S. Central Command, which includes a state-of-the-art air base the Pentagon depends on to target Islamic State. Saudi Arabia has strong counter-terrorism ties with the U.S. and is the top buyer of American weapons. Ahead of his visit, an American defense official said the U.S. has seen no indication that the crisis will lead to an armed conflict between the nations involved. The official asked not to be identified given the sensitivity of the subject. 

Tillerson Flies To Gulf To Resolve Qatar Crisis As Ties Emerge Between Kushner And Qatar's Richest Man -- In the latest US attempt to mediate and resolve the Qatar crisis, Secretary of State Rex Tillerson flew to the Gulf on Monday for talks aimed at ending the standoff between a coalition of Arab states led by Saudi Arabia and the wealthy nat gas exporter, which has led to more than a month of economic, financial and naval blockade. The State Department said Tillerson, who forged extensive ties in the Gulf as CEO of ExxonMobil, would hold talks with leaders in Kuwait, Qatar and Saudi Arabia. He was flying from Istanbul where he attended an international petroleum conference. R.C. Hammond, a senior adviser to Tillerson, added that the former Exxon CEO would explore ways to end a stalemate following Qatar’s rejection of 13 demands issued as condition for ending sanctions. Meanwhile, President Donald Trump has expressed support for Saudi Arabia in the dispute, which may emerge as a new potential scandal for the presidency. Earlier on Monday, the Intercept reported that in what may be seen as a conflict of interest, Trump's son in law Jared Kushner tried, and failed, to obtain a $500 million investment to refinance and fund the expansion of his 666 Fifth Avenue property, where the family is severely underwater, from one of Qatar's richest men, the former prime minister and former head of the local sovereign wealth fund, Sheikh Hamad bin Jassim al-Thani.Throughout 2015 and 2016, Jared Kushner and his father, Charles, negotiated directly with a major investor in Qatar, Sheikh Hamad bin Jassim al-Thani, known as HBJ for short, in an effort to refinance the property on Fifth Avenue, the sources said.HBJ ultimately agreed to invest at least $500 million through Al Mirqab, on the condition that Kushner Companies could raise the rest of a multibillion refinancing elsewhere. The negotiations continued long after the election, carried out as recently as this spring by Charles Kushner. “HBJ basically told them, we’re good for 500, subject to a lot of things, but mainly subject to you being able to raise the rest,” said one source in the region with knowledge of the deal.

Does Jared Kushner Even Know Anything About the Countries He’s Supposed to Be Doing Diplomacy With? - Amy Wilentz, a long-time contributing editor at The Nation, was Jerusalem correspondent for The New Yorker. She’s the author of several award-winning books, most recently Farewell Fred Voodoo: A Letter from Haiti. The interview has been edited and condensed.

US and Qatar broker counterterrorism agreement - The US and Qatar have signed a memorandum of understanding on fighting terrorism that Secretary of State Rex Tillerson said might help resolve the worst diplomatic crisis to shake the Gulf Arab states in decades. "I'm hopeful we can make some progress to bring this to a point of resolution," Tillerson said during a joint news conference in Doha with Qatari Foreign Minister Sheikh Mohammed al-Thani. Tillerson traveled to the Middle East to try to resolve the stand-off between Qatar and other Persian Gulf nations, who have accused their oil-rich neighbor of supporting terrorism. At its core, the dispute reflects long-standing Gulf frustration with Qatar's independent foreign policy, including its support for Islamist groups and its ties to Iran, with which Qatar shares the world's largest gas field. The regional family feud threatens to undermine a central foreign policy goal of the Trump administration: all the Gulf countries involved in the dispute are members of the US-led coalition fighting ISIS, with Qatar playing perhaps the most prominent role. It is home to the largest US military base in the Middle East where flights against the terrorist group are coordinated. "I think Qatar has been quite clear in its positions and I think very reasonable and we want to talk now (about) how do we take things forward," Tillerson said. "That's my purpose in coming." The top US diplomat added that he was there as "a friend to the region."

U.S., Qatar sign agreement on combating terrorism financing (Reuters) - The United States and Qatar signed an agreement on Tuesday aimed at combating the financing of terrorism, as U.S. Secretary of State Rex Tillerson visited Doha to try to end a month-long rift between Western-allied Arab states. Saudi Arabia, Bahrain, the United Arab Emirates and Egypt imposed sanctions on Qatar last month, accusing it of financing extremist groups and allying with the Gulf Arab states' arch-foe Iran, allegations Doha denies. Tillerson said the agreement signed with his Qatari counterpart, Sheikh Mohammed bin Abdulrahman al-Thani, had been under discussion for weeks. "The agreement which we both have signed on behalf of our governments represents weeks of intensive discussions between experts and reinvigorates the spirit of the Riyadh summit," Tillerson said at a joint news conference with Sheikh Mohammed. U.S. President Donald Trump met representatives of Arab states during a visit to Saudi Arabia in May. "The memorandum lays out a series of steps that each country will take in coming months and years to interrupt and disable terror financing flows and intensify counter terrorism activities globally," Tillerson added. The four Arab states boycotting Qatar said later on Tuesday that sanctions would remain in place until it met their demands and that they would keep a close eye on the tiny Gulf monarchy's efforts to fight terrorism funding. In a joint statement released in their state media, Egypt, Saudi Arabia, the United Arab Emirates and Bahrain said they appreciated U.S. efforts in fighting terrorism but that they would closely monitor Qatar's behavior.

Top U.S. diplomat ends talks in Gulf; no sign Qatar crisis resolved (Reuters) - U.S. Secretary of State Rex Tillerson ended talks with ministers from Saudi Arabia and three Arab allies on Wednesday over how to end a month-long rift with Qatar, but there was no immediate word of any breakthrough. Tillerson returned to Kuwait, the mediator between the feuding Gulf countries, without making any statement on his talks in the Saudi Red Sea city of Jeddah. He had signed a U.S.-Qatari accord on terrorism financing on Wednesday, but Qatar's opponents said it fell short of allaying their concerns. Any resolution of the impasse must address all the key issues for Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, a senior UAE official said before the talks in Saudi Arabia. The four countries imposed sanctions on Qatar on June 5, accusing it of financing extremist groups and allying with the Gulf Arab states' arch-foe, Iran. Doha denies those accusations. The four states and Qatar are all U.S. allies. Tillerson met the foreign ministers to try to end the worst dispute in decades among the U.S.-allied Gulf Arab states. He also met separately with Saudi King Salman and Crown Prince Mohammed bin Salman to discuss cooperation in combating terrorism and its financing. "We're happy to see this continuous cooperation between us and (to) even strengthen it and increase it further without limits ..." Mohammed bin Salman said in welcoming Tillerson. U.S. officials said Tillerson would travel to Qatar on Thursday to brief the emir, Sheikh Tamim bin Hamad al-Thani, on his talks in Jeddah, State Department spokesman R.C. Hammond said.

Trump Says U.S. Seeks a Syria Cease-Fire in a Second Area - President Donald Trump said the U.S. is working to expand a regional cease-fire in the Syrian civil war to a second zone, saying it may prove to be the first step toward ending a civil war that has killed more than 400,000 people and sent millions more fleeing. Trump said Thursday in Paris that the cease-fire in southwest Syria that he and Russian President Vladimir Putin agreed to impose after their July 7 meeting in Hamburg, Germany, has saved “a lot of lives.”  “We’re working on a second cease-fire in a very rough part of Syria,” Trump said during a press conference with French President Emmanuel Macron. “And if we get that, and a few more, all of a sudden you’re going to have no bullets being fired in Syria. And that would be a wonderful thing.” U.S. Secretary of State Rex Tillerson said this week in Istanbul that the U.S. and Turkey were beginning to rebuild trust and could come to an agreement about northern Syria, where the U.S. backs a Kurdish militia that Turkey considers a terrorist organization. After Iraqi forces recaptured the city of Mosul from Islamic State militants, the U.S. and allies are considering the best options for maintaining peace in the region. Trump told Reuters in an interview Wednesday that the fight against the terrorist group in Iraq and Syria was “almost complete.”

Here’s the White House’s Transcript of What Trump Told Reporters Off the Record - Bloomberg -- President Donald Trump spoke to reporters off the record Wednesday aboard Air Force One on his way to Paris to meet with French President Emmanuel Macron and participate in Bastille Day festivities. In an unusual episode, the White House on Thursday released its transcript of some of his comments, after Trump asked a reporter in Paris why she hadn’t reported on what he’d said the night before. Here’s the transcript as released by the White House.

Full transcript: Defense Secretary James Mattis’ interview with The Islander – The MIHS Islander - (high school newspaper) After obtaining his contact information through its accidental exposure by the Washington Post, The MIHS Islander contacted Secretary of Defense James Mattis for an interview. Two companion pieces to this article, a description and reflection on the experience of getting and conducting the interview as well as a feature on the connection between education and radicalization according to Mattis, have been published online. Mattis is a retired four-star Marine Corps general who additionally spent time as the NATO Supreme Allied Commander of Transformation and commander of the United States Central Command responsible for operations in the Middle East, Northeast Africa, and Central Asia, from 2010 to 2013.

Betsy DeVos Invested In Military Tech Contractor Run By Son-In-Law, While Brother Shaped Afghan War Policy -- Department of Education Secretary and billionaire heiress Betsy DeVos invested in a defense contracting firm owned by her son-in-law at the same time her brother was helping the Trump administration craft a new Afghan war strategy — one that called on the military to use more private contractors.Betsy DeVos invested between $100,000 and $250,000 in LexTM3, LLC in May according to U.S. Office of Government Ethics (OGE) disclosure reviewed by the International Business Times. (Disclosure forms give only a range for the value of purchases.) LexTM3 is a defense contractor led by CEO and co-founder Nate Lowery, DeVos’ son-in-law. The company has received 70 contracts worth $1,425,248 from the Defense Department since the company formed from the merger of Lex Products Corp and TM3 Systems Inc. in September 2015.DeVos has invested repeatedly in LexTM3 since Donald Trump became president. Disclosure forms show she invested between $250,001 and $500,000 in LexTM3 in February and in March, and between $100,001 and $250,000 in April. This is all after she disclosed that she owned a total of between $1,000,001 and $5,000,000 worth of the company in an initial disclosure form submitted the day before Trump took office in January. But DeVos’ most recent investment was filed with the OGE on May 30, the day before her brother Erik Prince published an op-ed in the Wall Street Journal calling for a new approach to the Afghan war and urging the U.S. military to use “cheaper private solutions.”  Prince, who founded the security firm Blackwater Worldwide and now leads Frontier Resource Group, wasn’t just using the pages of the Wall Street Journal to call for the U.S. to employ more private contractors. He was spreading the same message in the White House, according to a report Monday in the New York Times.

Democrats introduce new Iran sanctions bill: Democrats in the US House of Representatives have presented a new version of a Russia and Iran sanctions bill, in an apparent message to President Donald Trump who is seeking to improve ties with Moscow. Democrats on the House Foreign Affairs Committee on Wednesday introduced legislation unchanged from what was passed nearly unanimously by the Senate on June 15. Senators voted 98-2 to pass the Countering Iran's Destabilizing Activities Act, to which anti-Russia sanctions were also attached. But it has been stalled ever since. The legislation is labeled as a House bill to avoid a procedural issue that prompted House Republican leaders to send the measure back to the Senate. Democrats are suggesting that the delay is intentionally engineered by Republicans out of loyalty for President Donald Trump, who opposes imposing extra sanctions on Russia. Republicans, who control majorities in both the House and the Senate, are not likely to support the bill. Republican House Speaker Paul Ryan’s spokeswoman, AshLee Strong, dismissed the Democrats' action as "grandstanding."

Nuclear Summer - Donald Trump, it appears, has never met an international agreement he wasn’t prepared to trash. On June 1, the president stepped to the podium in the Rose Garden and announced his decision to withdraw from the Paris climate accord. This followed on the heels of his reluctance to reaffirm America’s commitment to defend its NATO allies, an obligation dating back seven decades, and his decision to walk away from the Trans-Pacific Partnership, the largest multilateral trade deal in a generation. The next potential target on the president’s hit list: the Iran nuclear deal, an agreement he has called “the worst deal ever negotiated” and has pledged to dismantle.The stakes could not be higher. The deal—officially known as the Joint Comprehensive Plan of Action—places significant and verifiable constraints on Iran’s nuclear activities, effectively blocking its pathway to an atomic bomb. If Trump exits the agreement, the prospects of a nuclear-armed Iran—or a major war to head off that outcome—would increase.The Trump administration is in the midst of a comprehensive review of the Iran deal, and the conclusions are likely to be harsh. Indeed, in a notoriously factionalized administration, being hawkish on Iran is one of the few things that Trump officials seem to agree on.  Hostility toward the Islamic Republic starts at the top. Trump has consistently claimed that the nuclear deal requires U.S. taxpayers to provide Iran with a $150 billion “lifeline” in exchange for “nothing.” Both claims are false: The deal frees up around $60 billion of Iran’s own money, and the nuclear constraints are considerable. The president has also accused Iran of “not living up to the spirit” of the “terrible agreement,” even though his own State Department certified in April that Iran is complying with the deal. During his visit to Saudi Arabia in May, Trump singled out Iran for its support of terrorism, and even hinted at the need for regime change.

Trump’s war on the State Department  - President Trump is seeking to radically remodel the State Department in an unprecedented way, according to former officials from administrations of both political parties. The administration’s efforts, which include a proposed budget cut of nearly 30 percent, a hiring freeze and a potential reshuffling of offices within the State Department, have left scores of positions unfilled, demoralizing the staff that remain. Past GOP presidents have also sought to cut the State Department down to size, and even current employees have acknowledged bureaucratic problems at Foggy Bottom.But some former officials describe Trump's efforts as something unseen before — a war of sorts on the State Department that if carried out would leave it hobbling. “My suspicion is that within the White House, particularly amongst the nationalist faction … that this seems to actually be a concerted effort to diminish the role of the State Department in U.S. foreign policy and hamper its abilities to pursue policies that would be considered overly globalist,” said Stewart Patrick, who served on the policy planning staff at the State Department in the George W. Bush administration. “They also don’t see much use, frankly, in diplomacy,” said Patrick, now a senior fellow at the Council on Foreign Relations. The White House, which has sought to promote an “America First” policy at home and abroad, isn’t worried about been perceived as taking unprecedented steps at the State Department. 

House panel votes to split Air Force, create new US Space Corps -- As part of its version of the 2018 Defense authorization bill, the House Armed Services Committee voted to create a sixth branch of the U.S. armed forces: the U.S. Space Corps, which would absorb the Air Force’s current space missions.You could be forgiven if you haven’t been closely following the debate about creating the nation’s first new military service since 1947. Several members of the panel said they themselves were blindsided by the proposal, and staged an unsuccessful effort to block the change until it could be studied further — or at least until the full committee had held at least one hearing on the subject.Rep. Michael Turner (R-Ohio) said he only learned about the proposal last week, when it first came before the subcommittee on strategic forces.“I chastised my staff and said, ‘How could I not know that this was happening?’ They said, ‘Well, they had a meeting about it and you missed it,’” Turner said. “A meeting is certainly not enough. Maybe we do need a space corps, but I think this bears more than just discussions in a subcommittee. We have not had Secretary Mattis come before us and tell us what this means. We have not heard from the secretary of the Air Force. There’s a whole lot of work we need to do before we go as far as creating a new service branch.”

Steel and aluminum trade restraints are good first steps, but not nearly enough to rebuild manufacturing -- EPI Blog --The Trump administration is poised to impose broad tariffs and/or quotas on imports of steel and aluminum products. As the issues are being pondered, battles are raging between metal-producing and consuming industries, and between the United States and its trading partners. Trade restriction in these sectors could relieve near-term pressure on thousands of jobs and, if done well, could buy valuable time that could lead to global solutions to chronic dumping and overcapacity problems centered in China and a few other countries. But tariffs and quotas in a few industries will never be sufficient to structurally rebalance U.S. trade or rebuild U.S. manufacturing, goals that have been clearly identified by the president and other members of his administration. In order to achieve these goals, the United States needs to realign the dollar to reverse the effects of more than two decades of unfair trade and currency manipulation on world trade and the global economy.  The conclusions in this blog are based on the following key observations:

  • U.S. steel and aluminum industries have been heavily injured by massive growth of excess capacity and overproduction in China and other countries. More than 13,000 U.S. jobs have been lost in aluminum since 2000—and 14,000 steel jobs disappeared in last two years alone.
  • Surging imports of steel and aluminum and diminished domestic production capacity in these industries are a threat to national security because access to reliable sources of these metals is critical to supply of military equipment and critical infrastructure. If current trends persist, in time of war or other national emergency, the United States would find itself dependent on unstable import sources.
  • Tariffs and quotas will save jobs in these industries from near-term threats and help domestic producers recover from unfair trade.  But trade remedies can have negative consequences too. Increasing costs of steel and aluminum may reduce the competiveness of other domestic producers (both downstream producers of steel and aluminum products, as well as other users such as automakers and aircraft manufacturers), hurting consumers and reducing exports. Imposing trade restraints can also lead to retaliation by other countries, further reducing U.S. exports.
  • Thus, imposing tariffs and quotas on steel and aluminum imports is, at best, only a partial solution to trade deficits and manufacturing job losses.

The Administration Considers Raising Taxes - Menzie Chinn --On imported steel, that is.. From Politico today: Commerce Secretary Wilbur Ross is expected as early as next week to give President Donald Trump a menu of options for restricting steel imports, senators said after a closed-door meeting with the Cabinet official Thursday afternoon. The avowed basis for these restrictions would be for national security (technically Section 232, described in this post). Apparently China is in the cross-hairs. This is interesting because imports of steel from China have decreased, and now rank behind countries like, for instance Russia.   Some people will say that it’s okay to raise taxes on foreigners. But anybody who has a grasp of elementary economics will recognize that the incidence depends on the size of the domestic market relative to the rest of the world. If the domestic market is small, then some of the incidence will fall on domestic consumers, broadly defined to include downstream steel-using firms.  Jay Bryson at Wells Fargo has documented the sectoral impact.  A tariff on foreign-produced steel, should the administration decide to levy one, would raise its price to American purchasers. If the tariff were confined to China only, its effect on the overall steel industry likely would not be that impactful given China’s small share at present of the overall American steel market.  However, a tariff levied on all foreign producers of steel would be more impactful. With roughly 30 percent of the market experiencing a tariff-induced price hike, American producers of steel could feel emboldened to raise prices as well. The detailed input-output tables for the U.S. economy show that the following notable industries have high degrees of exposure to steel inputs: fabricated metal products (#332), electrical equipment, appliances and components (#335), machinery (#333), transportation equipment (#336), and furniture and related products (#337). Prices charged by these industries could also rise and/or profit margins could be squeezed. …. These industries, some of which would seem to be important to national defense, would experience a deterioration in their effective rate of protection. If indeed the administration proceeds with implementing restrictions against China by way of Section 232, it should also do so against Russia. I must confess, I do not believe this administration will impose sanctions against Russian-sourced imports. Just call it a hunch.

Mexico Is No Longer No. 1 U.S. Corn-Buyer After Trade Tensions -- Mexico is no longer the biggest buyer of corn from the U.S., a sign that trade tensions are pushing American grain toward other markets while its southern neighbor lines up new suppliers. Sales to Mexico through May were $1.04 billion, down 6.7 percent from a year earlier, the U.S. Department of Agriculture said Thursday in a monthly update. That contrasts with the 32 percent increase for the overall value of U.S. corn exports in the period, during which the average dollar value of the commodity was little changed. Japan boosted its purchases 53 percent to $1.19 billion to become the largest importer of American corn. Mexico initiated talks with other major corn exporters this year after it was criticized by President Donald Trump, who said the country has taken advantage of its northern neighbor through the North American Free Trade Agreement, taking away jobs and investment. The dispute helped to send the Mexican peso to a record low against the dollar in January Mexican purchases now seem to be rebounding as the peso recovers, said Lesly McNitt, public policy director for the National Corn Growers Association in Washington. Still, the relatively sluggish pace of shipments shows how the bilateral trade relationship in agriculture is at risk, with Nafta heading toward a renegotiation as soon as next month, she said. 

Mnuchin Kills Idea Of Tax Hike For The Wealthy --Last week the Republican party was at arms after Axios reported that Steve Bannon was said to be pushing president Trump to raise taxes on the wealthiest Americans. According to thewebsite, Trump’s chief strategist was urging to raise the top tax rate on individuals, with Axios saying the former Breitbart CEO looking for the top rate to have “a 4 in front of it” (currently, the highest income-tax bracket in the US is 39.6% for individuals earning more than $414,000 a year).Well, they can now sleep easier after Treasury Secretary Steven Mnuchin on Sunday killed that particular idea, saying that the Trump administration is not considering a plan to raise taxes on the wealthiest Americans in order to pay for tax breaks for the middle class. Speaking on ABC's "This Week," Mnuchin said the administration plans is “absolutely committed” to releasing its tax plan in early September, and getting it through Congress by the end of the year - and that plan won’t include a 40 percent tax rate for the richest Americans.“Our plan is to have a full-blown release of the plan in the beginning of September, with being able to vote and getting this passed before the end of the year,” Mnuchin said on ABC’s “This Week” on Sunday.The “objective” of the proposal is still that no one in the middle class will have a tax increase, Mnuchin said. “We’re finalizing the details of the plan, so there’s certain issues that are still on the table.”

Plan for U.S. tax increase on rich not being considered: Mnuchin | Reuters: The Trump administration is not considering a plan to raise taxes on the wealthiest Americans in order to pay for tax breaks for the middle class, U.S. Treasury Secretary Steve Mnuchin said on Sunday. Speaking on ABC's "This Week," Mnuchin said the administration plans to release its tax plan in early September and is aiming for a vote on Congress on it by the end of this year. The news website Axios reported that Trump's chief strategist Steve Bannon was advocating a proposal to raise the highest tax bracket to 40 percent or above in order to pay for tax cuts on middle-class Americans. "I've never heard Steve mention that," Mnuchin said.

Trump’s Massive Tax-Cut Plan Faces ‘Train Wreck’ of a Calendar -- Congress returns from its mid-summer break Monday for a crucial three-week stretch that will help determine whether President Donald Trump can deliver on his promise of a historic tax cut. Several obstacles await lawmakers, including an ongoing health-care fight, divisions among Republicans on the basic parameters of a tax bill, and a maelstrom of upcoming deadlines to keep the government running and avert a catastrophic default on U.S. debt. Republican leaders had hoped to spend July working on what House Speaker Paul Ryan has called a once-in-a-generation bid to overhaul the U.S. tax code. But the Senate remains bogged down with the president’s call for undoing Obamacare. With no clear endgame for that effort, observers question the prospects for tax legislation, which can’t move procedurally until health care is off the agenda. “The longer the health-care debate drags out, the harder it’ll be to get to the finish line on tax reform,” said William Galston, a senior fellow at the Brookings Institution. “Health care and tax reform are linked in very concrete ways,” he said, in part because the Senate health bill would establish a lower tax base by repealing a number of taxes imposed by the 2010 Affordable Care Act, or Obamacare. Meanwhile, House Republicans have been delaying consideration of a fiscal 2018 budget resolution, the vehicle they plan to use for tax legislation. Factions within the party disagree on whether tax rate cuts for individuals and businesses should be offset with new revenue or spending cuts, or just be allowed to add to the deficit. Debate among conservative and moderate Republicans has focused on how deeply they should cut “mandatory” safety-net spending. 

Senate Republicans Cancel First Two Weeks Of August Recess To Work On Legislation --It just got serious.With Trump buried in domestic scandals, it was virtually certain that in the handful of days left before Congress takes its summer recess, there was zero chance that either Obamacare repeal or Trump's tax plan could make any headway in the Senate, prompting many to ask if the Senate would cancel or at least delay its summer break.Moments ago, Senate GOP leader Mitch McConnell announced the latter, when he said that he would cancel the first two weeks of August recess, delaying it to the third week of August, to give more time to complete action on outstanding legislation.“In order to provide more time to complete action on important legislative items and process nominees that have been stalled by a lack of cooperation from our friends across the aisle, the Senate will delay the start of the August recess until the third week of August,” Senate Majority Leader Mitch McConnell says in statement. His full statement below.

Nation “Too Broke” for Universal Healthcare to Spend $406 Billion More on F-35 - The nation’s most expensive weapons program isn’t done showing U.S. taxpayers how much it will ultimately cost them, with Bloomberg reporting Monday that the F-35 fighter jet budget is now predicted to jump by a cool $27 billion.“Think about [F-35's] $405 billion price tag when a family member dies of a preventable disease. Get angry.”Though the estimated future cost of the program had previously hovered at a mind-boggling $379 billion, an updated draft that could be submitted to Congress as early as today will reportedly exceed $406 billion—a nearly 7 percent increase. The new cost increases may come as a hit to President Donald Trump, who has bragged about his ability to get weapons manufacturers to offer the Pentagon “better deals.”

4 ways you probably didn’t know the Republican bill changes Medicaid -Vox -- The headlines of the Senate Republican bill's Medicaid overhaul should be familiar by now: It ends the generous federal funding for Obamacare's Medicaid expansion and places a federal spending cap on the program for the first time. The cumulative impact: a $772 billion spending cut over 10 years, versus current law, and 15 million fewer people enrolled in Medicaid in 2026.But the Senate plan also changes the program in subtler yet still important ways. The consequences might not be on the same scale as ending the expansion and capping spending, but they would still be felt by many of the 70 million Americans who depend on Medicaid.The changes would be made in the name of reducing costs and encouraging work, but they would also make it harder for people to receive Medicaid benefits.Here are four provisions you should know about:

  • 1) Work requirements - The Senate bill codifies the authority for states to institute work requirements for some Medicaid enrollees.  States would be allowed, under the Senate bill, to require Medicaid enrollees to have a job, look for work, or participate in some kind of job training. There are exceptions: Pregnant women, children, the elderly and disabled, and adults caring for kids younger than 6 years old would be exempted.
  • 2) Retroactive eligibility. The Senate bill also repeals what's known as retroactive eligibility — a wonky but important provision for new Medicaid enrollees. Under the current program, when people sign up for Medicaid, they can get their medical care from the three previous months covered retroactively. That's an important benefit, as many people don't sign up for Medicaid until they have a medical incident and start racking up bills. Under the Senate plan, that coverage would be scaled back to the same calendar month that a person enrolled in Medicaid. T
  • 3) Presumptive eligibility. Obamacare made it easier for certain health care providers, particularly hospitals, to enroll people in Medicaid. It's called "presumptive eligibility" — if the hospital can presume, based on what you tell them, that you're eligible for Medicaid, they'll enroll you and your coverage starts.  The Senate bill would repeal presumptive eligibility, prohibiting hospitals from making those determinations and stopping states from enrolling people in Medicaid expansion on a presumptive basis, as Obamacare had allowed.
  • 4) Eligibility redeterminations - Right now, states are required to recheck a person's Medicaid eligibility once a year. The Republican plan would require that redetermination every six months.  states lose enhanced Medicaid expansion funding if a person cycles off the program for more than a month. More frequent eligibility checks are likely to lead to more people cycling on and off of Medicaid.Second, it risks more disruptions in a person's health coverage and a lapse in coverage if there is a paperwork problem.

The Medicaid Threat That Isn’t Getting Much Attention -- No corner of the health care system would be harder hit than Medicaid, the federal-state health insurance program for the poor, if Republican leaders in Congress round up the votes to repeal major portions of the Affordable Care Act.GOP lawmakers have proposed winding down the Medicaid expansion that added 17 million people in 31 states and the District of Columbia under the ACA, and eventually capping the program’s spending per capita.If the current bill in the Senate becomes law, 15 million fewer people would have coverage through Medicaid by 2026, the Congressional Budget Office has predicted.But other efforts that are garnering much less attention would further reshape Medicaid, potentially knocking millions more off the rolls. They include asking beneficiaries to verify their eligibility twice a year, instead of once under the current law.In many ways, the current battles pit those who view Medicaid as a health insurance program, in which higher enrollment is not seen as a problem, against those who see it as a welfare program, in which lower enrollment is prized. Some states that have experimented with more frequent verification and other techniques to manage enrollment say they’ve worked well while others say they’re not cost-effective and are overly burdensome.In addition, the Trump administration has said it wants to let states experiment more with their Medicaid programs, inviting them to ask for waivers that do not need congressional approval. In recent months, states have proposed requiring able-bodied adults on Medicaid to work, drug testing enrollees, capping the length of time some can stay on the program and limiting the number of people who can be on the program at once. The Obama administration had rebuffed some of those efforts. “All of the bells and whistles and hoops that people have to jump through create an enormous amount of red tape and that depresses enrollment,” says Joan Alker, executive director of the Center for Children and Families, a research center at Georgetown University. “That’s a proven strategy.”

Don’t Assume That Private Insurance Is Better Than Medicaid --As we recently wrote, it’s better for patients to have Medicaid than to be uninsured, contrary to critics of the program. But is having Medicaid, as those critics also say, much worse than having private insurance? This idea has become a talking point for conservatives who back big changes to Medicaid, as the Senate health bill proposes. The poor would benefit simply by being ushered off Medicaid and onto private insurance, they write. But it’s far from proven that Medicaid is worse than private insurance. A lot depends on what kind of insurance is compared with Medicaid, and how they are compared. Many studies that measure Medicaid against private insurance suffer from the same flaws that compare Medicaid with being uninsured. They’re terribly confounded, and can show only associations, not causation. People with private insurance are healthier and wealthier than those on Medicaid, and in ways not fully controlled for in statistical analyses. These factors almost certainly predispose someone on Medicaid to have worse outcomes than someone with private insurance. Perhaps the most convincing way to compare Medicaid and private insurance would be with a randomized controlled trial that pits them head to head. No such trials exist. Recall that the Oregon Medicaid study randomly offered, via a lottery, the opportunity for low-income adults to enroll in Medicaid. It did not have another study arm that offered private insurance. But we do have a decades-old trial that looked at varying levels of cost-sharing: the RAND Health Insurance Experiment. This is relevant because one substantial difference between Medicaid and most private coverage is the level of cost-sharing. Medicaid is nearly free. Most private coverage comes with deductibles and co-payments. The RAND study found that the more cost-sharing was imposed on people, the less health care they used — and therefore the less was spent on their care. The study also found that, over all, people’s health didn’t suffer from lower health care use and spending. But the results of the RAND study, like so much in health care, are complicated. A deeper dive into the data shows that people decreased their consumption of necessary health care in equal measure to unnecessary health care. In the RAND study, poorer and sicker people — exactly the kind more likely to be on Medicaid — were slightly more likely to die with cost-sharing.

GOP Lawmakers Bought Health-Insurance Stocks While Advancing Trumpcare -- It’s hard to imagine how the GOP could have set about reforming the health-care system in a more politically toxic fashion. The American Health Care Act is the most unpopular piece of legislation that either party has pursued in the past three decades. And it isn’t hard to see why: The bill would throw millions of poor people off of Medicaid, so as to finance a capital-gains tax cut for millionaire investors; it would undermine regulatory protections for people with preexisting conditions; and it would massively increase premiums for older, lower-middle-class people, especially those in rural areas — which is to say, a significant chunk of the GOP base. What more could Republicans have done to validate Democratic narratives about who they really stand for? The Intercept’s Lee Fang provides one answer:Just as the House Republican bill to slash much of the Affordable Care Act moved forward, Rep. Mike Conaway, a Texas Republican and member of Speaker Paul Ryan’s leadership team, added a health insurance company to his portfolio.An account owned by Conaway’s wife made two purchases of UnitedHealth stock, worth as much as $30,000, on March 24th, the day the legislation advanced in the House Rules Committee, according to disclosures. The exact value of Conaway’s investment isn’t clear, given that congressional ethics forms only show a range of amounts, and Conaway’s office did not respond to a request for comment. It was a savvy move. Health industry stocks, including insurance giants like UnitedHealth, have surged as Republicans move forward with their repeal effort, which rolls back broad taxes on health care firms while loosening consumer regulations which prevent insurance companies from denying coverage for medical treatment. Three months later, as Mitch McConnell and company were rewriting the bill in Congress’s upper chamber, Oklahoma senator James Inhofe purchased between $50,000 and $100,000 worth of UnitedHealth shares.  New York congressman Chris Collins owns 17 percent of the Australian biotech firm Innate Immunotherapeutic, making him the company’s largest shareholder. He is also a member of the House subcommittee that oversees the FDA. In his role as a congressman, Collins authored legislation designed to expedite FDA approval of experimental drugs like those Innate specializes in. In his capacity as a big money Innate investors, Collins (reportedly) sold several of his fellow Republican congressmen on the virtues of investing in the company. Among those who took him up on that offer was current Health and Human Services secretary Tom Price.

Trump Slams Congress On Obamacare Repeal As Senate Remains Deadlocked -   Trump took aim at Congress, and specifically the passage of Obamacare repeal, saying he did not expect Congress to leave for its summer recess without approving a "beautiful" new healthcare bill. “I cannot imagine that Congress would dare to leave Washington without a beautiful new HealthCare bill fully approved and ready to go!” Trump tweeted. Trump has good reason to be skeptical: the legislation to repeal and replace ObamaCare has stalled in the Senate as GOP leaderships works on a new version of the bill. The first draft of the legislation was rejected by several Republican senators, forcing Mitch McConnell to delay a vote on the measure initially scheduled for the end of June. As Reuters adds, Trump's effort to roll back Obamacare are facing growing obstacles on Monday as Republicans who control the U.S. Senate remained sharply divided over how to keep down the costs of their healthcare bill and prevent millions from losing coverage. White House chief of staff Reince Priebus told "Fox News Sunday" that Trump, who made repeal and replacement of Obamacare a central plank of his 2016 campaign, still expected the Senate to pass a healthcare bill either before the scheduled start of Congress' August recess "or maybe a little bit into" the recess. Other Republicans voiced pessimism: over the weekend, Arizona Senator John McCain said that "my view is that it's probably going to be dead, speaking of the healthcare legislation on the CBS program "Face the Nation." Furthermore, conservative senators, such as Ted Cruz of Texas and Rand Paul of Kentucky, have said they cannot support the proposal unless it goes further to repeal the 2010 Affordable Care Act, popularly known as Obamacare. As a result, McConnell warned at a luncheon in his home state of Kentucky last week that if Republicans were unable to pass their own replacement bill, they might need to work with Democrats to bolster the insurance markets created under Obamacare, according to the Associated Press.

Senate GOP returns from break no closer to Obamacare deal - Senate Republicans appear miles away from their long-sought repeal of Obamacare, returning to Washington on Monday with just a few weeks to put the pieces back together before they could be forced to abandon their partisan attempts at a health care overhaul altogether.Over the July 4 recess, conservative demands hardened and surprising opposition to the Senate GOP’s first stab revealed itself in red states like North Dakota and Kansas. Republicans sniped over the merits of deregulating the health insurance industry and GOP senators began floating exit strategies in case they can’t agree on legislation, ranging from working with Democrats to amend Obamacare to simply repealing the law and figuring out how to replace it later.Senate Majority Leader Mitch McConnell isn’t giving up yet, and his staff and allies toiled over the break to fashion a compromise that can get 50 of the Senate GOP’s 52 senators on board. The calculating Kentucky Republican could still find a deal that unites his fractious party. But McConnell and his whip, John Cornyn of Texas, are facing the party’s toughest legislative task since taking the majority in 2014.At best, the repeal effort stayed stuck in neutral over the past nine days, several Republicans familiar with the ongoing negotiations said. At worst, the bill McConnell unveiled before the recess has little chance of being saved.“My view is it’s probably going to be dead,” Sen. John McCain (R-Ariz.) said on “Face the Nation” on Sunday. “I fear that it’s going to fail.” White House chief of staff Reince Priebus said on “Fox News Sunday” that such a result would be unacceptable. The rest of President Donald Trump’s agenda is already moving glacially through Congress. If the GOP’s six-month effort on health care is scuttled ahead of the August recess, the party risks coming up empty-handed during what is typically the most fertile period of legislating in a president’s first term.

Trump prods Congress to pass stalled healthcare overhaul | Reuters: President Donald Trump on Monday prodded the Republican-led U.S. Congress to pass major healthcare legislation but huge obstacles remained, with a senior lawmaker saying the Senate was unlikely to take up the stalled bill until next week. The House of Representatives approved its healthcare bill in May but the Senate's version appeared to be in growing trouble as lawmakers returned to Washington from a week-long recess. "I cannot imagine that Congress would dare to leave Washington without a beautiful new HealthCare bill fully approved and ready to go!" Trump wrote on Twitter, referring to the seven-year Republican quest to dismantle Democratic former President Barack Obama's signature legislative achievement. Lawmakers are set to take another recess from the end of July until Sept. 5. Repealing and replacing the Affordable Care Act, dubbed Obamacare, was a central campaign pledge for the Republican president. But Senate Republican leaders have faced a revolt within their ranks, with moderate senators uneasy about the millions of Americans forecast to lose their medical insurance under the legislation and hard-line conservatives saying it leaves too much of Obamacare intact. They were struggling to find a compromise that could attract the 50 votes needed for passage in a chamber Republicans control by a 52-48 margin, with Vice President Mike Pence casting a potential tie-breaking vote in the face of unified Democratic opposition.

Revised Health-Care Plan to Be Unveiled This Week in Senate -- Senate Republican leaders plan to unveil a revised version of their health-care bill later this week after making little progress on winning over party holdouts.GOP leaders will hold a vote on the measure next week, John Cornyn of Texas, the No. 2 Senate Republican, told reporters on Monday. They haven’t said publicly how they’re planning to change the proposed legislation to win more support.Senate Majority Leader Mitch McConnell has been negotiating with his Republican colleagues over revisions to a bill he proposed last month that combines tax cuts with deep reductions in health spending. Changes under consideration include ditching a repeal of Obamacare’s tax increases on the wealthy, revising Medicaid cuts and adding more spending to stabilize premium costs in the individual insurance market, according to a GOP aide who requested anonymity.McConnell has little time to make a deal. Republican leaders have said they need to move on to other issues, including a tax-code overhaul and next year’s spending bills, if they can’t agree on a health bill before a month-long August break. For the bill to pass, and Republicans to live up to their promise to eliminate President Barack Obama’s signature domestic accomplishment, they can lose no more than two GOP votes from their 52-48 majority amid unanimous Democratic opposition. Republicans say they’re increasingly pessimistic the GOP legislation can win approval.

Republicans voice growing doubts on U.S. healthcare bill's fate | Reuters: Republicans expressed increasing pessimism on Sunday about the prospects for the healthcare bill in the U.S. Senate aimed at rolling back Obamacare as lawmakers prepared to return from a week-long recess. One prominent Republican lawmaker, Senator John McCain, said he thought the Republican bill would probably fail. "My view is that it's probably going to be dead," McCain, said on the CBS program "Face the Nation," adding that Republicans, who narrowly control the chamber, would likely need to work with Democrats on a healthcare bill. President Donald Trump took to Twitter on Sunday to put pressure on Republicans to stay the course. "For years, even as a "civilian," I listened as Republicans pushed the Repeal and Replace of ObamaCare. Now they finally have their chance!" he tweeted. The Senate bill, which faces unified Democratic opposition, has been further imperiled during the recess, when Republican senators have had to return to their states and face constituents strongly opposed to the measure. Senators return to Washington on Monday. The Senate bill keeps intact much of the 2010 Affordable Care Act, former Democratic President Barack Obama's signature legislation, popularly known as Obamacare, but strips away most of its funding. It repeals most Obamacare taxes, overhauls the law's tax credits and ends its Medicaid expansion. It also goes beyond repealing Obamacare by cutting funding for the Medicaid program for the poor and disabled beginning in 2025. At least 10 Republican senators have opposed the bill in its current form, but many more have criticized the legislation or said they are undecided. Republican Senator Bill Cassidy said on Sunday the draft bill was undergoing a "serious rewrite." "Clearly, the draft plan is dead," he said on Fox News. "Is the serious rewrite plan dead? I don't know. I've not seen the serious rewrite plan."

McConnell warns Senate: Don't block ObamaCare repeal debate | TheHill: Senate Majority Leader Mitch McConnell (R-Ky.) is warning his colleagues to not block the chamber from taking up a bill to repeal and replace ObamaCare as leadership struggles to shore up support for the legislation. "I'm sure members will have other good ideas ... and I hope they will offer them. ... But if the Senate is prevented from even proceeding to the bill, none of us will have an opportunity — not Republicans, not Democrats, not anyone," McConnell said from the Senate floor Wednesday. McConnell's comments come as at least 10 GOP senators have publicly voiced opposition to the current version of the healthcare legislation. Leadership had wanted to vote in late June but had to delay the measure because of resistance from both moderates and conservatives.GOP leaders are expected to unveil an updated bill on Thursday, potentially paving the way for a vote on the legislation next week. A crucial new analysis from the Congressional Budget Office is expected to be released on Monday. McConnell will need at least 50 of the 52 GOP senators to vote to allow the bill to be bought up, assuming Vice President Pence casts the tiebreaking vote, but could face an uphill battle in winning over enough support. Sen. Rand Paul (R-Ky.) told reporters during a conference call Wednesday that he was still opposed to the Senate's legislation and thought it was moving in the wrong direction. "Doesn’t sound much like repeal to me. One might even argue it’s worse than ObamaCare-lite because it actually creates a giant superfund to bail out the insurance companies — something even the Democrats feared to do," he wrote in a Breitbart News op-ed. 

 Republicans debate Plan B if ObamaCare repeal fails | TheHill: Senate Republicans are starting to consider what they should do if their ObamaCare replacement bill fails to pass. Lawmakers are largely splitting into two camps: those who want to work with Democrats on a fix to the healthcare law, and those who want to simply pass a straight repeal of the law and work on a replacement later. While conservatives are mainly behind the second option, Senate Majority Leader Mitch McConnell (R-Ky.) made waves on Thursday by saying that his party could work with Democrats to stabilize ObamaCare markets if the repeal bill fails. “If my side is unable to agree on an adequate replacement, then some kind of action with regard to private health insurance markets must occur,” McConnell said. McConnell’s comments could have been intended as a message to conservatives who are opposed to the existing repeal bill, suggesting they will like the result even less if the GOP has to work with Democrats. Indeed, McConnell warned late last month that “my suspicion is that any negotiation with the Democrats would include none of the reforms that we would like to make.” Nonetheless, Democrats seized on McConnell’s comments. They said McConnell has now acknowledged that ObamaCare markets can be fixed and that the law is not collapsing and beyond repair, contrary to the arguments that Republicans have been making for years. Some Republican senators have even expressed eagerness to work with Democrats on a healthcare bill. 

Uneven Playing Field: Applying Different Rules to Competing Health Plans - Kaiser -- As the Senate considers the Better Care Reconciliation Act (BCRA), a proposal to repeal and replace the Affordable Care Act (ACA), amendments have been discussed to further change private health insurance market rules that apply under current law.  Under the BCRA, current law health insurance market rules would still apply: Insurers in the non-group health insurance market are prohibited from turning applicants down or charging higher premiums based on health status and from excluding coverage for pre-existing conditions.  In addition, all policies must provide major medical coverage for 10 categories of essential health benefits and must limit the annual out-of-pocket cost sharing (deductibles, co-pays and coinsurance) that people must pay for covered services in network (although states can alter those requirements through waivers). However, an amendment to the BCRA, suggested by Senator Ted Cruz (R-TX), reportedly would allow insurers in the non-group market to also sell some policies that would not be required to follow all of the ACA market rules.  For example, such policies might not have to follow ACA essential health benefit and cost sharing standards.  In addition, some reports suggest that insurers would not have to sell these policies to people with health conditions or risks and could vary premiums for them based on the health of applicants. This brief examines the likely impact of such a change on the stability of coverage offered through non-group markets and on the number of individuals who might be affected.

New Op-Ed From Senator Rand Paul Blasts GOP Decision To "Keep Obamacare" -- Earlier this week, Senate Majority leader Mitch McConnell promised a new Obamacare bill would be delivered by tomorrow morning and that a vote would be scheduled for next week.  Of course, we've heard that story many times in the past so only time will tell whether there's any truth to it this time.  We have our doubts. But apparently Rand Paul (R-KY), who has just published an op-ed on Breitbart, isn't a fan of what he's hearing about the new bill which he says is more or less a capitulation by Republicans to simply "keep Obamacare." I miss the old days, when Republicans stood for repealing Obamacare.Republicans across the country and every member of my caucus campaigned on repeal – often declaring they would tear out Obamacare “root and branch!” What happened?  The Senate Obamacare bill does not repeal Obamacare. I want to repeat that so everyone realizes why I’ll vote “no” as it stands now: The Senate Obamacare bill does not repeal Obamacare. Now too many Republicans are falling all over themselves to stuff hundreds of billions of taxpayers’ dollars into a bill that doesn’t repeal Obamacare and feeds Big Insurance a huge bailout.Obamacare regulations? Still here. Taxes? Many still in place, totaling hundreds of billions of dollars.Insurance company bailouts? Those, too. Remember when Republicans complained about Obamacare’s risk corridors? Remember when we called the corridors nothing more than insurance company bailouts? I remember when one prominent GOP candidate during a presidential debate explicitly called out the Obamacare risk corridors as a bailout to insurance companies. Does anyone else?Now, the Senate GOP plan being put forward is chock full of insurance bailout money – to the tune of nearly $200 billion. Republicans, present company excluded, now support the idea of lowering your insurance premium by giving a subsidy to the insurance company.

Senate moderates sidelined in new Obamacare repeal bill - POLITICO: In a closed-door meeting of Senate Republican chairmen Wednesday, Lisa Murkowski ripped GOP leaders’ attempt to scale back Medicaid spending in their Obamacare repeal bill. The two matters were unrelated, she argued, because the Affordable Care Act did not change Medicaid spending levels across the entire program. The independent-minded Alaska senator was backed up by Sen. John Hoeven of North Dakota, a Republican generally aligned with leadership, according to senators and people familiar with the conversations.“The ACA allowed for Medicaid expansion. The ACA didn’t address traditional Medicaid. … Why do we not focus on the urgency of the concerns with the ACA?” she said in an interview afterward. “Let’s deal with the urgency of the issue. Let’s set Medicaid off to the side.” GOP leaders are set to unveil a new version of their health bill Thursday, but no major changes have been made to satisfy senators concerned about winding down Obamacare’s Medicaid expansion and aggressive Medicaid cuts over the next decade. So even as Senate Majority Leader Mitch McConnell struggles to keep restive conservatives like Ted Cruz and Mike Lee on board, lingering concerns from moderates like Murkowski could signal the bill’s demise. McConnell needs 50 votes simply to open debate on the bill next week, and he is well short of that number, GOP senators said. “Not right now. But we don’t need them right now,” said Sen. John Cornyn (R-Texas), the party’s chief vote counter. “We’re going to need them next week.” Republicans are planning to pump billions more into the health care system to reduce premiums for low-income people, fight opioid addiction and give states money to make health care innovations. But Cornyn said Medicaid is still “one of the biggest challenges” leaders face. 

GOP releases revised health-care bill in Senate, includes 'skimpy plans'; tough road remains for passage - The revised Republican bill to replace Obamacare was revealed Thursday by Senate leaders, and allows the sale of less-generous insurance plans, retains significant planned cuts to Medicaid, keeps some Obamacare taxes on the wealthy and offers larger subsidies to help people buy health plans than the old version did.But the new version of the Senate bill, as with the first, faces a difficult route to passage because of concerns about its effects among some GOP caucus members.However, Sen. John Cornyn of Texas, the second-ranking Republican in the Senate, said there will be enough votes to pass the revised bill by the time it comes to a vote.A vote on a motion to proceed with the bill is expected to be held next week. That would allow amendments to be offered for the bill, and put it on track to a final vote.The revised legislation will add another $70 billion in federal funding on top of an already-proposed $112 billion earmarked for states to help reduce insurance premiums and out-of-pocket costs for customers in the individual plan markets. The bill also calls for allowing people, for the first time, to use their health savings accounts to pay for their premiums.The bill also would allow the sale of health plans that do not comply with current minimum standards set by Obamacare, and for federal tax credits to help customers pay for such skimpy plans. The Affordable Care Act, as of now, bars insurers from charging sicker customers higher premiums, and also mandates that insurance plans contain a minimum set of "essential health benefits" for customers.  The bill's new provision would allow insurers to sell less-expensive plans, which at the same time offered fewer coverage benefits.

Senate Republicans Unveil New Health Bill but Divisions Remain — Senate Republican leaders unveiled a fresh proposal to repeal and replace the Affordable Care Act, revising their bill to help hold down insurance costs for consumers while keeping a pair of taxes on high-income people that they had planned to eliminate. But the measure was immediately imperiled when two Republican senators, moderate Susan Collins of Maine and conservative Rand Paul of Kentucky, announced they were not swayed — even on a procedural motion to take up the bill next week, a motion to proceed.Still deep cuts to Medicaid in Senate bill. Will vote no on MTP. Ready to work w/ GOP & Dem colleagues to fix flaws in ACA. — Sen. Susan Collins (@SenatorCollins) July 13, 2017   One more defection would doom the bill and jeopardize the Republicans’ seven-year-old quest to dismantle the health law that is a pillar of President Barack Obama’s legacy. In a sign that more could follow, two other Republican senators, Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, unveiled their own alternative plan, just minutes before Senate leaders offered their latest. Senator Shelley Moore Capito, Republican of West Virginia, expressed “serious concerns about the Medicaid provisions” in the latest draft, although she did not reject it. With the revised bill, the majority leader, Mitch McConnell, Republican of Kentucky, had hoped to win the 50 votes he needs to win Senate passage. But the changes may not have been enough to bridge the vast divide that has opened between the Senate’s most conservative Republicans, who had vowed to destroy the Affordable Care Act “root and branch,” and its moderate Republicans, who worry that deep cuts to Medicaid would leave too many in their states without health care.  A leading health insurance lobbying group has strongly criticized that idea, saying it would lead to higher premiums for sick people, who would not be interested in buying less coverage than they need.

Senate Republicans Reveal New "Obamacare-Lite" Healthcare Bill --In what could very well end up being just another exercise in futility, Senate Majority Leader Mitch McConnell has just released a new version of a healthcare plan which, among other things, incorporates demands from Senator Ted Cruz (R-TX) and Senator Mike Lee (R-UT) to allow insurers to sell low-cost, skimpier plans all in an effort to draw conservative support for the new bill. Called the "Consumer Freedom Amendment," we highlighted the main points of the Cruz/Lee proposal last month:The "Consumer Freedom Amendment" would leave existing ObamaCare plans on the individual market, while also allowing insurers to sell plans that don't comply with requirements of the Affordable Care Act."What that does — it leaves existing plans on the market but it gives new options so that people can purchase far more affordable health insurance.It will enable a lot more people to be able to afford buying health insurance," Cruz told The Hill on Thursday afternoon.Cruz's amendment would allow insurers to continue offering plans that follow ObamaCare's "Title One" requirements, including essential health benefits, which mandates 10 services insurers must cover with no cost-sharing.But insurers could also sell skimpier, cheaper plans that don't cover those 10 services or meet other ObamaCare requirements. "If a health insurer offers a plan consistent with the Title One mandates, insurers can also sell in that same state any other plans that consumers desire," Cruz said. Of course, with precious little votes to spare, McConnell's new bill has plenty of handouts for moderate Republicans as well. The rewritten package would add $70 billion to the $112 billion McConnell originally sought that states could use to help insurers curb the growth of premiums and consumers' other out-of-pocket costs.  It also has $45 billion for states to combat the misuse of drugs like opioids. That's a big boost from the $2 billion in the initial bill and an addition demanded by Republicans from states in the Midwest and Northeast that have been ravaged by the drugs. The revised bill also restores some of the original Obamacare taxes on investment income and the payroll tax in an effort to help fund Medicare. Axios had more highlights:

The updated Senate health care bill: What you need to know - Politico - The Affordable Care Act, also known as Obamacare, requires insurers to meet minimum requirements, including coverage of 10 essential health benefits. A change brokered by Sens. Ted Cruz and Mike Lee would allow insurers to offer cheaper, slimmed-down coverage as long as they offer at least one plan meeting Obamacare standards. Experts have warned that such a provision could severely threaten access to coverage for sick patients. The Senate would provide $45 billion to states to address the national opioid crisis. But addiction experts say that still falls well short of what is needed.  The original version allocated $2 billion for one year. The ACA includes a number of taxes on industry and the wealthy to help fund the law’s coverage expansion. The Senate bill would eliminate two tax cuts benefiting the wealthy, and it would no longer scrap a tax break for high-earning health insurance executives.  The ACA allows young adults and certain other people to buy high-deductible, catastrophic plans featuring low premiums. The Senate bill would allow people otherwise eligible for subsidies to receive tax credits to purchase catastrophic health plans, and anyone would be allowed to buy catastrophic coverage. The Senate bill would allow people to use health savings accounts to pay for premiums. The bill provides $182 billion for states to reduce premiums in order to stabilize their insurance marketplaces. The updated bill provides an additional $70 billion on top of the $112 billion in the first draft.  The Senate plan would dramatically overhaul the traditional Medicaid program covering low-income children, pregnant women, the elderly and people with disabilities. Instead of receiving open-ended funding from the federal government, states would receive a set amount per enrollee and have new flexibility to run their programs. Certain vulnerable populations could be protected from the spending cap. States would have the option to add work requirements for able-bodied adults. Insurers are banned from charging people more or denying coverage based on an existing medical condition.  That requirement would remain. But states could waive other insurance rules that could weaken protections for medical conditions, such as the basic benefit package and the minimum payments insurers must make toward medical bills.  The Senate bill would gradually roll back enhanced federal funding for Medicaid over three years starting in 2021. Penalties for going without insurance would disappear. People who haven’t been continuously covered would be locked out of the market for six months.  The women’s health organization would be banned from the Medicaid program for one year.

Here are the hidden horrors in the Senate GOP’s new Obamacare repeal bill -- Senate Republicans unveiled a new, “improved” version of their Affordable Care Act repeal bill Thursday, so the treasure hunt is on: the search for provisions so horrifically inhumane that they’ve had to be concealed deep in the measure’s legislative language and procedural maze. We’ve found quite a few, with the help of professional spelunkers Andy Slavitt, David Anderson, Larry Levitt and others. Here are some of the provisions in the so-called Better Care Reconciliation Act, or BCRA, that the Senate GOP really doesn’t want you to know about.

  • - The measure kills the birth control and women’s health screening requirements. That action is part of the Cruz Amendment. It allows states to authorize the sale of health plans that don’t include the women’s health provisions. Observes Dawn Laguens of Planned Parenthood, “Insurance companies would once again be allowed to refuse to cover basic preventive health care, as well as charge women co-pays for birth control, immunizations and cancer screenings.” She calls this “a major step backward for women.”
  • —HHS Secretary Tom Price gets enormous new power over health care standards and even state budgets. The essence of the amended bill’s bait-and-switch structure is the creation of several slush funds to moderate the costs to states of various repeal provisions, especially the drastic cutback in Medicaid funding.Those slush funds, however, would come under the control of Health and Human Services Secretary Tom Price. A known enemy of Medicaid and of expanding health care services for women and the needy, Price would have the authority to apportion those funds as he wishes, favoring some states over others because of their politics and policies, for example.
  • —The bill still cuts taxes for the wealthy. One widely noticed change from the original Senate bill is the retention of two taxes the ACA imposes on high-income taxpayers — those earning more than $200,000, or $250,000 for couples. These are a 3.8 percent surcharge on capital gains and dividends and a 0.9 percent increase in the Medicare tax for those taxpayers. But don’t cry for the wealthy just yet. The amendment expands another windfall — health savings accounts, which are tax-preferred accounts that can be used to pay for out-of-pocket medical expanses. Under the amended bill, HSAs also can be used to pay premiums, which effectively renders premiums in the individual market tax-deductible for the first time.
  • —The senators exempt themselves from the loss of consumer protections. A convoluted provision in the amended measure exempts Congress and its staff members from the loss of guarantees for those with preexisting conditions and other consumer protections.
  • —The “Murkowsky Mollification.” The Senate bill has a craftily worded handout for Sen. Lisa Murkowsky, R-Alaska. The amended measure guarantees at least $1.3 billion, or 1 percent of a $132 billion, 10-year bailout fund, to any state where premiums are 75 percent higher than the national average. Only one state qualifies: Alaska.
  • —The Cruz Amendment is a disaster for health insurance buyers. . It would effectively destroy the health care market nationwide. Buyers of cheap Cruz plans would be locked out of the insurance market if they get sick. A little-noticed aspect of the Cruz proposal is that the cheap plans it allows would not qualify as legitimate insurance coverage under the GOP’s “continuous coverage” rules.

McConnell Again on Healthcare -- Mitch McConnell and the Republicans in the Senate are not satisfied with the Tom Price appointed CBO chief, who insists that there are four fingers in front of his face and apparently won’t make numbers up to help take away health insurance from 22 million people.  So Mitch McConnell and the Republicans will rely upon, and I am not making this up, “ALTERNATIVE SCORING” to further the Ted Cruz amendment to Obamacare repeal through the Senate. Republicans are expecting it will take weeks to get the scoring from the CBO.  Repubs are running out of time to repeal the ACA and achieve tax reform under reconciliation. The budget year ends EOM September. If the ACA is not repealed by then, it has to wait until next budget year. You can not do two reconciliations in one year and the other one is tax reform.

Republican Senators Left Exposed in Health Care Ad Wars -- By now, we know that Republicans in the Senate are having a tough time coming to agreement on a health care bill. Senate Majority Leader Mitch McConnell took the drastic step this week of cancelling at least the first two weeks of the August recess in order to give them more time to round up 50 votes.  But, McConnell has more than just vote counting problems. He’s got a messaging problem. The story about health care reform today is all about process (whip counts, what's in and what's out of the bill, and what rifts are still too large to bridge) and very little about substance. Voters looking for a reason to support the GOP effort aren’t being given much. As the Washington Post’s Paul Kane astutely noted: “In public appearances, and often in private GOP meetings, Republican after Republican outlines the reasons that they stand opposed to the legislation, as written, with almost no one taking up the mantle of defending a proposal that was unpopular from Day One.”  The President isn’t helping much either.  Delegating by tweet – he’s sent multiple mixed messages about the way forward. He wants the bill to be less “mean” than the House version. He’s advocated for an immediate repeal and replace later strategy. But, here’s what else should worry Republicans, especially those up in 2018.  The forces opposed to the legislation are outspending those supporting the bill $5.8 million to $354,000. According to data supplied to the Cook Political Report from Kantar Media CMAG, a nonpartisan tracker of political TV advertising, there have been 26,713 ads run between May 23 and July 10 that mention the health care bill. Just over 25,000–or 94 percent–of those ads have been critical of the GOP plan. Note that these figures don’t represent digital or radio ad buys. 

Insurers warn Cruz provision will 'skyrocket' premiums for sick people | TheHill: The two leading health insurer trade groups sent a strongly-worded letter Friday expressing opposition to a controversial conservative provision included in the latest GOP ObamaCare replacement bill. America’s Health Insurance Plans and the Blue Cross Blue Shield Association warned that the provision from Sen. Ted Cruz (R-Texas) would mean “premiums will skyrocket for people with preexisting conditions” and “millions of more individuals will become uninsured.” The letter expresses opposition to a provision, included in the new GOP repeal bill, that would allow insurers to sell plans that do not meet ObamaCare regulations, including the ban on discrimination based on pre-existing conditions, if they also sold plans that did meet the requirements. Conservatives argue this move would allow younger, healthier people to buy cheaper plans.

The massive Senate GOP shift on pre-existing conditions --Over the past several weeks, senior GOP aides have repeatedly said that if the Senate bill touches pre-existing conditions in any way, it will lose around a third of the caucus. Today, a provision that could cause sick people to pay much higher premiums than they currently do has not caused any Republicans to say they'll vote against the GOP health bill. When Senate GOP leaders first presented their plan to the caucus in a PowerPoint presentation, it explicitly said that pre-existing conditions wouldn't be touched, aides say. As recently as two weeks ago, aides said members were surprised and angry to learn that Sen. Ted Cruz's Consumer Freedom Option would allow plans that didn't include the Affordable Care Act's pre-existing conditions protections. (They could only be sold by insurers that also offered plans with the protections.) Now, that resistance is "melting away," as one Senate Republican aide put it today. "No one wants to be bad guy." Indeed, almost seven hours after the revised bill — including the Cruz provision — had been released, no Republican senator had threatened to vote against the bill unless the provision is removed. In fact, Republicans had surprisingly little to say about it.

Kasich spokesman: Pence’s healthcare claims ‘false’ - Ohio Gov. John Kasich's (R) office has flatly rejected Vice President Pence's claim that nearly 60,000 disabled Ohioans are on waiting lists for Medicaid’s home and community-based services.Kasich spokesman Jon Keeling told The Washington Post that such an assertion is "not accurate" and that suggesting Medicaid expansion hurt the developmentally disabled system "is false, as it is just the opposite of what actually happened."Kasich is among a group of GOP governors to oppose the Senate GOP plan to repeal and replace large parts of the Affordable Care Act. He issued a statement this week saying that proposed changes to the bill were "still unacceptable" because of their possible effects on Medicaid and the private ObamaCare market.Now, the Trump administration is pushing Republican governors opposed to the measure to get behind the bill.“I know Gov. Kasich isn’t with us, but I suspect that he’s very troubled to know that in Ohio alone, nearly 60,000 disabled citizens are stuck on waiting lists, leaving them without the care they need for months or even years,” Pence said in a speech Friday at the National Governors Association summer meeting in Providence, R.I. According to the Post, waiting lists for such Medicaid services are common and are typically longer in states that did not take ObamaCare's Medicaid expansion than in those that did.

 Senate Health Bill Can’t Be Fixed – CBPP - The Congressional Budget Office (CBO) analysis of the Senate Republican health care bill revealed that the bill would have much the same effects as the House-passed version: it would cause more than 20 million people to lose coverage and would make coverage worse or less affordable for millions more. Likewise, CBO’s analysis of the House-passed bill showed that it would have much the same effects as an earlier bill that the House rejected in March, which CBO also scored as causing more than 20 million people to lose coverage. Nonetheless, speculation has begun about whether reported changes to the Senate bill will significantly alter its impact on coverage or on the quality and affordability of health insurance. The answer is no. It’s no accident that CBO reached similar conclusions about all three versions of the Republican health bill, as the bill has maintained five core structural features over time:

  • Ending the Affordable Care Act (ACA)’s expansion of Medicaid to low-income adults.
  • Capping and cutting federal Medicaid funding for seniors, people with disabilities, and families with children.
  • Increasing premiums and deductibles for millions of moderate-income people who buy health insurance through the ACA marketplaces.
  • Undermining the ACA’s individual market reforms by weakening key consumer protections for older people and people with pre-existing conditions and eliminating the ACA’s individual mandate, which helps ensure a balanced individual market risk pool.
  • Providing hundreds of billions of dollars in tax cuts for high-income households, drug companies, and other corporations.

As long as the bill retains these five components, its broad consequences for Americans’ health insurance and health care will stay the same. None of the specific changes that Senate Republicans are reportedly considering would affect those five core features (see Table 1). Moreover, some of the bill’s major flaws are unfixable purely as a matter of math — even if senators adopt a proposal to drop one of the bill’s high-income tax cuts.

Republicans’ best play amid health bill chaos is failure - USA Today - The Republican plan to undo the Affordable Care Act has spun out of control. GOP senators are frustrated by a process that excluded many of themand violates their promise to make health care more affordable. The abysmally unpopular plan is favored by only 12% in the latest USA TODAY/Suffolk University poll. In the face of this, the Republican Senate and president are abandoning their posts, and it’s now every man or woman for himself. Unless the bill dies, the result will reflect every bit of this chaos. For many Senate Republicans, not passing a bill reflexively feels like failure, and bipartisanship feels too unfamiliar. But those who focus on it may conclude that passing the bill is the worst of all options. A Democratic poll of battleground states shows that simply supporting the bill could increase the unfavorable ratings of Republican senators up to 30 points. President Trump and Republicans ran on repealing Obamacare — yet not quite six months into the president’s term, Democrats hold their largest lead over the GOP in the area of dealing with health care.  And because the real impact of the bill has yet to be felt, that 12% favorable rating might not be rock bottom.   With the secretive, rushed reconciliation process the Senate is using, Majority Leader Mitch McConnell and the GOP have little more than two weeks to amend the bill and complete voting before a scheduled month-long August recess. Conventional wisdom is that McConnell has already lost the only two votes he can afford to lose. This means he's forced to listen to all the ideas lobbed in from everyone, no matter how bad. Sens. Ted Cruz of Texas and Mike Lee of Utah think the answer is to wipe out all the patient protections in current law and segregate Americans into two pools — the healthy in one and the sick in a separate and unaffordable one. Other senators are looking for more money to be spent — tofight opioids, to increase subsidies for low income people to get them off Medicaid, or to rectify some injustice in their state. The problem McConnell has is that the very tax breaks for the wealthy at the heart of the conservative motivation for repeal of the ACA have left him with little money for goodies. Even if he reluctantly scraps some of the tax cuts, there’s not nearly enough funding to actually fix anything given the more than $1 trillion cut from Medicaid and subsidies for low income people in 10 years.

 Obamacare Death Spiral: At Least 2 Million Adults Ditch Coverage In 2017 Amid Soaring Premiums --As Democrats continue to defend an obviously failed Obamacare system, the effects of soaring rates and collapsing coverage options seem to be taking a toll on the number of people actually buying health insurance these days.  According to the "Gallup-Sharecare Well-Being Index," the percentage of uninsured adults in the U.S. bottomed out at 10.9% in Q4 2016 but has since increased to 11.7% in just the first two quarters of 2017. For those keeping track, there are roughly 250 million adults in the United States.  Therefore, a0.8% increase in the uninsured rate implies that roughly 2 million people have decided they're simply not willing to continue absorbing Obamacare's exorbitant annual premium increases.  Not surprisingly, the biggest increases in the uninsured rate came from 18-34 year know, the people who don't really need coverage but were forced to subsidize older, sicker people because of Obama's view that "when you spread the wealth around it's good for everybody"...apparently they're no longer convinced that it was good for them. Per the chart below from the Department of Health and Human Services, the average individual purchaser of health insurance across the United States saw their premiums increase from $232 per month in 2013 to $476 per month in 2017, a 'modest' increase of over 100% in just a few years.  To put that into perspective, that's nearly $3,000 per year and roughly 9% of what the median American earns each year.

Why Single-Payer Health Care Saves Money - NYT -- Discussions of the California measure have stalled, however, in the wake of preliminary estimates pegging the cost of the program as greater than the entire state government budget. Similar cost concerns derailed single-payer proposals in Colorado and Vermont. Voters need to understand that this cost objection is specious. That’s because, as experience in many countries has demonstrated, the total cost of providing health coverage under the single-payer approach is actually substantially lower than under the current system in the United States. It is a bedrock economic principle that if we can find a way to do something more efficiently, it’s possible for everyone to come out ahead. Total costs are lower under single-payer systems for several reasons. One is that administrative costs average only about 2 percent of total expenses under a single-payer program like Medicare, less than one-sixth the corresponding percentage for many private insurers. Single-payer systems also spend virtually nothing on competitive advertising, which can account for more than 15 percent of total expenses for private insurers.The most important source of cost savings under single-payer is that large government entities are able to negotiate much more favorable terms with service providers. In 2012, for example, the average cost of coronary bypass surgery was more than $73,000 in the United States but less than $23,000 in France. Despite this evidence, respected commentators continue to cite costs as a reason to doubt that single-payer can succeed in the United States. A recent Washington Post editorial, for example, ominously predicted that budget realities would dampen enthusiasm for single-payer, noting that the per capita expenditures under existing single-payer programs in the United States were much higher than those in other countries.

 Republicans and Democrats Continue to Block Drug Reimportation – After Publicly Endorsing It - Matt Taibbi - Amidst all the angst and acrimony of last year's trench-warfare presidential campaign, there was one area in which the two major-party candidates purported to agree. Both Hillary Clinton and Donald Trump favored allowing the importation of cheap drugs from Canada. Drug reimportation would be a no-brainer policy move if actual human beings ran our government. Disgust with high prescription drug prices is nearly universal – 77 percent say drug prices are "unreasonable" – and 71 percent of respondents favor allowing the importation of cheaper drugs from Canada. The entire pharmaceutical industry is floated by a protectionist racket. Drugs that are in fact very cheap to make are kept artificially expensive – we have drugs that cost $1,000 a pill here in America that sell for $4 in India, for instance. The means of keeping prices high vary, but include lengthy patents to push production of generics into the future, the barring of foreign competition (usually on "safety" grounds), and the prohibition of negotiations to lower prices for bulk purchases by both the federal and state governments. Without government intervention, the pharmaceutical industry would be profitable, but it wouldn't be the massive cash factory it is now. In 2015, for instance, the 20 largest drug companies made a collective $124 billion in profits. All the industry needs to protect those sums is the continued cooperation of Congress. 

ICE Officers Told to Take Action Against All Undocumented Immigrants Encountered While on Duty -- The head of the Immigration and Customs Enforcement unit in charge of deportations has directed his officers to take action against all undocumented immigrants they may cross paths with, regardless of criminal histories. The guidance appears to go beyond the Trump administration’s publicly stated aims, and some advocates say may explain a marked increase in immigration arrests.In a February memo, Matthew Albence, a career official who heads the Enforcement and Removal Operations division of ICE, informed his 5,700 deportation officers that, “effective immediately, ERO officers will take enforcement action against all removable aliens encountered in the course of their duties.”The Trump administration, including Homeland Security Secretary John Kelly, has been clear in promising to ramp up immigration enforcement, but has so far emphasized that its priority was deporting immigrants who posed a public safety threat. Indeed, Kelly, to whom Albence ultimately reports, had seemed to suggest a degree of discretion when he told the agencies under his command earlier this year that immigration officers “may” initiate enforcement actions against any undocumented person they encountered. That guidance was issued just a day before Albence sent the memo to his staff.A spokesman with ICE said Albence’s directive did not represent a break with Kelly’s stated aims, and was consistent with current agency policies. “The memo directly supports the directions handed down in the executive orders and mirrors the language ICE consistently uses to describe its enforcement posture,” the spokeswoman, Sarah Rodriguez, said in a statement. “As Secretary Kelly and Acting Director [of ICE] Homan have stated repeatedly, ICE prioritizes the arrest and removal of national security and public safety threats; however, no class or category of alien in the United States is exempt from arrest or removal.”

Can America's Farms Survive the Threat of Deportations? --Since Donald Trump took office in January, ICE has been newly empowered and encouraged to target undocumented immigrants with criminal records for deportation—a practice that winds up capturing a huge number of undocumented immigrants without criminal records, too. But, while the Trump administration may be more zealous about enforcement than previous administrations, they have not actually  changed any laws. Existing immigration legislation has long been at odds with the U.S. economy and with farming communities across the country. Trump’s aggressive rhetoric is only having an impact because of the legal framework buttressing it. Which is why, after a string of ICE arrests cut through the local Hudson Valley farm community, word quickly spread among Hispanic farmworkers there that nobody is safe. As in the rest of the United States, according to the U.S. Department of Agriculture, as much as half of the farm workforce in New York is undocumented. The fear of deportation looming over Hudson Valley farmworkers is also impacting farmers—what they’re willing to plant and what they think they’ll be able to harvest. “My ancestors are Irish and they were called all sorts of names,” Pete, a 58-year-old farmer, told me. He said the country has swung back around to how it was a century ago. “Now people say Hispanics are taking their jobs,” Pete said. “Come on. You can’t get a kid who can flip a burger to come here and do this job for $15 an hour. If we had a workforce that was willing to do this work, I’d hire them, but we don’t.” A 2014 American Farm Bureau study backs that up: It shows that unemployed Americans regularly shun farm work, even preferring to stay unemployed. Which is one reason why Pete told me he’s anticipating a rough year: He’s not sure he’ll have the hands to do the work on his berry, apple, and vegetable crops. “Word of mouth used to bring guys to the farm during the harvest, but now I don’t know,” he said. He wouldn’t agree to let me use his name because he said even talking to a reporter had him worried about repercussions from zealous ICE agents. (While we were talking, Pete’s wife yelled at him to hang up the phone. He didn’t.) Pete pointed to an ICE arrest of five farmworkers in western New York who did not have criminal records. He said it’s just that kind of unpredictability that adds another layer of uncertainty to a business already fraught with pressures farmers cannot control—like the weather or consumer appetites.

In memo, Trump administration weighs expanding the expedited deportation powers of DHS – WaPo - The Trump administration is weighing a new policy to dramatically expand the Department of Homeland Security’s powers to expedite the deportations of some illegal immigrants. Since 2004, the agency has been authorized to bypass immigration courts only for immigrants who had been living in the country illegally for less than two weeks and were apprehended within 100 miles of the border. Under the proposal, the agency would be empowered to seek the expedited removal of illegal immigrants apprehended anywhere in the United States who cannot prove they have lived in the country continuously for more than 90 days, according to a 13-page internal agency memo obtained by The Washington Post. The new guidelines, if enacted, would represent a major expansion of the agency’s authority to speed up deportations under President Trump, who has made border security a top priority. Two administration officials confirmed that the proposed new policy, which would not require congressional approval, is under review. The memo was circulated at the White House in May, and DHS is reviewing comments on the document from the Office of Management and Budget, according to one administration official familiar with the process who spoke on the condition of anonymity. 

 Democratic leaders to secretly huddle over strategy to save DACA - Senate Democratic leaders will huddle secretly with immigration advocates Wednesday to find out what measures they will — and won’t —support as the clock ticks down on immigration issues that must be decided in the next 50 to 90 days, including the Obama-era policy that grants temporary legal status to immigrants brought into the country illegally as children.Knowing that the deferred action program known as DACA — Deferred Action for Childhood Arrivals — could be eliminated if it ends up in court, Senate Minority Leader Chuck Schumer and other leaders are expected to hold a conversation with advocates on the realities of the political fight, pressing for unity and asking if the advocates will give in on any other parts of the immigration fight in order to save DACA.“Schumer is a good person to be meeting with right now because he has to hold his guys together to block some of this stuff that is coming from the House,” said a congressional staffer who could not speak publicly about Democratic strategy.The Trump administration has until Sept. 5 — the same day Congress returns from its August recess — to decide if the administration will phase out DACA or risk a court challenge by Texas Attorney General Ken Paxton and nine other states. DACA is the biggest of a number of immigration decisions looming over the Trump administration, all with September deadlines — including whether to renew temporary protective status for nationals of Somalia and Yemen, whether to demand funding for the border wall and whether to continue an immigrant investor program that the sister of Trump’s son-in-law, Jared Kushner, controversially used to court Chinese investors. There is absolutely no appetite for immigrants being traded off each other or issues being traded off each other.

Trump crafting plan to slash legal immigration - POLITICO: Donald Trump and his aides are quietly working with two conservative senators to dramatically scale back legal immigration — a move that would mark a fulfillment of one of the president's biggest campaign promises. Trump plans to get behind a bill being introduced later this summer by GOP Sens. Tom Cotton of Arkansas and David Perdue of Georgia that, if signed into law, would, by 2027, slash in half the number of legal immigrants entering the country each year, according to four people familiar with the conversations. Currently, about 1 million legal immigrants enter the country annually; that number would fall to 500,000 over the next decade.The senators have been working closely with Stephen Miller, a senior White House official known for his hawkish stance on immigration. The issue is also a central priority for Steve Bannon, the president's chief strategist, who has several promises to limit immigration scribbled on the walls of his office. The forthcoming bill is a revised and expanded version of legislation the two senators unveiled in February, known as the RAISE Act, which they discussed with Trump at the White House in March, and which the president praised at the time. Though lawmakers on both sides of the aisle have at least paid lip service to the need to crack down on illegal immigration, reducing legal immigration is more controversial, even among Republicans. It’s unclear how the White House could pull off such contentious legislation, given Congress is already bogged down in its attempt to repeal Obamacare and has not yet seriously started on tax reform and an infrastructure package — two other major GOP priorities. Congress must also pass legislation by this fall to avoid a government shutdown and to raise the debt ceiling. 

Trump Team Seeks to Salvage Travel Ban After Judge Limits Scope - The Trump administration embarked on a multi-court appeals process to salvage full enforcement of the president’s travel ban less than a day after a Hawaii federal court ruled to limit the scope of the executive order. Attorney General Jeff Sessions intends to appeal Hawaii Judge Derrick Watson’s ruling to the U.S. Supreme Court, claiming the judge based his order on his own political preferences. That order defies both presidential privilege and the Supreme Court “in a time of grave threats,” Sessions said in a written statement. The top court has said it will hear arguments on the travel ban during the term that starts in October, after its summer break. “The Supreme Court has had to correct this lower court once, and we will now reluctantly return directly to the Supreme Court to again vindicate the rule of law and the executive branch’s duty to protect the nation,” Sessions said. “Once again, we are faced with a situation in which a single federal district court has undertaken by a nationwide injunction to micromanage decisions of the co-equal executive branch related to our national security.” Minutes after Sessions issued his statement, the Justice Department informed Watson’s court that it would also appeal his ruling to the Ninth Circuit Court of Appeals. A week ago, that same federal appeals court denied Hawaii’s request for clarification on the scope of the travel ban, citing lack of jurisdiction. At the same time, the three-judge panel advised Hawaii Attorney General Doug Chin on a legal path that would prompt Watson to consider the case. Watson’s ruling late Thursday has re-opened doors -- at least temporarily -- to prospective visitors from six mostly Muslim countries and refugees who have links people in the U.S. and its resettlement agencies. Watson had already stopped two previous versions of the president’s executive order from being enforced. 

Sessions says Trump has directed him to issue guidance on religious liberty protections - President Trump has directed Attorney General Jeff Sessions to issue new guidance to government agencies for interpreting federal religious liberty protections. The attorney general revealed the directive on Tuesday in a speech to the conservative Christian legal group Alliance Defending Freedom. The Federalist on Thursday released Sessions' prepared remarks from the event, which members of the press were barred from attending. The fact that Sessions has been directed to issue such guidance fulfills a key provision of Trump's May 4 executive order granting religious organizations and churches greater leeway in their political activities, such as endorsing candidates. It also offers "regulatory relief" to religious groups that object to the Affordable Care Act's provision mandating that employers offer certain health services to their employees, such as access to contraceptives. That executive order calls for the attorney general to "issue guidance interpreting religious liberty protections in Federal law." In the address on Tuesday, Sessions vowed that the Trump administration would stand up for "religious Americans," saying that the "cultural climate has become less hospitable to people of faith and to religious belief." "The president has also directed me to issue guidance on how to apply federal religious liberty protections," Sessions said. "The department is finalizing this guidance, and I will soon issue it."

Two Trump federal appeals court nominees survive judiciary committee votes --Two of President Trump's nominees to the federal courts of appeals survived Senate Judiciary Committee votes on Thursday.  John K. Bush's nomination to the 6th Circuit Court of Appeals narrowly passed along an 11-9 vote. Eleventh Circuit Court of Appeals nominee Kevin Newsom sailed through the committee by an 18-2 vote.  Bush suffered under scrutiny from senators of both parties for pseudonymous blog posts he made expressing his political views on presidential politics and judicial activism. Senate Judiciary Committee Chairman Chuck Grassley acknowledged the blog posts in his opening remarks at Thursday's committee meeting and said he did not think Democrats appeared as concerned with judicial nominees' blog postings under President Obama. "[T]he Democrats certainly set the standard that prolific bloggers who write with no holds barred are certainly eligible to be judges," Grassley said. "I don't think we should change that standard now." California Sen. Dianne Feinstein, the Judiciary Committee's ranking Democratic member, said she thought Bush and Schiff's various writings shown "strident" and "provocative" views that raised concerns about their "temperament and impartiality." Vermont Sen. Patrick Leahy, a long-time Democratic member of the Judiciary Committee, joined Feinstein's criticism of Bush and Schiff and said the "Bush and Schiff nominations never should have been made." Despite such complaints, both of Trump's nominees succeeded and will now undergo consideration by the full Senate.

Trump’s expected pick for wage chief sued for stiffing house cleaners -- President Donald Trump reportedly wants Cheryl Stanton to lead the agency that enforces federal wage and overtime laws, holding employers accountable when they cheat workers.  But records show Stanton has had her own problems paying people who work for her. Currently head of the South Carolina Department of Employment and Workforce, Stanton was named last year in a lawsuit alleging she failed to pay her house cleaners. Laurie Titus of Sunflower Cleaning Group stated in her suit that Stanton failed to pay for four house cleaning visits, at $90 each.  “I have emailed, mailed, and certified mailed trying to get payment,” the lawsuit said. Shortly after filing suit, Titus notified the court that Stanton finally had paid the company. Reached by phone, Titus said she didn’t want to comment on former clients.Bloomberg BNA, a news organization for legal and business professionals, reported last month that Stanton was expected to be named chief of the Wage and Hour Division of the U.S. Department of Labor, though Trump has not yet nominated her officially. Her appointment is subject to Senate confirmation.Stanton, through a spokesman, declined to comment on the nomination, the lawsuit or criticisms of her leadership of the South Carolina agency. “Director Stanton focuses her efforts on running the agency and, unfortunately, is unavailable to accept your interview invitation,” spokesman Bob Bouyea wrote by email. The Labor Department and White House didn’t respond to requests for comment. The Trump administration already has shown a less aggressive, more pro-employer approach to wage enforcement, from employer liability to overtime pay.

Sniffing the scent of free publicity, Google and Facebook steamroll into net neutrality protest -- Hark, ye internet peasants. Google and Facebook today trumpeted that they will join the day of protest against efforts to kill off America's net neutrality rules.The news was welcomed by Fight for the Future, the organization behind the protest planned for Wednesday, July 12. But it also noted pointedly that neither of the online giants had been in contact."We have not heard directly from either Facebook or Google, but we're glad to hear that these companies are listening to their employees and Internet users and will speak out for net neutrality with the rest of the Internet on July 12," Fight for the Future campaign director Evan Greer said in a statement. "We hope that they plan to do something meaningful."Several big internet names have been notable for their absence from the list of companies planning to use their widespread reach to highlight the plan by Ajit Pai – the boss of America's comms regulator, the FCC – to scrap the Open Internet Order and replace it with... well, we don't know what yet.When the campaign was formally announced, the biggest name of roughly 45 companies backing it was Amazon. Since then, nearly 150 other companies have come aboard, including big names like Netflix and Twitter.But Google and Facebook have stubbornly failed to appear on the list, leading to repeated questioning from the press and employees over why, and whether they will join in the protest.On Thursday, Google broke its self-imposed silence with a spokesperson saying that it "will participate" and claiming that it has "always planned to be part of it," but the company has yet to announce any plans or even blog its support.Likewise Facebook, which hasn't even supplied on-the-record support and has also not said what it plans to do.That is in stark contrast to the other tech companies, many of whom have explicitly relayed their plans for next Wednesday. Vimeo, for example, will include a short 30-second ad in front of all its videos, warning about the risks of getting rid of the rules.

The Trump Administration Is Planning an Unprecedented Attack on Voting Rights -- Four things that pose a grave danger to voting rights.

  • 1. The House Appropriations Committee voted to defund the Election Assistance Commission, the only federal agency that helps states make sure their voting machines aren’t hacked. The House Administration Committee previously voted to kill the EAC in February, but yesterday’s vote makes it one step closer to reality—practically inviting Russia to try to hack our elections again.
  • 2. The Department of Justice sent a letter to all 50 states informing them that “we are reviewing voter registration list maintenance procedures in each state covered by the NVRA [National Voter Registration Act]” and asking how they plan to remove voters from the rolls. While this might sound banal, it’s a clear instruction to states from the federal government to start purging the voting rolls.
  • 3. The White House commission on election integrity, led by vice chair Kris Kobach, also sent a letter to 50 states asking them to provide sweeping voter data including “the full first and last names of all registrants, middle names or initials if available, addresses, dates of birth, political party (if recorded in your state), last four digits of social security number if available, voter history (elections voted in) from 2006 onward, active/inactive status, cancelled status, information regarding any felony convictions, information regarding voter registration in another state, information regarding military status, and overseas citizen information.” While Kobach asked for “publicly-available voter roll data,” much of this information, like someone’s Social Security number or military status, is, in fact, private.
  • 4. The Trump administration named Hans von Spakovsky of the Heritage Foundation as a member of the commission, who’s done more than anyone other than Kobach to spread the myth of voter fraud and enact suppressive policies. Von Spakovsky was special counsel to the Bush administration’s Assistant Attorney General for Civil Rights Brad Schlozman, who said he wanted to “gerrymander all of those crazy libs right out of the [voting] section.”

Former Ohio official who accidentally released Social Security numbers is on Trump’s voter fraud panel --The Republican gubernatorial primary was just weeks away, and then-Ohio Secretary of State Ken Blackwell had his sights set on securing the nomination. But in March of that year, his office caused a stir: The full Social Security numbers of 1.2 million Ohio voters were posted accidentally on the secretary of state’s website. A month later, in a separate incident, Blackwell’s office inadvertently distributed voter lists with the Social Security numbers of 5.7 million voters. The numbers, by law, are supposed to remain private. … Blackwell, 69, has been tapped to serve on the Trump administration’s bipartisan voter fraud commission, an endeavor election officials nationwide have called a waste of time. The panel, officially called the Presidential Advisory Commission on Election Integrity, asked secretaries of state nationwide to provide voters’ personal information, including names, addresses and the last four digits of Social Security numbers. The commission has faced intense pushback from both Democrats and Republicans, while a watchdog group has filed a lawsuit arguing the commission’s request breaches privacy laws.

 Trump election commission stops collecting personal voter data—for now --The Presidential Advisory Commission on Election Integrity made headlines on June 28 when it requested that states hand over registered voters' full names, political affiliations, addresses, dates of birth, criminal records, the last four digits of their Social Security numbers, and other personal identifying information. The government wants to make all of the data public. Many of the states deem varying parts of the data private—meaning state law forbids them from divulging it.So far, Arkansas is the only state that has complied with the commission's demands. But the commission, put together by President Donald Trump amid allegations of voter fraud on a massive scale during the 2016 election, said it has erased Arkansas' data. And now the commission, which (among other topics) wants to investigate whether dead people voted in elections the past decade, is telling the rest of the states they don't need to comply—at least for now. The commission told a federal judge Monday that the states can hold off on supplying the requested data until the District of Columbia federal court decides whether the commission may require the states to hand over the data. The Electronic Privacy Information Center (EPIC) is asking a judge for a temporary restraining order (TRO) to block the request until the privacy issue can be litigated in court. Most of the states have already balked at complying, citing voter privacy. The commission's request also demands data showing the history of whether voters participated in elections (but not actual votes cast). "Today, July 10, 2017, the Commission also sent the states a follow-up communication requesting the states not submit any data until this Court rules on plaintiff's TRO motion," the government wrote (PDF) the court. The commission e-mailed state election officials early Monday that, "Until the judge rules on the TRO, we request that you hold on submitting any data."

Trump And Kobach’s Voter Fraud Panel Releases Brutal Responses From The Public - The White House released all 112 pages of public comments it received on its Presidential Advisory Commission on Election Integrity Friday. Of the dozens and dozens of comments received, just three seem to support the Commission’s mission to investigate voter fraud. The rest are almost uniformly critical of the commission’s existence, the president’s claims of widespread voter fraud in last year’s election, and commission vice chair Kris Kobach’s request for voter data from the states, a request that has been widely rejected. Most of the comments accuse the commission, and Kobach in particular, of being interested in nothing but voter suppression. (Kobach is the Kansas secretary of the state and recently announced a gubernatorial bid.) A substantial number of the comments call on the commission to focus on defending elections from Russian interference instead of voter fraud. Others call for an end to gerrymandering and a reversal of the Supreme Court’s Citizens United decision. Many use very, very colorful language. Many are not nice. And while these are public comments, some on Twitter pointed out that the White House did not redact personal information on the emails, which underlines the privacy concerns many have voiced about a commission seeking the private information of millions of voters. What follows are some of the highlights from the submitted comments. Some typos have been edited out for clarity.  

 Trump's Nominee to Lead F.B.I. Pledges to Resist White House Pressure  -— Christopher A. Wray, President Trump’s nominee to be F.B.I. director, sought at his confirmation hearing on Wednesday to show lawmakers that he could protect the bureau’s independence and resist pressure from the White House. On a day when Mr. Trump again called the Russia investigation “a witch hunt,” Mr. Wray said he disagreed, told senators that no one at the White House had asked him to pledge loyalty to the president and vowed to resign should the president ask him to do anything illegal. Mr. Wray’s expected confirmation is seen by many F.B.I. agents as a chance to stabilize an institution shaken by the events of the past year, including Mr. Trump’s dismissal of its previous director, James B. Comey, and subsequent revelations about the president’s attempts to influence Mr. Comey. Mr. Wray, dressed in a pinstripe suit and purple tie, calmly reassured senators that he could rebuff any overtures from Mr. Trump.  “I will never allow the F.B.I.’s work to be driven by anything other than the facts, the law and the impartial pursuit of justice. Period,” Mr. Wray told senators. The hearing was a chance for Mr. Wray, 50, a private lawyer and former top Justice Department prosecutor, to demonstrate that he was the person to lead the nation’s premier law enforcement agency under extraordinary circumstances. Many of the questions from senators centered on how he would deal with Mr. Trump, referring to Mr. Comey’s tense interactions with the president. Senator Patrick J. Leahy, Democrat of Vermont, asked what Mr. Wray would do if the president requested that he take any steps that Mr. Wray believed were illegal. “First, I would try to talk him out of it,” Mr. Wray said. “If that failed, I would resign.” He also said he had no doubts about the intelligence community’s assessment that Russia interfered in the election, a conclusion the president has questioned. He pledged that if confirmed, he would read the classified portions of the assessment as soon as he was sworn in.

Comey’s private memos on Trump conversations contained classified material | TheHill: More than half of the memos former FBI chief James Comey wrote as personal recollections of his conversations with President Trump about the Russia investigation have been determined to contain classified information, according to interviews with officials familiar with the documents. This revelation raises the possibility that Comey broke his own agency’s rules and ignored the same security protocol that he publicly criticized Hillary Clinton for in the waning days of the 2016 presidential election. Comey testified last month he considered the memos to be personal documents and that he shared at least one of them with a Columbia University lawyer friend. He asked that lawyer to leak information from one memo to the news media in hopes of increasing pressure to get a special prosecutor named in the Russia case after Comey was fired as FBI director. "So you didn’t consider your memo or your sense of that conversation to be a government document?,” Sen. Roy Blunt (R-Mo.) asked Comey on June 8. “You considered it to be, somehow, your own personal document that you could share to the media as you wanted through a friend?” “Correct,” Comey answered. “I understood this to be my recollection recorded of my conversation with the president. As a private citizen, I thought it important to get it out.” Comey insisted in his testimony he believed his personal memos were unclassified, though he hinted one or two documents he created might have been contained classified information. “I immediately prepared an unclassified memo of the conversation about Flynn and discussed the matter with FBI senior leadership,” he testified about the one memo he later leaked about former national security adviser Lt. Gen. Michael Flynn. He added, “My view was that the content of those unclassified, memorialization of those conversations was my recollection recorded 

Comey Bombshell: FBI Director's Leaked Trump Memos Contained Classified Information -- Comey appears to be in serious trouble, because according to a blockbuster report from The Hill, in addition to the leaked memos, Comey also leaked classified information in gross and direct violation of FBI rules and regulations. Aside from once again confirming that Trump may have been right all along in his accusation of the ex-FBI chief's motives, this shocking revelation raises the possibility that Comey broke his own agency’s rules - by putting his own interests above those of his country - but far more grotesquely, ignored the same security protocol that he publicly criticized Hillary Clinton for in the waning days of the 2016 presidential election, in order to settle his vendetta with President Trump. Amusingly, Comey's alleged flagrant disregard for FBI regulations would explain why he also found Clinton's email server transgressions to not be a material concern, contrary to what most Republicans claimed at the time. After all, if it was good - or rather not bad enough for Clinton, maybe it was the same with Comey's own abuse of confidential data? The only problem is that while Comey was generous enough to let Hillary go, now that the ex-FBI chief is facing the president of the US as his adversary, he may not be quite so lucky. Comey's troubles started when he testified under oath last month that he considered the memos he prepared to be personal documents and that he shared at least one of them with a Columbia University lawyer friend. As Comey later disclosed, he asked that lawyer to leak information from one memo to the news media in hopes of increasing pressure to get a special prosecutor named in the Russia case after Comey was fired as FBI director.

 National Security Chair Calls For Investigation Of Comey's "Political Warfare"; "Purge" Of Obama Holdovers --   As the Washington Free Beacon points out today, Representative Ron DeSantis (R-FL), a member of the House Committee on Oversight and Government Reform and chair of its National Security subcommittee, is urging Attorney General Jeff Sessions to launch a full scale investigation into Comey's handling of a series of potentially classified memos that were leaked to the press recently as well as efforts of the Washington "bureaucracy to weaponize" intelligence information."This is not just standard Washington fair," DeSantis said. "It's happening on such a scale with this president that it's much different." "Really, it has a whiff of people inside the bureaucracy who do not accept the election results, so they're rebelling against the elected president by leaking and doing things to damage him politically," the lawmaker explained. "It's unprecedented, certainly in modern American history. The way you stop the leaks is if people are leaking info that is classified, and that's a crime, DOJ has got to pursue that." "If the bureaucracy is going to weaponize this stuff, I think Congress is going to be much less willing to give them the authority to do this,"DeSantis said. "It is a big deal, and if no one is held accountable it's going to continue to happen." And here are his thoughts on Comey..."Congress needs to press Sessions and other people to make sure they are investigating this because the American people need the truth," DeSantis told the Free Beacon in a wide-ranging interview. "If he did violate any laws, he needs to be held accountable. If you're violating laws in service of doing political warfare, that is just absolutely unacceptable, particularly for someone who held such a high position in the government.""Not only is he leaking this stuff, not only were the memos done in the course of his em ployment and likely government property, he may have disclosed classified information in this quest to basically wage a vendetta against the president because the president fired him and to try and create a special counsel," DeSantis said.

New Research Shows Guccifer 2.0 Files Were Copied Locally, Not Hacked - New meta-analysis has emerged from a document published today by an independent researcher known as The Forensicator, which suggests that files eventually published by the Guccifer 2.0 persona were likely initially downloaded by a person with physical access to a computer possibly connected to the internal DNC network. The individual most likely used a USB drive to copy the information. The groundbreaking new analysis irrevocably destroys the Russian hacking narrative, and calls the actions of Crowdstrike and the DNC into question.The document supplied to Disobedient Media via Adam Carter was authored by an individual known as The Forensicator. The full document referenced here has been published on their blog. Their analysis indicates the data was almost certainly not accessed initially by a remote hacker, much less one in Russia. If true, this analysis obliterates the Russian hacking narrative completely.The Forensicator specifically discusses the data that was eventually published by Guccifer 2.0 under the title "NGP-VAN."  This should not be confused with the separate publication of the DNC emails by Wikileaks. This article focuses solely on evidence stemming from the files published by Guccifer 2.0, which were previously discussed in depth by Adam Carter. Disobedient Media previously reported that Crowdstrike is the only group that has directly analyzed the DNC servers. Other groups including Threat Connect have used the information provided by Crowdstrike to claim that Russians hacked the DNC. However, their evaluation was based solely on information ultimately provided by Crowdstrike; this places the company in the unique position of being the only direct source of evidence that a hack occurred.  “At present, it looks a LOT like Shawn Henry & Dmitri Alperovitch (CrowdStrike executives), working for either the HRC campaign or DNC leadership were very likely to have been behind the Guccifer 2.0 operation.”

New Evidence Says DNC Hack an Inside Job, Not Russia Related -- In the Russia hacking probe, the DNC Denied FBI Direct Access to their Servers. Why? What is the DNC is hiding? Who the DNC is protecting?  Server access denial makes it a lot easier to point a finger at Russia especially when that is story mainstream media and Democrats wish to perpetuate.However, new analysis now suggests neither Russia nor a Romanian named Guccifer 2.0 was involved at all. Rather, the alleged DNC hack was an inside job. A person who bills himself as The Forensicator provides the analysis in Guccifer 2.0 NGP/VAN Metadata Analysis.The Forensicator uses timestamp analysis and transfer rate analysis and concludes the files were copied locally, then a subset of the files was selected for the leak. His analysis is beyond my expertise to comment on, but it is readable and well presented. It deserves a close look.“Guccifer 2.0” is a person or persona stating they were the hacker(s) that hacked into the Democratic National Committee (DNC) computer network and then leaked its documents to the media, the website WikiLeaks, and a conference event.The U.S. Intelligence Community concluded that some of the genuine leaks that Guccifer 2.0 has said were part of a series of cyberattacks on the DNC were committed by two Russian intelligence groups.This conclusion is based on analyses conducted by various private sector cybersecurity individuals and firms, including CrowdStrike, Fidelis Cybersecurity, Fireeye’s Mandiant, SecureWorks, ThreatConnect, Trend Micro, and the security editor for Ars Technica.The Russian government denies involvement in the theft, and “Guccifer 2.0” denied links to Russia. WikiLeaks founder Julian Assange said that multiple parties had access to DNC emails and that there was “no proof” that Russia was behind the attack. According to various cybersecurity firms and U.S. government officials, Guccifer 2.0 is a persona that was created by Russian intelligence services to cover for their interference in the 2016 U.S. presidential election.

  • Theory #1: Putin hired Guccifer 2.0 to hack the DNC server. Guccifer 2.0 succeeded, then managed to download massive amounts of data in minimal time over relatively slow connections. A subset of those files later appeared on Wikileaks.
  • Theory #2: Someone at the DNC did not want Hillary to win. That person, having local access, was able to transfer large numbers of files quickly. A subset of those files later appeared on Wikileaks.

Trump Team Met With Lawyer Linked to Kremlin During Campaign - NYT --Two weeks after Donald J. Trump clinched the Republican presidential nomination last year, his eldest son arranged a meeting at Trump Tower in Manhattan with a Russian lawyer who has connections to the Kremlin, according to confidential government records described to The New York Times.The previously unreported meeting was also attended by Mr. Trump’s campaign chairman at the time, Paul J. Manafort, as well as the president’s son-in-law, Jared Kushner, according to interviews and the documents, which were outlined by people familiar with them.While President Trump has been dogged by revelations of undisclosed meetings between his associates and Russians, this episode at Trump Tower on June 9, 2016, is the first confirmed private meeting between a Russian national and members of Mr. Trump’s inner circle during the campaign. It is also the first time that his son Donald Trump Jr. is known to have been involved in such a meeting. Representatives of Donald Trump Jr. and Mr. Kushner confirmed the meeting after The Times approached them with information about it. In a statement, Donald Jr. described the meeting as primarily about an adoption program. The statement did not address whether the presidential campaign was discussed.

Trump’s Son Met With Russian Lawyer After Being Promised Damaging Information on Clinton - NYT - President Trump’s eldest son, Donald Trump Jr., was promised damaging information about Hillary Clinton before agreeing to meet with a Kremlin-connected Russian lawyer during the 2016 campaign, according to three advisers to the White House briefed on the meeting and two others with knowledge of it.The meeting was also attended by the president’s campaign chairman at the time, Paul J. Manafort, as well as by the president’s son-in-law, Jared Kushner. Mr. Manafort and Mr. Kushner recently disclosed the meeting, though not its content, in confidential government documents described to The New York Times.The Times reported the existence of the meeting on Saturday. But in subsequent interviews, the advisers and others revealed the motivation behind it.The meeting — at Trump Tower on June 9, 2016, two weeks after Donald J. Trump clinched the Republican nomination — points to the central question in federal investigations of the Kremlin’s meddling in the presidential election: whether the Trump campaign colluded with the Russians. The accounts of the meeting represent the first public indication that at least some in the campaign were willing to accept Russian help. between his associates and the Russians, the episode at Trump Tower is the first such confirmed private meeting involving his inner circle during the campaign — as well as the first one known to have included his eldest son. It came at an inflection point in the campaign, when Donald Trump Jr., who served as an adviser and a surrogate, was ascendant and Mr. Manafort was consolidating power.

Trump Jr. becomes central character in Russia storm - Donald Trump Jr. said Monday he’d be willing to speak with the Senate Intelligence Committee about his meeting with a Russian lawyer who promised opposition research on Democratic presidential nominee Hillary Clinton. The offer came after Sen. Susan Collins (R-Maine), a member of the Intelligence panel, called on her committee to interview Trump Jr. and any other individuals involved in the June 2016 meeting. Paul Manafort, then President Trump’s campaign chairman, and Jared Kushner, Trump’s son-in-law who is now a senior White House adviser, also attended the June 2016 meeting with Natalia Veselnitskaya, a Moscow lawyer who came to the United States last year in connection to a $230 million tax fraud case initially exposed by Sergei Magnitsky — an accountant who died in a Russian prison after accusing prosecutors in that country of the fraud. Several congressional panels, along with special counsel Robert Mueller, are investigating Russia’s meddling in last year’s presidential election, including possible links between Moscow and the Trump campaign. Sen. Mark Warner (Va.), the ranking Democrat on the Intelligence Committee, echoed Collins in saying he thought the panel should talk to Trump Jr. and anyone else involved in the meeting. “This is the first time the public has seen clear evidence of at least an attempt by the Trump campaign to obtain [information] … from a possible foreign agent that would interfere with the Hillary Clinton campaign efforts,” Warner said. “This is, again, the underlying premise that has been raised throughout the whole investigation. “In terms of questions, clear collusion or potential violations, that’s for special prosecutor Mueller to determine.” 

GOP senator: Trump Jr. should be interviewed by Senate Intel panel | TheHill: Sen. Susan Collins(R-Maine) is calling for the Senate Intelligence Committee to interview Donald Trump Jr. over a meeting he held with a Russian lawyer who promised to provide compromising information on Hillary Clinton during the 2016 presidential contest. The Maine lawmaker, who sits on the committee, told reporters that “our intelligence committee needs to interview him and others who attended the meeting.” The Hill confirmed the comments with Collins's office. President Trump's eldest son met with Russian lawyer Natalia Veselnitskaya after she promised to provide damaging information on Clinton, The New York Times reported Sunday.Then-candidate Trump's campaign chairman Paul Manafort and son-in-law Jared Kushner also attended the meeting, which took place in June 2016 at Trump Tower. Trump Jr. tweeted Monday afternoon that he would be happy to "pass on what I know" to a Senate panel. Trump Jr. and the White House have downplayed the meeting, saying there was nothing wrong with the president's son taking it. Trump Jr. said Monday made a sarcastic comment on Twitter about how he could hardly have been the only person to attend a meeting where someone was offering damaging information on a political opponent. 

Trump son defends meeting Russian 'with Clinton material' - BBC News: President Donald Trump's son has hit back at US media reports of his meeting with a Russian lawyer who said she had damaging material about Hillary Clinton. Donald Trump Jr denied issuing inconsistent statements about last year's meeting. He also suggested it was normal practice to receive information about a political opponent. US officials are investigating alleged Russian meddling in the US election. The president's son-in-law, Jared Kushner, and then-campaign head, Paul J Manafort, were also at the meeting with Natalia Veselnitskaya. Mr Trump Jr insists she provided "no meaningful information" on Mrs Clinton, his father's rival for the presidency. On Monday he tweeted sarcastically: "Obviously I'm the first person on a campaign to ever take a meeting to hear info about an opponent." He then tweeted: "No inconsistency in statements... In response to further Q's [questions] I simply provided more details." And he linked to a piece in the New York Post headlined "The Times' exposé' on Donald Trump Jr is a big yawn". Later, Mr Trump Jr tweeted: "Happy to work with the committee to pass on what I know", after a Republican member of the Senate Intelligence Committee said it should interview him. The White House says there was nothing inappropriate about Mr Trump Jr's meeting with the Russian lawyer.

Natalia Veselnitskaya, the lawyer who met with Donald Trump Jr., defends herself - With one story, Russian lawyer Natalia Veselnitskaya found herself at the center of one of the biggest stories in America: the Trump family's potential collusion with Russia.On Sunday, the New York Times reported that Veselnitskaya met with the president's eldest son in June 2016, and that Donald Trump Jr. was promised damaging information about top Democrats. Trump Jr. had allegedly been told that Veselnitskaya was part of the Russian government's efforts to help his father win the 2016 presidential race.Within hours, Veselnitskaya had become a source of intrigue — who is she, really? On Tuesday morning, Veselnitskaya defended herself in an NBC television interview. “I never had any damaging or sensitive information about Hillary Clinton. It was never my intention to have that,” the lawyer said. Veselnitskaya said she met with Trump Jr. to press her client’s interest in the Magnitsky Act, a wide-ranging Russia sanctions bill. The Magnitsky Act imposes sanctions on Russian officials identified by the U.S. government as having been involved in violations of human rights. The Kremlin hates the law — and banned the adoption of Russian children by Americans in retaliation. One of Veselnitskaya’s clients, Denis Katsyv, has been lobbying hard to get the American law overturned. He is the son of senior Russian government official Pyotr Katsyv and the owner of Prevezon, under investigation by the Department of Justice for laundering millions of dollars into New York City real estate.

Read Donald Trump Jr.’s Emails About Russia Meeting - Faced with the prospect of the New York Times publishing emails showing Donald Trump Jr. agreeing to meet with a Kremlin-connected lawyer to receive damaging information on Hillary Clinton, the president’s son attempted to pre-empt the story by publishing them himself.In a June 3, 2016, email, a Russian business partner of then-presidential candidate Donald Trump emailed Donald Trump Jr. offering documents from a senior Russian government official that “would incriminate Hillary and her dealings with Russia and would be very useful to your father.”Donald Trump Jr. responded quickly, saying “If it's what you say I love it especially later in the summer.”The emails show the younger Trump and the business partner setting up a meeting in Trump Tower, with campaign chairman Paul Manafort and Trump’s son-in-law and now senior adviser Jared Kushner set to meet the Russian lawyer as well. The New York Times previously reported that the meeting took place on June 9, 2016. Read the emails here:

The Everybody-Does-It Defense of Collusion - As evidence continues to mount suggesting the Trump campaign worked with Russia to influence the 2016 election, the president’s allies have shifted to a new defense. As former House Speaker Newt Gingrich put it: “You could argue it’s dumb, but it’s not illegal.”For months, the White House has fervently denied allegations of collusion, with President Trump routinely dismissing Russia stories in the press as "fake news," and calling himself the victim of an historically unprecedented "witch hunt." His Republican defenders have largely followed suit, rejecting the entire collusion narrative as a "hoax," or at least a partisan smear.  Now, however, many of Trump's high-profile supporters and surrogates are changing tack. A series of explosive The New York Times stories this week revealed that three campaign officials—Donald Trump Jr., Jared Kushner, and Paul Manafort—met with a Kremlin-connected lawyer in June of last year in hopes of discovering valuable dirt on Hillary Clinton. The drip-drip procession of Times stories prompted Donald Jr. on Tuesday to release his private emails, revealing that the man who set up the meeting explicitly said the Russian government was trying to aid Trump’s candidacy.These revelations—and the possibility that more is yet to come—have made it increasingly untenable for Trump’s supporters to argue that there is nothing to the collusion story. And so, many have now begun to argue that even if there was collusion of the kind suggested by the Times, it wouldn’t be a crime—or even all that out of the ordinary. Some Trump loyalists are even making the case that it was smart and savvy for the campaign to pursue help from the Russians.In an interview on Tuesday, Gingrich, who has become one of Trump’s most vocal defenders, said that the entire story was an “absurdity.” “If somebody in the middle of the campaign walks in the door and says ‘I have information that will harm your opponent,’ virtually every campaign in the world will say show me, what do you have,” he said.

Be Careful How You Define Collusion: On the Veselnitskaya Bombshell and the Steele Dossier - emptywheel -- The NYT has a new bombshell showing that Don Jr. was willing to meet with someone to get Russian dirt on Hillary. It is damning. But Democrats should be very careful about calling it collusion, yet. On Saturday, the NYT reported that Don Jr, Paul Manafort, and Jared Kushner met on June 9 with Natalia Veselnitskaya, a Russian lawyer who has worked to overturn the Magnitsky sanctions. In Don Jr’s first response to the NYT, he admitted to the meeting, but said it focused primarily on adoptions (which means it focused on the sanctions). Then, yesterday, NYT reported that Don Jr took the meeting because he was promised Russia-related dirt on Hillary. With that new detail, Don Jr changed his story, admitting that’s why he took the meeting, though he claimed that the information Veselnitskaya offered “made no sense.”“After pleasantries were exchanged,” he said, “the woman stated that she had information that individuals connected to Russia were funding the Democratic National Committee and supporting Ms. Clinton. Her statements were vague, ambiguous and made no sense. No details or supporting information was provided or even offered. It quickly became clear that she had no meaningful information.” He said she then turned the conversation to adoption of Russian children and the Magnitsky Act, an American law that blacklists suspected Russian human rights abusers. “It became clear to me that this was the true agenda all along and that the claims of potentially helpful information were a pretext for the meeting,” Mr. Trump said. WaPo revealed that the meeting was set up by music publicist Rob Goldstone, and hints that he may have done so at the behest of Emin Agalarov (which Goldstone has since confirmed). This news is damning for several reasons. Kushner failed to disclose it at first in his clearance application, and Don Jr didn’t reveal it in past interviews about meeting with Russians. Everyone tried to hide this at first. But thus far, it is not evidence of collusion, contrary to what a lot of people are saying.

Trump Jr.: Never Told My Father, "There Was Nothing To Tell" -- In his first public appearance since his tweeted emails earlier today, which seemed to confirm that the Trump campaign was aware that the Russian government was willing to help then-Mr.Trump, Donald Trump Jr. admits "in retrospect I probably would have done things a little differently," telling Fox News' Sean Hannity that he did not tell his father about the meting because "It was just a nothing. There was nothing to tell." Key excerpts include (via Axios): On whether in retrospect he would have done things differently: "In retrospect I probably would have done things a little differently. Again this is before the Russia mania, this is before they were building this up in the press. For me this was opposition research, they had something you know maybe concrete evidence to all the stories I'd been hearing about, probably under reported for years not just during the campaign so I think I wanted to hear it out. But really it went nowhere and it was apparent that wasn't what the meeting was about."  Clip from the show:  Watch the latest video at  On whether he told his father about the meeting: "No. It was just a nothing. There was nothing to tell. I mean, I wouldn't have even remembered it until you started scouring through this stuff. It was literally just a wasted 20 minutes, which was a shame."

Trump Jr.'s Russia emails could trigger probe under election law (Reuters) - Donald Trump Jr.'s meeting with a woman he was told was a Russian government lawyer who had incriminating information about Democratic candidate Hillary Clinton that could help his father's presidential campaign could lead investigators to probe whether he violated U.S. election law, experts said. Trump Jr. met the woman, lawyer Natalia Veselnitskaya, on June 9, 2016, after an email exchange with an intermediary. The emails, tweeted by Trump Jr. on Tuesday, could provide material for Special Counsel Robert Mueller's probe into possible collusion between the Trump campaign and Russia during the 2016 presidential election. In one of the emails dated June 3, 2016, Trump Jr. wrote: "If it's what you say I love it." He released the tweets after the New York Times said it planned to write about their contents and sought his comment. Trump Jr. said in his tweets that nothing came of the meeting. Veselnitskaya told NBC News early on Tuesday she was not affiliated with the Russian government and had passed no information. "In retrospect, I probably would have done things a little differently," Trump Jr. said in an interview on Fox News. "For me, this was opposition research." Collusion itself is not an actual crime under the U.S. criminal code, so prosecutors would look to see if Trump Jr.'s conduct ran afoul of a specific law, legal experts said. Moscow has denied interference in the U.S. election, and President Donald Trump has said his campaign did not collude with Russia. Alan Futerfas, Trump Jr.'s lawyer, did not respond to a request for comment. A spokesman for Mueller declined to comment. 

What the Election-Law Camp Is Saying About Donald Trump Jr.’s Emails - - Donald Trump Jr.’s emails that disclosed a meeting with a Russian operative offering negative information on Hillary Clinton exploded this week and triggered new questions about possible election law violations.Alan Futerfas, a lawyer for Trump Jr., said in a statement that the emails were “much ado about nothing.” Kushner’s lawyers, led by Jamie Gorelick and Abbe Lowell, reportedly found Trump Jr.’s emails. Comments from veteran election law attorneys, however, suggest otherwise or at least raise more questions for Special Counsel Robert Mueller III’s team. What follows is a snapshot of some of what lawyers are telling us and saying around the web about the legal significance of the newly disclosed emails.

  • Robert Bauer, Perkins Coie, former President Obama White House Counsel: “People tend to view this as an individual issue for Donald Trump Jr. There’s a question of his own personal liability or the liability of Mr. [Jared] Kushner and [former campaign chair Paul] Manafort. They’re agents of the campaign: They’re speaking for the campaign, they’re holding a meeting at Trump Tower. I think that one of the things to keep in mind about the exchange of emails today is that it opens up the question of campaign organization liability. That is to say, the campaign as an entity. That, of course, brings it a lot closer to President Trump.” [Q&A in New York magazine]
  • Charlie Spies, a campaign finance lawyer at Clark Hill: “A few, unhinged liberal lawyers have put forth the theory that there’s a campaign finance violation, but there is zero precedent or legal authority to back up that claim. Based on public information, the conversation regarding potential negative information did not meet the standard for a solicitation, and also does not have a provable value, which would be necessary in a campaign finance context.” [Washington Post]
  • Norm Eisen and Richard Painter, former White House ethics officials: “[T]here is the question of whether the statements of enthusiasm in the emails about the meeting (“I love it,” Donald Jr. wrote) constituted assent on behalf of the Trump campaign to continuing Russian help. Welcoming the information and taking the meeting can reasonably be understood to signal a broader receptivity to Russian aid. This is even more serious than the campaign finance violation because it brings conspiracy law into play. That could make Donald Jr. and others liable for all of the Russian dirty tricks that followed, including any Russian cybercrimes or other crimes targeting the Clinton campaign.” [The New York Times, op-ed]
  • Jan Baran, Wiley Rein, co-chair election law and government ethics: “I have a hard time seeing how a meeting is a contribution from a foreign national. It’s not concrete. It doesn’t have a quantifiable value.” [Los Angeles Times]
  • Barak Cohen, Perkins Coie: “The emails tell me that he’s aware that the Russian government is trying to influence the election in favor of Trump, and they also indicate an intent, at least on the part of Donald Trump Jr., to entertain the idea of working with the Russians in their efforts,” said Barak Cohen, a former federal prosecutor now in private practice at Perkins Coie. “It raises a number of potential areas of liability.” [The Washington Post]
  • Jens David Ohlin, Cornell Law School: ”It’s a shocking admission of a criminal conspiracy. The conversation will now turn to whether President Trump was personally involved or not. But the question of the campaign’s involvement appears settled now. The answer is yes.” [ABC News]
  • Richard Hasen, University of California Irvine School of Law: “It is illegal for a person to solicit a contribution to a campaign from a foreign individual or entity. Hard to see how there is not a serious case here of solicitation. Trump Jr. appears to have knowledge of the foreign source and is asking to see it. As I explained earlier, such information can be considered a ‘thing of value’ for purposes of the campaign finance law.” [Election Law Blog]

 Kremlin 'has nothing to do' with Russian lawyer who contacted Trump's team  (Reuters) - The Kremlin has never been in touch with Russian lawyer Natalia Veselnitskaya who met a group of U.S. President Donald Trump's associates last year, Kremlin spokesman Dmitry Peskov said on Wednesday. "We have already said we are absolutely unaware of this story, we have never been in contact with this lawyer ... She has nothing to do whatsoever with us," Peskov told a conference call with reporters. Trump's eldest son eagerly agreed last year to meet a woman he was told was a Russian government lawyer who might have damaging information about Democratic White House rival Hillary Clinton as part of Moscow's official support for his father, according to emails released on Tuesday.

Kucinich: Trump Jr. meeting with Russian 'a bunch of nothing' | TheHill: Former Rep. Dennis Kucinich (D-Ohio) on Friday called the meeting between Donald Trump Jr. and a Russian lawyer during the 2016 presidential campaign "a bunch of nothing." "This attorney set up the meeting under false pretenses," Kucinich said during an appearance on "The Fox News Specialists," referring to the Russian lawyer. "Big picture: I think this thing is a bunch of nothing," added Kucinich, who is a Fox News contributor. Kucinich said he didn't believe Trump Jr. did anything illegal by meeting with attorney, Natalia Veselnitskaya, in an effort to obtain damaging information on Hillary Clinton. Trump Jr. claimed that nothing came from the brief meeting in June 2016, and that Veselnitskaya had no useful information on the Democratic candidate. Kucinich argued that Trump Jr. had not violated campaign finance law, which he explained required "receiving something of value." "We've spent a lot of time on this, and it's going nowhere," he said. "I don't care how many investigations they have, I've seen these kind of investigations going nowhere." 

Why does it look like somebody close to the White House is trying to destroy Don Jr.? – Josh Barro - The call is coming from inside the White House — or near it, at least. A remarkable fact about The New York Times' Sunday report of the meeting of a Kremlin-linked lawyer and Donald Trump Jr., Jared Kushner, and Paul Manafort is that the story was sourced to "three advisers to the White House briefed on the meeting and two others with knowledge of it." Subsequently, The Times obtained Trump Jr.'s email exchange with the publicist Rob Goldstone to set up the meeting. That is the exchange during which Goldstone promised damaging information about Hillary Clinton obtained as "part of Russia and its government's support for Mr. Trump." And Trump Jr. responded not by saying, "What Russian effort to support my dad?" but rather, "I love it especially later in the summer." The Times cannot have gotten the emails from Goldstone. After all, The Times knew that Trump Jr. had "forwarded the entire email chain to Mr. Kushner's company work email, and to Mr. Manafort at his Trump campaign email." Goldstone wasn't included on that forward, as we can see from Trump Jr.'s publication of the email chain on Twitter after The Times called him for comment about it. So five people in or around the White House have been spilling highly incriminating information to The Times about Trump Jr.'s meeting, and an email chain that only Kushner, Manafort, and Trump Jr. possessed also made its way to The Times somehow. This raises a bunch of interesting questions: Why are some people close to the White House trying to destroy Trump Jr. in a way that risks destroying the whole Trump presidency? Why are they dribbling it out in a manner designed to inflict maximum political damage? And is it a coincidence that this is happening right after the president's long meeting with Vladimir Putin?  I don't know exactly what's going on here. But I can only imagine that there must be some group of people in or around the administration who believe they stand to gain from these disclosures.

Exclusive: DOJ let Russian lawyer into US before she met with Trump team -TheHill: The Russian lawyer who penetrated Donald Trump’s inner circle was initially cleared into the United States by the Justice Department under “extraordinary circumstances” before she embarked on a lobbying campaign last year that ensnared the president’s eldest son, members of Congress, journalists and State Department officials, according to court and Justice Department documents and interviews.This revelation means it was the Obama Justice Department that enabled the newest and most intriguing figure in the Russia-Trump investigation to enter the country without a visa. Later, a series of events between an intermediary for the attorney and the Trump campaign ultimately led to the controversy surrounding Donald Trump Jr. Just five days after meeting in June 2016 at Trump Tower with Trump Jr., Trump's son-in-law Jared Kushner and then-Trump campaign chairman Paul Manafort, Moscow attorney Natalia Veselnitskaya showed up in Washington in the front row of a House Foreign Affairs Committee hearing on Russia policy, video footage of the hearing shows. She also engaged in a pro-Russia lobbying campaign and attended an event at the Newseum in Washington, D.C., where Russian supporters showed a movie that challenged the underpinnings of the U.S. human rights law known as the Magnitsky Act, which Russian President Vladimir Putin has reviled and tried to reverse. At least five congressional staffers and State Department officials attended that movie showing, according to a Foreign Agent Registration Act complaint filed with the Justice Department about Veselnitskaya’s efforts. And Veselnitskaya also attended a dinner with the chairman of the House subcommittee overseeing Russia policy, Rep. Dana Rohrabacher (R-Calif.) and roughly 20 other guests at a dinner club frequented by Republicans. 

Lynch distances herself from Russian lawyer after Trump attack | TheHill: Former attorney general Loretta Lynch on Thursday distanced herself from the Russian lawyer that gained passage into the U.S. before landing a meeting with Donald Trump Jr. during the 2016 campaign. At a press conference in France earlier Thursday, President Trump blamed the Obama administration and Lynch’s Justice Department for allowing Natalia Veselnitskaya into the country. In a statement, a spokesperson for Lynch said the former attorney general “does not have any personal knowledge of Ms. Veselnitskaya's travel.” In his remarks in France, Trump appeared to cite a report in The Hill that the Justice Department issued Veselnitskaya a special immigration waiver so that she could defend her client, a Russian firm, in an asset forfeiture case in New York. The U.S. Attorney’s office in New York told The Hill that it let Veselnitskaya into the country on a grant of immigration parole from October 2015 to early January 2016 after her initial request for a visa had been denied. Court records show that when Veselnitskaya sought permission to extend her stay, the U.S. attorney at the hearing told the judge that the special visa the Russian lawyer received was part of a “discretionary act that the statute allows the attorney general to do in extraordinary circumstances.”The U.S. attorney described the grant of parole immigration as extremely rare. 

Kaspersky Lab Has Been Working With Russian Intelligence   -- Russian cybersecurity company Kaspersky Lab boasts 400 million users worldwide. As many as 200 million may not know it. The huge reach of Kaspersky’s technology is partly the result of licensing agreements that allow customers to quietly embed the software in everything from firewalls to sensitive telecommunications equipment—none of which carry the Kaspersky name.  That success is starting to worry U.S. national security officials concerned about the company’s links to the Russian government. In early May six U.S. intelligence and law enforcement agency chiefs were asked in an open Senate hearing whether they’d let their networks use Kaspersky software, often found on Best Buy shelves. The answer was a unanimous and resounding no. The question, from Florida Republican Marco Rubio, came out of nowhere, often a sign a senator is trying to indirectly draw attention to something learned in classified briefings. Eugene Kaspersky took to Reddit to respond. Claims about Kaspersky Lab’s ties to the Kremlin are “unfounded conspiracy theories” and “total BS,” the company’s boisterous, barrel-chested chief executive officer wrote. While the U.S. government hasn’t disclosed any evidence of the ties, internal company emails obtained by Bloomberg Businessweek show that Kaspersky Lab has maintained a much closer working relationship with Russia’s main intelligence agency, the FSB, than it has publicly admitted. It has developed security technology at the spy agency’s behest and worked on joint projects the CEO knew would be embarrassing if made public.

Kushner Sought $500 Million Investment From Qatar: Report - Jared Kushner has no experience in public service or policymaking. His only qualification for his senior White House position (beyond having been born and betrothed to the right people) is the business savvy that allowed him to avoid squandering his family’s enormous fortune (for the moment, anyway). In 2007, Kushner’s killer instinct told him that the real-estate market had nowhere to go but up. And so the 26-year-old mogul decided to plow $500 million of his family’s money — and $1.3 billion in borrowed capital — into purchasing 666 Fifth Avenue for twice the price it had previously sold for. Even if we’d somehow avoided a global financial crisis, this would have been a bad bet: Before the crash, when the building was almost fully occupied, it generated only about two-thirds of the revenue the Kushners needed to keep up with their debt payments. After the crisis, however, things got really hairy. The Kushners were forced to sell off the building’s retail space to pay their non-mortgage debt on the building — and then to hand over nearly half of the office space to Vornado as part of a refinancing agreement with the real-estate giant. The office space that the Kushners retained is worth less than its $1.2 billion mortgage — which is due early in 2019. If their company can’t find some new scheme for refinancing and redeveloping the property by then, Jared Kushner will have cost his family half a billion dollars. On November 8, 2016, the firm’s prospects of securing a bailout massively improved. At that point, the company was already in talks with former Qatari prime minister and billionaire investor Sheikh Hamad bin Jassim al-Thani, also known as “HBJ.” The Qatari billionaire had agreed to invest at least $500 million into 666 Fifth Avenue on the condition that the Kushners demonstrated a capacity to raise the rest, according to a new report from the Intercept. But other investors had proven difficult to come by —until Jared’s father-in-law moved into the Oval Office. Then, doors began opening: After the election, Kushner Companies found many more suitors interested in doing business … An insurance firm [in China] with close ties to the country’s ruling elite had been pursued for months, but, like the other investors, wasn’t truly interested in the deal until after the election…In March, the details of the talks between Kushner and the firm, Anbang, became public. Anbang would invest $400 million in the project and the Kushners would put up $750 million, and additional investors, of which The Intercept’s sources say HBJ was to be one, would contribute a total of almost $2 billion more, according to a document being shown to investors that was shared with Bloomberg. Anbang’s $400 million, plus $100 million from other investors, would flow to the Kushners, meaning the family would recoup the entirety of their initial $500 million investment…Crucially, in addition to the cash investment, the deal called for Anbang to take out a $4 billion loan to finance the demolition of the current building and the construction of an 80-story Zaha Hadid-designed residential and retail tower in its place.

Kushner updated disclosure to add more than 100 foreign contacts: report | TheHill: White House adviser Jared Kushner reportedly updated his federal disclosure form several times to include more than 100 names on a list of foreign contacts. Kushner, President Trump's son-in-law, updated the list of foreign contacts on his disclosure form — which he needed to submit to get security clearance — three times, The New York Times reported. He added more than 100 names to it, people close to Kushner told The Times.Some have raised questions recently about Kushner's security clearance after new details emerged about a meeting he attended last year with Donald Trump Donald TrumpOvernight Cybersecurity: Trump dodges on Putin hacking denial | Senate panel wants Trump Jr. to testify | House approves cyber amendments to defense bill Man who jumped White House fence pleads guilty Overnight Finance: Yellen pushes back on GOP banking deregulation plan | Trump dodges on Russia sanctions bill | Mnuchin touts growth as solution to Social Security, Medicare woes MORE Jr. and a Russian lawyer. Trump Jr. earlier this week released emails detailing his conversations setting up the meeting with a Russian lawyer he was told had compromising information on Hillary Clinton. Sen. Chris Murphy (D-Conn.) on Wednesday said in a "normal political world," Kushner would no longer have his job. "If this were a normal political world, Jared Kushner wouldn't have a job by the end of today," he said during a Wednesday interview, "and at the very least, he should absolutely have his security clearance revoked." 

High-Profile Team Sues Trump Campaign, Alleging Role in DNC Hack -- A group of prominent lawyers is behind a new lawsuit filed Wednesday on behalf of Democratic donors against President Donald Trump and Roger Stone, who has advised Trump in an informal capacity. The lawsuit, filed Wednesday in the U.S. District Court for the District of Columbia, was organized by the nonprofit United to Protect Democracy. In addition to the Protect Democracy team, other lawyers include Keker, Van Nest & Peters partner Steven Hirsch, former federal judge and Harvard professor Nancy Gertner and Richard Primus, a professor at the University of Michigan law school. All three are working on the case pro bono. The complaint alleges the Trump campaign and Stone conspired with Russia and Wikileaks to publicly release emails stolen from the Democratic National Committee, in violation of D.C. privacy laws and federal civil rights laws. Wikileaks published the emails during the 2016 presidential election. The plaintiffs include Eric Schoenberg and Roy Cockrum, two DNC donors, and Scott Comer, a former DNC staffer, who say the publication of their private emails caused emotional stress and harm.  “We thought about the people who were not political candidates or public figures, but who were just trying to participate in their democracy at the basic level as Americans always have. And it became obvious that so long as those victims didn’t have justice, their access to our democracy would stand violated and other civic-minded Americans might be chilled from participating,” said Protect Democracy executive director Ian Bassin in a written statement. Mark Corallo, a spokesperson for Trump’s personal legal team, declined to comment. In an emailed statement, Grant Smith, a lawyer for Roger Stone, said that the lawsuit “is without merit, is blatantly untruthful, and not supported by one stitch of evidence.”“This is nothing more than an attempt to drag Mr. Stone into something in which he was not involved,” Smith said. “Further, it is a gigantic waste of time of the precious resources of our already overburdened court system. Mr. Stone and his legal team believe this will be summarily dismissed when the matter is taken out of the political arena and left to the judiciary.”

Aiding and Abetting Trump as Tweeter-in-Chief - I don’t tweet, but I do have a brief message for our president: Will you please get the hell out of the way for a few minutes? You and your antics are blocking our view of the damn world and it’s a world we should be focusing on! Maybe it was the moment, more than a week ago, when I found myself reading Donald Trump’s double tweet aimed at MSNBC’s Joe Scarborough and Mika Brzezinski who, on Morning Joe, had suggested that the president might be “possibly unfit mentally.”“I heard,” the president tweeted, “poorly rated @Morning_Joe speaks badly of me (don’t watch anymore). Then how come low I.Q. Crazy Mika, along with Psycho Joe, came… to Mar-a-Lago 3 nights in a row around New Year’s Eve, and insisted on joining me. She was bleeding badly from a face-lift. I said no!” In response to Trump’s eerie fascination with women’s blood, Brzezinski tweeted a shot of the back of a Cheerios box that had the phrase “Made for Little Hands” on it. And so it all began, days of it, including the anti-cyber-bullying First Lady’s rush (however indirectly) to her husband’s side via her communications director who said, “As the First Lady has stated publicly in the past, when her husband gets attacked, he will punch back 10 times harder.” But one tweet truly caught my attention, even if it was at the very beginning of a donnybrook that, with twists and turns, including claims of attempted White House blackmail over a National Enquirer article (and Trumpian rejoinders of every kind), would monopolize the headlines and fill the yak-o-sphere of cable TV for days.  That tweet came from conservative idol Bill Kristol, editor at large for the Weekly Standard.  It said: “Dear @realDonaldTrump, You are a pig. Sincerely, Bill Kristol.”

Trump Sued For Blocking Twitter Users -- A trying day for the Trump administration has turned more bizarre, when shortly after Donald Trump Jr. released the chain of emails released ahead of his correspondence with the Russian lawyer who had promised to deliver anti-Clinton information with the implied blessing of the Russian government, a free-speech group sued President Donald Trump for blocking Twitter users from his @realDonaldTrump account, arguing the practice violates the First Amendment of the U.S. Constitution.The lawsuit was brought by the Knight First Amendment Institute at Columbia University in New York and joined by seven individual Twitter users, and claims that Trump blocked a number of accounts whose owners replied to his tweets with comments that criticized, mocked or disagreed with the president. The lawsuit, filed in Southern District of NY, claims that Trump's blocking of the accounts amounted to an unconstitutional effort to suppress dissent, although we are confident that Twitter itself would have certain things to say about the purpose of the "block" function which it has been touting in recent months as a way to evade trolls."Everyone being able to see the president's tweets feels vital to democracy," Joseph Papp, one of the seven Twitter users involved in the suit, said in a statement. As Reuters adds, Papp, an author, said he had been a registered Republican for 10 years and did not join the suit for political reasons, but that he "felt a deep sense of unease" when he was blocked.The suit names Spicer and Dan Scavino, the White House director of social media, as defendants in addition to Trump. It asks for the blocking to be deemed unconstitutional and seeks an injunction to require the president to unblock users. The complaint follows a letter from the Knight Institute to Trump last month warning it would sue if users were not unblocked.

Enjoy The Trump Show While Wall Street Pillages The Country - Lee Camp - Donald Trump is the best thing to happen to Wall Street in twenty years. …This is because since the moment he took the oath of office, no one has so much as uttered a word about Wall Street. And much like Tyler Durden, Wall Street LOVES when no one is talking about it.  As long as Donald Trump is caressing the White House with the care and loving kindness of a bull in a china shop being chased by a farmer trying to collect its testicles – As long as that’s going on, Wall Street can continue the breathtaking and unfettered pillaging of our country without the slightest bit of oversight. And of course Trump has put Goldman Sachs in charge of the economy, just as President Obama did. [Insert your own fox/ hen house joke here, but I warn you, we’ve heard them all.]  During the 2011/ 2012 Occupy movement, for the first time in years the entire country took a critical eye to the institution that was running our economy (by “running” I mean “dry humping”). The nation FINALLY cared that this institution was steadily extracting all of the wealth and resources and giving it (in an unmarked bag) to a tiny percentage of men and women (mainly men) who smelled impeccable. Even those citizens who were wrongly disgusted by Occupy still felt that Wall Street was exploiting the American people at a jaw-dropping pace. This is when the mainstream media did what they do best – they acted as the white blood cells attacking the infection in the system. (And I’m sure I’m not the first to use that analogy.) In this case the “infection” was activists calling attention to the full-blast destructive tendencies of capitalism. The media piled on the protesters as if those activists were the ones sucking every last penny out of the American people. This, along with a healthy dose of militarized police and FBI infiltration, is how Occupy ended up maligned and imprisoned.  …But I digress. Right now the amounts of money being thrown around on Wall Street are bigger than they’ve ever been. There’s a massive auto loan bubble, and student loan bubble, and various other bubbles, and they’re all itching, aching, juking, and jiving to burst into a thousand pieces that will result in a lot of people going broke and McDonald’s McRib suddenly looking like a delicacy. The five richest men in the world have the same amount of wealth as the bottom half of the world – 3.67 BILLION people, and in the U.S. 99% of the wealth created since the “recovery” from the 2008 collapse has gone to the top 1%. The people that work on Wall Street – at the hedge funds and the big banks – do nothing but push around ones and zeros (and lowly interns). Yet they make more in a day than most people make in a year – and some people make in a lifetime.

Jamie Dimon: "It's Embarrassing As An American Listening To This Stupid Shit We Have To Deal With" --One month after Goldman CEO Lloyd Blankfein trolled Donald Trump, when on June 9 in only his 4th ever tweet, the chief executive sarcastically said on Twitter "Just landed from China, trying to catch up.... How did "infrastructure week" go?" moments ago Jamie Dimon, in some very uncertain terms, lashed out at the gridlock in Washington in general, and - according to some - president Donald Trump in particular.During today's earnings call discussing JPM's Q2 beat, which however masked another sharp drop in the company's trading revenue, Dimon - fresh from a work trip overseas, unloaded on everything that’s holding U.S. businesses back. “It’s almost an embarrassment being an American traveling around the world and listening to the stupid shit Americans have to deal with. At one point, we would have to get our act together, do what we're supposed to do to the average American."Dimon's outburst was prompted by a Wall Street analyst who asked if clients were beginning to worry about D.C. dysfunction and a lack of progress. Dimon countered by saying that the economy has grown despite years of bad policy, and that it would continue to grow regardless of the US political climate. Although, he added  “there would be much stronger growth if there were more intelligent decisions and less gridlock." In an earlier call, Dimon said the media should focus on the major issues the nation faces rather than the vagaries of the firm’s Wall Street trading businesses: "the USA has to start to focus on policy which is good for all Americans and that is regulation, tax, education, we have to get those things done." Dimon has become a vocal critic of the US economic and social situation, devoting an entire section of his April annual letter to the problems in the US, saying "Something is Wrong' with America" and offering several ideas of what needs to be fixed.

Trump Nominates Randal K. Quarles to Oversee Wall Street Banks - — President Trump on Monday named Randal K. Quarles, a former Treasury Department official, to serve as the Federal Reserve’s top watchdog overseeing Wall Street and to play a leading role in the administration’s plans to reduce financial regulation. Mr. Quarles would be the first person to serve in the role of vice chairman for supervision, which Congress created after the financial crisis to sharpen the Fed’s focus on regulatory issues. As a member of the Fed’s board of governors, he would also have a vote on monetary policy.  The position requires Senate confirmation, but Republicans, who hold a majority, can confirm Mr. Quarles without support from Democrats, should that be necessary.  Mr. Quarles, 59, would be a counterweight to the Fed chairwoman, Janet L. Yellen, who has led the Fed’s postcrisis stimulus campaign and its efforts to strengthen financial regulation. Mr. Quarles has criticized some of those policies, including the focus on constraining the largest banks. He is regarded as more sympathetic than Ms. Yellen to the industry’s view that regulation is restricting lending and impeding economic growth. In a 2016 opinion article in The Wall Street Journal, Mr. Quarles warned against “arbitrarily taking an ax to big banks and irreparably damaging the economy.” Mr. Quarles has also publicly criticized the Fed’s efforts to stimulate the economy, and will probably push for the central bank to end those efforts more quickly. He has endorsed a Republican proposal to constrain monetary policy by requiring the Fed to publicly describe a mathematical formula for determining the level of interest rates. Mr. Quarles, 59, was a lawyer for the financial industry before joining the Treasury Department under President George W. Bush in 2002, first as assistant secretary for international affairs and then as under secretary for domestic finance. After leaving the Bush administration in 2006, he became a partner at the Carlyle Group. In 2014, he helped to found the Cynosure Group, a private equity firm based in Salt Lake City.

Nomi Prins: Easy Money Policy Makes Another Crisis Inevitable -- Nomi Prins joined The Foreign Correspondents’ Club of Japan in Tokyo to discuss the banking landscape and state of financial regulations in the Trump era. The central bank historian and financial expert also took a deep dive into the shifting relations between the United States and Japan and what easy money policy has meant for financial markets.The author began the discussion noting that, “A lot of things have happened in the past months in particular within finance and trade alliances amongst countries in the Trump era.”Speaking on the recent gathering of world leaders Prins’ notes,“One of the things that came out of the G20 is whether it is America last in terms of the alliances occurring today. The American first policy is pushing new diplomacy and agreements with countries that have not spoken with one another in the past. This is happening for two reasons. One, from a standpoint of protecting the commonality of the world. It is filling the gap between receding powers versus rising power. Two, it is an anti-protectionist move.”Prins’ then builds on easy money policy stating, “We still have a problem of banks that are too big to fail. We still have a problem where the initial financial crisis that happened ten years ago in the United States, that was the result of the banks being too large and too speculative… in using the guarantees that the U.S government has provided to bank depositors and the provisions provided in the Glass-Steagall. Those deposits have become a guarantee for banks to become bigger and a guarantee for financial crises to become something that the government subsidizes. Our Federal Reserve, our central bank, also subsidizes this.”

America Will Fail Without Reenacting Glass-Steagall -  Paul Craig Roberts - For 66 years the Glass-Steagall act reduced the risks in the banking system. Eight years after the act was repealed, the banking system blew up threatening the international economy. US taxpayers were forced to come up with $750 billion dollars, a sum much larger than the Pentagon’s budget, in order to bail out the banks. This huge sum was insufficient to do the job. The Federal Reserve had to step in and expand its balance sheet by $4 trillion in order to protect the solvency of banks declared “too big to fail.” The enormous increase in the supply of dollars known as Quantitative Easing inflated financial asset prices instead of the consumer price index. This rise in bond and stock prices is a major cause of the worsening income and wealth distribution in the United States. The economic polarization has undercut the image and reality of the US as a land of opportunity and has introduced political and economic instability into the life of the country. These are huge costs and for the benefit only of the rich who were already rich.So, what we can say about the repeal of Glass-Steagall is that it turned a somewhat egalitarian democracy with a large middle class into the One Percent vs. the 99 percent. The repeal resulted in the destruction of the image of the United States as an open prosperous society. The electorate is very much aware of the decline in their economic situation, and this awareness expressed itself in the last presidential election. It makes perfect sense to separate commercial from investment banking. The taxpayer insured deposits of commercial banking should not serve as backing for investment banking’s creation of risky financial instruments, such as subprime and other derivatives. The US government understood that in 1933, but no longer did in 1999. This deterioration in government competence has cost America dearly. By merging commercial banking with investment banking, the repeal of Glass-Steagall greatly increased the capability of the banking system to create risky financial instruments for which taxpayer backing was available. So, we have the extraordinary situation that the repeal of Glass-Steagall forced the 99 percent to bail out the One Percent.

Doubling Down on Deregulation: SEC Extends JOBS Act Benefit in Elusive Quest to Goose IPO Market -- naked capitalism by Jerri-lynn Scofield - The Securities and Exchange Commission (SEC) under its new chair, Jay Clayton, has wasted no time in doubling down on deregulation. From today, the agency’s Division of Corporation Finance will allow all companies to submit draft registration statements relating to initial public offerings  (IPOs) for review on a nonpublic basis, according to this agency press release. This new policy extends a benefit previously available only to emerging growth companies (EGCs) under the Jumpstart Our Businesses Startup (JOBS) Act to all companies. According to a memo to clients by white shoe law firm Sullivan & Cromwell:In particular, for IPOs and other initial registrations, an issuer must confirm in a cover letter to the non-public draft submission that it will publicly file its registration statement and non-public draft submissions at least 15 days prior to any road show or, in the absence of a road show, at least 15 days prior to the requested effective date of the registration statement. For eligible follow-on offerings, the issuer must publicly file its registration statement and non-public draft submission at least 48 hours prior to any requested effective time and date.These new procedures will be available not only for IPOs but will also apply to most offerings  made in the first year after a company entered the public reporting system. Note that note that Clayton was a Sullivan & Cromwell partner until he became SEC chair , as I discussed in these previous posts, Trump Selects Jay Clayton, S & C Partner, to Head SEC and Taking on Trump’s Agenda: Nine Tough Questions for SEC Chair Nominee Jay Clayton on the Eve of His Confirmation Hearings.Interested readers can find further details in this SEC announcement, Draft Registration Statement Processing Procedures Expanded.

CFTC Approves Options Trading In Bitcoin -- US regulators aren’t yet comfortable with bitcoin ETFs, but apparently options and swaps are another story. This week, the CFTC took a bold step forward in terms of granting institutional investors access to the bitcoin market, approving the creation of the first SEF or Swap Execution Facility. Previously, traders who wished to place bets in bitcoin derivatives markets were forced to operate in markets that were strictly OTC. But now the agency has issued a registration order to LedgerX, granting it status with the CFTC as a Swap Execution Facility, in the process approving bitcoin options trading.SEFs are platforms for swap trading that were created under Dodd-Frank to bring tighter regulatory scrutiny to derivatives markets. By authorizing the first SEF for bitcoin options, the CFTC is effectively clearing the way for institutional traders like hedge funds and CTAs to participate in those markets.“LedgerX is an institutional trading and clearing platform which has been patiently waiting for full regulatory approval from the CFTC to trade and clear options on bitcoin.It is now the first federally regulated bitcoin options exchange and clearing house which will list and clear fully-collateralized, physically-settled bitcoin options for the institutional market.On December 16, 2016, Ledger Holdings and Miami International Holdings, Inc. (MIH), the parent holding company of the MIAX Options Exchange, jointly announced that MIH had completed an investment in Ledger Holdings. Early investors in Ledger Holdings include Google Ventures and Lightspeed Venture Partners.”

One Trader Made $200M Trading Ethereum...And Nobody Knows Who To Tax - During Ethereum’s big rally last month, when the price of a single coin went from $220 to just shy of $400 in the span of two weeks, one trader turned $55 million of paper wealth into more than $398 million.  And nobody knows who they are, or – more importantly – who to tax. As Bloomberg so astutely observes, the growing number of wealthy crypto investors is starting to infuriate regulators, who are now calling for more transparency in the cryptocurrency market. Specifically, they’re arguing that it’s time for cryptocurrency wallets to include information that might help identify users. Otherwise - they say - the continued association with criminality – cemented by the Dread Pirate Roberts’s life sentence – could start to impact the crypto-asset market which now has an aggregate valuation approaching McDonald’s Corp. Others, like the purported owner of Ethereum wallet 0x00A651D43B6e209F5Ada45A35F92EFC0De3A5184, which holds 680,000 ether tokens, worth about $150 million at present prices but nearly twice that when ether was trading at its mid-June highs, have a different definition of transparency. Some one alleging to be the accounts owner penned an instagram post bragging about their gains in the middle of ether's June rally.

Will Bitcoin Tear Itself Apart? - It’s time for bitcoin traders to batten down the hatches. The notoriously volatile cryptocurrency, whose 150 percent surge this year has captivated everyone from Wall Street bankers to Chinese grandmothers, could be headed for one of its most turbulent stretches yet. Blame the bitcoin civil war. After two years of largely behind-the-scenes bickering, rival factions of computer whizzes who play key roles in bitcoin’s upkeep are poised to adopt two competing software updates at the end of the month. That has raised the possibility that bitcoin will split in two, an unprecedented event that would send shockwaves through the $41 billion market. While both sides have big incentives to reach a consensus, bitcoin’s lack of a central authority has made compromise difficult. Even professional traders who’ve followed the dispute’s twists and turns aren’t sure how it will all pan out. Their advice: brace for volatility and be ready to act fast once a clear outcome emerges. “It’s a high-stakes game of chicken,” said Arthur Hayes, a former market maker at Citigroup Inc. who now runs BitMEX, a bitcoin derivatives venue in Hong Kong. “If you’re a trader, there’s a lot of uncertainty as to what happens. Once there’s a definitive signal about what will be done, the price could move very quickly.” (Detailed summary of key dates and potential outcomes at bottom.) Behind the conflict is an ideological split about bitcoin’s rightful identity. The community has bitterly argued whether the cryptocurrency should evolve to appeal to mainstream corporations and become more attractive to traditional capital, or fortify its position as a libertarian beacon; whether it should act more as an asset like gold, or as a payment system.

Wolf Richter: Cryptocurrencies Collapsed --Wolf Richter --A “collapse” isn’t when something edges down 1% in value or even 10% or 20%; it’s when something plunges 50% in a short time.  Ethereum has collapsed 52% in four weeks. The second largest cryptocurrency by market capitalization had surged from $0.95 at the end of 2015 to $8.21 by the end of 2016; a gain of 764% in one year. Then it surged to $400 by June 13, according to CoinMarketCap; a gain of nearly 5,000% in less than six month. Over the 18-month period, it multiplied by 421 times. That’s a 42,000% gain. No wonder hedge funds have piled into this madhouse. But in the four weeks since then, it has collapsed by 52% to $193. And its market capitalization plunged from $37 billion to $18.2 billion. In other words, $18.8 billion, over half of that $37 billion in imaginary wealth, has been left behind in the imagination. Ripple has collapsed 57% in seven weeks. The third largest crypto coin had surged from $0.006 on March 17 to $0.42 on May 17, to a market cap of $16.2 billion, having thus multiplied by a factor of 70. For percentage lovers, it skyrocketed by nearly 7,000% in just two months. Today it’s at $0.18. Down 57% in seven weeks! Its market cap has plunged to $7.1 billion – down $9 billion in seven weeks. Bitcoin has plunged “only” 21% in one month. The granddaddy of crypto coins had soared to just about $3,000 by June 12, and a market cap of $48.5 billion. Since then, it has plunged 21% to $2,366 and a market cap of $38.9 billion. Another $9.5 billion down the drain in just a few weeks.Between these top three crypto coins, about $35 billion in “wealth” has returned to the ether in two months.

Why OCC fintech charter may have life under new leader- Observers see recent comments by acting Comptroller of the Currency Keith Noreika as a sign that the agency may plow ahead on its policy for fintech firms.  With legal challenges and uncertainty about the agency's leadership, the Office of the Comptroller of the Currency's fintech charter appeared dead in the water just months ago. But industry observers say the OCC's interim chief is emerging as a potential savior for the controversial initiative.“We're seeing an assertive OCC,” said Brian Knight, a senior research fellow at the Mercatus Center. “And this is an area where they can very legitimately claim leadership among federal regulators.”

Blockchain too slow for banks, warns top blockchain firm --The fintech startup helping the Bank of England to research blockchains has warned the technology may not, in fact, work for banks wanting faster and cheaper ways of moving money. Ripple, which has developed an internet-based bookkeeping system for cross-border payments, has said there are a "few things wrong" with blockchain in its purest form that make it unsuitable for banks requiring privacy and speed. The warning will cut through some of the hype around distributed ledger technologies, which the world's largest financial institutions hope can help them modernise post-trade systems and save billions in the process. The technology was originally created to underpin trading in cryptocurrencies such as Bitcoin and works as a record-keeping system that gives multiple parties access to the same transaction records. But Marcus Treacher, the global head of strategic accounts at Ripple, said the fact that each user of a blockchain has a record of every transaction conducted would not work for banks competing with one another. He said: "Every single bank gets a copy of everything, even when it’s encrypted. That is not going to work." Another crucial issue is one of speed. The more banks that trade on a single blockchain, the more updates to, and copies of, a ledger will be necessary. This, according to Treacher, will slow the whole system down. He said: "If you have every bank on the platform and all the payments need to be updated, the system will slow down. The speed of Bitcoin is quite slow now because of the way it’s updated. The infrastructure you are using has to be able to deal with high volumes. That’s why you need to break free of this single idea of blockchain and just use the part that you need to use." He added: “You have to be prepared to adapt and not be too religious about it.” As a result, Ripple has changed the way it uses the technology, developing its own blockchain in such a way as to allow others to connect to it. Treacher said that requiring all banks to sign up to a single blockchain was a big task. He said: “There’s no way the world will agree on one blockchain. It’s the sheer practicality that gets in the way." 

JPMorgan Chase and Finicity ink data-sharing agreement - JPMorgan Chase and the data aggregator Finicity have signed an agreement that will let the bank’s customers share their data with third-party financial apps — without disclosing their login credentials.  The companies will use an application programming interface to let Chase customers send the data to the apps Finicity supports, including personal financial services apps and income verification tools. Chase struck a similar data deal with Intuit but this marks the first partnership with a data aggregator that powers many different kinds of apps. The announcement comes as banks are evaluating data-sharing options and as the Consumer Financial Protection Bureau is exploring the very heated issue of data access. Some technologists believe screen scraping — where consumers grant access to their data by surrendering their credentials — is necessary so apps like Mint or Venmo can grab the financial data consumers want to share with or without investment from the banks. However, banks see sharing credentials as a serious security and liability risk and a scenario where customers won’t always know what app is pulling which data and for how long.

Hallucinating Banks Believe They Are Technology Start-Ups -- naked capitalism by Clive  This latest piece of finance industry nonsense. It comes from bank pom-pom wavers and general all round flim-flam merchant Tearsheet. While it is always entertaining and comic relief to include these kinds of industry echo-chamber delusions in our daily roundup of links, this one on bank technology caught my eye. It warrants unpacking in a little more detail. The original Tearsheet story is here and the topic is how banks, according to the article, are getting “creative”, “innovative” and “design-led” in both new products and also how they work, culturally, in their internal operations and management. But in the process, this inadvertently highlights several industry issues. It’s even more revealing when financial services rha-rha’ing shows how the banks are not only bad actors, but are so delusional in their group-think and surrounded by paid shills who can’t or won’t provide a challenge to the skewed logic. The first paragraph states what may be obvious to those outside the finance industry bubble. Namely that users of financial services mostly do not want or need so-called innovative financial products or any new ways of using finance in their lives. Rather, they want banks to provide simple, easy-to-understand basic financial products that work. According to the copious data available from the Consumer Financial Protection Bureau which I’ve analyzed, retail bank customers’ top five sources of complaint are:

  1. Fees.
  2. Poor customer service.
  3. Unpaid checks or other bounced payments.
  4. “Gotcha’s” hidden in product Terms and Conditions small print.
  5. Bank errors (which were either not corrected, took a lot of effort to get corrected or the corrections caused other knock-on issues).

I’ve worked in finance for nearly 30 years. The very first list I ever saw for complaints looked exactly the same as this. And this begs an obvious question: if customers complain about how banks let them down, why are the banks not concentrating on what customers are telling them is wrong with the products and services the banks provide already – rather than spending time and money on creating new supposedly innovative ones? The answer is, of course, that it generates profits for the banks to do things which customers find annoying (high fees, obscure product features and even bank errors which cause the customer to lose and the bank to win). Or else it costs money, such as to train staff and then retain that knowledge in their workforces or to have sufficient numbers of staff available in the first place, to fix the problem.

Strategic risk, CRE loan concentrations remain top threats: OCC  -— The Office of the Comptroller of the Currency told a somewhat familiar story Friday about the industry's risk environment: the quality of strategic decision-making is ever important while credit underwriting and concentrations of commercial real estate loans remain concerns.  "Strategic risk continues to be concentrated in midsize and community banks searching for revenue and market niches," the agency said in its semiannual risk report. "The increased pressure for revenue, challenging external economic drivers, and the changing regulatory environment continue to increase strategic risk."

Wells Fargo’s scandals just won’t die - It’s almost a year after the bombshell announcement that Wells Fargo would pay $185 million to settle charges that it opened unauthorized accounts for customers, among other things. Now, there’s a new CFPB investigation and a wave of lawsuits over Wells’s mortgage practices. Last week, Elizabeth Warren sent a letter to the Federal Reserve with an unprecedented demand that the Fed seek the removal of Wells Fargo’s board of directors.That’s not all. Lurking in the background is a largely forgotten lawsuit involving Wells’ overdraft practices. No wonder it’s been forgotten: The case has been tied up in torturous litigation for almost a decade. But the ultimate resolution could make the $185 million look like a small down payment for years of aggressive business practices.Way back when, banks used to cover overdrafts without charging their customers. But starting in the early 1990s, banks began to figure out that this could be a rich source of fees. A 2008 FDIC report said that overdraft fees for debit cards could carry effective annualized interest rate exceeding 3500%.And then banks figured out that overdraft charges could be even more lucrative if they were reordered. Instead of having them hit a customer’s account in the most straightforward way—chronologically—the banks could reorder them from largest to smallest in order to maximize the damage to their customers. So if you had $100 in your bank account, and you had a $5 cup of coffee, a $10 sandwich, a $50 gas bill, and a $175 grocery bill, in that order, you should pay one $35 overdraft fee. But if the bank reorders the charges to put the grocery bill first, they could collect three fees, or $105.

Fed is prepared to act against Wells Fargo if warranted, Yellen says: Sen. Elizabeth Warren intensified her attacks on Wells Fargo, pressing Fed Chair Janet Yellen on Thursday to remove all of the bank's directors who were on board during its fake accounts scandal. Yellen said the central bank is investigating the matter and will act should the facts warrant. The bank defended the steps it has taken to address its problems. Warren previously had sent Yellen a letter asking for the board members' dismissal. The Massachusetts Democrat revealed that Yellen has since replied to that request, acknowledging that the Fed has the authority to act. "How could removal of these board members not be warranted given the facts that we already know?" Warren said during Yellen's semiannual testimony before the Senate Banking Committee. Wells Fargo already has paid millions in fines and is nearing a settlement in a class-action lawsuit over the scandal, in which employees created some 2 million fake accounts for customers without their knowledge. They did so to meet aggressive sales goals that called for employees to use cross-selling techniques to enroll customers in as many programs as possible. More than 5,000 employees have been fired in connection with the scandal, but Warren said that's not enough. She said the bank clearly has run afoul of Fed regulations calling for proper risk management, and people at the top should pay. "Can you explain to me how the Wells board can possibly have satisfied its obligations under the Fed's risk management regulations?" Warren said. Yellen would not comment specifically on what actions the Fed will take, but she also was critical of the bank's actions.

 Yellen lends support to tweaking big-bank capital measure   — Federal Reserve Board Chair Janet Yellen on Wednesday defended policies related to commercial banks in the face of GOP criticism while also pinpointing areas where the Fed is open to regulatory easing. In the home stretch of her term, which expires in February, Yellen for the first time sounded open to changes in the "supplementary leverage ratio," took issue with claims that the Fed's paying banks interest on excess reserves had constrained lending, and touted the central bank's efforts to reduce community banks' regulatory burden.

Read Fed Chair Yellen's full testimony - - Below is the full transcript of Federal Reserve Chair Janet Yellen's testimony to Congress, where she discusses monetary policy and the current economic situation.

Trump's FDIC choice pulls out, cites family reasons - The Trump administration's choice to become chairman of the Federal Deposit Insurance Corp. has asked the White House to withdraw his nomination. James Clinger cited "family-related obligations" in a statement released Wednesday. The administration had chosen the former congressional aide to succeed Martin Gruenberg as head of the agency.

Consumer bureau cracks down on arbitration clauses | TheHill: The Consumer Financial Protection Bureau (CFPB) on Monday issued a controversial rule to prevent companies from using arbitration clauses to stop litigation over customer complaints. The long-awaited rule targets credit card companies and banks that use arbitration clauses in customer contracts to block lawsuits over alleged wrongdoing or fraud. Such clauses often force consumers to settle complaints with financial companies through mediated arbitration, instead of filing a class-action lawsuit. "Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong," said CFPB Director Richard Cordray."These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up. Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together." Credit card companies and banks have argued that arbitration clauses are fair, simple and cheaper ways to settle customer complaints, and that a CFPB ban would overstep the agency's authority. House Republicans will likely try to repeal the rule. "As a matter of principle, policy, and process, this anti-consumer rule should be thoroughly rejected by Congress under the Congressional Review Act," said House Financial Services Chairman Jeb Hensarling (R-Texas). "Congress must work with President Trump to make good on this mandate by fundamentally reforming the CFPB and dismantling the Administrative State.” The new CFPB rule forces companies to write arbitration clauses in ways that wouldn’t prevent consumers from joining class-action lawsuits. It also forces financial firms to hand over information about “initial claims and counterclaims, answers to these claims and counterclaims, and awards issued in arbitration.” #160;

CFPB Makes It Easier For Customers To Sue Banks ---The Consumer Financial Protection Bureau just made it easier for ordinary citizens to sue banks by restricting how they can use mandatory arbitration to block class-action lawsuits, according to Bloomberg. But the decision – inspired by a 2015 investigative series in the New York Times about how US companies, particularly credit card companies and payday lenders, abuse the practice – likely won’t stay on the books for long. As the LA Times writes: It's all but certain that Republican lawmakers in control of the House and Senate will move quickly to overturn the rule as part of their ongoing efforts to cripple the consumer-watchdog agency and create a more business-friendly regulatory landscape.” Clauses requiring arbitration to settle disputes are inserted routinely in contracts for credit cards, payday loans and other financial products. They typically prevent consumers from filing lawsuits or banding together in class actions."Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong," CFPB Director Richard Cordray said in a statement.“These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up. Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together.”

CFPB’s Finalized Arbitration Rule Takes Away Banks’ ‘Get Out Of Jail Free Card’ - Consumerist - In roughly 240 days from now, banks and other financial companies will no longer be allowed to prohibit customers from banding together in class-action lawsuits through the use of binding arbitration clauses, as the Consumer Financial Protection Bureau today released a long-awaited finalized rule on arbitration. The 775-page rule [PDF] doesn’t ban the use of forced arbitration clauses outright, but it dictates when financial institutions, lenders, and others can use the provisions and creates specific language to be included in consumer contracts. Arbitration clauses allow companies to force customers with legal disputes out of the courtroom and into the process of private, often confidential, binding arbitration. In a March 2015 report, the CFPB found that even though virtually all Americans are directly affected by at least one forced arbitration clause, a stunning 75% of consumers don’t know whether or not they have the right to sue their banks or credit card companies, and that fewer than 7% of those with arbitration clauses could even understand the clauses that they had unwittingly agreed to. The most troubling aspect of arbitration clauses is the fact they almost universally contain bans on class actions. This means that if several customers are all wronged by a bank in the same way, they must each go through the arbitration process individually. To make matters worse, arbitration rulings are final, even when the arbitrator made an error that would have changed the outcome. In some instances, the arbitrator doesn’t even give a reason for their decision — just a simple ruling in favor of one party. The CFPB’s finalized rule — which was first proposed in May 2015 — is not an outright ban on the use of arbitration agreements. Instead, affected companies can still use arbitration rules in their contracts with individual customers, but they can not use these clauses to stop consumers from being part of a group action.The rule includes specific language that companies must use if they include an arbitration clause in a new contract.

Court House Doors Will Reopen for Millions of U.S. Consumers -- Pam Martens - Yesterday, Richard Cordray, the Director of the Consumer Financial Protection Bureau (CFPB), did what few Americans thought he would dare to do: he stood up to threats of being fired; threats of backlash from Wall Street titans; threats of having his agency’s budget gutted; and Congressional threats of being put on a leash by a commission appointed by the President. Despite all of these threats and more, Cordray issued the final rule that allows consumers who have been defrauded in financial transactions involving credit cards and bank accounts to have access to file a group action (known legally as a “class action”) using the nation’s courts. The rule mandates the following wording in bank account and credit card contracts: “You may file a class action in court or you may be a member of a class action filed by someone else.” The final rule issued by the CFPB throws a monkey wrench into the gears of Wall Street’s institutionalized wealth transfer system which has for decades been seamlessly moving the meager life savings of the 99 percent to the heretofore impenetrable vaults of the 1 percent. It guts Big Banking’s private justice system known as mandatory arbitration, which has previously been described as McJustice by Gloria Steinem and kangaroo courts by women’s groups. (For background on this rigged wealth transfer system, see related articles below.) While the CFPB’s final rule leaves mandatory arbitration in place for individual claims, the CFPB notes that most individual consumers don’t bother to fight a $20 ripoff by a bank. The class action is a critical consumer weapon for the following reasons, according to an in-depth study conducted by the CFPB: “…group lawsuits succeed in bringing hundreds of millions of dollars in relief to millions of consumers each year, and at least 34 million members of group lawsuits received payments over the five-year study period. Those payments totaled $1 billion in cash direct to consumers, net of attorney’s fees and expenses. Conversely, over the two years that we studied final results, in about one thousand arbitration cases, the arbitrators awarded a combined total of about $360,000 in relief to a total of 78 consumers. Therefore, by blocking group lawsuits, companies are able to avoid paying out significant amounts of money in private litigation when they wrong consumers.”

CFPB Arbitration Rulemaking--and Potential FSOC Veto - Credit Slips - Adam Levitin - Today the CFPB finalized the most important rulemaking it has undertaken to date.  This rulemaking substantially restricts consumer financial service providers' ability to prevent consumer class actions by forcing consumers into individual arbitrations. I believe this is by far the most important rulemaking undertaken by the CFPB because it affects practices across the consumer finance space (other than mortgages, where arbitration clauses are already prohibited by statute).  The financial services industry seems to be circling the wagons for a last ditch defense of arbitration. There appear to be three prongs to the defense strategy.  First, there will be intense lobbying to get Congress to overturn the rulemaking under the Congressional Review Act.  There's a limited window in which that can happen, however, and it will be an uncomfortable vote for members of Congress, particularly with the 2018 election looming.  This one will be an albatross for them.  Second, there's an effort afoot to have the Financial Stability Oversight Council veto the rulemaking.  And finally, if the rule isn't quashed by Congress or the FSOC, there will assuredly be a litigation challenge to the rulemaking.  I want to focus on the FSOC veto strategy, which has just popped up in the news.  The FSOC veto strategy is really a legal hail Mary.  The FSOC is an eleven member body that includes the heads of all of the federal financial regulatory agencies and an insurance representative.  It's chaired by the Treasury Secretary. For the FSOC to veto a CFPB rulemaking, an FSOC member agency must file a petition with the FSOC within 10 days of the publication of the rule in the Federal Register.  The Treasury Secretary may then stay the rule for 90 days, and the FSOC must decide whether to veto before the expiry of the stay.  That means there are 100 days after the publication of the rule in the Federal Register for the FSOC to potentially veto the rule.   In order to veto the rulemaking, there must be a 2/3 vote of the FSOC, so it will take 8 of 11 votes.  At present 4 of the FSOC members are still Democratic appointees, plus the insurance representative.  If one more seat flips within 100 days, then the override would require only votes of GOP appointees.  That's quite possible given the end of terms for the FDIC and CFPB Director Cordray's own uncertain plans. So the votes may well be there for an FSOC veto. But here's the thing.  The FSOC veto is subject to some legal procedures and judicial review, and I don't think it has a chance in hell of surviving such review, although it would buy the industry some time (and the affect of an overturned veto on the Congressional R eview Act timeline is currently unclear to me).  Here are the most immediate problems I see for an FSOC veto.  First, the petitioning agency must have "in good faith attempted to work with the Bureau to resolve concerns regarding the effect of the rule on the safety and soundness of the United States banking system or the stability of the financial system of the United States."  Presumably the OCC would be the petitioning agency, but I could see the NCUA also joining the petition given its current leadership.

The CFPB Arbitration Rule is Pro (Honest) Businesses - William K. Black -  Politico has just published a column with a title and analytics that drive white-collar criminologists nuts:  “In a major setback for businesses, CFPB opens door to consumer class actions.”  Logically, the title should have read: “In an important step forward for consumers, investors, and honest bankers and lenders, CFPB begins to restore the rule of law to banking.”The CFPB is the acronym for the Consumer Financial Protection Bureau.  The problem that led to CFPB to issue its new rule has six parts.  First, it is often profitable for lenders to abuse and defraud borrowers.  Second, lenders are able to do this because financial understanding is highly asymmetric.  Third, even if the borrower eventually spots the fraud or abuse it is rare that the typical borrower could profitably prove the fraud and recover enough funds in a lawsuit to (net of legal expenses) recover effectively and could never recover enough to deter future misconduct.  Fourth, the only potential legal remedy for the typical victim to recover and deter is the class action suit.Fifth, lenders routinely eliminate this potential remedy by requiring in their form contracts that the borrower give up any right to bring a class action suit against the lender.  Indeed, they typically forbid the victims of their frauds and abuses to bring any civil suit.  They permit only arbitrations in a rigged system that ensures that the typical borrower will rarely find it cost-effective to arbitrate and deterrence is impossible.  The Supreme Court, to its shame, has allowed this abusive use of form contracts.  Sixth, the environment I have just described is highly criminogenic.  It creates powerful perverse incentives not simply for individual bankers to defraud and abuse their customers, but for such frauds and abuses to become dominant.  Elite bankers will gain a competitive advantage by causing the firms they control to abuse and defraud the borrowers.  Economists and criminologists refer to this as a “Gresham’s” dynamic.  George Akerlof gave it this name in his famous 1970 article on a market for “lemons” that led to the award of the Nobel Prize in Economics in 2001.  Akerlof explained that the dynamic is so perverse that it not simply the individual customer who is a victim of the fraud, but also the honest CEO who cannot compete with the cheater.  Akerlof further explained that this meant that all of us would suffer as customers in such an industry as it became corrupted.

Fight over CFPB arbitration rule may just be starting -- With the ink barely dry on the Consumer Financial Protection Bureau's final arbitration rule Monday, defenders and critics of the rule were already girding for a congressional fight over its ultimate fate. The rule, which is meant to allow consumers to more easily form or join class action lawsuits, is widely unpopular among banks and congressional Republicans, who have vowed to repeal it through the Congressional Review Act. The law allows lawmakers to review and overrule regulations within 60 legislative days by a simple majority.

Banks’ imperfect options for killing CFPB arbitration rule -- Opponents of the Consumer Financial Protection Bureau's arbitration rule are eyeing a trio of options for blocking the regulation before it takes effect, but all three are beset with their own challenges. The strategy with the most attention is for lawmakers on Capitol Hill to repeal the rule through the Congressional Review Act. But industry representatives are also considering the prospect of the Financial Stability Oversight Council overruling the regulation, or a group such as the Chamber of Commerce suing to throw the rule out. 

Class action waivers rob workers of the freedom to negotiate with their employer - EPI Blog - Yesterday, the Consumer Financial Protection Bureau (CFPB), an independent agency that serves as a watchdog for consumers, issued a rule that would ban companies from using mandatory arbitration clauses to deny Americans their day in court. The rule would restore consumers’ ability to band together in class-action suits. Without the ability to pool resources, many people are forced to abandon claims against financial institutions and other powerful companies. Consider that hundreds of millions of contracts for consumer financial products and services include mandatory arbitration clauses. Yet, the New York Times found that between 2010 and 2014, only 505 consumers went to arbitration over a dispute of $2,500 or less. By prohibiting class actions, companies have dramatically reduced consumer challenges to predatory practices. Mandatory arbitration clauses are also used by employers. Employees are forced give up their right to sue in court and accept private arbitration as their only remedy for violations of their legal rights. Private arbitration clauses tilt the system in the business’s favor: the company is often allowed to choose the arbitrator, who will thus be inclined to side with the business; arbitration also cannot be appealed, leaving workers and consumers in much worse shape than if they had access to the courts. As such, employees who bring grievances against their employers are much less likely to win in arbitration than in federal court. Employees in arbitration win only about a fifth of the time (21.4 percent), whereas they win more than a third (36.4 percent) of the time in federal courts.

How Perfect Markets Concentrate Wealth and Strangle Growth and Prosperity – Steve Roth, graphics - Capitalism concentrates wealth. Ridicule Marx and his latter-day disciples all you like (I’ll help); he definitely got that right. But capitalism is a big word with lots of meanings, and enough ideological baggage to fill a Lear Jet. Let’s talk about something more precise: perfect markets, with ownership, in which individuals compete with others to produce stuff, and store up savings. You can see this kind of perfect world in agent-based simulations like Sugarscape. Start with a bunch of sugar farmers trying to accumulate sugar in an artificial world, hit Go, and watch what happens. Here’s what happens to wealth concentration (number of poorer farmers on the left, richer on the right): Wealth is pretty evenly distributed at the beginning (top). That doesn’t last long. You can see the same effect in another Sugarscape run, here compared to real-world wealth distributions: That’s the Gini coefficient for wealth. Zero equals perfect equality; everyone has equal wealth. 1.0 equals perfect inequality; one person has all the wealth.  Perfect markets concentrate wealth. It’s their nature. But at some point, market-generated wealth concentration strangles those very markets (compared to markets with broader distributions of wealth). If a handful of people have all the wealth, how many iPhones will Apple sell? If only a few have the wealth to buy cars, automakers will produce a handful of million-dollar Bugattis, instead of forty handfuls of $25,000 Toyotas. Sounding familiar? But wealth concentration doesn’t just strangle the flows of spending, production, and income. It throttles the accumulation of wealth itself. Another simple simulation of an expanding economy (details here) explains this: The dynamics are straightforward here: poorer people spend a larger percentage of their income than richer people. So if less money is transferred to richer people (or more to poorer people), there’s more spending — so producers produce more (incentives matter), there’s more surplus from production, more income, more wealth…rinse and repeat. This picture says nothing about how the wealth transfers happen (favored tax rates on ownership income, transfers to poorer and older folks, free public schools, Wall Street predation, the list is endless). It just shows the results: As wealth is transferred up to the rich, on the left, and wealth concentration increases, our total wealth increases more slowly. When that transfer is extreme, even in this growing economy the poorer people end up with less wealth. (Note how the curves get steeper on the left.) As wealth concentration declines on the right, our total wealth increases faster, and poorer people’s wealth increases much faster. Note that richer people still get richer in most scenarios — it’s a growing economy, always delivering a surplus from production, and increasing wealth — just more slowly.

No one should have to rely on payday loans in retirement  -- In 2016, California residents 62 and older took out more payday loans than any other age group, according to industry data compiled in a new report from the Department of Business Oversight.  Seniors entered into nearly 2.7 million payday transactions, 18.4% more than the age group with the second-highest total (32 to 41 years old). It marked the first time that the DBO report on payday lending, published annually, showed seniors as the top payday lending recipients. The total transactions by the oldest Californians in 2016 represented a 60.3% increase from the number reported for that age group in 2013.  The fees can bring annual percentage rates that top 400%. In 2016, the average APR was 372%, according to the DBO report. Customers typically take out multiple loans in a year, ending up in what critics call a “debt trap.” .. The average payday loan borrower 62 years or older took out almost seven payday loans last year, compared with the average of 6.4 loans for all customers.The payday lending data not only indicates troubling signs about the debt burden for seniors, but also provides evidence of the disturbingly weak state of retirement security for state residents.California state officials have tried to strengthen retirement security through a program to enroll private-sector workers, who are not currently enrolled, into a retirement account. The Secure Choice program requires employers with five or more employees to make the program available to their workers. Payroll deductions start at 3% and can go as high as 8%. Employees are automatically enrolled in the program unless they opt out. But the program is under attack by President Trump and the Republican Congress. In early May, Trump signed a GOP-passed congressional resolution that reversed a 2016 regulation that explicitly gave Secure Choice a safe harbor from having to comply with the Employee Retirement Income Security Act of 1974.

Can AI make debt collection smarter and easier? - Over the past decade, as banks have effectively outsourced debt collection to third parties, this corner of the financial world has slid into an abyss of harassing phone calls, shoddy recordkeeping and wrongful collections. This is reflected in the latest data from the Consumer Financial Protection Bureau’s complaint database. Since the database was opened to the public in June 2012, Americans have aired more grievances about collections than about any other aspect of their financial lives. As of June, the CFPB had received 316,810 complaints about debt collection. The most common objection? “Continued attempts to collect debt not owed,” cited by 39% of filers. (The second-largest topic of complaints is mortgages, at 272,153.) The CFPB has said it plans to hold banks and other first-party creditors responsible for accuracy of their consumer debt data even after it’s sold to third parties, which may accelerate the trend for lenders to bring debt collection back under their roof. Banks historically sold distressed consumer debt to agencies, but that process was rife with problems. In August 2014, the Office of the Comptroller of the Currency issued guidance that dramatically reduced the pace of sell-offs. Since then, banks have primarily only outsourced the collection of the debt, versus selling it off. However, the CFPB’s actions could also curtail that practice.  The timing is good, though. Artificial intelligence, chatbots and self-service technology have reached a point where they can provide a much-needed makeover to the collections process. Such technologies can help lenders learn to reach out to people at times and in channels that are more conducive to a conversation and repayment. They can help engage borrowers in a negotiation about their debt that can result in far higher repayments than repeated threatening phone calls.

The "Missing Slide": JPM Credit Card Charge-Offs Jump To Four Year High -- While JPM was quick to provide all the favorable data in its earnings presentation (and not so favorable when it comes to the sharp drop in its markets sales and trading division) one thing was conspicuously missing: the slide on "Mortgage Banking And Card Services" which has traditionally been part of the bank's earnings presentation and was certainly featured prominently last quarter. Of course, it is possible that JPM simply forgot to include it, or perhaps it did not want to bring attention to a troubling trend: the concerning increase in net credit card charge-offs, which last quarter rose to just shy of $1 billion, and which prompted JPM to report an unexpected increase in credit costs (driven also by JPM's write-down in its student loan portfolio).  So we decided to recreate the chart using data JPM disclosed in its earnings supplement, and which may explain why JPM unexpectedly forgot to add that particular slide. It shows that JPM's net credit card chargeoffs surpassed $1 billion as of June 30, and we the highest going back to March 2013.

 Visa Trying to Bribe Merchants to Stop Taking Cash – Yves Smith - The war on cash is escalating. A big driver isn’t central banks who want to be able to inflict negative interest rates on savers, or Treasuries who see cash transactions as hiding revenues from their tax collectors, but the payment networks that want to kill cash (and checks!) as competitors to their oh so terrific (and fee-gouging) credit and debit cards. However, one bit of good news is there doesn’t appear to be much enthusiasm on the buyer, as in merchant, end.  First, the overview from the Wall Street Journal:Visa Inc. has a new offer for small merchants: take thousands of dollars from the card giant to upgrade their payment technology. In return, the businesses must stop accepting cash.The company unveiled the initiative on Wednesday as part of a broader effort to steer Americans away from using old-fashioned paper money. Visa says it is planning to give $10,000 apiece to up to 50 restaurants and food vendors to pay for their technology and marketing costs, as long as the businesses pledge to start what Visa executive Jack Forestell calls a “journey to cashless.” There are good reasons to think this initiative won’t get far. Food vendors, and in particular restaurants, are low margin businesses with fickle customers who have little to no loyalty. Why risk driving business away?  Aside from the fact that some customers prefer cash, a related issue is that using cards and smartphones often seem to be a tax on time. I really hate using chip cards. Mag cards were often faster than cash, since you swiped and could stuff the card back in your wallet while the transaction was being approved. Chip cards, by contrast, require you to keep the card in the machine while it is being approved, so one is very much aware of the wait. And when I’ve seen people using phones (often to buy small stuff like coffee, which really amazes me), I find that they are slower with it that they would probably be with cash, in that they seem to have to fumble with the phone to get the right app readied and then the payment doesn’t always go right through either.  And that’s before you get to the fact that ApplePay and other smartphone payments time stamp exactly when you paid, adding to the information the surveillance state is gathering about you. By contrast, even if you use a credit card at a store, Clive informs us that the card network typically retains only the date of transaction.

Nearly a Third of Millennials Have Used Venmo to Pay for Drugs -- In a recent poll commissioned by LendEDU, we found that 68 percent of respondents who use a mobile payment application use Venmo. In fact, more respondents used Venmo than Square Cash, a bank’s mobile payment app, and other similar services combined!  Last year, we had conducted a study that analyzed over 500,000 Venmo transactions to see what Venmo was being used for. In short, beer, pizza, and fantasy football were amongst the most popular terms used on the mobile payment application.LendEDU was intrigued by this idea of payments for taboo items being made over Venmo, so we ran a poll!We commissioned an online survey of over 1,000 millennials to find out how many of them were using Venmo for drugs or gambling.The first question was asked to 1,217 millennials and read like this: “Have you used Venmo to pay for drugs (ex. Marijuana, adderall, cocaine, etc.)?”Nearly a third of respondents, 32.6 percent, claimed that they have used Venmo for some type of drug.Meanwhile, 67.4 percent of millennials stated that they have never used the app to pay for narcotics.For the second question, 1,269 participants were asked to answer the following question: “Have you used Venmo for betting or gambling (ex. Sports betting, fantasy football, poker, etc.)?”As it turns out, less millennials, 21 percent, use Venmo for gambling than those that use it for drugs. Additionally, 79 percent of respondents claimed that they have never used Venmo for sports betting.What are we to make of all this?One thing is for certain: Venmo has become a medium to make shady transactions, and a sizable portion of millennials are using it for exactly that.It would seem a near impossible task for engineers at Venmo to be able to monitor daily transactions and flag payments that look suspicious. That mission becomes even more overwhelming when you consider that Venmo is on track to process $20 billion in payments per year.

 Hackers nab credit card data from up to 1,000 California Realtors -- Just over 1,000 California Association of Realtors members may have been affected by a breach of the online store they use to buy everything from blank home sales contracts and disclosure forms to books, software, magnets, lapel pins and coffee mugs. The malware attack, which occurred from March 13 through May 15, prompted CAR subsidiary Real Estate Business Services to notify the affected 1,033 members last week their personal data may have been stolen while using payment cards such as credit cards for online purchases. The list of potential victims is limited to CAR members, such as real estate agents and mortgage brokers, as opposed to the general public. Still, the breach is worrisome in that the hackers penetrated the Real Estate Business Services computers even though they were equipped with virus and malware protection, said Debra Ferrier, REBS chief executive. "We'd like to keep ahead of these guys, but these guys are so smart it's sickening," Ferrier said. The breach was discovered after a member called and said, "My credit card got hacked." Apparently, illicit charges to the member's card were made right after he bought something online at the site, the REBS web address. REBS brought in computer experts, who discovered malware had been uploaded onto the store's payment processing software. The malware made it possible for hackers to get a user's name, address, payment card number, card expiration date and, in some cases, the three-digit card verification code (or CVC) -- in short, everything needed to bill charges to a customer's account. REBS has changed its payment processing, using PayPal rather than taking payment card data directly. In addition, the online store is offering free LifeLock card monitoring for a year to affected members. "We've changed all our practices," Ferrier said. Although 1,033 members used their payment cards to make purchases during period REBS computers were infected, Ferrier said she doesn't know how many cards were hacked. 

RBS Pays $5.5 BIllion To Settle US Mortgage-Backed Securities Probe --  Moments ago Royal Bank of Scotland announced it has agreed to pay $5.5 billion to the U.S. Federal Housing Finance Agency to settle a probe into its sale of toxic mortgage-backed securities ahead of the financial crisis, part of what it says was a “heavy price” paid for over-expansion before the financial crisis. The settlement targets $32 billion in debt issued by housing agencies Fannie Mae and Freddie Mac."This settlement is a stark reminder of what happened to this bank before the financial crisis, and the heavy price paid for its pursuit of global ambitions" said RBS CEO Ross McEwan, adding that it was an “important step forward in resolving one of the most significant legacy matters facing RBS”. There was some good news: RBS is eligible for a $754 million reimbursement under indemnification agreements with third parties.According to the WSJ, RBS said in a statement that it had already set aside funds to cover most of the cost of the settlement. The 71% U.K. government owned bank will have to take an additional charge of $196 million which will be realized in its coming results in August.Settling these probes is a major hurdle for RBS as it continues its slow return to private hands. U.K. government officials have said they would not sell down the government’s stake until they have clarity on the size of the U.S. fines RBS may face. RBS warned Wednesday that “further substantial provisions and costs may be recognized…depending upon the final outcomes.”RBS had set aside $8.3 billion to cover a range of allegations linked to its role in packaging and selling on subprime mortgages in the lead up to the financial crisis. The bank still faces probes from several U.S. agencies including a criminal and civil investigation by the U.S. Department of Justice.

FDIC May Revive Three US Bank Lawsuits Over Soured Mortgage Debt  — A federal judge granted the FDIC permission to revive lawsuits against Citigroup Inc, Bank of New York Mellon Corp and U.S. Bancorp that he had dismissed last September, to recoup more than $695 million of losses on soured mortgage debt that a failed Texas bank once owned. In a decision made public on Tuesday, U.S. District Judge Andrew Carter in Manhattan said the FDIC could try to show it still had legal standing to sue as the receiver for Austin-based Guaranty Bank, despite having transferred its claims to a "resecuritization trust" when it sold the debt in March 2010. The FDIC, whose full name is Federal Deposit Insurance Corp, had accused the three banks in its lawsuits of failing, as bond trustees, to monitor the underwriting and servicing of mortgages backing $2.7 billion of securities that Guaranty bought. The FDIC has estimated that Guaranty's failure in August 2009 could cost its deposit insurance fund $3 billion. Carter's decision, dated on Monday, said the FDIC could invoke a federal rule allowing the resecuritization trust, which the regulator said does have standing, to ratify its claims. Newsletter Sign UpContinue reading the main story "Defendants do not contest that ratification is an option for plaintiff under the resecuritization agreements," Carter wrote. He gave the FDIC 90 days to file an amended complaint. According to the lawsuits, the securities were issued from 2005 to 2007. Some were sponsored by the EMC unit of Bear Stearns Cos and the others by a unit of Countrywide Financial Corp. 

CFPB's HMDA reg relief gets mixed response from CUs -- Some credit union trade groups are claiming a victory in the ongoing battle against the Consumer Financial Protection Bureau, but not everyone is pleased with the result.On Monday, CFPB Director Richard Cordray pledged the bureau would issue a new proposal raising the home equity line of credit reporting threshold to exempt institutions that originate fewer that 500 HELOCs in either of the last two years from reporting requirements, a five-fold increase over the current threshold.The proposal is set to be issued within the next two weeks and will apply to reporting for 2018 and 2019, according to a letter Cordray sent to several senators.Credit union trade groups have pushed the bureau to raise the threshold required under the Home Mortgage Disclosure Act. According to Credit Union National Association, 23 percent of credit unions currently offering HELOCs indicated they planned either to curtail their HELOC offerings or stop offering them entirely as a result of burdensome compliance requirements. In his letter, Cordray wrote that “Temporarily increasing the HELOC threshold in this way will give small institutions additional relief and provide the Consumer Bureau ample opportunity reconsider the HELOC threshold contained in the final rule and decide where it should be beginning in 2020.” Among those praising the bureau for its move was the Cooperative Credit Union Association, which serves credit unions in Delaware, New Hampshire, Rhode Island and Massachusetts, and which has pressed lawmakers and regulators to provide further regulatory relief for CUs.“I commend the CFPB for recognizing the burden the low 100 HELOC threshold would have on smaller institutions,” CCUA President and CEO Paul Gentile told CU Journal. “This is a step in the right direction for reasonable regulatory relief..” Not all groups, however, were as effusive as CUNA and CCUA.  "While we support increasing the threshold for HELOCs, this does not go nearly far enough," said Brandy Bruyere, VP of regulatory compliance at the National Association of Federally Insured Credit Unions. 

Treasury quietly looking at revamping CRA | American Banker - The Treasury Department is embarking on an effort to revise the implementation of the Community Reinvestment Act, a law many community groups say is out of step with modern banking practices and that institutions say has devolved into a compliance exercise. Tucked away in Treasury Department’s regulatory reform report released last month was a nascent effort to reform the way regulators implement the CRA — a law intended to compel banks to offer loans and financial services to low- and moderate-income areas. The report said regulators need to “better align the benefits arising from banks’ CRA investments with the interest and needs of the communities that they serve” while also improving the “supervisory and regulatory framework” for CRA obligations.

Lack of FHA chief fuels uncertainty about premium cut — Almost six months after the newly inaugurated Trump administration tabled a Federal Housing Administration premium cut, industry backers have maintained hope it will be revived, especially as the FHA portfolio continues to recover. But a key obstacle remains: There's no one to run the mortgage insurance agency.The latest data shows the FHA insurance fund continues to strengthen, with serious delinquencies down 50% since 2012. Ben Carson, secretary of the Department of Housing and Urban Development, had promised a full review of the Obama administration's proposed 25-basis-point price cut, setting the stage possibly for the policy to be resumed.

Black Knight Mortgage Monitor: "Underwater Borrower Population Below Two Million for First Time Since 2006" Black Knight Financial Services (BKFS) released their Mortgage Monitor report for May today. According to BKFS, 3.79% of mortgages were delinquent in May, down from 4.25% in May 2016. BKFS also reported that 0.83% of mortgages were in the foreclosure process, down from 1.13% a year ago.  This gives a total of 4.62% delinquent or in foreclosure. Press Release: Black Knight’s May Mortgage Monitor: Underwater Borrower Population Below Two Million for First Time Since 2006 Today, the Data and Analytics division of Black Knight Financial Services, Inc. released its latest Mortgage Monitor Report, based on data as of the end of May 2017. This month, Black Knight finds that rising home prices have both decreased the number of borrowers underwater on their mortgages while increasing the amount of tappable – or lendable – equity available to homeowners. As Black Knight Data & Analytics Executive Vice President Ben Graboske explained, continued growth in the equity landscape has also improved the net worth of many – but not all – homeowners with mortgages.“The steady upward trajectory of home prices continues to improve the equity positions of many homeowners,” said Graboske. “This is plainly visible in the number of borrowers who are underwater on their mortgages, owing more than their homes are worth. Over the past year, we’ve seen a 35 percent decline in the total underwater population, with a 16 percent decline in that population over the first three months of 2017 alone. Home prices rose 2.3 percent in the first quarter, as compared to 1.8 percent over the same period last year, helping an additional 350,000 borrowers regain equity in their homes. As of today, there are 1.8 million underwater borrowers remaining, the first time this population has fallen below two million since 2006.

To fill volume gaps, lenders expand entry-level loan options - To close gaps in volume caused by inventory shortages and help consumers get over the homeownership hump, lenders are offering mortgage programs and features like low down payments, bridge loans for home sellers and student loan refinancing.

 MBA: Mortgage Applications Decrease in Latest Weekly Survey --From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey Mortgage applications decreased 7.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 7, 2017. This week’s results include an adjustment for the Fourth of July holiday... The Refinance Index decreased 13 percent from the previous week to the lowest level since January 2017. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 22 percent compared with the previous week and was 3 percent higher than the same week one year ago. ... The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to its highest level since May 2017, 4.20 percent, from 4.13 percent, with points decreasing to 0.31 from 0.32 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Mortgage rates rise, crossing the 4% threshold -- Mortgage rates rose across the board for the second consecutive week, with the 30-year fixed-rate loan moving over 4%, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 4.03% for the week ending July 13, up 7 basis points from last week when it averaged 3.96%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.42%, 61 basis points lower.

Million-dollar house is the new normal in one Seattle neighborhood - As Seattle home prices continue to set records, Queen Anne has officially become Seattle's first big neighborhood to have a median home price of $1 million. Both Seattle and the Eastside once again set price records in June as prices rose throughout King County and other central Puget Sound counties, according to the latest monthly data from the Northwest Multiple Listing Service. Seattle, which has been setting records for months, reached $750,000 as the new midpoint for home prices — $21,000 above the previous month's median price. The Eastside beat an all-time high set in April, as its typical home prices last month rose to $885,000. For King County as a whole, the median home price reached $653,000. Queen Anne's jump to become the area's first large neighborhood where a million-dollar home sale is typical resulted from a steep jump in the median price: to $1,001,779, up 11.3 percent from May's $900,000. Melissa Klinnert, a longtime broker with Steve Kennedy Team on Queen Anne, said the high and rising prices in that part of town make sense given the strong demand and the low inventory. "It's the most convenient neighborhood for downtown Seattle with a great sense of community," she said. Areas with easy commutes to downtown Seattle are seeing high demand, she added. May's median house pricing showed the Capitol Hill area nearing the million-dollar mark, but that neighborhood's median dropped back down in June to $890,000 this month — still $100,000 higher than last year's median price. 

House Prices to National Average Wage Index - Bill Mcbride - One of the metrics we'd like to follow is a ratio of house prices to incomes. Unfortunately most income data is released with a significantly lag, and there are always questions about which income data to use (the average total income is skewed by the income of a few people). And for key measures of house prices - like Case-Shiller - we have indexes, not actually prices. But we can construct a ratio of the house price indexes to some measure of income. For this graph I decided to look at house prices and the National Average Wage Index from Social Security.This graph shows the ratio of house price indexes divided by the National Average Wage Index (the Wage index is first divided by 1000). This uses the annual average National Case-Shiller index since 1976. As of 2016, house prices were somewhat above the median historical ratio - but far below the bubble peak.  Prices have increased further in 2017, but house prices relative to incomes are still below the 1989 peak (and way below 2006).Going forward, I think it would be a positive if wages outpaced, or at least kept pace with house prices increases for a few years. Notes: The national wage index for 2016 is estimated using the same increase as in 2015.

Only In San Francisco: Couples Making $138k A Year Now Qualify For Subsidized "Affordable Housing" -- You know the economics of your city are a bit distorted when a married couple earning roughly 3x the national median income can't even afford to put a roof over their head.  Oddly enough, that seems to be exactly the case in San Francisco where the Board of Supervisors has just approved a piece of legislation that would allow couples earning up to $138,000 a year to qualify for "affordable housing."  Per SFGate: A family of at least two people who collectively earn $138,000 or less per year will likely soon qualify for one tier of San Francisco's affordable housing that would allow them to buy a home unit, following Tuesday's Board of Supervisors meeting.Under the city's previous policy, last updated in 2002, only those who earned 55 percent of the typical San Francisco median household income or less were able to utilize the option to buy affordable housing, per ABC. With the new proposal, families of at least two who are together earning up to 150 percent of San Francisco's median income can take advantage of that amendment. Based on the Mayor's Office of Housing and Community Development median salary outlines, that means any family of at least two earning less than $138,400 qualifies.

Hotels: Occupancy, RevPAR down Year-over-Year --From STR: US hotel results for week ending 8 JulyThe U.S. hotel industry reported mixed year-over-year results in the three key performance metrics during the week of 2-8 July 2017, according to data from STR.
In comparison with the week of 3-9 July 2016, the industry recorded the following:
• Occupancy: -3.0% to 65.3%
• Average daily rate (ADR): +1.1% to US$122.73
• Revenue per available room (RevPAR): -2.0% to US$80.11
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

 Leading Index for Commercial Real Estate Increases in June -- Note: This index is possibly a leading indicator for new non-residential Commercial Real Estate (CRE) investment, except manufacturing.  From Dodge Data Analytics: Dodge Momentum Index Moves Higher in June The Dodge Momentum Index took another step forward in June, increasing 1.1% to 141.1 (2000=100) from its revised May reading of 139.6. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. June’s lift was due to a 4.8% advance by the institutional component of the Momentum Index, while the commercial component fell 1.3%. The Momentum Index has exhibited substantial strength since mid-2016, with the institutional and commercial components trading off as the driver of growth almost on a month-to-month basis. Although the commercial component of the Momentum Index declined in the latest month it is 11.8% higher than it was in June 2016, while the institutional component is 9.5% above a year ago. The overall rising trend for both sectors continues to suggest that construction activity will remain healthy through the end of the year.

US consumer credit up $18.4 billion in May, most in 6 months - ABC News: American consumers increased their borrowing in May at the fastest pace in six months, reflecting a sharp rebound in the category that includes credit cards. The Federal Reserve reported Monday that total consumer borrowing rose by $18.4 billion in May, the strongest gain since a $25.1 billion increase in November. In addition, April's gain of $8.2 billion, the weakest increase in nearly six years, was revised up to a more respectable increase of $12.9 billion. Consumer borrowing is closely watched for signals it can provide about consumer spending patterns. With the labor market continuing to churn out jobs and the stock market at record levels, economists believe that households will feel more confident about boosting their debt levels to support increased spending. Consumer spending accounts for 70 percent of economic activity. The strength last month reflected a greater use of credit cards, which rose by $7.4 billion, much stronger than the $1.2 billion April increase. The category that includes auto loans and student loans increased $11.05 billion, slightly lower than April's $11.8 billion gain. Auto sales have been slowing this year after last year's record pace. The $18.4 billion rise in credit pushed borrowing measured in the monthly report to a fresh record of $3.84 trillion. The Fed's monthly credit report does not cover home mortgages or any other debt secured by real estate such as home equity loans.

Consumer Credit Surges Most Since November 2016 - After a big miss in April, when US consumer credit posted its smallest monthly increase in 6 years, resulting form a slump in demand for revolving credit, one month later things promptly reverted back to normal, and according to the Fed, in the month of May, total consumer credit rose by $18.4 billion, well above the $14.9 billion expected, and a solid jump from the upward revised April print of $12.9 billion. This was the biggest monthly jump in consumer credit of 2017, and the highest since last November's increase of $25.1 billion. Broken down by components, revolving credit rose by $7.4 billion, also the highest monthly increase since November, and a big jump from April's $1.2 billion. Meanwhile, non-revolving credit, or student and auto loans, continued their steady grind higher, rising by $11.0 billion, in line with recent months.Finally, broken down by source of funding, the Federal Government was oddly missing in May, when it provided only $4.7 bilion of the unadjusted increase, while the biggest contributor to credit growth in the month was depository institutions, i.e., banks, which injected just over $14 billion in the economy.

Retail Sales decreased 0.2% in June --On a monthly basis, retail sales decreased 0.3 percent from May to June (seasonally adjusted), and sales were up 2.8 percent from June 2016. From the Census Bureau report: Advance estimates of U.S. retail and food services sales for June 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $473.5 billion, a decrease of 0.2 percent from the previous month, and 2.8 percent above June 2016. ... The April 2017 to May 2017 percent change was revised from down 0.3 percent to down 0.1 percent.This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). Retail sales ex-gasoline were down 0.1% in June.The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Retail and Food service sales, ex-gasoline, increased by3.2% on a YoY basis. The decrease in June was below expectations, although sales in May were revised up.  A disappointing report.

US Consumers Reeling: Core Retail Sales Post Weakest Growth In Over Three Years --This is not the data the Fed was looking for: after the 4th consecutive miss in CPI data, moments ago the Census Bureau also reported June retail sales which was unexpectedly poor, missing across the board once again, and judging by the surge in bonds, suggests that the Fed's rate hike intentions and narrative is now on indefinite hold. The details, as shown below, missed in every category:

  • Retail sales down -0.2%, Exp. +0.2% after falling 0.1% in May
  • Retail ex-autos -0.2%, Exp. +0.2%
  • Retail sales ex-autos and gas -0.1%, Exp. 0.4%
  • Retail sales control group -0.1%, Exp. +0.3%

Furthermore, the steep disappointment in the control group, suggests that Q2 GDP estimates are about to be revised sharply lower. Putting the weak consumer spending data in context, core retail sales ex auto/gas posted by the lowest annual increase going back to February 2014.The breakdown: despite a modest rebound in Motor Vehicle Sales (0.1%), Building Material and Garden equipment (0.5%) and Health and Personal care stores (0.3%), and of course the relentless increase in non-store retailers, i.e., internet vendors such as Amazon, which rose 0.4%, the rest declined led by a sharp decline in Miscellaneous store retailers which tumbled -3.1%. Coupled with the miss in CPI, the USD has taken a plunge and the risk is, as Citi notes, it has more to go. More importantly, the Fed is now in a hole how to explain not only the 4th consecutive CPI miss but also the unexpectedly poor retail sales confirming that US consumers fail to see the so-called economic recovery.

Michigan Consumer Sentiment: July Continues to Slide -- The University of Michigan Preliminary Consumer Sentiment for July came in at 93.1, down from the June Final reading of 95.1. had forecast 95.0.  Surveys of Consumers chief economist, Richard Curtin, makes the following comments: Confidence in future economic prospects continued to slide in early July, with the Expectations Index now 10.1 Index points below its January 2017 peak. In contrast, consumers' assessments of current economic conditions regained the March 2017 peak, the highest level since the July 2005 survey. Overall, the recent data follow the same pattern repeatedly recorded around past cyclical peaks: expectations start to post significant declines while assessments of current economic conditions continue to reach new peaks. To be sure, the data do not suggest an impending recession. Rather, the data indicate that hopes for a prolonged period of 3% GDP growth sparked by Trump's victory have largely vanished, aside from a temporary snap back expected in the 2nd quarter. The declines recorded are now consistent with just above 2% GDP growth in 2017. Much steeper declines in expectations typically precede recessions. The weakness in the Expectations Index in early July was concentrated among Republicans (falling to 108.9 from June’s 116.0 and February’s 120.1); Democrats continue to hold much less favorable expectations, although the Expectations Index among Democrats has markedly improved (to 63.2 from June’s 62.0 in June and 55.5 in February). Overall, the data indicate an annual gain of 2.4% in personal consumption during 2017. [More...] See the chart below for a long-term perspective on this widely watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.

The Return of Monopoly - Matt Stoller --The rise of Amazon, and its overwhelming market dominance, has accelerated the collapse of traditional retail outlets. Amazon’s stock has risen by 300 percent since 2012, and Wall Street analysts have compiled a “Death by Amazon” index to track the retail companies most likely to be killed off by the online giant. This year alone, three retail stalwarts—Walmart, JCPenney, and Rite Aid—plan to shutter or sell off nearly 1,200 stores, and nearly 90,000 Americans have been thrown out of work since October. One of every eleven jobs is tied to shopping centers, which generate $151 billion in sales taxes each year. All of which is rapidly being lost to a single company. In June, Amazon announced its largest-ever acquisition, paying $13.4 billion to buy the Whole Foods grocery chain. Such is the power of the “everything store” and its “one-click ordering.” Amazon did not come to dominate the way we shop because of its technology. It did so because we let it. Over the past three decades, the U.S. government has permitted corporate giants to take over an ever-increasing share of the economy. Monopoly—the ultimate enemy of free-market competition—now pervades every corner of American life: every transaction we make, every product we consume, every news story we read, every piece of data we download. Eighty percent of seats on airplanes are sold by just four airlines. CVS and Walgreens have a virtual lock on the drugstore and pharmacy business. A private equity firm in Brazil controls roughly half of the U.S. beer market. The chemical giant Monsanto is able to dictate when and how farmers plant its seeds. Google and Facebook control nearly 75 percent of the $73 billion market in digital advertising. Most communities have one cable company to choose from, one provider of electricity, one gas company. Economic power, in fact, is more concentrated than ever: According to a study published earlier this year, half of all publicly traded companies have disappeared over the past four decades.

Toilet Paper Roll Size in U.S. ‘Steadily Shrinking’: The Independent, London, U.K, reported this past week that toilet paper squares, the individual sheets that connect to make each roll, were once 4.5 in. wide by 4.5 in. long, consistently, but the standard has shifted, or at the very least, loosened its grip on the industry to a point where companies are now selling sheets up to a half-inch shorter on one side. According to the article, a reader wrote in to a columnist at the Los Angeles Times recently saying he's noticed "a roughly 26% reduction in the surface area" of his toilet paper. "The old standard for a single sheet of tissue was 4 and 1/2 by 4 and 1/2 inches, a nice square," he said. "Some tissue companies have changed the length of the sheet to 4 inches, with a width of 4 1/2 inches, no longer a square." Others, including Consumer Reports, have had their departments take notice and are now attempting to highlight the ‘trend’ as well. The consumer advocacy group said that rolls are becoming "narrower," cardboard tubes are getting "bigger" (although multiple brands have now released tubeless rolls in recent years), and sheets are shrinking in both size and number. So, they say, toilet paper rolls might look the same at a first or even second or third glance, even though they carry less actual toilet paper. As a result, toilet paper sales may have only slightly increased in recent years, but value per weight has risen significantly and has been a noticeable boost to the industry. In 2013, unit price for tissue rose by 2%, after growing by nearly the same the year prior, according to data from market research firm Euromonitor. "The practice has been a tried and true strategy for makers of tissue and toilet paper, allowing companies, quietly and effectively, to raise prices per unit," the Wall Street Journal noted in 2013.

Consumer Price Index: Headline & Core Below 2% Again - The Bureau of Labor Statistics released the June Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 1.63%, down from 1.87% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.70%, down from the previous month's 1.73%. Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in June on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.6 percent.The energy index declined again in June, falling 1.6 percent; this offset an increase in the index for all items less food and energy. All the major energy component indexes declined, with the gasoline index falling 2.8 percent. The food index was unchanged in June, with the index for food at home declining slightly as five of the six major grocery store food group indexes decreased.The index for all items less food and energy rose 0.1 percent in June, its third straight such increase. The shelter index continued to rise, and the indexes for medical care, motor vehicle insurance, education, and personal care also increased. The indexes for airline fares, used cars and trucks, wireless telephone services, and new vehicles were among the indexes that declined in June.  The all items index rose 1.6 percent for the 12 months ending June; this measure has been declining steadily since February, when it was 2.7 percent. The index for all items less food and energy rose 1.7 percent for the 12 months ending June, the same increase as for the 12 months ending May. The energy index rose 2.3 percent over the last year, while the food index increased 0.9 percent. [More…] was looking for a 0.1% increase MoM in seasonally adjusted Headline CPI and 0.2% in Core CPI. Year-over-year forecasts were 1.7% for Headline and 1.7% for Core. The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

June Producer Price Index: Final Demand Inches Up - Today's release of the June Producer Price Index (PPI) for Final Demand came in at 0.1% month-over-month seasonally adjusted, up from last month's 0.0%. It is at 2.0% year-over-year, down from 2.4% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.31% MoM, down from 0.3% the previous month and is up 1.9% YoY. MoM consensus forecasts were for -0.1% headline and 0.2% core.Here is the summary of the news release on Final Demand:The Producer Price Index for final demand increased 0.1 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in May and rose 0.5 percent in April. (See table A.) On an unadjusted basis, the final demand index advanced 2.0 percent for the 12 months ended in June.In June, almost 80 percent of the rise in the final demand index is attributable to prices for final demand services, which increased 0.2 percent. The index for final demand goods edged up 0.1 percent.Prices for final demand less foods, energy, and trade services increased 0.2 percent in June. For the 12 months ended in June, the index for final demand less foods, energy, and trade services advanced 2.0 percent. More… The BLS shifted its focus to its new "Final Demand" series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates. As this overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.

'Transitory' - Core Producer Price Inflation Falls Back Below Fed Mandate With The Fed convinced any downturn in inflation is 'transitory' - due to wireless carrier discounting, or oil ups and downs - today's Core PPI fell back below the 'mandated' 2.0% level after one brief shining month above it. Producer prices ex food and fuel rose just 1.9% YoY, slowing from last month's 2.1% rise. This is the 3rd time in5 years that Core PPI has managed just one month above The Fed's mandate and faded...  Under the covers shows some interesting standouts..A major factor in the June increase in the index for final demand services was prices for securities brokerage, dealing, investment advice, and related services, which rose 4.0 percent. The indexes for machinery and equipment wholesaling, loan services (partial), insurance, inpatient care, and truck transportation of freight also advanced. Conversely, margins for apparel, footwear, and accessories retailing declined 3.7 percent. The indexes for motor vehicle maintenance and repair (partial) and for airline passenger services also fell. Leading the June advance in the index for final demand goods, prices for meats increased 5.5 percent. The indexes for pharmaceutical preparations, light motor trucks, young chickens, potatoes, and butter also moved higher. Conversely, prices for gasoline moved down 1.1 percent. The indexes for fresh vegetables (except potatoes), plastic resins and materials, and unprocessed finfish also fell.

Wholesale Sales Tumble For 3rd Straight Month, Inventories Build - Well they "built it", but in May, "no one came." Wholesale Inventories rose a better-than-expected 0.4% MoM but sales tumbled worse-than-expected 0.5% (the 3rd monthly decline in a row). Inventories reversed April's decline... But sales keep falling... and accelerating... Automotive inventories rose 0.7% MoM (against April's 1.4% drop) but Automotive sales dropped 0.5% in April. Wholesale Inventories are still marginally lower for Q2 so far (-0.13%) providing a modest drag on GDP, but sales are down 0.77% in Q2 wit hthe biggest 3-month decline since March 2016 (amid fears of global recession) This divergence between inventories building and sales slumping pushed the inventories-to-sales ratio up for the first time since November...

US wholesale inventories post largest gain in 5 months: U.S. wholesale inventories increased more than previously estimated in May as automobile stocks rose amid declining sales, but inventory investment still likely weighed on economic growth in the second quarter. The Commerce Department said on Tuesday wholesale inventories climbed 0.4 percent. That was the biggest gain since December 2016 and followed a 0.4 percent decline in April. The department reported last month that wholesale inventories increased 0.3 percent in May. Auto inventories jumped 0.7 percent after declining 1.4 percent in April. The auto sector has been hit by slowing demand, which has seen manufacturers reporting a decrease in sales for four straight months. The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale stocks excluding autos - increased 0.3 percent in May. A report last week showed inventories at factories slipped 0.1 percent in May. Data on retail inventories will be published on Friday. Economists expect inventory investment slowed further in the second quarter and remained a drag on GDP growth during the period.The Atlanta Federal Reserve is forecasting GDP rising at a 2.7 percent annualized rate in the second quarter. Inventory investment subtracted 1.11 percentage points from GDP growth in the first quarter, helping to hold down the economy to a 1.4 percent growth pace.

AAR: Rail Traffic increased in June --From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.  U.S. rail traffic in June 2017 was a mix of the good and the not so good. The good included intermodal, which was up 4.6% in June and 2.7% (179,515 containers and trailers) for the year to date. Year to-date intermodal volume through June was the highest ever. On the carload side, coal was up 13.2% in June and up 18.0% (326,783 carloads) for the first half. The first half of 2016 was a ridiculously bad period for coal, so the comparisons this year were pretty easy. As we go forward in 2017, the comps for coal will get much tougher. Carloads of crushed stone, gravel and sand were 18.5% higher in June and 12.8% higher in the first half. Thanks to surging sand shipments, this category set a year-to-date record this year. Year-to-date carloads of chemicals thorugh June were the highest ever too. The not so good included petroleum and petroleum products (down 15.2% in June, their 25th straight year-over-year decline) and motor vehicles and parts (down 7.9% in June for combined U.S. and Canadian carloads, their sixth straight monthly decline to match the six straight months in which new light vehicle sales have fallen). Total carloads in June 2017 were up 4.4% over last year; total carloads in the first half of 2017 were up 6.4% (404,078 carloads) over last year.

Industrial Production Increased 0.4% in June --From the Fed: Industrial production and Capacity Utilization - Industrial production rose 0.4 percent in June for its fifth consecutive monthly increase. Manufacturing output moved up 0.2 percent; although factory output has gone up and down in recent months, its level in June was little different from February. The index for mining posted a gain of 1.6 percent in June, just slightly below its pace in May. The index for utilities, however, remained unchanged. For the second quarter as a whole, industrial production advanced at an annual rate of 4.7 percent, primarily as a result of strong increases for mining and utilities. Manufacturing output rose at an annual rate of 1.4 percent, a slightly slower increase than in the first quarter. At 105.2 percent of its 2012 average, total industrial production in June was 2.0 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.2 percentage point in June to 76.6 percent, a rate that is 3.3 percentage points below its long-run (1972–2016) average. This graph shows Capacity Utilization. This series is up 9.9 percentage points from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 76.6% is 3.3% below the average from 1972 to 2015 and below the pre-recession level of 80.8% in December 2007. The second graph shows industrial production since 1967.Industrial production increased in June to 105.2. This is 20.8% above the recession low, and is close to the pre-recession peak. The increase was close to expectations, however the previous months were revised down.

  Auto slowdown Flashes Caution Lights for Manufacturing Employment and Trump – Brookings -After a good run, warning lights are flashing in the auto industry—and that’s not good for the broader manufacturing sector, for heartland metropolitan areas, or for President Trump.Here’s the problem: after seven years of strong growth following the 2008 economic crisis and federal bailouts of both General Motors (GM) and Chrysler, auto sector output and employment growth have slowed markedly from record levels. Years of catch-up purchases by car buyers have finally plateaued. Likewise, automakers must economize to invest billions in developing the electric and self-driving cars of tomorrow. And so the layoffs have begun. Last fall, Ford jolted the industry by revealing that its sales had peaked, while projecting a tough 2017. Then came the company’s April disclosure that it will need to slash $3 billion in costs to free up capital to invest in new technology. Soon after that came Ford’s announcement of as many as 20,000 layoffs worldwide, as well as word that GM had cut production at four U.S. assembly lines and would be laying off about 4,400 factory workers. Fiat Chrysler also laid off 1,300 workers at a Detroit assembly line.By themselves, these announcements are not apocalyptic like the dire layoffs of 2008. Rather, the recent cuts mostly reflect the fundamentally cyclical nature of a huge consumer business. And yet, the present and future auto slow-down is a big deal because auto is critical to the manufacturing sector, which in turn looms large in regional and political narratives about whether the country is moving “in the right direction.”Auto-related industries, after all, delivered about 40 percent of the nation’s manufacturing employment gains in the last two years, especially important given the slow growth of other production sectors in the face of a strong dollar. Auto-related industries, after all, delivered about 40 percent of the nation’s manufacturing employment gains in the last two years, especially important given the slow growth of other production sectors in the face of a strong dollar. Focusing on just last year and the first quarter of this year, though, the data shows that auto represented fully 80 percent of U.S. manufacturing employment growth, even as auto hiring slowed significantly. Since then, the trend line has been blurry, but it’s unclear whether other industries—such as chemical manufacturing—are going to be able to pick up the slack from a likely auto-sector slowdown.

BofA Stunned By Drop In Gasoline Demand: "Where Is Driving Season?" --With the US now inside peak summer driving season, the cyclical drivers behind gasoline supply and demand are vastly different, and yet something has remained the same: gasoline demand in the US simply refuses to rebound, surprising analysts by how weak it is. So weak, in fact, that Bank of America has released a note which, like Goldman half a year ago, reveals confusion about why - if the economy is indeed strong -  demand hasn't kept up and has prompted BofA's energy analyst Francisco Blanch to ask "where is the driving season?" and, more specifically, "is this year's driving season over before it began?"Here's why some of the biggest banks continue to be amazed at the relentless failure of gasoline demand to validate an economic recovery, courtesy of BofA: In a U-turn from the last two years, when demand growth for gasoline was running at phenomenal speed, gasoline consumption in the Atlantic Basin has fallen by 1% on last year. In the US, lower demand growth seems largely a function of higher retail gasoline prices, underscoring how extremely price elastic oil demand is (Chart 1). Annual growth in miles driven has slowed to 1.5% from 3.4% in the same period last year. Higher prices are turning people back on to smaller and more fuel-efficient cars, reviving the well-established trend prior to 2015. Sales growth for SUVs, which averaged 7% YoY in 2016, has now slowed to 2%, allowing fuel efficiency gains in the US fleet to come through more forcefully (Chart 2). More recently, slowing employment growth, as well as a slowdown in construction activity, may have also played a marginal role.

NFIB: Small Business Optimism Index declined in June  --Earlier from the National Federation of Independent Business (NFIB): June 2017 Report: Small Business Optimism Index The Index of Small Business Optimism fell 0.9 points to 103.6, but sustained the surge in optimism that started the day after the election. The Index peaked at 105.9 in January and has dropped 2.3 points to date, no doubt in part due to the mess in Washington, D.C. ... There isn’t much euphoria in the outlook for the second half of the year... Small business owners reported an adjusted average employment change per firm of negative 0.04 workers per firm over the past few months, basically zero. This followed one of the best readings since 2008 posted in May. Ten percent (down 5 points) reported increasing employment an average of 3.4 workers per firm and 11 percent (up 2 points) reported reducing employment an average of 2.1 workers per firm (seasonally adjusted). Fifty-four percent reported hiring or trying to hire (down 5 points), but 46 percent reported few or no qualified applicants for the positions they were trying to fill. ...

Weekly Initial Unemployment Claims decrease to 247,000 - The DOL reported:In the week ending July 8, the advance figure for seasonally adjusted initial claims was 247,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 248,000 to 250,000. The 4-week moving average was 245,750, an increase of 2,250 from the previous week's revised average. The previous week's average was revised up by 500 from 243,000 to 243,500.  The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.

Unemployment rate gap between black and white falls to record low - Business Insider: The gap between the black and white unemployment rates in the US shrunk to a record low in June. According to the Bureau of Labor Statistics, the share of jobless African Americans in the labor force fell to 7.1%, the lowest level since April 2000. It was 1.5 percentage points down from a year ago, and it helped create the smallest gap between white and black employment on record."This trend is exactly what we want to see" as the economy gets closer to full employment, said Elise Gould, a senior economist at the Economic Policy Institute. The rebound in available jobs after the recession has attracted millions of Americans back into the labor force. With the unemployment rate back at a post-recession low, the economy is nearer to the theoretical level of full employment, at which everyone who wants a job and can work is employed. "While the unemployment rates for workers of color remain far higher than for white non-Hispanic workers, the black unemployment rate has been falling faster than overall unemployment over the last year," she said in a statement after the jobs report. Overall, the US economy added 222,000 jobs in June, more than economists had expected. Black unemployment, however, remained much higher than the overall unemployment rate of 4.4%, which in June inched up from a 16-year low.  And, it was greater than the white unemployment rate, which at 3.8%, was lower than the overall rate.

The Labor Market Conditions Index Down in June - The latest update of the Labor Market Conditions Index for June is at 1.5, down from May's revised 3.3.The LMCI is a relatively recent indicator developed by Federal Reserve economists to assess changes in the labor market conditions. The cumulative index (discussed below) is currently at its post-recession peak.The indicator, designed to illustrate expansion and contraction of labor market conditions, was initially announced in May 2014, but the data series was constructed back to  August 1976. Here is a linear view of the complete LMCI. We've highlighted recessions with callouts for its value the month recessions begin and for the latest index value.

BLS: Job Openings Decreased in May --From the BLS: Job Openings and Labor Turnover Summary The number of job openings decreased to 5.7 million on the last business day of May, the U.S. Bureau of Labor Statistics reported today. Over the month, hires increased to 5.5 million and separations increased to 5.3 million. Within separations, the quits rate was little changed at 2.2 percent and the layoffs and discharges rate was unchanged at 1.1 percent. ...  The number of quits increased to 3.2 million (+177,000) in May. The quits rate was 2.2 percent. The number of quits rose for total private (+159,000) and for government (+19,000).  The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.  Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for May, the most recent employment report was for June.Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.Jobs openings decreased in May to 5.666  million from 5.967 in April.The number of job openings (yellow) are up 2% year-over-year.Quits are up 7% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits"). Job openings are mostly moving sideways at a high level, and quits are increasing.  This is another solid report.

These U.S. States Still Haven’t Fully Recovered From Recession -- As the U.S. economy enters its ninth year of expansion this month, many Americans feel the recovery has been incomplete -- and the numbers back them up. Five states -- Arizona, Connecticut, Mississippi, Nevada and Wyoming -- still haven’t regained their levels of gross domestic product from before the financial crisis, more than five years after the country as a whole hit that milestone. Eight states are below prerecession levels of employment. And 15 have home prices that have yet to rebound fully. While each of the states has individual obstacles, they illustrate how growth has lagged outside of the nation’s largest cities in New York, California and Florida. And though President Donald Trump won some of the states last November after highlighting sectors and regions that have lagged for years -- including, for example, coal mining in West Virginia and manufacturing jobs in the Midwest -- the pain hasn’t been limited to Republican territory. “The hallmark of the recovery is that it is being driven by the nation’s largest metro areas,” said Mark Zandi, chief economist at Moody’s Analytics. “Metro areas have attracted millennials and boomer empty-nesters and are globally oriented, benefiting from global capital inflows. Rural economies that are dependent on commodity-based activities have suffered.” 

Minimum Wage Wars: The Media Celebrate Job Loss - Dean Baker - There has probably never been a National Bureau of Economic Research working paper that produced as much glee in the media as last week's report showing that Seattle's minimum wage law may have led to a net loss in wages for low wage workers. According to the analysis, there was a reduction in average hours worked among those in the low wage labor market that more than offset the gain in wages. The result was a net loss in wages for exactly the group of people the law was intended to benefit.This finding was quickly picked up in every major news outlet. While some, notably the New York Times, reported the finding with appropriate cautions, others (e.g. here, here, here, here, and here) were nearly gleeful at the idea that workers in Seattle were losing their jobs. Most of the reporting ignored the fact that the same week a team of researchers from Berkeley produced an analysis using a very similar methodology that found no statistically significant impact on employment.There are important differences in the studies. The Berkeley study follows much prior research and only looks at the restaurant industry, a major employer of low wage workers. The University of Washington NBER paper looked at all workers getting paid less than $19 an hour. It also had two additional quarters of data. However, the Washington study also excluded the roughly 40 percent of the workforce that worked at multi-site employers (think Starbucks and McDonald's). In other words, it it not obvious that the Washington study is the "better" analysis. The Berkeley team has produced much of the cutting edge research on the minimum wage over the last fifteen years. I doubt that many of the reporters touting the Washington study would be able to explain why it is a better analysis of the impact of Seattle's minimum wage hikes.

Republicans in several states are lowering the minimum wage — yes, you read that right -- While journalists and political junkies are focused on the latest implosion of the GOP effort to repeal Obamacare and gut Medicaid, conservatives in several states have been working to decrease the minimum wage that businesses can pay to their workers. In Missouri, Republicans just passed a law overturning a local measure passed by the city of St. Louis that had raised the minimum wage to $10 per hour. The new law will prohibit counties and cities within Missouri from creating their own minimum wage laws. It will also roll back the St. Louis minimum hourly wage to the statewide floor of $7.70. Notably, Gov. Eric Greitens, a Republican, refused to sign the law, even though he spoke out in favor of it. Under the Missouri constitution, bills passed by both houses of the state assembly automatically become law. The governor’s refusal to sign the law was interpreted as an at of cowardice by some Democrats. The GOP effort in Missouri came on the heels of an earlier success in March, when Iowa Republicans managed to roll back mandatory pay increases passed by local jurisdictions. It was the first time such a law had ever been passed, according to the National Employment Law Project, a liberal nonprofit group that supports higher minimum wage laws.Terry Branstad, Iowa’s Republican governor, was decidedly more gung-ho in his response to the idea. He held a formal signing ceremony for the bill and spoke on its behalf, citing his desire for a single wage across the state.  Advocates of lowering the minimum wage have also had success using lawsuits. In October, Kentucky’s Supreme Court overturned a 2014 Louisville ordinance that would have raised the city’s minimum wage to $9 an hour. In a 6-1 ruling, the court ruled that the local law violated the state constitution. Republicans in Maine have also been successful at changing local minimum wage laws. While GOP efforts in other states have been opposed by low-wage workers, in the Pine Tree State, bartenders and restaurant employees appear to have assisted them and a number of Democrats joined in.

State lawmakers in Missouri just undercut wages for 38,000 workers in St. Louis -- Last week, Missouri’s governor announced that he will let a preemption law take effect, prohibiting cities from requiring a minimum wage higher than the state’s—nullifying the city of St. Louis’s minimum wage ordinance and effectively lowering the city’s minimum wage from $10 down to $7.70. With this law, lawmakers have potentially undone raises for roughly 31,000 workers in St. Louis who received a raise when the city’s ordinance took effect in May, and likely stopped scheduled raises for those same 31,000 workers plus another 7,000 workers, for a total of 38,000 workers who would have gotten a pay increase when the city’s minimum wage was scheduled to rise to $11 an hour in January. (Minimum wage increases typically also lead to raises for workers slightly above the new minimum wage. The estimates here do not include these “spillover” effects.)  In 2015, the St. Louis city council and mayor approved a minimum wage ordinance, which would have gradually raise the city’s minimum wage to $11 per hour by January 2018. A protracted legal dispute delayed implementation of the ordinance until this past spring, but on May 5th, the ordinance finally took effect, raising the city minimum wage to $10 per hour. Now the city’s minimum wage will lose effect on August 28th, and the wage floor for workers in the city will fall back to the state minimum wage of $7.70.

The death of big-box stores is speeding up suburbia’s slide into poverty -- Poverty has been creeping into the suburbs for the last 20 years, and the rise of online retailers could be making it worse. According to a new book, "Places in Need: The Changing Geography of Poverty," by University of Washington professor Scott Allard, American suburbs are facing economic hardship on a massive, if poorly understood, scale. As of 2014, urban areas in the US had 13 million people living in poverty. Meanwhile, the suburbs had just shy of 17 million. The Great Recession of 2008 helped accelerate much of the poverty that emerged in the early 2000s, Allard's research has found. But another disrupting factor was the technological shift that enabled — and continues to enable — online retailers like Amazon and other e-commerce sites to replace shopping malls and big-box stores. This ongoing demise has hollowed out many of the jobs suburban Americans once turned to as a means of supporting themselves. "When we think about the current labor market, there's reason to be concerned about the disappearance of good-paying, low-skill jobs," Allard told Business Insider. His research has found that even when the US began its climb to economic recovery in the 2010s, the suburbs continued to sink into poverty. More jobs sprang up, but not the kinds that helped people live secure lives. Most are part-time positions with low wages. The kinds of jobs that do entice younger people — mostly higher-skill, white-collar work — are increasingly found in cities. Suburban office parks are becoming a thing of the past as millennials flock to nearby metropolitan areas for work, accelerating the speed at which the suburban workforce hollows out overall. Allard said it's a reversal of several decades ago, when businesses moved to the suburbs to attract people who had recently vacated the city in search of a safer, greener place to live.

Black Lives Matter responds to chilling National Rifle Association video that was seen as an 'open call to violence' -- Black Lives Matter activists issued a video response to a chilling advertisement published by the National Rifle Association, and demanded that the NRA take its video down.   "We demand that the NRA immediately remove their dangerous propaganda videos narrated by conservative radio hosts Dana Loesch and Grant Stinchfield," a Black Lives Matter representative says in the video.  The original NRA ad featured dramatic overlaid commentary by conservative media personality and NRA spokeswoman Dana Loesch, who urged Americans to join "America's safest place" and called protesters of President Trump members of the "resistance." Business Insider reported that the NRA's video showed footage of anti-Trump protests while Loesch described the demonstrations as "madness" that "shut down interstates and airports," requiring police intervention.  Black Lives Matter's two-and-a-half-minute video begins in a similar fashion to the NRA ad, with a representative speaking forcefully over video clips of police officers, schools, and protests:  "They use their guns to assassinate black people, they use their schools to funnel black students through a school to prison pipeline. They use their state institutions, bought politicians, business conglomerates, and white supremacist domestic terrorists to incite violence over and over again," the speaker says.  But the speaker abruptly stops and changes her tone:  "Wait, hold up. What’s with the aggressive fear mongering video tactics?" she asks, before calming the tone of the video and continuing.  "When the NRA issues a public call to their constituents, inciting violence against people who are constitutionally fighting for their lives — we don’t take that lightly. We know that we are not safe, but we are not scared either. We will continue to produce media, teach students, march, and protest to not only protect the First Amendment as fiercely as the NRA protects the second, but to protect our lives from gun-toting racists," the representative says. The original NRA ad prompted backlash from progressives, and has been referred to as "an open call to violence" and "barely a whisper shy of a call for full civil war."

Troubled Chicago school system sells $500 million bonds at high rates (Reuters) - The financially troubled Chicago public school system will pay hefty interest rates for a general obligation bond issue that was doubled in size on Monday to $500 million, up from the $250 million that the district announced last week. The refunding portion of the deal was increased on Monday to $215 million from the previous $50 million, while the new money portion was raised to $285 million from $200 million, according to a preliminary pricing scale. Underwriters led by J.P. Morgan priced the unrated general obligation bonds targeted at "qualified institutional buyers," with a final 7.65 percent yield and 7 percent coupon for new bonds due in 2046, according to the district. The bonds were initially priced to yield 7.75 percent. The repricing of refunding bonds due in 2042 dropped the yield 5 basis points to 7.55 percent with a 7 percent coupon. The yield on refunding bonds due in 2030 with a 6.75 percent coupon remained at 7.25 percent. Escalating pension payments have led to drained reserves, debt dependency and junk bond ratings for Chicago Public Schools (CPS), the nation's third-largest public school system. "CPS successfully completed the issuance of its GO bond offering, with more than $1 billion in orders for $500 million in bonds," Ron DeNard, the district's senior vice president of finance, said in a statement.

Illinois' $21 billion in school debt pushes up property taxes | Madison - St. Clair Record: Illinoisans are struggling under the highest property tax burdens in the country. Many of the reasons for those high taxes are known ­– too many local governments, executive pay for local administrators and rising pension costs. What taxpayers don’t know is that local school districts have billions in debt, which drives up property taxes even further. School districts across Illinois owe nearly $21 billion in long-term debt. That’s an increase of over 67 percent since 2002, when debt equaled $12.3 billion. School debt grew at nearly double the rate of inflation over the 2002-2015 period. Illinoisans have had to shoulder this debt growth through higher property tax bills. Not all these school districts are issuing debt to accommodate masses of new students. Student enrollment across the state has remained essentially flat over the past decade and a half, according to data from the U.S. Census Bureau.

Chicago's Terrible New Plan To Force High School Kids Into The Military - Chicago, Illinois, has a chronic inflated state problem disguised as a schooling problem. In order to eradicate the symptom, Mayor Rahm Emanuel has decided to attack those who suffer from it and not the actual root of the problem — adopting a classic “more of the same” approach. A plan approved in May is set to take effect soon, forcing high school seniors to either be enlisted in the military, have a job, be enrolled in a gap-year program, or have a college acceptance letter before the Chicago public schooling system will give them their diploma. The obvious consequences of this new policy are problematic. Still, Emanuel doesn’t seem to care. In the scenario Chicago’s mayor envisions, students from the poorest areas of the city, where many parents are often absent due to their work schedules, problems with the law, or other issues, children nearing the end of their senior year will have to head to a counselor’s office for advice on which path to take if they want to obtain their high school diplomas. Unfortunately, in many of the schools in those areas, counselors often work with 400 students at a time. With few resources to offer sound advice, these students will be forced to do whatever seems easier, less complicated, and perhaps less burdensome in order to meet the new requirements. As such, many will enlist in the military while others will head to already crowded city colleges. The other obvious consequence of this policy is that many students will simply postpone graduating or completely give up on it. In no time, Chicago, whose population already suffers due to poverty, high crime rates worsened by a suffocating anti-gun agenda that hurts blacks more than anyone else, and the ongoing drug war will see yet another problem gradually taking over. As young high school students feel uncertain of their future, they will have no incentives to pursue their own individual paths. Instead, they will turn to those that are readily available. As a result, many of the poorest kids in the city will likely take up crime, whether on behalf of the state — by joining the military — or on behalf of a drug cartel that wouldn’t exist without the U.S. government’s war on drugs.

Reading, Writing And Fracking? What The Oil Industry Teaches Oklahoma Students - It's a Saturday at Choctaw High School, but for hundreds of Oklahoma teachers, there's a training class in session. Carrie Miller-DeBoer perches atop a stool monitoring a pair of soda bottles linked with a small length of thin plastic tubing created to mimic enhanced oil recovery, while teaching chemistry fundamentals. "I love it and my students will be so excited," she says. DeBoer is among 14,000 teachers in Oklahoma being trained to instruct a K through 12 education curriculum funded by the oil and gas industry. The lesson plans, created by the Oklahoma Energy Resources Board, have been used in Kansas, and the overall model has been pitched to at least five other states. The program centers on teaching math and science through oil-centric lessons and labs. That includes things like calculating the mileage of tanker trucks, or the slope of pipelines. "Half of our budget is restoration, half is education," says Dara McBee, communications director with the Oklahoma Energy Resources Board. Since the 1990s, the energy board – funded by oil and gas taxes – has spent $40 million on the education program. But an investigation by the Center for Public Integrity and StateImpact Oklahoma, a collaboration of local NPR member stations, reveals there's a blurry line between industry promotion and education. Documents show educators had some role in creating the plans, but it's unclear how the lessons are written and updated each year. The board's education director does not have a background in education or science.  Here are just a few of those lessons:

  • Hydraulic Fracturing:
  • Seismic Exploration:
  • Refineries and Petroleum Byproducts:

Charles Anderson, a professor at Michigan State University who studies environmental literacy and develops curricula, says the Oklahoma lessons are blatantly pro-energy, but do not appear to deliberately distort science.

Most Republicans Think College Is Ruining America -- A new Pew Research Center survey found 58 percent of right-leaning Americans think colleges and universities are harming the country—up 13 percent from last year.  A majority of Republicans now believe college is bad for the country, and a majority of Democrats think it's great.The poll, conducted by Pew Research Center, found that 58 percent of Republicans feel colleges and universities "have a negative effect on the country," with just 36 percent supporting higher education. The proportion of Republican-leaning voters who are anti-college has shot up in recent years, spiking by 21 percentage points from 2015 to 2017. That figure jumped 13 percentage points over the past year alone. Opinions on higher education have remained pretty consistent among Democrats, with 72 percent of those surveyed this year saying college positively impacts the country. At its lowest level of support, back in 2010, that figure for Democrats was at 65 percent.  Republican disdain for colleges and universities climbs as you move further right on the spectrum: Whereas 43 percent of moderates believe higher education is harming the country, a whopping 65 percent of conservatives are against it. Interestingly, Republicans who never attended or finished college think it's better for the country than those who actually went: 37 percent of Republicans with high school educations or some college education support higher education, compared with 32 percent of college graduates, and 35 percent of folks who finished a postgrad program. Pew also collected data on the college-aged Republicans attending the institutions their peers believe are destroying the country. Roughly half of right-leaning 18 to 29 year olds think college has a positive effect on America. Compare that with the mere 27 percent of those aged 65 and older who feel the same way.

Most Republicans Say Universities Negatively Impact America -- A majority of Republicans think higher education is having a negative effect on the U.S.according to new polling from the Pew Research Center. As Statista's Niall McCarthy notes, both Democrats and Republicans are deeply divided about the impact of a whole host of institutions and in many instances, that partisan divide has widened significantly over the past 12 months. The level of division is most evident when it comes to America's colleges and universities... While 55 percent of the public think U.S. colleges and universities are having a positive effect on the country, Republicans are particularly downcast about higher education. Pew found that an overwhelming 72 percent majority of Democrats think colleges and universities are exherting a positive influence while 58 percent of Republicans say they are having a negative effect.  Republican skepticism of the national news media is no secret so it comes as little surprise that 85 percent say it is having a negative effect on the country. Democrats are more divided on the media with 46 percent saying it is negative and 44 percent feeling it is positive. When it comes to banks and financial institutions, Democrats are more skeptical than Republicans while majorities in both parties are positive about churches and religious organizations.

 We Don’t Need No Education - Paul Krugman - A few days ago Pew reported that Republicans, who were already much less positive than Democrats about higher education, have turned very negative on the role of colleges in America. True to form, this worries some liberal commentators, who are calling for outreach – universities should examine their implicit biases, make an effort to hire more conservative faculty, etc..   Is there discrimination against would-be academics who express conservative beliefs? I’m sure it happens, but it’s not the main reason conservatives are less likely than liberals to join the academy, just as discrimination against would-be officers with liberal views probably isn’t the main reason the military trends conservative. But hasn’t the anti-conservative lean of academics gotten more pronounced over time? Yes – but surely that has a lot to do with the changing nature of what it means to be a conservative. When denial of climate change, and for that matter the theory of evolution, become tribal markers, you shouldn’t be surprised to find academics, very much including those in the hard sciences, decline to be identified as members of the tribe. Which brings me to the abrupt decline in Republican views of colleges? What’s that about? Did the colleges get a lot more liberal? I doubt it. But Republicans have changed in the age of Trump: what was already a strong strain of anti-intellectualism has become completely dominant. The notion that there was a golden age of conservative intellectuals is basically a myth. But there used to be at least some pretense of taking facts and hard thinking seriously. Now anyone pointing out awkward facts – immigrants haven’t brought a reign of terror, coal jobs can’t be brought back, Trump lost the popular vote – is the enemy. In fact, I’d argue that anti-intellectualism was, in its own way, as big a factor in the election as racism.  What this means for the future is grim. America basically invented the modern, educated society, leading the way on universal K-12 education, building the world’s finest and most comprehensive higher education system; this in turn was an important factor in how we became leader of the free world. Now a powerful political movement basically wants to make America ignorant again.

Man outwits Student Loans Company by staying poor forever: AN ingenious graduate has hatched a plan to avoid repaying his student loan by never earning a decent wage. Tom Logan, 21, has announced his cunning scheme to earn less than £18,000 for every year of his life, keeping him out of reach of the tentacles of the Student Loans Company. He said: “I’ve done it. I’ve beaten the system. “The suckers at the Student Loan Company have lent me a cool £50,000, but I’ll make sure that’s the last time I’ll ever have that kind of scratch. “All I have to do is stay in dead-end jobs, being careful never to let any one of them turn into a career and never move out of rented accommodation, and it’s easy street for life. “Joke’s on you, big finance. You’ve been outsmarted. Shouldn’t have messed with the cream of the intellectual crop.” Friend Emma Bradford said: “He’s got a philosophy degree, so this would have happened anyway.”

How teachers, firemen and college endowments ended up enriching America’s hedge fund billionaires -

  • Public pensions and college endowments are some of the biggest investors in hedge funds, investment vehicles that have made their managers some of the wealthiest people in the world.
  • Middlemen funnel this public money into the hedge funds, as do funds of funds. All of them collect fees.
  • Pensions could have been better off investing in cash than in hedge funds, largely because of the high fees investors pay hedge fund managers. Hedge funds haven't met the expectations for endowments over the past several years, either.

The Retirement Wealth Inequality Machine --Yves Smith - Yves here. I have mixed feelings about this video. On the one hand, Professor Ghilarducci does an impressive job of laying out the severity of the retirement crisis. But the flip side is she pushes the fallacy of having a public-private retirement savings program as a mass solution. We already have an economy which has a financial sector that is so oversized that it is dampening growth. One of the big activity and I hate to use the word, talent drains is the amount of time and energy devoted to the secondary trading of securities, which does absolutely nothing to support growth. It’s asset-shuffling which does not send terribly good signals as to the pricing of capital assets (and in any event, research has repeatedly found that business managers generally assign overly high return targets for projects, leading to chronic underinvestment, particularly in projects with back-ended payoffs). To put this another way, one person’s financial asset is another person’s financial liability. And as Micheal Hudson has repeatedly pointed out, expecting debt, and by extension, other financial assets to earn above inflation returns simply leads to period busts.  The best way to provide for retirement is to look to MMT-based solutions. The currency issuer can create new spending with the constraint being generating too much inflation. Having the national government play a bigger role in retirement funding also aligns incentives better, since the powers that be would have incentives to find ways to make sure that employers didn’t discriminate against older workers who wanted to continue working (notice Ghilarducci’s discussion of how far the US lags other countries in some important respects), as well as pursuing more bona fide pro growth policies (which can and should include a lot more aggressive action on the environment) as opposed to graft and looting programs.

As Illinois Goes Bankrupt, Michigan Embraces Bold Pension Reforms  - After years of overpromising and underperforming, state pensions face a yawning $1 trillion-plus funding gap. As states try to dig themselves out of this massive hole, they should look to the Great Lake State for a solution. For years, Michigan had been racking up pension liabilities for public school teachers that it had no money to pay for. By 2016, the state's unfunded liability had reached $29 billion — which meant state was funding only 60% of its pension obligations. According to the Michigan-based Mackinac Center for Public Policy, pension costs eat up more than a third of the state's school payroll budget. Michigan is hardly the only state to have made this mistake. Pressured by public sector unions, state lawmakers boosted retirement benefits, using wildly unrealistic forecasts for investment returns and wage growth to justify them. So what did Michigan do to avoid Illinois' fate? It embraced bold pension reforms that will protect taxpayers and provide a solid retirement benefit to teachers. First, it's shifting its public school teachers toward defined contribution plans. All new hires will be automatically enrolled in a 401(k)-type plan with a default 10% contribution rate. Teachers will still be able to opt for a traditional defined benefit pension, but one that splits costs 50-50 between workers and the state, and includes safeguards that will prevent the funding ratio from dropping below 85%.

First Look at 2018 Cost-Of-Living Adjustments and Maximum Contribution Base -- The BLS reported this morning: The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.5 percent over the last 12 months to an index level of 238.813 (1982-84=100). For the month, the index increased 0.1 percent prior to seasonal adjustment. CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months. Note: this is not the headline CPI-U, and is not seasonally adjusted (NSA). In 2016, the Q3 average of CPI-W was 235.057.  This was the highest Q3 average, so we have to compare Q3 this year to last year. This graph shows CPI-W since January 2000. The red lines are the Q3 average of CPI-W for each year. Note: The year labeled for the calculation, and the adjustment is effective for December of that year (received by beneficiaries in January of the following year). CPI-W was up 1.5% year-over-year in June, and although this is very early - we need the data for July, August and September - my current guess is COLA will be positive this year, and will probably be around 1% to 2% this year. The law prohibits an increase in the contribution and benefit base if COLA is not greater than zero.  However if the there is even a small increase in COLA (seems likely this year), the contribution base will be adjusted using the National Average Wage Index.

 The Coalition Pushing for Single Payer in California Is Fracturing - David Dayen -- The coalition organized to bring universal single-payer health care to America for the first time has sparked an unprecedented level of enthusiasm in state politics. Behind the scenes, however, Campaign for a Healthy California is fracturing, amid complaints of brass-knuckle leadership on the part of the California Nurses Association, the public face of the movement. According to interviews with more than a half-dozen leading activists within the coalition, a collection of scores of progressive groups big and small, some key members have grown frustrated by CNA’s lack of consultation about its aggressive tactics and strategy, and its refusal to disclose amendments that could improve the legislation — amendments that are repeatedly referenced in the press, but remain hidden to both the public and other coalition members.One labor group, the National Union of Healthcare Workers, is in active discussions with its executive board to withdraw from Healthy California’s steering committee, according to its president, Sal Rosselli. At least two additional steering committee members, the California Federation of Teachers and Unite Here, may also be on the outs, according to sources familiar with their planning. And others are stepping outside the coalition to engage with one another and devise how to move forward separately.  In an interview, Rosselli, who has worked with CNA since the 1980s, stressed the positives of CNA’s leadership, such as “organizing more people than ever” to the cause of health care for all. But he expressed disappointment with what he called CNA’s unwillingness to collaborate.

Nurses Won’t Back Down in Fight for Single-Payer in California - Despite efforts by the political establishment to shut it down, the quest for a state based, Medicare for all type system in California, based on patient need, not corporate profits, rolls on. After SB 562 passed the California Senate in early June, California Assembly Speaker Anthony Rendon unilaterally blocked the bill from advancing before a single hearing could be held or a single amendment could be considered. Nurses, the lead sponsors of the bill, and thousands of healthcare and community activists who have organized and mobilized in support of SB 562, responded with multiple protests at the state Capitol, canvassing and hosting a town hall meeting in Rendon’s Los Angeles area district, and flooding social media in protest.  They are far from done. Activists will work to hold every member of the California Assembly accountable, insisting all sign on as co-sponsors of the bill and declare whether they agree that insurance companies should be the determinants of our health. They are also reminding Rendon that there is still time to move the bill in a legislative session that does not end until mid-September.With Rendon claiming he acted because the bill is “woefully inadequate,” many have wondered what is the job of elected representatives if not to hold hearings and make amendments to legislation they think needs changes.Corporate media critics have been quick to inflate the projected cost of a system to guarantee healthcare for all Californians, with real patient choice, and no premiums, deductibles and co-pays that reinforce an inequitable system based on ability to pay.  But economist Robert Pollin, lead author of a study on the potential costs, recently wrote that the bill “could deliver decent health care to all 39 million California residents while also lowering overall costs of health care by about 8 percent relative to the existing system.” [Editor’s note: this study was commissioned by the California Nurses Association/National Nurses Association.] Under Pollin’s recommended approach virtually every California household and business would spent less on health care than they do today.

Hospitals performing private cosmetic operations despite delays for necessary surgeries | National Post: While some Canadians wait months to undergo medically necessary surgeries, public hospitals across the country are routinely providing operating-room space for cosmetic, privately paid operations, a National Post survey reveals. Breast enhancements, nose jobs and other aesthetic procedures are being carried out during daytime hours — employing the same facilities and support staff used for heart bypasses or liver transplants, hospitals and surgeons confirm. Of 16 hospitals or health regions in seven provinces that responded to questions from the Post, 11 said they permit at least some cosmetic surgery cases, with one recording 168 such cases last year. The institutions stress it’s still a small fraction of the total number, but the phenomenon underscores a surprising reality of Canada’s health-care system: despite the demand and long queues, governments often don’t provide enough money to fill standard operating-room hours — typically 8 a.m. to 3:30 p.m. — with medically necessary surgeries, the facilities say. I can see how in certain segments of society (aesthetic surgery in public facilities) would raise eyebrows. I can also see this is a means for hospitals to raise revenue That means there’s room to allow patient-paid, non-medical work without affecting wait lists at all, they say. Indeed, the delay even for heavily funded “priority” treatments like hip replacements remains daunting. More than 20 per cent of those patients in 2016 waited longer than the recommended six months after first seeing an orthopedic surgeon, according to the Canadian Institute for Health Information. 

Vaccine skepticism In Australia now punishable by 10 years in jail -- Australian nurses and midwives who dare to speak out against the dangers of vaccinations, regarding deadly mercury contents, faetal tissue and other harmful ingredients, on social media or in person will be prosecuted, the Australian government has warned, urging members of the public to report vaccine skeptics to the authorities.  Medical professional face a jail sentence of 10 years for expressing doubt about the effectiveness of vaccinations or urging further studies into vaccine safety. Opponents of the new law claim free speech and scientific integrity is under attack in Australia by a government that has been bought and paid for by Big Pharma.“With no exceptions we expect all registered nurses, enrolled nurses and midwives to use the best available evidence in making practice decisions. This includes providing information to the public about public health issues,” Chair of the Nursing and Midwifery Board of Australia (NMBA) Dr. Lynette Cusack said in a statement.  The NMBA has called on Australians to report nurses or midwives promoting anti-vaccination – ‘anti-vaxxers’, as they’re known colloquially. “The board will consider whether the nurse or midwife has breached their professional obligations and will treat these matters seriously,” the statement said.  “Any published anti-vaccination material and/or advice which is false, misleading or deceptive which is being distributed by a registered nurse, enrolled nurse or midwife (including via social media) may also constitute a summary offence under the National Law and could result in prosecution by AHPRA [Australian Health Practitioner Regulation Agency.

Big Pharma Spends on Share Buybacks, but R&D? Not So Much – NYT - Gtretchen Morgenson - Under fire for skyrocketing drug prices, pharmaceutical companies often offer this response: The high costs of their products are justified because the proceeds generate money for crucial research on new cures and treatments.It’s a compelling argument, but only partly true. As a revealing new academic study shows, big pharmaceutical companies have spent more on share buybacks and dividends in a recent 10-year period than they did on research and development. The working paper, published on Thursday by the Institute for New Economic Thinking, is entitled “U.S. Pharma’s Financialized Business Model.”The paper’s five authors concluded that from 2006 through 2015, the 18 drug companies in the Standard & Poor’s 500 index spent a combined $516 billion on buybacks and dividends. This exceeded by 11 percent the companies’ research and development spending of $465 billion during these years.The authors contend that many big pharmaceutical companies are living off patents that are decades-old and have little to show in the way of new blockbuster drugs. But their share buybacks and dividend payments inoculate them against shareholders who might be concerned about lackluster research and development. A few companies have spent more money repurchasing shares than they allocated to research over the period, the study found. They included Gilead Sciences, which spent $27 billion on buybacks versus $17 billion on research, and Biogen Idec, which repurchased $14.6 billion in stock and spent $13.8 billion on research and development.

Oregon Legislature Passes Bill To Decriminalize Cocaine, Meth, And Heroin - Oregon’s state legislature just reduced penalties for drug possession in a bill also intended to reduce racial profiling by law enforcement agencies. H.B. 2355 passed both the House and Senate last week and reduces possession of illegal drugs to misdemeanors rather than felonies as long as the person in possession does not have prior drug convictions. According to a press release issued on July 7 by Oregon Attorney General Ellen Rosenblum, the bill provides for “the reduction of penalties for lower level drug offenders. The bill also reduces the maximum penalty for Class A misdemeanors by one day to avoid mandatory deportation for misdemeanants.” According to the text of the bill, drugs like LSD, MDMA, cocaine, meth, oxycodone, and heroin are essentially decriminalized in small amounts. Each drug listed is accompanied by the following text, indicating possession is only a felony if: “(a) The person possesses a usable quantity of the controlled substance and: (A) At the time of the possession, the person has a prior felony conviction; (B) At the time of the possession, the person has two or more prior convictions for unlawful possession of a usable quantity of a controlled substance.” The “misdemeanor” title applies for varying amounts of different drugs. For example, the maximum allowable amount of acid is up to “40 units,” while individuals may have up to five MDMA pills or less than one gram before their “offense” crosses the line into a felony. Less than two grams of cocaine constitutes a misdemeanor.

DOJ announces charges against 400 people for $1.3 billion in health-care fraud - More than 400 people across the country have been charged with participating in health care fraud scams totaling about $1.3 billion in false billings, including for the prescription and distribution of opioids.In what federal officials Thursday called the “largest ever health care fraud enforcement action” by the Medicare Fraud Strike Force, 412 individuals, including 115 doctors, nurses and other licensed medical professionals, were arrested in a nationwide operation that involved more than 1,000 law enforcement agents in at least 30 states. “One American dies of a drug overdose every 11 minutes and more than 2 million Americans are ensnared in addiction to prescription painkillers,” Attorney General Jeff Sessions said at a news conference. “We will continue to find, arrest, prosecute, convict and incarcerate fraudsters and drug dealers wherever they are.”Sessions said the operation began with tips from people in the affected communities and from “very sophisticated computer programs that identify outliers.”The investigation particularly focused on medical professionals who were involved in the unlawful distribution of opioids and other prescription narcotics, officials said. The abuse of pharmaceutical opioids is widely blamed for a medical crisis involving tens of thousands of overdoses on heroin and fentanyl.

Some doctors were handing out opioids like candy. The Justice Department just shut them down - The US Department of Justice just took what it calls its biggest action against opioid-related fraud ever. The department announced Thursday that it’s charged 120 people with opioid-related crimes. That includes doctors who were allegedly running pill mills in which they unscrupulously prescribed opioids to patients. It also includes fraudulent treatment centers, which attract customers with promises of treatment for their addiction and then offer shoddy, ineffective services — if any at all. “Too many trusted medical professionals, like doctors, nurses, and pharmacists, have chosen to violate their oaths and put greed ahead of their patients,” Attorney General Jeff Sessions said. “Their actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start.” The news was part of the Justice Department’s annual announcement about its health care fraud work. In total, the Justice Department announced charges in more than 400 cases, totaling more than $1.3 billion in health care fraud — what the feds called the biggest health care fraud enforcement action ever taken by the Medicare Fraud Strike Force. The opioid actions are meant to address a major public health crisis. It’s currently estimated that up to 65,000 people died of drug overdoses in the US last year alone — more than all the American casualties from the entire wars in Vietnam and Iraq. Most of those overdoses are believed to be tied to opioids. This is now the deadliest drug overdose crisis in US history. The Justice Department’s latest work won’t come close to ending the opioid crisis. And there’s evidence it could actually make the crisis worse in the short term — if the actions leave addicted users without a reliable source of prescription painkillers, they may turn to more dangerous opioids like heroin, increasing their chances of overdose and death. But if the Justice Department’s work is paired with increased access to drug treatment, it may help.

In one year, drug overdoses killed more Americans than the entire Vietnam War did - More Americans died of drug overdoses in 2016 than died in the entirety of the Vietnam War — the result of the US’s opioid epidemic.That’s one takeaway from a new report by Josh Katz for the New York Times, based on preliminary data estimating how many Americans died of drug overdoses last year.The official, more precise numbers will be available later in 2017 — once the Centers for Disease Control and Prevention (CDC) finishes tabulating and verifying reports from across the US. In the meantime, the Times contacted local and state agencies across the US to come up with a rough estimate. It calculated that 59,000 to 65,000 people died of overdoses last year, with a harder, but likely imprecise, number of 62,497. In comparison, more than 58,000 US soldiers died in the entire Vietnam War, nearly 55,000 Americans died of car crashes at the peak of such deaths in 1972, more than 43,000 died due to HIV/AIDS during that epidemic's peak in 1995, and nearly 40,000 died of guns during the peak of those deaths in 1993.The Times can’t specify how many of the overdose deaths were caused by opioids, much less what kind of opioid — painkillers, heroin, or fentanyl — was behind the deaths. But based on the past few years’ trends and on-the-ground reports, most of the overdose deaths were likely linked to opioids and an increasing amount were linked to fentanyl.The total, if it holds true, would surpass 2015’s record for most recorded drug overdose deaths in US history. Back then, more than 52,000 deaths were linked to overdoses. The Times estimates there was a 19 percent increase between 2015 and 2016 alone, which would be the largest known increase in drug overdose deaths for any single year yet.  Although it’s hard to say for certain, the Times suggested “the problem has continued to worsen in 2017.”   In short, the opioid epidemic was already the deadliest in American history in 2015. And it got much deadlier in 2016 — and is likely even worse so far in 2017.

Children of the Opioid Epidemic Are Flooding Foster Homes. America Is Turning a Blind Eye. –  The scourge of addiction to painkillers, heroin, and fentanyl sweeping the country has produced a flood of bewildered children who, having lost their parents to drug use or overdose, are now living with foster families or relatives. In Ashtabula County, in Ohio’s northeast corner, the number of children in court custody quadrupled from 69 in 2014 to 279 last year.  “I can’t remember the last time I removed a kid and it didn’t have to do with drugs,” says Mongenel, a quick-witted redhead. Her clients range from preschoolers who know to call 911 when a parent overdoses to steely teenagers who cook and clean while Mom and Dad spend all day in the bathroom. Often, the kids marvel at how quickly everything changed—how a loving mom could transform, as one teenager put it, into a “zombie.” The pattern mirrors a national trend: Largely because of the opioid epidemic, there were 30,000 more children in foster care in 2015 than there were in 2012—an 8 percent increase. In 14 states, from New Hampshire to North Dakota, the number of foster kids rose by more than a quarter between 2011 and 2015, according to data amassed by the Annie E. Casey Foundation. In Texas, Florida, Oregon, and elsewhere, kids have been forced to sleep in state buildings because there were no foster homes available, says advocacy group Children’s Rights. Federal child welfare money has been dwindling for years, leaving state and local funding to fill in the gaps. But Ashtabula County is one of the poorest counties in Ohio, and despite a recent boost in funding, the state contributes the lowest share toward children’s services of any state in the country. Ohio also has one of the nation’s highest overdose rates. In 2016, at least 4,149 Ohioans died of drug overdose—a 36 percent jump from the year before, according to the Columbus Dispatch. In 2015, 1 in 9 US heroin deaths occurred in Ohio.

Goal of nation's first opioid court: Keep users alive - —After three defendants fatally overdosed in a single week last year, it became clear that Buffalo's ordinary drug treatment court was no match for the heroin and painkiller crisis. Now the city is experimenting with the nation's first opioid crisis intervention court, which can get users into treatment within hours of their arrest instead of days, requires them to check in with a judge every day for a month instead of once a week, and puts them on strict curfews. Administering justice takes a back seat to the overarching goal of simply keeping defendants alive. "The idea behind it," said court project director Jeffrey Smith, "is only about how many people are still breathing each day when we're finished." Funded with a three-year $300,000 United States Justice Department grant, the program began May 1 with the intent of treating 200 people in a year and providing a model that other heroin-wracked cities can replicate. Two months in, organizers are optimistic. As of late last week, none of the 80 people who agreed to the program had overdosed, though about 10 warrants had been issued for missed appearances.Buffalo-area health officials blamed 300 deaths on opioid overdoses in 2016, up from 127 two years earlier. That includes a young couple who did not make it to their second drug court appearance last spring. The woman's father arrived instead to tell the judge his daughter and her boyfriend had died the night before. "We have an epidemic on our hands.... We've got to start thinking outside the box here," said Erie County District Attorney John Flynn. "And if that means coddling an individual who has a minor offense, who is not a career criminal, who's got a serious drug problem, then I'm guilty of coddling." Regular drug treatment courts that emerged in response to crack cocaine in the 1980s take people in after they've been arraigned and in some cases released. The toll of opioids and profile of their users, some of them hooked by legitimate prescriptions, called for more drastic measures. Acceptance into opioid crisis court means detox, inpatient or outpatient care, 8 p.m. curfews, and at least 30 consecutive days of in-person meetings with the judge. A typical drug treatment court might require such appearances once a week or even once a month. 

 Once the Cathedral of Kensington, now a heroin shooting gallery - A gas company supervisor showed up at Mother of Mercy, a storefront church on Allegheny Avenue, in late June. He’d just been inside the long-shuttered Ascension of Our Lord, a hulking cathedral of a building at F and Westmoreland. After what he’d seen, he needed to speak with a priest. He’d been working in the neighborhood, the PGW man said, and slipped through a broken stained-glass window to take some photos for his wife, who had grown up in the parish. That’s when he saw the mess of needles carpeting the floor and pews — and the figures moving in the darkness. “There were so many people in there it looked like they were waiting for Mass to start,” the man reported. It made sense to Father William Murphy. For months, he and Father Joseph Devlin and Sister Ann Raymond had been feeding the young people who got high on the lawn of McPherson Square library. But then the police drove the crowds away. The addicted people had to have gone somewhere, he thought. So Father Murphy and Sister Raymond walked the few blocks to the church that long was the jewel of the neighborhood, until it wasn’t. They stepped through a window, glass crunching underneath their feet.  In the half-light, they could make out thin forms. Some shot heroin in the pews, some laid half-naked on mattresses. Others stumbled past in their stupor, not noticing the priest and nun in their presence. Now the cathedral is a shooting gallery, a makeshift haven for young people who come to the neighborhood from all over for pure and powerful heroin – the latest place where they have taken up residence as the city attempts to address other Kensington heroin encampments like McPherson Square and the Gurney Street train tracks.

The Louisiana Environmental Apocalypse Road -- If you’re visiting New Orleans and want to see something truly amazing, take your beer or daiquiri to-go and walk a few blocks past the Superdome—you’ll find a school being constructed on an old waste dump.“All the toxins from the landfill are still there,” says toxicologist Wilma Subra. These toxins include lead, mercury, and arsenic, exposure to which can lead to reproductive damage, and skin and lung cancer. Even more astonishing, Subra says hundreds of schools across Louisiana have been built on waste dumps. Why? Dumps represent cheap land often already owned by a cash-strapped town or city, plus serve as rare high ground in a flood-prone state. And this is just the beginning of Louisiana’s nightmare. The risk of cancer in Reserve, a community founded by freed slaves, is 800 times the national average, making the community, by one EPA metric, the most carcinogenic census tract in America—the cause is a DuPont/Denka chemical plant adjacent to the town that annually spews 250,000 pounds of the likely carcinogen chloroprene into the air. If you think the situation in Flint is bad, there are approximately 400 public water systems in Louisiana with lead or other hazardous substances leaching into the drinking water. Meanwhile, hundreds of petrochemical plants peppered across the state’s lush swampy interior freely emit carcinogens, endocrine disruptors, and neurotoxins into the air and water, as well as inject them deep into the earth. Perhaps it’s no surprise that Louisiana is ranked, according to different surveys, 47th in environmental quality, third in poverty, and 49th in education. Are you still gushing about your latest trip to New Orleans for Jazz Fest Presented by Shell, or French Quarter Festival presented by Chevron? “New Orleans is the best,” one visitor recently wrote to me, “you are so smart to live there!” But how smart is it to allow children to attend school built on toxin-laced waste? How smart is it to allow a community’s cancer rates to shoot off the charts? Louisiana is rich in culture, spirit, and faith, yet what type of state knowingly poisons its own people? What type of country stands by and allows it to happen?

Environmental Nightmare! Dozens Of Highly Toxic Substances Have Been Found In Tap Water All Over America -  Most Americans have generally assumed that the water coming out of our taps is perfectly safe, but the Flint water crisis and other similar incidents are starting to help people to understand that there are some very dangerous substances in our water.  In particular, I am talking about things like arsenic, lead, atrazine, perchlorate and a whole host of pharmaceutical drugs.  According to an absolutely stunning NRDC report, close to 77 million Americans received their water from systems “that violated federal protections” in 2015.  And even if you get your water from a system that meets federal standards, that still does not mean that it is safe.Let’s start by talking about arsenic.  Earlier today I came across an article that talked about how levels of arsenic in the water at some schools in the San Joaquin Valley “exceed the maximum federal safety levels by as much as three times”… The International Agency for Research on Cancer says that arsenic is a “group 1 carcinogen”, and if you get too much of it in your system it can kill you.  Sadly, the EPA has estimated that36 million Americans are drinking tap water that contains dangerous levels of arsenic. In addition to arsenic, a very nasty pesticide known as “atrazine” is often found in tap water supplies.  The following information about atrazine comes from the NRDCThis endocrine-disrupting chemical is one of the most commonly detected pesticides in U.S. waters. NRDC studies have found its contamination is most common in drinking water across the Midwest and the southern United States. Perchlorate is another very dangerous substance that is commonly found in our drinking water.  According to the NRDC, perchlorate has been discovered in water supplies “in at least 26 states”…

London Tube passengers can inhale more than 12 million toxic air particles a minute -- Tube travellers could be at risk of developing dementia as it emerged passengers can inhale more than 12 million toxic air particles a minute on the Underground.  Monitors placed on the Tube network by Transport for London found that "nanodusts" comprised mostly of iron oxides surge with the movement of trains.  They are thought to spike because of the grinding of wheels and rails as trains brake, and are also blown up from the tracks as trains move along them.  Peaks measured by TfL and released to The Sunday Times under freedom of information laws found that particle levels on the Central line exceeded two million particles for every litre of air.  Ten litres of air are breathed in by adults every minute, meaning passengers could inhale between 12 and 20m particles in that time. Despite being different from pollution on roads, the "nanodusts" are said to be equally toxic and are often so small they can pass straight into people's organs and brains.

Human Guinea Pigs: Congress Slams Door On Pentagon Biochemical Weapons Testing Declassification -- In the 1960's and 1970's the US government tested chemical and biological weapons on US troops in still little known secret programs called Projects 112 and SHAD (Shipboard Hazard and Defense). The Vietnam era tests involved some 6,000 military personnel being subject to experiments involving deadly nerve agents like sarin and VX, as well as biological agents like E. Coli, all of which can result in quick death or potential lifelong debilitating health issues such as long-term central nervous system failure. A fatal dose of VX nerve agent, for example, can kill in minutes, but it is unknown if the program resulted in deaths because documents remain classified as "Top Secret" even 50 years later.Veterans advocacy groups have long tried to get specifics of the program declassified in the hopes that disclosure might allow victims of the tests access to health benefits and better medical treatment, but on Thursday Congress slammed the door on these attempts, leaving veterans and some congressional sponsors outraged.

Damage From Wayward Weedkiller Keeps Growing  -  NPR -  Two weeks ago, in a remarkable move, the State Plant Board of Arkansas voted to ban the sale and use of a weedkiller called dicamba. It took that action after a wave of complaints about dicamba drifting into neighboring fields and damaging other crops, especially soybeans.  That ban is still waiting to go into force. It requires approval from a committee of the state legislature, which will meet on Friday.  Estimates of dicamba's damage, however, continue to increase. Since the Plant Board's vote, the number of dicamba-related complaints in Arkansas has soared to 550. Reports of damage also are increasing in the neighboring states of Tennessee, Missouri and Mississippi. The total area of damaged soybean fields could reach 2 million acres."I've never seen anything even close to this," says Larry Steckel, a weed specialist at the University of Tennessee. "We have drift issues every year in a handful of fields, but I've never seen anything like this."Dicamba is not a new weedkiller; it's been around for 50 years. It's being used in a new way, though, because the biotech company Monsanto is now selling new soybean and cotton varieties that have been genetically altered to tolerate dicamba.  Farmers are spraying dicamba on those new crops, and they report that it's working great, killing weeds that farmers have struggled to control lately. The problem is, dicamba doesn't always stay where it's supposed to. In hot weather, dicamba turns into a gas that apparently can drift for miles. And soybeans that haven't been specifically engineered to tolerate dicamba are extremely sensitive to it. According to Steckel, soybean farmers in western Tennessee are in one of two camps. Perhaps 60 percent of them are spraying dicamba, because they invested in Monsanto's new dicamba-tolerant crops. The rest, with soybeans that are vulnerable, likely have seen some fields damaged.

Two states ban dicamba weed killer after drift complaints | Reuters: (Reuters) - Missouri joined Arkansas on Friday in banning the use and sale of the weed killer dicamba after a rise in complaints that the agricultural chemical is drifting into neighboring fields and damaging crops, the states agriculture departments said on Friday. Dicamba use and complaints about its use have spiked in the past two years in the United States. More farmers are spraying it to control hard-to-kill weeds in fields planted with crops bioengineered to survive the chemical, which is produced by Monsanto Co, Germany's BASF and others. The bans are the latest regulatory setback for Monsanto, which sells dicamba-tolerant crop seeds and licenses the biotech traits to other seedmakers. Officials in California announced last week that the company's flagship herbicide glyphosate would be labeled as a probable carcinogen in the state. "Based on feedback and research, the Department of Agriculture is going to hit the pause button on all dicamba products," Missouri Director of Agriculture Chris Chinn said in a statement. Distributors are not allowed to sell it and farmers cannot apply it, effective immediately, but the state will work with industry to develop new handling guidelines as soon as possible, she said. Missouri has received more than 130 complaints of pesticide drift this year believed to be caused by dicamba, the Missouri Department of Agriculture said. Arkansas' 120-day ban will go into effect as soon as paperwork is filed with the Arkansas Secretary of State, said agriculture department spokeswoman Adriane Barnes. The state's House and Senate Agriculture Committee voted on Friday to follow recommendations by the Arkansas Plant Board and Governor Asa Hutchinson to ban dicamba use. The state also approved an increase in fines for illegal use of dicamba to up to $25,000, from $1,000 currently, effective Aug. 1. Arkansas has logged nearly 600 complaints of crop damage as of Friday, according to the Arkansas Agriculture Department. 

Syngenta Loses $218 Million Verdict in First GMO Trial Test -- Syngenta AG was ordered to pay $217.7 million to a group of Kansas farmers who claimed the company carelessly marketed its genetically modified corn seed, causing contamination of U.S. crops and a rejection of export sales to China by officials there. A Kansas jury issued the verdict Friday in the first trial brought by U.S. farmers alleging Syngenta caused five years of depressed corn prices. Several other trials are pending as lawyers pursue suits on behalf of some 350,000 corn growers claiming as much as $13 billion in losses. The win gives momentum to claims by farmers from more than 20 states who are suing the Swiss agrochemical giant. Syngenta faces its next class action in a Minnesota court in August, where farmers are seeking more than $600 million. “This drastically changes the complexion of the upcoming litigation,” s “A jury found the plaintiffs’ claims of depressed prices so convincing that, not only did the jury give them a win on the liability, they awarded the entire amount of damages asked for. That is not an everyday occurrence.” The Kansas City, Kansas, jury awarded only compensatory damages and no punitive damages. The farmers’ lawyers had asked for $217.7 million for lost sales plus punitive damages. Syngenta said it would appeal the verdict. “We are disappointed with today’s verdict because it will only serve to deny American farmers access to future technologies even when they are fully approved in the U.S.,’’ the company said in an e-mail. “The case is without merit.’’ 

New Evidence Shows Bayer, Syngenta Tried to Influence Scientists on Bee Study - Bayer and Syngenta repeatedly asked scientists to give them raw data on a major new study which found that neonicotinoid pesticides cause harm to bees before it was published, according to emails obtained under Freedom of Information Act (FOIA). Both companies cited their position as co-funders to try to get information from researchers at the Centre for Ecology and Hydrology (CEH), including on experiments paid for by the government backed National Environment Research Council. The pesticide giants also encouraged the academics to study their own research on bees, which showed no harm from their products, only to be rebuffed by the researchers. Published last week in the prestigious journal Science, the CEH study made headlines for showing for the first time that neonicotinoids can cause harm to honey bees in real world conditions. It also showed that the nicotine-based chemicals can harm the reproductivity of wild bees. Since publication, both companies have attacked the study and criticised CEH for the way it presented the findings. The body is one of the leading centers for the scientific study of pesticides. But speaking to Energydesk, Bayer refused to say if it would continue to back research by CEH. "There are a lot of questions coming out of this data and it will be a while before we have definitive answers about what we want to do next," said Dr. Julian Little, Bayer's head of government relations in the  UK. "It's a bit early to say of course we're going to be working with them, or we're definitely not going to be working with them. It will depend entirely on the situation going forward."

Verily Robot Will Raise 20 Million Sterile Mosquitoes for Release in California - MIT Technology Review -- Alphabet’s life sciences arm, Verily, says it has built a robot that can raise a million mosquitoes a week and has used it to produce infertile male insects. The company has started releasing the first batches of what will total 20 million sterilized mosquitoes in Fresno County, California.  This field trial is expected to be the largest U.S. release to date of male mosquitoes treated with Wolbachia, a type of naturally occurring bacteria that infects many types of insects. Verily says it is using custom-built software algorithms and machines to ramp up the number of mosquitoes it’s able to grow and release. The mosquitoes are part of the company’s plan, announced last October, to fight diseases like Zika and dengue fever. Verily’s effort represents a growing interest by industry and nonprofit organizations in using altered insects to stop the transmission of deadly diseases and protect crops from agricultural pests. The Bill and Melinda Gates Foundation is also exploring the idea of sterilized mosquitoes, and the U.K. company Oxitec is genetically engineering moths with a gene that makes the insects die off over time (see “Are Altered Mosquitoes a Public Health Project, or a Business?”). The mosquitoes the company is making aren’t genetically engineered. Rather, they’re bred to be infected with the bacteria, which essentially sterilizes them. When the treated males mate with females in the wild, the females’ eggs aren’t able to develop properly and don’t hatch. The idea is that the sterile males will help deplete the local mosquito population. Male mosquitoes do not bite humans and cannot transmit disease to people, so Verily and its partners aim to release only males. The company has created an automated sex-sorting process to lower the risk that females will end up in the mix.

Amish farmers square off against Big Organic in milk battle - Chicago Tribune: This small town has become a landmark in the organic-farm movement, and it has nothing to do with foodies or hippies. Instead it has been Amish farmers who, in their suspenders and wide-brimmed hats, have helped develop one of the densest clusters of organic farms in the United States. More than 90 operations certified by the Agriculture Department have emerged within a 10-mile radius, producing, among other things, corn, soybeans, eggs and, perhaps most important, milk. "This is our living and our way of life," The question for small organic dairy farmers is how long they can hold out against growing competition from very big dairies producing large volumes of organic milk that, in the view of many here, does not deserve the label. A glut of organic milk has sunk prices across the United States, threatening livelihoods and rekindling long-standing suspicions that some of the large organic dairies that have emerged are swamping the market with milk that does not meet organic standards. Over the years, some of these very large dairies, most of them in the West, have been cited for violating organic rules by the USDA or inspection agencies. To the chagrin of many here, most have been allowed to continue operating. Then, last month, The Washington Post reported that one of the nation's largest dairy producers, Colorado-based Aurora Organic Dairy, a supplier to Walmart, Costco and Albertsons, appeared to fall short of organic grazing standards. "Nobody's real happy right now," said James Swantz, an Amish father of eight who milks about 70 cows here. "We'd like to know what our milk check will be, and right now we can't tell." 

Here's Why Most Most of the Meat Americans Eat Is Banned in Other Industrialized Countries - Recently, Organic Consumers Association , along with Friends of the Earth and Center for Food Safety filed suit against chicken giant Sanderson Farms for falsely marketing its products as "100% Natural" even though they contain many unnatural and even prohibited substances. Specifically, Sanderson chicken products tested positive for the antibiotic chloramphenical, banned in food animals , and amoxicillin, not approved for use in poultry production. Sanderson Farms products also tested positive for residues of steroids, hormones, anti-inflammatory drugs—even ketamine, a drug with hallucinogenic effects.  This is far from the first time unlabeled human drugs have been found in U.S. meat. The New York Times reported that most chicken feather-meal samples examined in one study contained Tylenol, one-third contained the antihistamine Benadryl, and samples from China actually contained Prozac. The FDA has caught hatcheries injecting antibiotics directly into chicken eggs. Tyson Foods was caught injecting eggs with the dangerous human antibiotic gentamicin. The Natural Resources Defense Council has reported the presence of the potentially dangerous herbs fo ti, lobelia, kava kava and black cohosh in the U.S. food supply as well as strong the antihistamine hydroxyzine. Most of the ingredients are from suppliers in China.  Because the activities of Animal Pharma are so underreported, few Americans realize that most of the meat they eat is banned in other industrialized countries. One example is ractopamine , a controversial growth-promoting asthma-like drug marketed as Optaflexx for cattle, Paylean for pigs, and Topmax for turkeys and banned in the European Union, China and more than 100 other countries. Also used in U.S. meat production is Zilmax, a Merck drug similar to ractopamine that the FDA linked to 285 cattle deaths during six years of administration. Seventy-five animals lost hooves, 94 developed pneumonia and 41 developed bloat in just two years, Reuters reported . The European Union boycotts the U.S.'s hormone-grown beef. The routinely used synthetic hormones zeranol, trenbolone acetate and melengestrol acetate pose "increased risks of breast cancer and prostate cancer," says the European Commission's Scientific Committee on Veterinary Measures. "Consumption of beef derived from Zeranol-implanted cattle may be a risk factor for breast cancer," according to an article in the journal Anticancer Research.

States Sue EPA for Failing to Ban Toxic Pesticide -- In late March, U.S. Environmental Protection Agency ( EPA ) Administrator Scott Pruitt decided that his agency would not place an outright ban on a pesticide manufactured by Dow Chemical called chlorpyrifos. The decision came after a federal court ordered the EPA to make a final decision on whether or not to ban the pesticide, which the Obama administration had proposed banning in 2015. The chemical has been on the market in the U.S. since 1965 under the brand name Lorsban and indoor use of the chemical has been banned for more than a decade . In its decision to allow the pesticide to continue being used in the U.S., the EPA went against its own agency's findings that the pesticide presented unnecessary risks to American citizens. And while Pruitt's EPA officials did not deny those findings , they did claim additional studies on the chemical were still needed before they could ban it, thus allowing the product's continued use. In the three and a half months since the EPA's chlorpyrifos decision, the story has become far more complex than the usual "regulators siding with industry" trope that has played out far too often.  One of the most interesting developments was from a report in early July indicating Pruitt met with the CEO of Dow Chemical, Andrew Liveris, a few weeks prior to his decision not to ban chlorpyrifos. While the EPA claims that the meeting was simply a brief introduction when the two men met in a hallway during a conference in Houston on March, the timing of the "chance" meeting has sparked talk that it could have potentially influenced Pruitt's decision on the chemical, which came just a few weeks later. Originally, Pruitt and Liveris had scheduled an official meeting together while at the conference, but an EPA spokesperson told the Associated Press that the meeting had been canceled due to scheduling conflicts and that the two men did not discuss chlorpyrifos in their brief hallway interaction.

Is it Time to Return to Last Midcentury's System of Crop Rotation in the Midwest? - Kay McDonald at Big Picture Agriculture - Much as "economic progress" has tried, there doesn't seem to be a smarter system than the one used by my Dad on the farm I was raised on in Nebraska. Now, the Union of Concerned Scientist's has produced a document (shown above) which includes research by Iowa State University, advocating crop rotational systems.  Here is an important quote from the DesMoines Register editorial featuring the Union of Concerned Scientist's paper and promoting its merits:  Plenty of barriers stand in the way, however, including financial and technical constraints and crop insurance restrictions. Federal farm policy got us into the two-crop system, and it can help get us out. I can't emphasize those two statements enough as they pertain to the feasibility of switching back to this type of farming.  The main important thing that the average agricultural-writer pundit without real life farm experience overlooks when advocating a farming system like this is the labor required. Having cattle in crop rotation is a 24/7, 365-day-a-year job. Growing corn and soybeans is seasonal and less labor intensive. It allows for off farm payroll income, too. This helps explain why monoculture row cropping systems appeal to the farmer and are an easy sell to him/her by big agribusiness. Today's modern two-crop system farmer buys expensive inputs to produce grains. There is always something new to sell to the farmer and entice him and her to borrow money. Then, with the necessary taxpayer guarantees, by growing today's two primary monoculture row crops efficiently, finances can flow. Profits of the corporate agricultural powerhouses are the cake. If there are any additional monies left-over, that's the icing for the Midwestern farmer. Biofuels mandates lock the system into place more firmly by ensuring demand that wouldn't otherwise be there.  Instead of this charade, we need a farm policy that supports the farmer who practices healthy crop rotational systems. To read the publication by the Union of Concerned Scientist's, go here for the summary and here for the report.

Climate change to deplete water supply for Arizona cotton farmers -- A trade almost completely dependent on the climate is bound to be impacted by climate change. And a new study shows agriculture in the Southwest would be severely affected if farmers don’t adapt. Arizona growers rely on irrigation to water their crops, transported by canals from water sources.The new study from MIT shows that if nothing changes by 2050, less rainfall will deplete that water supply, putting more water stress on farmers. And crop yields will drop, especially in the production of cotton.The study compared a recent decade to a modeled decade in the future, taking into account climate-change effects.Lead author of the study Élodie Blanc says Arizona cotton farmers will have to change how they irrigate to avoid yield losses up to 10 percent.“It could be adaptation like how you apply the water to your plants, but also how you convey the water," Blanc said. "There’s a lot of waste of water when you convey it in open canals, for example, the water evaporates, so it could be transfer[ed] in pipes.” Just a few years ago, the number of cotton acres planted in Arizona hit a record low at about a 100,000 but has bounced back to 180,000 acres this year

Garbage-Fed Seagulls Are Spoiling Our Lakes and Reservoirs With Their Poop - Where there are landfills there are seagulls. An estimated 1.4 million of these opportunistic feathered critters feed on these vast tracts of waste across North America. And as a new study from Duke University shows, the voluminous amounts of poop from these gulls is compromising the water-quality of nearby lakes and reservoirs. Landfills provide sustenance for seagulls, which greatly increases their numbers. This is well documented, but the environmental impact of these birds has been largely ignored. A new study published in the journal Water Research is now the first to look at the magnitude and geographic scope of landfill gulls, and to quantify the amount of nutrients they’re depositing into nearby lakes and reservoirs through their landfill-fueled crap.  The numbers are staggering. According to the new research, an estimated 240 extra tons of nitrogen and 39 extra tons of phosphorus are plopped into these water systems each year across North America. Under normal circumstances, a little bird poop—filled with many beneficial nutrients—wouldn’t be anything to worry about. But all of this added seagull crap is contributing to extensive algal blooms, which sucks a tremendous amount of oxygen from the water. This results in mass fish kills, and the proliferation of algal toxins across precious water bodies. Algal blooms also degrades recreational and fishing areas—not to mention the increased costs for local governments that have to deal with them.

"Toxic Industrial Chemicals Found in 10 Types of Macaroni and Cheese Powders - Laboratory testing of 10 varieties of macaroni and cheese products has revealed toxic industrial chemicals (known as phthalates) in the cheese powders of all of the tested items, according to the Coalition for Safer Food Processing & Packaging, a national alliance of leading public health and food safety groups. In recognition of National Macaroni and Cheese Day, the coalition has issued a call to The Kraft Heinz Company—the dominant seller of boxed macaroni and cheese, with 76 percent of market share—to drive industry-wide change by eliminating any sources of phthalates (THAL-eights) that may end up in its cheese products. Detailed information and a public petition are available at .  "Serving up one of America's favorite comfort foods shouldn't mean exposing your children and family to harmful chemicals," said Mike Belliveau, executive director of the Environmental Health Strategy Center , a coalition member. "Our test results underscore the need for industry to comprehensively test their products for phthalates and determine the steps needed to eliminate them."

 From Beef to Palm Oil, Investors Worry about Climate Risk in the Food Industry - An oil giant and a pizza-delivery titan share an unlikely bond—a powerful shareholder with a climate conscience.New York State Comptroller Thomas DiNapoli oversees the country's third-largest pension fund, with $192 billion in assets, and is concerned both about ExxonMobil's tar sands oil and about the sources of palm oil and other ingredients that go into Domino's pizzas.He's at the forefront of a trend. Over the past several months, historic shareholder resolutions have pushed oil giants, including Exxon, to disclose their climate-related risks. Food companies are next, experts and investors now say—whether they use or produce palm oil, corn, soy or beef, to name some with the biggest climate impacts."There are many products consumers enjoy daily that suppliers produce in ways that destroy rainforests and promote climate change," DiNapoli said. "More and more companies recognize that by taking steps to buy palm oil or soy from suppliers that do not contribute to deforestation, they are promoting better environmental practices and protecting their shareholder value."DiNapoli led a push by investors in May to force Exxon to better explain the impacts of climate change on its business. He led a similar though unsuccessful effort calling on Domino's Pizza to commit to a deforestation-free supply chain.  Shareholder resolutions like these are rising in both number and variety, according to research from the sustainability advocacy group Ceres, which has tracked shareholder resolutions within the top publicly traded U.S. food companies in recent years.The number of climate-related resolutions filed with food and beverage companies is up from 12 in 2011 to 131 this year. Of those, most were focused on deforestation linked to supply chains—from the production of palm oil, beef and soy—as well as climate change and animal welfare. Resolutions were filed with 44 companies over that period.

Food Prices Near 2-Year High Thanks to a Record Surge in Butter, Wheat --Record butter prices, gains in meat and wheat’s drought-fueled rally have pushed global food costs to near the highest in two years. Limited export availability in the dairy market has made products including butter and cheese more expensive, while hot and dry weather in the U.S. and Europe in the past month sent wheat futures surging. That helped a gauge of food prices rise by 1.4 percent in June, the United Nations’ Food & Agriculture Organization said in a report Thursday. The FAO’s food index has rebounded 17 percent since touching a seven-year low in early 2016. The latest increase comes after worries the weather impact on crops in North America and western Europe sent wheat futures to multiyear highs. The meat market has also been hit by limited export supplies from some nations, as well as strong demand, and there have also been concerns about bird flu affecting poultry, the FAO said.The organization’s food-price index rose to 175.2 points last month, near a two-year high set in February.Some price changes for June:

  • Butter jumped 14 percent to a record.
  • Meat rose 1.8 percent, up for a sixth month.
  • Grains gained 4.2 percent to a one-year high.

In a separate report, the FAO cut its estimate for this year’s wheat harvest by 0.4 percent to 739.9 million metric tons. Still, grain stockpiles will probably finish the 2017-18 season at a record high after bumper grain harvests from Russia to Australia.

Foreign investment in U.S. farmland on the rise -- In 2013, the Chinese firm Shuanghui received wide public attention when it purchased U.S. pork producer Smithfield Foods for a record $4.7 billion.In an overlooked part of the deal, Shuanghui also acquired more than 146,000 acres of farmland across the United States, worth more than $500 million, according to U.S. Department of Agriculture data.The deal made Shuanghui, now the WH Group Limited, into one of the biggest foreign owners of U.S. agricultural land, according to an analysis of that same data.That purchase was just a part of a continuing surge in foreign investment in American farmland and food that has raised concerns in Congress and among rural advocacy groups.“The more control foreign interests have in our food system, the less control we have, obviously,” said Tim Gibbons, a director for the Missouri Rural Crisis Center, an advocacy organization based in Columbia. “I think it’s a national security concern.”“When foreign entities buy farmland, my assumption is that we’re never going to get that farmland back,” added Gibbons. “They’re going to keep it forever.”Indeed, over the past decade, foreign companies have been investing in agricultural land in the United States at a record pace, according to a Midwest Center for Investigative Reporting analysis of USDA data. The data was compiled from 1900 to 2014 under the Agricultural Foreign Investment Disclosure Act.While the database has errors and often has incomplete information, it still is a strong indicator of the quantity of land being sold to foreign interests. The database is the result of a federal law requiring foreign owners to disclose any purchase, sale or lease of American agriculture land. Updated data is set to be released later this year.

Why is China buying the world's seeds? - Jul. 13, 2017: China is gobbling up major seed businesses to satisfy its growing appetite for food firms. Two weeks ago, state-owned ChemChina finalized its $44 billion purchase of the Swiss pesticides and seeds giant, Syngenta. It was China's biggest foreign takeover of all time. On Tuesday, Dow Chemical announced that an agriculture fund backed by the Chinese government would pay $1.1 billion for its Brazilian corn seed and research business. Chinese firms have spent $91 billion over the past decade purchasing nearly 300 foreign companies involved in agriculture, chemicals and food, according to Dealogic. Why the massive spending spree?Experts say the purchases are part of China's plan to improve its ability to supply food to its population of nearly 1.4 billion. As Chinese living standards improve and citizens demand more meat products, the country needs a growing supply of animal feed. But China is contending with major challenges: An aging agricultural workforce, pollution, climate change and high levels of soil depletion, according to Rob Bailey, an expert in food security at policy institute Chatham House. The country's farms also suffer from low yields due to outdated farming practices, said Brett Stuart, CEO and co-founder of Global AgriTrends. The latest seed purchases show China wants to lock down the scientific know-how needed to improve its domestic crop yields, said Stuart. 

Progress on World Hunger Has Reversed - World hunger has increased, reversing years of progress, said a UN specialised agency. During its biennial conference held in Rome, Italy from 3-8 July, the Food and Agriculture Organisation (FAO) noted that the world is facing it’s worst food crisis since World War II. “I wish I could announce here today some good news regarding the global fight against hunger...but, unfortunately, it is not the case,” said FAO’s Director-General Jose Graziano da Silva to member states at the opening of the meeting. FAO has identified 19 countries facing severe food crises due to a combination of conflict and climate change including South Sudan, Northeast Nigeria, Somalia, and Yemen where nearly 20 million are affected. Though South Sudan recently declared that it no longer has areas in famine, millions are still on the brink of starvation as violence and insecurity ensues. In fact, almost 60 percent of hungry people around the world live in areas affected by conflicts and climate change. With no relief to be seen, many turn to migration, contributing to the doubling of global displacement, said Graziano da Silva. The concerning trends comes just two years after the adoption the internationally agreed Sustainable Development Goals which includes targets to eradicate hunger by 2030. “Strong political commitment to eradicate hunger is fundamental, but it is not enough. Hunger will only be defeated if countries translate their pledges into concrete action, especially at national and local levels,” said Graziano da Silva.

Earth Faces 'Biological Annihilation' as Animal Populations Decline - Two vertebrate species go extinct every year amid a man-made mass extinction unrivaled since the dinosaurs died out 66 million years ago.   Today, the phenomenon is known as the Sixth Extinction. Some 200 species have disappeared over the past century — a pace approximately 100 times faster than the “normal” rate.   At the turn of the millennium, Nobel prize winning atmospheric chemist Paul Crutzen and his colleague Eugene Stoermer published an article suggesting that humans had altered Earth so much that the planet should be thought to have entered a new geological epoch, which they dubbed the Anthropocene, or “Age of Humans.” The 11,700-year-old Holocene, which began at end of the most recent ice age and extended through the rise of modern human civilization, should be considered over, they argued.  Now, new research from scientists at the Universidad Nacional Autónoma de México and Stanford University provides a fresh picture of the size and scale of the threat facing the planet’s biodiversity at the hands of humanity.   “Earth’s sixth mass extinction is more severe than perceived,” constituting a “biological annihilation” that translates into a “frightening assault on the foundations of human civilization,” the study says.  The rate of loss of different types of species — two per year — doesn’t take into account the fact that surviving species are declining dramatically both in terms of their population numbers and in the geographical range over which they can be found, the authors write. The scientists used geographical range as a proxy for population sizes, and looked at 27,600 vertebrate species, with an even more detailed analysis of 177 mammals between the years 1900 and 2015. All of the 177 mammals lost 30 percent or more of their geographic ranges, according to the study, which was published in the Proceedings of the National Academy of Sciences. More than 40 percent of the species experienced severe range decline of over 80 percent.  The declining number of animals on earth “is already damaging the services ecosystems provide to civilization,” the authors wrote.

Earth’s sixth mass extinction event already under way, scientists warn -- A “biological annihilation” of wildlife in recent decades means a sixth mass extinction in Earth’s history is under way and is more severe than previously feared, according to research. Scientists analysed both common and rare species and found billions of regional or local populations have been lost. They blame human overpopulation and overconsumption for the crisis and warn that it threatens the survival of human civilisation, with just a short window of time in which to act.The study, published in the peer-reviewed journal Proceedings of the National Academy of Sciences, eschews the normally sober tone of scientific papers and calls the massive loss of wildlife a “biological annihilation” that represents a “frightening assault on the foundations of human civilisation”.  “The situation has become so bad it would not be ethical not to use strong language.”Previous studies have shown species are becoming extinct at a significantly faster rate than for millions of years before, but even so extinctions remain relatively rare giving the impression of a gradual loss of biodiversity. The new work instead takes a broader view, assessing many common species which are losing populations all over the world as their ranges shrink, but remain present elsewhere.The scientists found that a third of the thousands of species losing populations are not currently considered endangered and that up to 50% of all individual animals have been lost in recent decades. Detailed data is available for land mammals, and almost half of these have lost 80% of their range in the last century. The scientists found billions of populations of mammals, birds, reptiles and amphibians have been lost all over the planet, leading them to say a sixth mass extinction has already progressed further than was thought. A graphic showing wildlife population loss  Billions of animals have been lost as their habitats have become smaller with each passing year.  The scientists conclude: “The resulting biological annihilation obviously will have serious ecological, economic and social consequences. Humanity will eventually pay a very high price for the decimation of the only assemblage of life that we know of in the universe.”

Era of ‘Biological Annihilation’ Is Underway, Scientists Warn -- NYT -- From the common barn swallow to the exotic giraffe, thousands of animal species are in precipitous decline, a sign that an irreversible era of mass extinction is underway, new research finds. The study, published Monday in the Proceedings of the National Academy of Sciences, calls the current decline in animal populations a “global epidemic” and part of the “ongoing sixth mass extinction” caused in large measure by human destruction of animal habitats. The previous five extinctions were caused by natural phenomena. Gerardo Ceballos, a researcher at the Universidad Nacional Autónoma de México in Mexico City, acknowledged that the study is written in unusually alarming tones for an academic research paper. “It wouldn’t be ethical right now not to speak in this strong language to call attention to the severity of the problem,” he said. Dr. Ceballos emphasized that he and his co-authors, Paul R. Ehrlich and Rodolfo Dirzo, both professors at Stanford University, are not alarmists, but are using scientific data to back up their assertions that significant population decline and possible mass extinction of species all over the world may be imminent, and that both have been underestimated by many other scientists. The study’s authors looked at reductions in a species’ range — a result of factors like habitat degradation, pollution and climate change, among others — and extrapolated from that how many populations have been lost or are in decline, a method that they said is used by the International Union for Conservation of Nature.  They found that about 30 percent of all land vertebrates — mammals, birds, reptiles and amphibians — are experiencing declines and local population losses. In most parts of the world, mammal populations are losing 70 percent of their members because of habitat loss. In particular, they cite cheetahs, which have declined to around 7,000 members; Borneo and Sumatran orangutans, of which fewer than 5,000 remain; populations of African lions, which have declined by 43 percent since 1993; pangolins, which have been “decimated”; and giraffes, whose four species now number under 100,000 members.

World's Last Remaining Tigers Live Under Severe Threat of Extinction - The world's last remaining tigers are living under severe threat of extinction , having lost 93 percent of their historical range and suffered a population crash of 95 percent during the past century. The major threat to their continued existence on Earth is poaching to meet the high demand in Asia for their parts and derivatives. This demand is exacerbated by the legal trade in lion bone, so it was with dismay that the Environmental Investigation Agency witnessed the Convention on International Trade in Endangered Species (CITES) 17th Conference of the Parties last year decide to allow South Africa to export up to 800 lion skeletons a year—as long as the lions were sourced from captive breeding facilities in South Africa. Ahead of next week's 29th meeting of the CITES Animals Committee, in Geneva, Switzerland, the Environmental Investigation Agency has produced the detailed briefing The Lion's Share: South Africa's trade exacerbates demand for tiger parts and derivatives outlining the threat. Any quota for a trade in captive-bred lions is of major concern. Not only is it likely this decision will negatively impact wild lion populations but it will also adversely impact on other large big cat species, especially the endangered tiger. South Africa currently has up to 200 facilities breeding lions, with as many as 8,000 captive lions dwarfing the estimated 3,490 free-roaming lions found in the country.  Tigers are also being commercially bred in South Africa. In 2015, there were a known 44 facilities with at least 280 tigers being bred for trophy hunting and trade—in direct contravention of a CITES decision.  Legal exports of lion skeletons and parts from South Africa have increased markedly since 2008; exports of bodies and skeletons alone during this time period account for more than 4,200 lions.   The main destination countries for skeletons, bodies, claws and teeth are within Asia—Vietnam and Laos alone imported 755 bodies, 5.87.5kg of bones (equivalent to 65 lions), 54 claws, 3,125 skeletons, 67 skulls and 90 teeth, all commercial purposes.

2016 Was Deadliest Year Ever for Earth Defenders -- Last year was the deadliest in history to be an environmental activist , according to a new report that found, on average, nearly four people were killed per week.  Defenders of the Earth , released by UK-based human rights group Global Witness , lists the names and locations of 200 environmental advocates who were killed around the world. While the report found Brazil, Colombia and the Philippines were the nations with the most murdered environmentalists in 2016, Honduras has been the deadliest country for environmental activists over the last decade. Last year, Nicaragua was the most dangerous country per capita, where at least 11 environmental activists were killed—all but one were indigenous. In 2013, the Nicaraguan government agreed to allow a Chinese company to build a canal linking the Atlantic and Pacific Oceans; the canal will also force up to 120,000 indigenous people to relocate, according to the report. "We have carried out 87 marches, demanding that they respect our rights and we have had no response. The only response we have had is the bullet," Nicaraguan activist Francisca Ramírez said of her government's response to protests. "They sell the image that we are against development. We are not against development, we are against injustice," added Ramírez, who has been threatened, assaulted, and arrested for protesting the canal.

Europe's contribution to deforestation set to rise despite pledge to halt it - Europe’s contribution to global deforestation may rise by more than a quarter by 2030, despite a pledge to halt such practices by the end of this decade, according to a leaked draft EU analysis. An estimated 13m hectares (Mha) of the world’s forestland is lost each year, a figure projected to spiral in the next 30 years with the Amazon, Greater Mekong and Borneo bearing the brunt of tree clearances. But despite signing several international pledges to end deforestation by this decade’s end, more than 5Mha of extra forest land will be needed annually by 2030 to meet EU demand for agricultural products, a draft EU feasibility study predicts. “The EU pledged to stop deforestation by 2020, not to increase it,” said Sebastian Risso, a spokesman for Greenpeace. “Deforestation is a conveyor belt to devastating climate change and species loss that the world must stop, and fast. “It is hypocritical for Europe to portray itself as a climate leader while doing little to slow its own insatiable appetite for the fruits of destroyed forests.” Land clearances for crop, livestock and biofuel production are by far the biggest causes of deforestation, and Europe is the end destination for nearly a quarter of such products – beef, soy, palm oil and leather – which have been cultivated on illegally deforested lands.According to the draft EU feasibility study, which is meant to provide officials with policy options, the “embodied” deforestation rate – which is directly linked to EU consumption – will increase from between 250,000-500,000ha in 2015 to 340,000-590,000ha in 2030.  The figures do not encompass forest degradation or the impacts of lending by EU financial institutions.

Warmer Arctic harms crops in US, Canada: study - Exceptionally warm years in the Arctic have provoked extra-cold winters and springs further to the south, decreasing crop yields across central Canada and the United States, researchers said Monday. "Our study demonstrates for the first time an apparent linkage between Arctic temperature variations and agricultural productivity in mid-latitudes," they reported in the journal Nature Geoscience. Overall, global warming during the last half-century has boosted plant growth in temperate and boreal zones. Forests and other vegetation help absorb carbon dioxide, a greenhouse gas released into the atmosphere mainly by burning fossil fuels. But that fringe benefit in the fight against climate change can be undercut when especially hot weather hits the ice-covered Arctic, where surface temperatures have risen more than twice as fast as for the planet as a whole. The study confirms recent research showing that warmer-than-average years in the Arctic over the last three decades can lead to harsh winters in the upper reaches of Europe and North America, and diminished rainfall in the southern part of the United States.  During these Arctic hot spells, more autumn sea ice melts than usual, affecting atmospheric circulation so that more cold air descends from the north in winter. When this extends into spring, plants—including food crops—are vulnerable to damage and stunted growth. Harsh winter weather also decreases the capacity to take up CO2, which plants absorb during photosynthesis.

House passes California drought bill | TheHill: The House passed a bill on Wednesday that California Republicans say will help the state fight future droughts. The legislation, from Rep. David Valadao (R) and 14 other California Republicans, looks to expand water storage and improve water delivery as a way to get more water to the state’s Central Valley during times of drought. The bill overhauls federal regulations and permitting procedures that supporters say have hamstrung California and other states in the West that have faced persistent drought concerns. Rep. Tom McClintock (R-Calif.) said the bill “addresses the policy, regulatory and administrative failures that have mismanaged our water supplies across the West.” The House passed the bill on a 230-190 vote. Democrats accused the GOP of overriding California law and its power over water supplies, while significantly harming commercial fishing in the state by reapportioning water. “Make no mistake. If enacted, this bill will hurt a lot of people,” said Rep. Jared Huffman (D-Calif.). “It takes water away from fishermen, from tribes, the environment, Delta farmers and others in order to redistribute it, primarily to a small group of some of the nation’s biggest and most politically connected agribusiness interests.” Huffman said the bill pre-empts California state law in numerous ways, such as by blocking state protections for fisheries and the state's ability to manage water for the public good. He cited a letter Gov. Jerry Brown (D) wrote to the congressional delegation opposing it.

U.S. weather forecaster sees El Niño unlikely into the winter (Reuters) - A U.S. government weather forecaster on Thursday said there were no active El Niño or La Niña patterns and that neutral conditions were likely in the Northern Hemisphere into the coming winter. However, chances for El Niño remain above the long-term average at between 35 percent and 45 percent, the National Weather Service's Climate Prediction Center said in a monthly forecast. The last El Niño, a warming of ocean surface temperatures in the eastern and central Pacific that typically occurs every few years, was linked to crop damage, fires and flash floods before it went away in 2016. Last month the forecaster said neutral conditions were likely in the Northern Hemisphere through this fall.

Feds: 2017 is US’s second-warmest year on record so far - The contiguous United States is experiencing its second-warmest year on record so far in 2017, federal scientists announced Friday. The average temperature in the United States between January and June was 50.9 degrees Fahrenheit, which is 3.4 degrees above the 20th century average, the National Oceanic and Atmospheric Administration (NOAA) reported on Friday. Only the first six months of 2012 were warmer in the United States than this year, according to the report.That tally includes includes last year, which finished as the second-warmest year on record in the United States and the hottest year on record around the globe. This year has also produced a near-record number of costly weather events. Between January and June, there were nine weather or climate incidents that cost $1 billion or more, according to the report, second only to the 10 such events at this point in the year in both 2011 and 2016. The list of costly weather incidents so far this year includes three tornado outbreaks and two hailstorms that caused more than $2 billion in damage in Colorado, Minnesota and other parts of the central United States. 

 America is closing in on a record number of weather disasters, and it's not even peak hurricane season -- New data out Friday from the National Oceanic and Atmospheric Administration shows that there have been nine extreme weather events — each racking up more than $1 billion in losses — during the first half of 2017.An average year between 1980 and 2016 had just 5.5 major events , after adjusting for inflation.That means we’ve already racked up more than a year’s worth of weather disasters in 2017 — the second-fastest pace in history. Weather-wise, pretty much the whole country is a hot mess right now. In 20 states, regions experienced their warmest first half of the year on record; as of now, only Washington and Oregon are on pace for relatively normal years. There’s a smoldering drought burning up North Dakota wheat fields, rainfall in parts of Michigan and the South is 300 percent of normal over the past 30 days, and a 131-year-old heat record could fall in Los Angeles this weekend. Oh yeah, there’s also a 25,000 acre wildfire burning just outside Tucson, Arizona. And with hurricane season running about seven weeks ahead of schedule, it’s possible the  worst weather of 2017 is yet to come.

Hundreds of Wildfires Are Barreling Through the Western US and Canada --Wildfires are tearing across regions in the western US and Canada, forcing over 15,000 residents to flee their homes. Hot, dry, and windy conditions are fueling the fires, many of which are expected to grow over the coming days. Discouragingly, wildfire season has only just begun. It was a rough weekend in parts of Western Canada and the United States as hundreds of blazes swept through parts of British Columbia, California, Colorado, and Arizona. Following an unusually wet spring, the conditions in these areas are now ripe for wildfires, and crews are bracing themselves for what could be a very long and arduous fire season. In California, wildfires forced nearly 8,000 people from their homes, half of whom live near the grassy foothills of the Sierra Nevada, about 60 miles (100 km) north of Sacramento. Wildfires are also sweeping through an area just southeast of Oroville, where earlier this year heavy rains threatened to topple the town’s iconic dam, and forced the evacuation of 200,000 residents. The fire near Oroville is one of 14 currently sweeping through California. Dozens of structures have been destroyed so far (with more losses expected), and some 5,000 firefighters have been dispatched to tackle the blazes. Fires were also reported in the counties of Santa Barbara and San Luis Obispo. Outside of California, wildfires forced the evacuation of hundreds in Breckenridge, Colorado, and evacuation orders were issued for the entire town of Dudleyville near Phoenix, Arizona. Similar scenes played out in British Columbia, but at a far greater scale. The Western Canadian province is currently battling 220 blazes covering a land base of nearly 24,000 hectares (92 square miles). Over 100 different fires started on Saturday alone, and fire crews are now struggling to contain the largest blazes. The biggest of the fires is located near Ashcroft, just south of Cache Creek. Dozens of buildings have been destroyed, and both communities were forced to evacuate. On Sunday, the province’s premier, Christy Clark, announced a state of emergency as 7,000 residents were forced to flee their homes. Experts say the fires are likely to keep spreading, and the number of evacuations is expected to rise. In response, Clark is sending $100 million to the Canadian Red Cross to help displaced families.

The West Is on Fire As Heat Records Fall | Climate Central: From Phoenix to Boise, high temperature records fell like dominoes over the weekend as an impressive heat wave engulfed the western U.S., helping to fuel several wildfires. The heat came courtesy of a ridge of high pressure that moved in over the West, with the peak temperatures, including several records, occurring on Friday and Saturday:

  • Las Vegas hit 116°F on Friday, besting the record set in 1989 of 114°F. The city had a record-long streak of 23 days with highs above 105°F.
  • On Saturday, Reno, Nev., bested its old record of 99°F with a temperature of 104°F.
  • Los Angeles broke a record that had stood for 131 years, with the temperature downtown hitting 98°F (the old record was 95°F).
  • Temperatures in Phoenix soared to 118°F on Friday, besting the old record of 115°F set in 1905, and marking the third day of 2017 where temperatures were at or above that level, the second most on record.
  • In Salt Lake City, the temperature reached a record 104°F on Saturday. The city had three record highs in just four days last week.
  • The Boise airport also saw 104°F on Saturday, besting the record of 103°F set in 1968.

Daytime highs weren’t the only concern, as overnight lows stayed downright hot in some places, particularly in the Phoenix area. The temperature from Friday night to Saturday morning only reached as low as 95°F in Scottsdale, a record. (It was still 106°F at 1 a.m. that night.)

Canada wildfires disrupt industry, force 14,000 from homes -  Rapidly spreading wildfires in Western Canada's British Columbia on Monday disrupted timber and mining operations, damaged equipment at a regional electric utility and forced thousands from homes in the interior of the province. Authorities said at least 10 of more than 200 fires burning across the province were close to residential communities. Some 38,000 hectares (93,900 acres) had been ravaged as of midday on Monday. No deaths or serious injuries have been reported, but some 14,000 people have been forced from their homes. West Fraser Timber Co said it had temporarily suspended operations at 100 Mile House, Williams Lake and Chasm. It said the sites have total annual production capacity of 800 million board feet of lumber and 270 million square feet of plywood. "The fire situation in the Interior of British Columbia is volatile and the situation is evolving," Vancouver-based EnGold Mines Ltd said it had suspended exploration in British Columbia, home to all of its operations. Imperial Metals Corp said activity at its Mount Polley copper mine was "significantly reduced" because some employees had been evacuated from their homes, many roads had been closed and a local airport had been shut down. "Should critical supplies, such as fuel, not be available due to road closures, the mine may be forced to suspend operations," the company said. The province's main electricity distributor BC Hydro and Power Authority said more than 170 power poles and 29 transformers had been damaged, and it expected the damage to increase. British Columbia on Friday declared its first state of emergency since 2003 and deployed some 1,600 personnel over the weekend as electrical storms and brisk winds passed through the interior of the bone-dry province. The fires broke out just over a year after a wildfire in Fort McMurray in neighboring Alberta province displaced 88,000 people and burned 590,000 hectares. 

Wildfires Hit Scores of BC Towns, Close In on Kinder Morgan Pipeline -- British Columbia declared its first state of emergency in 14 years as the number of people under evacuation from hundreds of wildfires reached 14,000 and provincial officials warned that the experience—along with last summer’s catastrophic fires in Alberta—represent a “new normal” for many Canadian communities. About a dozen major fires, and as many as 300 smaller ones, burned across 500 kilometres of the province’s interior from Quesnel to Princeton, affecting scores of municipalities, Indigenous communities, and highways. On Monday, CBC News reported, the focus turned to Williams Lake, the Cariboo region’s largest community, where “10,500 people are surrounded by fires on three sides.” The Globe and Mail reported that flames forced the closure of several forest product mills and threatened Kinder Morgan’s Trans Mountain pipeline, carrying 300,000 barrels a day of diluted bitumen and other petroleum products from Alberta to Vancouver. The Canadian Forces sent helicopters to assist in the effort to contain the blazes, and outgoing B.C. Premier Christy Clark announced of a C$100-million fund, to be administered by the Red Cross, to aid those who’ve been displaced. But while the state of emergency was unusual, the events that prompted it are becoming anything but.“What we’re seeing right now” in B.C., and what we saw in Alberta last year, we are conditioned to think of as extreme events,” Sarah Henderson a senior scientist at the B.C. Centre for Disease Control, told Vancouver’s Metro News. “We have to start shifting our thinking [to] perceive them as what could be the new normal.” That normal includes potential long-term health effects from wildfire smoke, especially for vulnerable groups like pregnant women, infants, the elderly, and people with respiratory impairment, Henderson said. She urged “adaptation for our health authorities and larger populations themselves. It is a scary thought, but if we’re going to be realistic about the decades ahead, we are just going to see more and more fires and we have to ensure our communities are as prepared as possible.”

Climate change is going to make air travel even more nightmarish, study says -- Last month, Phoenix was hit by a sweltering heatwave, with temperatures reaching 120 degrees Fahrenheit. It was so hot, American Airlines was forced to cancel 50 flights scheduled to depart Sky Harbor International Airport. The news of the cancellations spread far and wide, as people were interested in learning more about the physics of air travel and how extreme heat affects flying. And now a new study suggests that what happened in Phoenix may be just the tip of the rapidly melting iceberg. Experts agree that as the Earth’s temperature rises, these heatwaves will come more frequently, last longer, and be felt more intensely. And this will have an indelible effect on how we use airplanes for travel and commerce. A team of researchers at Columbia University set out to chart exactly how rising temperatures will affect the takeoff and landing performance of aircraft; their findings were published today in the journal Climatic Change. In short, air travel is about to get much, much more complicated. The researchers constructed performance models for five common commercial aircraft flying out of 19 major airports around the world and projected daily temperature increases based on the World Climate Research Program’s models. They concluded that, on average, 10–30 percent of flights taking off during the hottest part of the day will need to be much lighter to get off the ground. This will affect both midsized and large commercial aircraft. Airports with short runways, as well as those located at high elevations, will also be severely impacted by rising temperatures brought on by climate change. This will likely lead to more delays and cancellations as airports and the major carriers grapple with how to respond to the new norm of extreme heat.   Meanwhile, air traffic controllers will need to scramble schedules so heavier planes fly during cooler times of the day. (This practice is already used by airports in cities where extreme heat is more common. At Dubai International Airpot, some flights — but not all — arrive at night or in the early morning to avoid the extreme heat problem.)

Thanks, Climate Change: Heat Waves Will Keep on Grounding Airplanes - Last month, Phoenix enduring a blistering heat wave, with temperatures so high that airport officials had to cancel dozens of flights. The reason was two-fold. First off, some jet engines risk catching on fire in extreme heat. And when air gets hot, it expands and becomes less dense—so an airplane’s wings can’t generate enough lift to get off the ground. Planes either need to speed up during take-off or use a longer runway. But Phoenix’s flight delays aren’t a one-off event. As the Earth’s climate undergoes a 1 to 3 degree Celsius warming over the next half-century, extreme heat waves will hit more frequently. Some of these heat waves will hit airports with short runways. Forget about rain delays or missing flight crews. At places like Washington’s Reagan National Airport, New York’s LaGuardia Airport, and Dubai International, the real trouble will come during heat waves. During the hottest part of the day, 10 to 30 percent of planes will have to offload cargo or people, according to a new study by graduate student Ethan Coffell and climate scientist Radley Horton at Columbia University. “This study shined a light on a potential vulnerability,” Horton says. “A lot of airplanes at full capacity are ill-equipped to take off on some of the world’s runways when temperatures get really high.” The scientists looked at five common commercial airplane models—the Boeing 737-800, Airbus A320, Boeing 787-8, Boeing 777-300, and Airbus A380—and calculated how their takeoffs would be affected at 19 airports around the world, based on projected temperatures from 27 different global climate models. The runways represented the most common climates, elevations, and runway conditions at busy airports around the world—including US airports in Denver, Phoenix, Chicago, Atlanta, New York, Washington, DC, Los Angeles, Houston and Miami.

  "Ready To Blow" - National Geographic's Guide To The Yellowstone Supervolcano (video) Amid a growing 'swarm' of over earthquakes (now over 1000), and Montana's largest quake ever, scientists are growing increasingly concerned that the so-called 'super-volcano' at the heart of Yellowstone National Park could be building towards a Category 7 eruption. So what is a 'super-volcano' and what does its explosion mean for life on earth? ..As National Geographic details...Think of Yellowstone as a gigantic pressure cooker, fueled by a massive supervolcano. Water from rain and snowmelt, much of it centuries-old, percolates through cracks in the Earth’s crust until heated by molten rock reservoirs deep below. The water then filters upward, eventually finding release in the thousands of geysers, hot springs, and other hydrothermal wonders. Eruptions of this supervolcano expel so much material that the crust caves in, creating a craterlike depression called a caldera. Yellowstone is known as a supervolcano because of the violence and size of its explosions. The plume of hot rock has been calculated at more than 600 miles deep. But scientists suspect it actually descends as far as 1,800 miles, all the way to what’s known as the Earth’s outer core-mantle boundary.

  Climate models are correct – it’s the historical temperature record that’s misleading us - How much Earth will warm in response to future greenhouse gas emissions may be one of the most fundamental questions in climate science — but it’s also one of the most difficult to answer. And it’s growing more controversial: In recent years, some scientists have suggested that our climate models may actually be predicting too much future warming, and that climate change will be less severe than the projections suggest.But new research is helping lay these suspicions to rest. A study, out Wednesday in the journal Science Advances, joins a growing body of literature that suggests the models are on track after all. And while that may be worrisome for the planet, it’s good news for the scientists working to understand its future. The new study addresses a basic conflict between what the models suggest about future climate change and what we can infer from historical observations alone. Some scientists have suggested that the models may be too sensitive, pointing out that the warming they predict for the future is greater than what we would expect based only on the warming patterns we’ve observed since humans began emitting greenhouse gases. The models, for instance, suggest that if the carbon dioxide concentration in the atmosphere were to reach double its preindustrial level, the planet would warm by anywhere from about 1.5 to 4.5 degrees Celsius (2.7 to 8.1 Fahrenheit). But the warming patterns we’ve actually observed over the past 200 years or so would suggest that a doubling in carbon dioxide should only lead to about 3 degrees Celsius (5.4 Fahrenheit) of warming at the most.The new study helps reconcile the models with the historical record. It suggests global warming occurs in different phases or “modes” throughout the planet, some of which happen more quickly than others. Certain slow-developing climate processes could amplify warming to a greater extent in the future, putting the models in the right after all. But these processes take time, even up to several hundred years, to really take effect — and because not enough time has passed since the Industrial Revolution for their signal to really develop, the historical record is what’s actually misleading at the moment.

Rising temperatures are curbing ocean’s capacity to store carbon | MIT News: If there is anywhere for carbon dioxide to disappear in large quantities from the atmosphere, it is into the Earth’s oceans. There, huge populations of plankton can soak up carbon dioxide from surface waters and gobble it up as a part of photosynthesis, generating energy for their livelihood. When plankton die, they sink thousands of feet, taking with them the carbon that was once in the atmosphere, and stashing it in the deep ocean. The oceans, therefore, have served as a natural sponge in removing greenhouse gases from the atmosphere, helping to offset the effects of climate change. But now MIT climate scientists have found that the ocean’s export efficiency, or the fraction of total plankton growth that is sinking to its depths, is decreasing, due mainly to rising global temperatures. In a new study published in the journal Limnology and Oceanography Letters, the scientists calculate that, over the past 30 years, as temperatures have risen worldwide, the amount of carbon that has been removed and stored in the deep ocean has decreased by 1.5 percent.“We figured the amount of carbon that is not sinking out as a result of global temperature change is similar to the total amount of carbon emissions that the United Kingdom pumps into the atmosphere each year,”

 CO2 Benefits the “Rats and Cockroaches” of Marine World --A study published yesterday in Current Biology suggests ocean acidification is driving a cascading set of behavioral and environmental changes that drains oceans’ biodiversity. Niche species and intermediate predators suffer at the expense of a handful of aggressive species. For three years, researchers from the University of Adelaide observed marine environments near undersea volcanic vents where CO2 levels are high—providing a window into the future acidity of ocean water—along with adjacent areas of normal acidity. They also conducted behavioral experiments on fish from the different zones to test their responses to food and habitat competition. Receding kelp means less habitat for intermediate predators, with about half as many near the volcanic vents. But the acidified conditions proved to be a boon to what the researchers called “the marine equivalent to rats and cockroaches”—small fish with low commercial or culinary value. Snails and small crustaceans can flourish in high-CO2 conditions, providing plenty of prey for those small fish. And their high risk-taking behavior and competitive strength, coupled with the collapse of predator populations, allowed them to more than double their population. In water with higher CO2, the dominant species were willing to adapt to riskier habitats, preferring bare surfaces instead of turf while subordinate species were nearby. Mimicked predator attacks also showed the dominant species adopted riskier behavior in higher-acidity water, fleeing shorter distances than the fish in water with normal acidity. Subordinate species showed no change. Rare and specialist species are the most vulnerable to climate change, even though they “contribute disproportionately to [ecosystems’] functional diversity,” the researchers wrote. 

Australian Researchers: 'We Found Evidence of Microplastics Pretty Much Everywhere We Looked' - A lot of attention is paid to the floating junkyards on our high seas, but a new study highlights how the problem of marine plastic goes much deeper. Australian researchers were surprised to find high concentrations of microplastics embedded in the seafloor along the southeast coast of Australia. Scientists with the Institute for Marine and Antarctic Studies sampled marine sediments at 42 locations from Adelaide to Sydney and discovered these tiny particles at every location, from busy city harbors to seemingly pristine locations. On average the team found 3.4 items of microplastics per milliliter of sediment. The highest concentration of microplastic pollution was from Bicheno, a fishing and beach town on Tasmania's east coast, with 12 microplastic filaments per milliliter of sediment. Results from the study was published in the journal Marine Pollution Bulletin . "Regardless of where we were, we found evidence of microplastics pretty much everywhere we looked," said marine biologist and lead researcher Scott Ling. "Even some very remote areas we found levels of microplastics up to more than 10 items of per milliliter of sediment." Microplastics are created by the fragmentation of larger pieces of plastic in the ocean. The debris is also carried into the waters after getting sloughed off synthetic fabrics in the washing machine. The research suggests that the issue of plastic pollution is spread throughout the marine environment. "In other studies it is estimated that 70 percent of marine litter is expected to  sink to the seafloor and enter marine sediments," Ling told Xinhua .

The Arctic is full of mercury, and scientists think they know how it’s getting there -- The remote Arctic tundra may seem like the last place on Earth human pollution should be causing a problem — yet it’s filled with mercury contamination. That mercury leaks from the soil into rivers and ultimately the Arctic Ocean, contaminating the fish and other sea life that native communities rely on for survival.Now, in a study published Wednesday in the journal Nature, scientists have begun to outline how the mercury is getting into and moving through the landscape in the first place. And the short answer is: It’s our fault it’s there in the first place, and climate change could now make that even worse.The study finds that the majority of the contamination in the Arctic tundra came from a gaseous form of elemental mercury, carried through the atmosphere from other parts of the world, where it was emitted to the atmosphere as a result of the burning of coal and other industrial activities.Once it reaches the Arctic, the scientists believe the mercury is sucked up by plants — mainly in the summer, when snow cover is at its lowest and the tundra is at its greenest — in much the same way that vegetation pulls carbon dioxide out of the air. As the plants shed their leaves or die, the mercury moves into the soil and eventually may leach into rivers and waterways, which carry it into the Arctic Ocean.As climate change continues to heat up the Arctic, the scientists are concerned about the ways that the resulting landscape changes — which may include less sea ice, less snow and more vegetation — could affect the cycling of mercury through the ecosystem. “This is really important in the sense of new work, because no one’s really take a look at the Arctic tundra and the impact that it has on the mercury cycle,”

What to Believe in Antarctica’s Great Ice Debate - Scientific American - Our fate is tied to a frozen desert at the bottom of the world. Should Antarctica’s ice sheets dissolve, sea levels would rise dramatically—enough to flood the world’s great coastal megalopolises from New York to Shanghai and push millions of people inland. But determining just how the vast and frigid continent is currently responding to a warming world has been a challenge. In West Antarctica the story is relatively clear. The floating platforms of ice that ring the coast are thinning, glaciers are surging toward the sea, meltwater is flowing across the surface, fast-growing moss is turning the once-shimmering landscape green and a massive crack threatens to cleave an iceberg the size of Delaware into the ocean. But in East Antarctica, where rising temperatures have caused increased humidity and thus more snowfall, the story takes an unexpected turn. Most scientists agree that East Antarctica—unlike its western counterpart—is gaining mass in the form of snowfall, ice or both. But how much? And is it enough to counterbalance West Antarctica’s accelerating losses? A recent study published in Geophysical Research Letters by Alba Martin-Español from the University of Bristol and his colleagues suggests the gains in East Antarctica are so small that the continent is losing mass overall. This is just one in a long line of studies that disagree with rather controversial findings published in the Journal of Glaciology in 2015, which suggested that Antarctica is gaining mass. That study sparked a dizzying debate—but one that will ultimately help glaciologists grasp just what is happening in East Antarctica, and push scientists to consider how to handle contentious results in a warming world.

Giant iceberg splits from Antarctic - BBC News: One of the biggest icebergs ever recorded has just broken away from Antarctica. The giant block is estimated to cover an area of roughly 6,000 sq km; that's about a quarter the size of Wales. An US satellite observed the berg on Wednesday while passing over a region known as the Larsen C Ice Shelf. Scientists were expecting it. They'd been following the development of a large crack in Larsen's ice for more than a decade. The rift's propagation had accelerated since 2014, making an imminent calving ever more likely. The more than 200m-thick tabular berg will not move very far, very fast in the short term. But it will need to be monitored. Currents and winds might eventually push it north of the Antarctic where it could become a hazard to shipping. An infrared sensor on the American space agency's Aqua satellite spied clear water in the rift between the shelf and the berg on Wednesday. The water is warmer relative to the surrounding ice and air - both of which are sub-zero. "The rift was barely visible in these data in recent weeks, but the signature is so clear now that it must have opened considerably along its whole length," explained Prof Adrian Luckman, whose Project Midas at Swansea University has followed the berg's evolution most closely. The event was confirmed by other spacecraft such as Europe's Sentinel-1 satellite-radar system. The new Larsen berg is probably in the top 10 biggest ever recorded. The largest observed in the satellite era was an object called B-15. It came away from the Ross Ice Shelf in 2000 and measured some 11,000 sq km. Six years later, fragments of this super-berg still persisted and passed by New Zealand.

A 1 trillion-ton iceberg has broken off Antarctica, and scientists say it's one of the largest ever recorded - The image is a bit fuzzy, but to scientists it's unmistakable: One of the largest icebergs ever recorded has broken free of Antarctica. A crack in an Antarctica's Larsen C ice shelf is responsible for calving the colossal new iceberg, which has roughly the area of Delaware state and more than twice the volume of Lake Erie.  Researchers noticed the distinctive rift in Antarctica's ice in 2010, and it had grown rapidly since 2016. The iceberg calved as early as Monday, researchers said.  A NASA Earth-observing satellite called Modis was among the first to photograph the colossal ice block freed of Antarctica's grasp. Based on the image above, and another created by Adrian Luckman, also a glaciologist at Swansea University and a Project Midas member, it appears the iceberg has largely stayed intact. That size could make it the third-largest iceberg recorded since satellite measurements began, according to a tweet last Thursday by The Antarctic Report. In a Wednesday blog post, Luckman and O'Leary said it was "one of the biggest ever recorded" at a weight of roughly 1 trillion metric tons, or 1.1 trillion tons, and said its name would most likely be dubbed A68. "The calving of this iceberg leaves the Larsen C Ice Shelf reduced in area by more than 12%, and the landscape of the Antarctic Peninsula changed forever," they said.  The ice block's area is roughly comparable to the US state of Delaware. But CryoSat — Europe's ice-monitoring satellite — recently took the most precise measurements to date of its thickness, allowing scientists to gauge its volume. Days before the iceberg broke free, Noel Gourmelen, a glaciologist at the University of Edinburgh, and his colleagues estimated that it would be about 620 feet (190 meters) thick and harbor some 277 cubic miles (1,155 cubic kilometers) of frozen water. That's big enough to fill more than 460 million Olympic-size swimming pools with ice, or more than twice the volume of Lake Erie — among the world's largest freshwater reservoirs.Gourmelen and the European Space Agency on July 5 released this 3D animation that shows the iceberg's dimensions:  And here's Lake Erie for a size comparison:

Massive Iceberg Finally Breaks Off: Antarctic Landscape 'Changed Forever' - One of the biggest icebergs ever recorded has "finally" broken away from the Larsen C Ice Shelf in Antarctica, researchers studying the event announced. The iceberg, which will likely be dubbed A68, weighs more than a trillion tonnes, has a volume twice that of Lake Erie, and is about 5,800 square kilometers in size—roughly the size of Delaware. According to Project MIDAS , the UK-based Antarctic researchers observing the ice shelf, the calving occurred sometime between Monday and Wednesday. The landscape of the Antarctic Peninsula has been "changed forever," the researchers said . The calving leaves the Larsen C Ice Shelf reduced in area by more than 12 percent, its smallest size ever recorded. The widening crack had been developing over the past year. Project MIDAS said last week that the massive iceberg was hanging onto the main shelf by just a 3-mile thread. "Multiple rift tips" had also formed, meaning a number of smaller icebergs could also splinter off.  "We have been anticipating this event for months, and have been surprised how long it took for the rift to break through the final few kilometers of ice. We will continue to monitor both the impact of this calving event on the Larsen C Ice Shelf, and the fate of this huge iceberg," Professor Adrian Luckman of Swansea University and lead investigator of the project said. "The iceberg is one of the largest recorded and its future progress is difficult to predict. It may remain in one piece but is more likely to break into fragments. Some of the ice may remain in the area for decades, while parts of the iceberg may drift north into warmer waters," Luckman added. The new configuration of Larsen C could potentially make it less stable. There's a chance it could follow the example of its neighbor, Larsen B, which rapidly broke apart in 2002 after a similar rift-induced calving event in 1995, the researchers said.

5 Things to Know about the Trillion-Ton Iceberg -Scientific American - It's finally adrift. When the Larsen C Ice Shelf calved yesterday, it sent one of the largest icebergs ever recorded slipping into a sea frosted with smaller chunks of ice. It marked the end of a decadeslong splintering first seen by satellites in the 1960s. The crack stayed small for years until, in 2014, it began racing across the Antarctic ice.The massive iceberg holds twice as much water used in the United States every year. It weighs about 1.1 trillion tons and measures 2,200 square miles. Its volume is twice that of Lake Erie.  “The iceberg is one of the largest recorded, and its future progress is difficult to predict,”  . “It may remain in one piece but is more likely to break into fragments. Some of the ice may remain in the area for decades, while parts of the iceberg may drift north into warmer waters.”By mass, the iceberg accounts for 12 percent of the Larsen C Ice Shelf. It's large enough that maps will have to be redrawn. Larsen C was the fourth-largest ice shelf in the world. Now it's the fifth.. Climate signals are not clear enough to attribute the event to rising levels of carbon dioxide, but human activity may have contributed to its calving nonetheless.An iceberg the size of Delaware is now in motion. If it follows the path of previous icebergs from the Larsen Ice Shelf, it will drift north along the coast of the Antarctic Peninsula before heading northeast into the south Atlantic Ocean, according to NASA. It will not likely pose any threat to ships navigating the area, and it will be tracked closely. Icebergs can take months to splinter apart, and smaller pieces will likely be around for years, said Dan McGrath, a glaciologist at Colorado State University. He said Antarctic icebergs generally don't make it past South Georgia Island, a British territory in the south Atlantic. It's located roughly along the same latitude as the tip of South America. The ice shelf itself is relatively stable. After large icebergs broke away from nearby ice shelves in recent decades, they collapsed and the land ice they were buttressing tumbled into the sea. The Larsen C shelf, however, has two points of bedrock protruding from the sea that essentially pin it in place. About 90 percent of the shelf is held back by those points, but scientists are closely monitoring fractures to see if they grow.

Antarctica shed a block of ice the size of Delaware, but scientists think the real disaster could be decades away -- A chunk of ice the size of Delaware broke off from the Antarctic Peninsula. Sometime in the last few days, scientists say an iceberg weighing roughly a trillion metric tons separated from the Larsen C Ice Shelf and began its long, slow drift northward through the Weddell Sea. The 2,400 square-mile mass of ice won’t immediately raise sea levels, but its loss has probably altered the profile of the continent’s western peninsula for decades to come, scientists say.   By the time it was first photographed in the 1960s, the fateful crack was already visible, according to NASA. But in 2014, the crack began to grow — and fast. It eventually expanded into a 124-mile-wide semicircular rift, with the iceberg holding on to the peninsula by a thread of ice less than 3 miles wide a month before it broke away. The break was first detected by Project MIDAS, an Antarctic research group at Swansea University and Aberystwyth University, both in Wales. The project uses data from NASA’s Aqua satellite.The release of this iceberg has reduced Larsen C, the largest ice shelf in the Larsen formation and the fourth-largest on the continent, by more than 12%. Scientists says the remaining ice shelf could now be less stable, which could pave the way for a more severe event: disintegration. “This ice shelf is on the trajectory to collapse in the coming decades,” said Eric Rignot, a UC Irvine glaciologist and research scientist at NASA’s Jet Propulsion Laboratory in La Cañada Flintridge.The iceberg that formed from Larsen C wasn’t abnormally large, Fricker said. It was only about half the size of one that calved from the Ross Ice Shelf in 2000: a 4,200-square-mile hunk of ice the size of Jamaica.  What’s worrisome about Larsen C’s calving is the possibility that it will lead to the collapse of the entire shelf, but scientists think that’s probably decades away. Rignot isn’t optimistic that the ice shelf will recover. He noted that it has now retreated further than it has in the last 100 years.

Sea Level Rise to Flood Major U.S. Cities -- As an iceberg the size of Delaware broke away from an ice shelf in Antarctica Wednesday, scientists released findings that up to 668 U.S. communities could face chronic flooding from rising sea levels by the end of the century. More than 90 communities are already grappling with "chronic inundation" from sea level rise caused by climate change —meaning they have crossed the threshold for when "flooding becomes unmanageable for people's daily lives," disrupting "people's routines, livelihoods, homes and communities." When Rising Seas Hit Home, the new report from the Union of Concerned Scientists , found that number could nearly double, to 170, over the next two decades. Coastal sections of Louisiana and Maryland account for the majority of the communities that are currently experiencing heavy flooding , but USC researchers predict these unmanageable floods will reach the Jersey Shore and Florida's Gulf Coast by mid-century. By 2100, they calculate 40 to 60 percent of all oceanfront communities on the East and Gulf Coasts, and a growing number of West Coast communities, will be inundated with chronic flooding. At-risk regions include major cities like Boston, Savannah, Fort Lauderdale, Newark and four of New York City's five boroughs. "We hope this analysis provides a wake-up call to coastal communities—and us as a nation—so we can see this coming and have time to prepare," said Erika Spanger-Siegfried, a USC senior analyst and co-author of the report, the first study of its kind to examine potential flood risks for the entire coastline of the lower 48 states.  The USC researchers also considered which cities may be spared from the worst of the flooding if the Paris agreement goals are met. Although Donald Trump withdrew from the climate agreement, many U.S. state and community leaders have committed to upholding it .

Climate Change Dilemma for Coastal America: How Much Flooding is Too Much?  - In the Florida Keys, residents are facing a question that may soon plague communities up and down the U.S. coastline: How much water are they willing to live with? During a bad bout of high tides in 2015, a Key Largo neighborhood flooded for 34 days, stranding and infuriating the people who live there. County officials responded by agreeing to raise the roads, but keeping them dry year-round would require making the roads 28 inches higher. That would cost $7 million for less than a single mile; extrapolated across the Keys, zero days of flooding was a goal more ambitious than the county’s 75,000 full-time residents could afford.So the county adopted a new standard across the Keys: Roads should be elevated enough so that they would flood, on average, no more than seven days a year. That meant roads in part of Key Largo would be raised six inches instead. “We have to make tough decisions,”   As climate change gets worse, “there may be sections of road that have to go under.” Local governments around the coastal U.S. will face variations on that dilemma, perhaps sooner than they realize. In a report released Wednesday, the Union of Concerned Scientists used federal data to project the year communities will become what it calls “chronically inundated.” The group, which urges Congress to take action to address climate change, defined that threshold as any community that faced flooding an average of every two weeks across at least 10 percent of its area.It’s not just small towns along the beach. By 2100, a third of Savannah, Georgia could be flooded twice a month, including more densely populated parts of the city's historic downtown. By 2100, parts of Connecticut, including Bridgeport, East Haven, Stratford and New Haven, could also suffer chronic flooding across at least 10 percent of their area. Around San Francisco Bay, one-quarter of Alameda could be chronically inundated by 2070. By 2100, more than 10 percent of Oakland, San Rafael and San Mateo could meet that threshold.

Is Climate Change Fair? - Just got around to reading the Hsiang et al piece in Science on the inequitable economics impacts of climate change.  Here's the abstract: Estimates of climate change damage are central to the design of climate policies. Here, we develop a flexible architecture for computing damages that integrates climate science, econometric analyses, and process models. We use this approach to construct spatially explicit, probabilistic, and empirically derived estimates of economic damage in the United States from climate change. The combined value of market and nonmarket damage across analyzed sectors—agriculture, crime, coastal storms, energy, human mortality, and labor—increases quadratically in global mean temperature, costing roughly 1.2% of gross domestic product per +1°C on average. Importantly, risk is distributed unequally across locations, generating a large transfer of value northward and westward that increases economic inequality. By the late 21st century, the poorest third of counties are projected to experience damages between 2 and 20% of county income (90% chance) under business-as-usual emissions (Representative Concentration Pathway 8.5). Here's a pretty picture (with a really long caption) that sums things up: Summary: We're all screwed, just some of us are screwed more than others.

The Uninhabitable Earth -- It is, I promise, worse than you think. If your anxiety about global warming is dominated by fears of sea-level rise, you are barely scratching the surface of what terrors are possible, even within the lifetime of a teenager today. And yet the swelling seas — and the cities they will drown — have so dominated the picture of global warming, and so overwhelmed our capacity for climate panic, that they have occluded our perception of other threats, many much closer at hand. Rising oceans are bad, in fact very bad; but fleeing the coastline will not be enough. Indeed, absent a significant adjustment to how billions of humans conduct their lives, parts of the Earth will likely become close to uninhabitable, and other parts horrifically inhospitable, as soon as the end of this century. Even when we train our eyes on climate change, we are unable to comprehend its scope.   This past winter, a string of days 60 and 70 degrees warmer than normal baked the North Pole, melting the permafrost that encased Norway’s Svalbard seed vault — a global food bank nicknamed “Doomsday,” designed to ensure that our agriculture survives any catastrophe, and which appeared to have been flooded by climate change less than ten years after being built.   The Doomsday vault is fine, for now: The structure has been secured and the seeds are safe. But treating the episode as a parable of impending flooding missed the more important news. Until recently, permafrost was not a major concern of climate scientists, because, as the name suggests, it was soil that stayed permanently frozen. But Arctic permafrost contains 1.8 trillion tons of carbon, more than twice as much as is currently suspended in the Earth’s atmosphere. When it thaws and is released, that carbon may evaporate as methane, which is 34 times as powerful a greenhouse-gas warming blanket as carbon dioxide when judged on the timescale of a century; when judged on the timescale of two decades, it is 86 times as powerful. In other words, we have, trapped in Arctic permafrost, twice as much carbon as is currently wrecking the atmosphere of the planet, all of it scheduled to be released at a date that keeps getting moved up, partially in the form of a gas that multiplies its warming power 86 times over. 

CDP Carbon Majors Report shows 100 companies to blame for 71% of emissions | WIRED UK: That's roughly the same amount released since the beginning of the industrial revolution until 1988, the CDP notes. If the next 28 years match the emissions rate of the previous 28, the report continues, we're on course for a 4ºC temperature rise by the end of the century, leading to food scarcity and species extinction. Just 25 fossil fuel producers were linked to 51% of global industrial greenhouse gas emissions, including BP, Shell, ExxonMobile, Rio Tinto and Total, with the top three worst emitters named as state-owned producers from China, Iran and Russia. China's coal manufacturers are responsible for a whopping 14% of the total between 1988 to 2015. Of the 100 companies highlighted, 30% are publicly owned and 11% privately owned, with the remainder state-owned. Pedro Faria, technical director at CDP, says that means investors have a role in pushing corporations to reduce emissions. “In particular, the report shows that investors in fossil fuel companies own a great legacy of almost a third of all industrial GHG [greenhouse gas] emissions, and carry influence over one fifth of the world’s industrial GHG emissions today," Faria said in a statement, calling for investors to push for ambitious emission reduction targets, adopt carbon pricing in accounting and disclose climate risk to the Financial Stability Board (FSB) task force - a body that brings together international policymakers to promote global financial stability.

We're Suing Trump Again for Delaying Protections Against Methane -- Earthjustice sued the Bureau of Land Management (BLM) Monday over its decision to delay regulations on methane , a major greenhouse gas.  Delays of critical environmental protections have become a familiar tactic from federal agencies, as the Trump administration takes marching orders from polluting industries that want to unravel Obama-era regulations.  The courts, however, have proven to be a powerful tool in pushing back on Trump's delay tactics. Earlier this month, a federal appeals court blocked Trump's U.S. Environmental Protection Agency (EPA) from delaying new rules on methane, a potent greenhouse gas 86 times more powerful than carbon dioxide that happens to be the primary component of natural gas. Monday's lawsuit targets a similar request to delay methane regulations, this time by the BLM.  At the same time, Earthjustice is monitoring and litigating against several other delays by the administration, including a delay in banning chlorpyrifos , a toxic agricultural pesticide.  "No matter how badly the Trump administration wants to dismantle important protections for our air and climate adopted during the Obama administration, they must follow the law," said Earthjustice attorney Joel Minor, who is working on the EPA and BLM methane cases. "They're taking shortcuts in each case. But the courts are going to hold them accountable."

 If You Fix This, You Fix a Big Piece of the Climate Puzzle - Fixing air-conditioning is, let’s face it, not the most exciting solution to climate change.  Perhaps for the same reason that remodeling a kitchen is more enticing than replacing a water heater, devising greener refrigerant chemicals will never make headlines like solar installations or electric cars do. You just can’t take a great selfie with the inside of an air-conditioner.  But fixing how we cool ourselves may also help fix the climate. New researchfrom the Lawrence Berkeley National Laboratory in California indicates that adding improved efficiency in refrigeration and phasing out fluorinated gases used for cooling, as mandated by international agreement, could eliminate a full degree Celsius of warming by 2100. Given that the “business as usual” trajectory leads to 4 to 5 degrees Celsius of warming, that is shaving off a pretty big slice. Hydrofluorocarbons, or HFCs, account for about 1 percent of global greenhouse gas emissions, but they can be thousands of times as potent than carbon dioxide and may account for up to 19 percent of emissions by 2050 if their manufacture continues unchecked. That’s because from India to the Philippines to South Africa, air-conditioners are increasingly a must-have item. Less than 10 percent of homes in India have units, but air-conditioning makes up 40 percent to 60 percent of the country’s electricity demand in major cities like New Delhi. Businesses and homeowners in Asia and Africa are expected to buy an estimated 700 million air-conditioners by 2030, and 1.6 billion by midcentury. Without major changes in the way we cool ourselves, those units will in turn crank up the global furnace. “This is going to matter a lot,” said Lucas Davis, an associate professor at the Haas School of Business at the University of California, Berkeley. “If one is thinking about energy and environment in the next couple decades, you have to think about cooling.”

Jerry Brown Announces Global Climate Action Summit As He Promotes Fracking, Delta Tunnels California Jerry Brown announced on July 6, via video message at the Global Citizen Festival in Hamburg, Germany, that the state will convene the “world’s climate leaders” in San Francisco in September 2018 for a “Global Climate Action Summit.”  Brown made the announcement at a time when increasing numbers of Californians are challenging his “environmental” and “climate” credentials as he teams up with the Donald Trump administration to build the controversial Delta Tunnels and to exempt three major California oilfields from protection under the federal Safe Water Drinking Act.  “It’s up to you and it’s up to me and tens of millions of other people to get it together to roll back the forces of carbonization and join together to combat the existential threat of climate change," said Governor Brown in his remarks on the eve of the G20 Summit. “That is why we’re having the Climate Action Summit in San Francisco, September 2018.”  “President Trump is trying to get out of the Paris Agreement, but he doesn’t speak for the rest of America. We in California and in states all across America believe it’s time to act, it’s time to join together and that’s why at this Climate Action Summit we’re going to get it done,” he claimed.  After hearing the announcement, the mainstream media responded with fawning puff pieces portraying Brown as an international “climate leader,” with doing little or no research into the Governor’s actual environmental policies.  “Gov. Jerry Brown of California on Thursday reinforced his reputation as America’s de facto leader on climate change, announcing to cheering crowds in Hamburg, Germany that his state would gather leaders from around the world for a global warming summit next year," wrote Lisa Friedman of the New York Times. “Speaking by videoconference to the Global Citizens Festival in Hamburg, where President Donald Trump is joining other world leaders for the Group of 20 economic summit, Governor Brown said the president ‘doesn’t speak for the rest of America’ in pulling out of the Paris agreement on climate change,” Friedman said. The New York Times didn’t mention that “America's de facto leader on climate change” received $9.8 million from oil, gas and utilities, often within days of winning big favors, since he ran for Governor, according to a report released by the the Santa Monica-based Consumer Watchdog last August:

Trump splits with other G-20 leaders on climate change - POLITICO: President Donald Trump emerged from the G-20 summit in Germany isolated from every other major economy on climate change, but the White House nonetheless scored small victories during the meeting. After a tense round of negotiations, G-20 nations on Saturday reached a compromise on climate change, the last remaining issue of contention at the summit. Every country except the United States declared that the Paris climate change agreement is “irreversible” and must be implemented “swiftly.” The U.S., on the other hand, declared its intention to pull out of the 2015 deal, which has won the backing of nearly 200 nations. Story Continued Below Several countries, including France, had objected to the United States' insistence on mentioning fossil fuels in the G-20's joint communique, leading to an eleventh-hour round of talks. In the end, the United States appeared to win that fight, keeping the reference to fossil fuels, while pairing it with a call to use renewable energy. "The United States of America states it will endeavor to work closely with other countries to help them access and use fossil fuels more cleanly and efficiently and help deploy renewable and other clean energy sources, given the importance of energy access and security in their nationally-determined contributions,” the joint communique says.Administration officials hailed the language as a victory, with one telling POLITICO the U.S. “scored big.”

Merkel criticizes the U.S. for standing alone on climate change at the G-20 in Hamburg - LA Times: German Chancellor Angela Merkel once again singled out the United States for criticism Saturday for walking away from the Paris climate agreement, saying that she "deplores" the decision and that she does not believe the Trump administration is open to returning to the deal to reduce international carbon emissions, as President Trump has said.The United States was alone at the G-20 summit in dissenting from the group's climate resolution. Leaders from the 19 other countries around the table in Hamburg agreed that the Paris climate agreement is "irreversible" and will take steps to implement the accords “as soon as possible,” said Merkel, who holds the chair of the summit this year.The issue highlighted the cold reception that President Trump's vision of American self-interest, denial of climate science and threats to throw up trade barriers received at the conference of 20 of the world's wealthiest countries.As she has before, Merkel called on European countries to step into the vacuum that Trump is leaving on the world stage. "We as Europeans have to take our fate into our own hands," she said. 

G20 closes with rebuke to Trump's climate change stance - (CNN) German Chancellor Angela Merkel closed the G20 summit in Hamburg with a rebuke to President Donald Trump's stance on climate change, but the group of the world's economic leaders appeared to make a concession on his protectionist trade policies.Officials had been at an impasse over an increasingly isolationist United States and Trump's climate change and trade policies for most of the summit, and Merkel made it clear the United States had made talks difficult. "Unfortunately -- and I deplore this -- the United States of America left the climate agreement, or rather announced their intention of doing this," Merkel said as she closed the summit and presented a G20 declaration.She said the other 19 members of the G20, which includes the European Union, agreed that the Paris climate accord was irreversible and that they remained committed to it.Trump faced global outrage last month when he announced he would withdraw the United States from the agreement, which obliges countries to reduce their carbon emissions to ward off catastrophic global warming.The G20 declaration noted the US withdrawal from the accord but said the country affirmed its "strong commitment to an approach that lowers emissions while supporting economic growth and improving energy security needs."After the summit, Russian President Vladimir Putin called climate change a "major issue" and said Merkel had reached a "good compromise.""Although the US will withdraw, they are nevertheless still prepared to carry on now (with) d iscussions on this subject. It seems to me this is a very positive point and can be chalked up to the successes of Angela Merkel," Putin said.British Prime Minister Theresa May said that she was dismayed at the US climate stance and that she had urged Trump to reconsider.  And Canadian Prime Minister Justin Trudeau said that "strong economic growth and environmental protection can go hand in hand."

"Pruitt blasts Europe, Merkel for ‘hypocrisy’ on climate" [part 1] - This guy might be the biggest in a large field of hypocrites: EPA Administrator Scott Pruitt dismissed European critics of President Donald Trump's climate policies as hypocrites on Wednesday, while chastising German Chancellor Angela Merkel for phasing out her country's nuclear power plants."I just think the hypocrisy runs rampant," Pruitt said in an interview with POLITICO. "To look at us as a nation and say, 'You all need to do more' in light of what we’ve done in leading with innovation and technology — the hypocrisy is palpable in those areas."Pruitt mentioned Merkel by name, urging the public to press her on the issue. If reducing carbon dioxide emissions "is so important to you, Madam Chancellor, why are you getting rid of nuclear? Because last time I checked, it’s pretty clean on CO2," he said. via  Yes, its clean in terms of CO2 but I can think of two reasons why you wouldn't want nuclear:

  1. Nuclear accidents (e.g., this)
  2. Nuclear waste storage (e.g., this)

Scott Pruitt seems not to care and/or understand what he is talking about. 

"Pruitt blasts Europe, Merkel for ‘hypocrisy’ on climate" [part 2] - Some people will say just about anything:Pruitt repeated his criticism of the Paris deal, casting doubt on whether the United States would remain part of the climate agreement even if the Trump administration rewrites former President Barack Obama's aggressive plan to cut U.S. emissions. When Trump announced the withdrawal June 1, he held out the possibility of negotiating to "re-enter" the accord "on terms that are fair to the United States."Pruitt argued that the United States has shown it can address climate change without being bound to an international agreement. He noted that U.S. carbon dioxide emissions have declined since President George W. Bush decided in 2001 to abandon the Kyoto Protocol.via Now correlation isn't causation but it appears to me that we were able to cut CO2 emissions by participating in an international recession agreement around about 2007 (in other words, U.S. CO2 emissions fell during the 2007 recession and recovery, CO2 emissions rose during the Bush II administration):

 Transcript of Reuters interview with EPA Administrator Scott Pruitt (Reuters) - U.S. Environmental Protection Agency Administrator Scott Pruitt gave Reuters a wide-ranging interview on Monday at his office in Washington, discussing issues from climate science to automobile emissions. The following is a full transcript of the interview:

Trump set for climate confrontation in Paris | TheHill: President Trump’s visit to Paris this week will put him face-to-face with French President Emmanuel Macron, perhaps Europe’s loudest critic of his climate agenda. Macron has issued a series of provocative statements against Trump’s decision to renege on the United States’ commitment to the Paris climate agreement, inviting American scientists to continue their work in France, highlighting a climate alliance with China and even mocking Trump with a Twitter hashtag fashioned after the U.S. president’s campaign slogan.Trump and Macron are due to hold a round of bilateral meetings and a joint press conference later this week, making it likely the two will confront the Paris agreement and the state of climate and energy diplomacy in light of Trump’s decision to pull out of the accord. “I think Macron has made the legacy of the Paris agreement, and its implementation, a core part of his agenda,” said David Waskow, international climate director at the World Resources Institute. “Exactly how it will come up between the leaders is hard to say, but it’s hard to imagine that Macron wouldn’t want to address it in some fashion.” Trump’s June 1 decision to pull out of the Paris agreement set the tone for his relationship with Macron, who had taken office only two-and-a-half weeks prior. Trump called the accord “very unfair” because of greenhouse gas emissions goals and financing provisions that he said benefit foreign nations, including France, over the United States. “I was elected to represent the citizens of Pittsburgh, not Paris,” he said in an address at the White House Rose Garden. 

Trump, Macron fail to break deadlock on Paris climate deal | TheHill: A Thursday meeting between President Trump and French President Emmanuel Macron did not yield a breakthrough on the Paris climate deal, the leaders said Thursday. “Something could happen with respect to the Paris accord. We’ll see what happens,” Trump said during a joint news conference with Macron in Paris on Thursday. Trump announced last month he would pull the U.S. out of the international climate change agreement. “But we’ll talk about that in the coming period of time. If it happens, that will be wonderful. If it doesn’t that’s ok, too.”Macron has been one of the most vocal supporters of the Paris deal and a loud critic of Trump’s decision to pull out of the deal. He said “there is nothing new and unprecedented” in Trump’s position on the deal following their Thursday meeting. “I very much respect the decision taken by President Trump,” he said. “He will work on implementing his campaign promises, and as far as I’m concerned I remained attached to the Paris accord and will make sure that, step by step, we can do everything that’s in the accord.” Trump has called the Paris deal “very unfair” to the United States because of its greenhouse gas emissions goals and financial provisions, both of which were negotiated by the Obama administration. He has vowed to renegotiate the deal, but international leaders have said that will not happen.

Conservative groups urge lawmakers to gut climate programs in U.S. military | Reuters: (Reuters) - A coalition of 14 conservative groups urged U.S. lawmakers on Wednesday to support an amendment to the House of Representatives' annual defense bill that would prevent the Pentagon from implementing climate-change and green energy policies meant to save taxpayers money and protect the planet. In a letter to the lawmakers, the groups said many climate programs "are likely to undermine military readiness by diverting scarce resources." The programs in question were initiated by former President Barack Obama's 2015 executive order requiring the military to meet green energy and greenhouse gas emissions targets. The conservative groups are trying to gather support for Republican Representative Warren Davidson's amendment to the House version of the National Defense Authorization Act that would stop the military from implementing the policies. The groups include the Competitive Enterprise Institute, a libertarian advocacy group; Americans for Prosperity, a group funded by the conservative Koch brothers; and Americans for Limited Government. U.S. Defense Secretary Jim Mattis has long been supportive of programs that reduce troops' petroleum dependence. In written testimony to a Senate panel after his confirmation hearing in January, Mattis said "climate change can be a driver of instability" and is "a challenge that requires a broader, whole-of-government response." The House bill includes language from Democratic Representative Jim Langevin that would require the Pentagon to report to Congress on military bases that are most vulnerable from rising seas and other effects of climate change. It is uncertain whether Davidson's or Langevin's measures would be in the final House bill. The House is due to vote this week on its version of the defense bill and the Senate version will follow later this year.

House defeats amendment to strip climate study from Defense bill | TheHill: The House defeated an amendment to a defense policy bill Thursday that would have blocked a Department of Defense study into the impacts of climate change on national security. The amendment, from Rep. Scott Perry (R-Pa.), would have stripped a National Defense Authorization Act provision that would have required a study into the 20-year impacts of climate change on the military. Perry said his amendment was not meant to debate the existence of climate change, but rather, “my point is that this should not be the priority" for the military.“Literally, litanies of other federal agencies deal with environmental issues including climate change,” Perry said. “The federal mandate [in the bill] detracts from the central mission of securing our nation against enemies.” The climate change study was included in the annual defense policy bill after a unanimous voice vote during a committee markup. The House voted 185-234 to defeat Perry's amendment and keep the study in the bill. Forty-six Republicans voted against Perry’s amendment. Two Republicans, Reps. Elise Stefanik (R-N.Y.) and Ileana Ros-Lehtinen (R-Fla.), argued against it during floor debate earlier Thursday. The effects of climate change “are drivers of geopolitical instability and degrade the security of the United States,” Stefanik said. “We would be remiss in our efforts to protect our national security to not fully account for the risk climate change poses to our bases, our readiness and to the fulfillment of our armed services mission.” 

In Landmark Move, GOP Congress Calls Climate Change ‘Direct Threat’ to Security - The Pentagon has been aware for years of the looming danger represented by climate change. But partisan infighting in Congress, budget sequestration, and the toxic nature of the climate debate have hamstrung the Defense Dept. from taking steps to protect key assets — or even identifying which facilities face the most serious threats. This week, though, the Pentagon may have gotten a boost — from the unlikeliest of places. The Republican-controlled House retained an amendment to the 2018 defense funding bill affirming that “climate change is a direct threat to the national security of the United States.” It orders defense officials to draw up a report laying out which facilities would be most affected.“This is a reflection that some Republicans at least are waking up to this reality and voting to affirm the work that DoD is doing,” said Andrew Holland, director of studies and senior fellow for energy and climate at the nonpartisan policy organization American Security Project.  For more than a decade, the Pentagon has been clear-eyed about the risks posed by climate change. Rising sea levels threaten coastal installations, while floods, famines, and droughts promise waves of instability and conflict across big chunks of the planet. Even in the climate-change denying Trump administration, Defense Secretary James Mattis has reiterated what is by now the Pentagon’s standard line. ‘‘I agree that the effects of a changing climate — such as increased maritime access to the Arctic, rising sea levels, desertification, among others — impact our security situation,’’ Mattis expressed in testimony prior to his confirmation.

How banks are fighting climate change | American Banker (12 slides) When the U.S. withdrew from the Paris Agreement, business leaders across the country called on the private sector to step up their own efforts to reduce greenhouse gas emissions and ultimately limit global warming to 2 degrees Celsius. From new corporate governance practices to energy efficient upgrades, here’s a look at some of the ways the banking sector is combating climate change.

 EPA chief wants scientists to debate climate on TV | Reuters (Reuters) - The U.S. Environmental Protection Agency is in the early stages of launching a debate about climate change that could air on television – challenging scientists to prove the widespread view that global warming is a serious threat, the head of the agency said. The move comes as the administration of President Donald Trump seeks to roll back a slew of Obama-era regulations limiting carbon dioxide emissions from fossil fuels, and begins a withdrawal from the Paris Climate Agreement - a global pact to stem planetary warming through emissions cuts. "There are lots of questions that have not been asked and answered (about climate change)," EPA Administrator Scott Pruitt told Reuters in an interview late on Monday. "Who better to do that than a group of scientists... getting together and having a robust discussion for all the world to see," he added without explaining how the scientists would be chosen. Asked if he thought the debate should be televised, Pruitt said: "I think so. I think so. I mean, I don’t know yet, but you want this to be open to the world. You want this to be on full display. I think the American people would be very interested in consuming that. I think they deserve it." Pruitt, one of the most controversial figures in the Trump administration, has repeatedly expressed doubts about climate change – one of the main points of contention in his narrow confirmation by the Senate.

Greens sue EPA over smog rule delay | TheHill: Environmental and health groups are suing the Trump administration to stop the Environmental Protection Agency’s (EPA) delay of an ozone pollution regulation. The groups, led by Earthjustice, said Wednesday that EPA Administrator Scott Pruitt acted illegally when he decided last month to delay by one year the implementation of the Obama administration’s regulation. “EPA’s delay flouts the rule of law,” Seth Johnson, an Earthjustice attorney who is representing the coalition, said in a statement. “It’s illegal and wrong,” he said. “It forces the most vulnerable people, like children, people with asthma and the elderly, to continue to suffer from dangerous ozone pollution. The EPA is wrong to put its polluter friends’ profits before people’s health.” The lawsuit is the latest in a string of legal challenges by greens, public health groups and Democratic state attorneys general against the massive, historic rollback of energy and environmental regulations by the Trump administration. Many of the same groups suing Wednesday were in the group that notched a win last week when the District of Columbia Circuit Court of Appeals rejected the EPA’s attempt to delay the Obama administration’s methane rule for oil and natural gas drillers.The groups are hoping the same appeals court will look skeptically at Pruitt’s attempt to delay another controversial regulation. 

Controversial Alaskan gold mine could be revived under Trump's EPA - The Trump administration has taken a key step toward paving the way for a controversial gold, copper and molybdenum mine in Alaska’s Bristol Bay watershed, marking a sharp reversal from President Barack Obama’s opposition to the project.The Environmental Protection Agency on Tuesday proposed withdrawing its 2014 determination barring any large-scale mine in the area because it would imperil the region’s valuable sockeye salmon fishery. The agency said it would accept public comments on the proposal for the next 90 days.“The facts haven’t changed. The science hasn’t changed. The opposition hasn’t changed,” said Taryn Kiekow Heimer, a senior policy analyst at the Natural Resources Defense Council, which has fought the proposed mine. “The fact that it’s the wrong mine in the wrong place hasn’t changed. But the politics have changed.”The EPA’s latest action stems from a legal settlement in the spring with Pebble Limited Partnership, a subsidiary of the Canadian firm Northern Dynasty Minerals Ltd. The settlement did not grant an immediate approval for the polarizing project, but it did begin to clear the way for the company to apply for federal permits — a path the Obama administration had thwarted.EPA Administrator Scott Pruitt said at the time that the settlement did not “guarantee” a particular outcome and that he merely wanted to provide the company a “fair process” while avoiding “costly and time-consuming litigation.” Northern Dynasty Minerals, which has sued the EPA on several occasions regarding the project, has said that it wants “nothing more than fairness and due process under the law.” Even if the EPA eventually does withdraw its opposition, Pebble Mine would have to undergo a federal environmental review and clear other state hurdles before construction could begin. The EPA said Tuesday that after it hears from the public and consults with local tribes, its regional administrator will make a final determination “in consultation” with Pruitt.

House Republicans Reject Trump’s Bid to Slash EPA’s Funding -- House Republicans rejected Donald Trump’s steep budgets cuts for the Environmental Protection Agency as members of the president’s party instead offered a trim in spending for the environmental regulator. The White House had proposed a record 31 percent cut to the agency’s roughly $8 billion budget, telling lawmakers it wanted to cut 3,200 jobs and shrink or eliminate a wide swath of programs, including those aimed cutting lead poisoning and improving the health of the Great Lakes. Instead, congressional appropriators released a bill Tuesday that would slice the agency’s budget by 6.5 percent to $7.5 billion. While the overall fate of spending bills in Congress is unclear, GOP Senators have also indicated they won’t go along with Trump’s plan. The House bill is scheduled to be considered by a panel of the Appropriations Committee Wednesday, the first formal step of many before it could make it to the president’s desk for signature."Trump’s proposed budget was a fantasy. It is hard to imagine that many sane lawmakers could support it," said Frank O’Donnell, president of Clean Air Watch. "Trump is so weakened politically that he has no political capital to use on this issue."The $31.4 billion bill also includes more modest reductions in spending for the Interior Department, which runs the national parks, protects endangered species and plays a primary role in permitting oil, gas and coal development on federal lands and waters. House Republicans are drafting a set of spending bills that largely rejects Trump’s overall call for $54 billion in domestic agency cuts, while they propose giving nearly $20 billion more to the military than Trump requested. Lawmakers of both parties had already warned EPA Administrator Scott Pruitt that the administration’s plans for the agency weren’t going to stick.

Greens slam Senate’s energy policy bill | TheHill: Environmental and progressive organizations are uniting to oppose the Senate’s broad energy legislation as it heads for a potential vote. The groups, which include Food & Water Watch, Our Revolution, the Center for Biological Diversity and, wrote a letter Monday asking senators to oppose the bill, which it casts as backward-looking legislation that would extend the United States’ dependence on fossil fuels. “In light of the current administration’s overt efforts to make it easier for the fossil fuel industry to pollute our air and water, it is more essential than ever that Congress resist efforts to increase fossil fuel production,” the groups wrote to Senate Majority Leader Mitch McConnell(R-Ky.) and Minority Leader Charles Schumer (D-N.Y.). “No energy legislation is better than bad energy legislation that serves to increase our dependence on dirty fossil fuel production instead of advancing energy efficiency to reduce the amount of energy we utilize and building on successful policies to expand clean energy sources such as solar and wind,” they said. The legislation, sponsored by Sens. Lisa Murkowski (R-Alaska) and Maria Cantwell (D-Wash.), was introduced late last month, and McConnell immediately put it on the Senate calendar. That allows it to go directly to a floor vote and skip committee consideration if McConnell wants to do so. Like legislation the Senate passed overwhelmingly last year, the bill aims to “modernize” energy policy, including through new infrastructure, cybersecurity protections, expediting natural gas exports and similar policies. The greens said their objections center on the pro-fossil fuel policies in the bill, like expediting mining and drilling purposes, expanding research into methane hydrate extraction and streamlining the natural gas export approval process.  ‘

 Another Koch Cadet Hired​ at Trump's Department of Energy - The Koch brothers have landed yet another of their trusted fossil fuel think tank veterans in the Trump administration's Department of Energy (DOE). Alex Fitzsimmons was manager of policy and public affairs at the Institute for Energy Research (IER) and its advocacy arm , the American Energy Alliance (AEA) , while also working as a " spokesman " and communications director for Fueling U.S. Forward (FUSF) , the Koch-funded campaign to bolster public opinion of fossil fuels .  Fitzsimmons will be joining former IER colleagues Daniel Simmons and Travis Fisher at the DOE.  Simmons now serves as the head of the Office of Energy Efficiency and Renewable Energy (EERE), an office that AEA called for eliminating in 2015 , under Simmons' guidance, as then-vice president of policy. Fisher is currently working on the controversial grid study ordered by DOE Secretary Rick Perry . While at IER, Fisher wrote a similar report in 2015 , which called clean energy policies "the single greatest emerging threat" to the nation's electric power grid, and a greater threat to electric reliability than cyber attacks, terrorism or extreme weather .

Trump: Not joking about solar wall | TheHill: President Trump said Thursday his administration is considering equipping his proposed border wall with solar panels to generate electricity. A reporter on board Air Force One on the way to France asked Trump whether he was joking about building a "solar wall." "No, not joking, no. There is a chance that we can do a solar wall. We have major companies looking at that," replied Trump. Trump added that "there is a very good chance" a solar wall could be built, and that "there's no better place for solar than the Mexico border — the southern border." Rep. Tony Cárdenas (D-Calif.), who opposes any border wall construction, batted down the idea. "Donald Trump doesn't know what he's talking about. I happen to be an electrical engineer, I happen to know a little bit about solar power, I happen to know that what he's saying just doesn't make sense," said Cárdenas. "Basically what he's saying is, 'Why don't we build a ramp so that people can drive over?' instead of building a wall that's supposed to do what he wants it to do," added Cárdenas. Trump said the wall would have to be see-through, a demand that's been made by some Border Patrol officials who oversee the border. Department of Homeland Security (DHS) Secretary John Kelly told Congress in February that officers under his command had asked for a barrier through which they could see the other side.

Trump's environment and energy policies trigger storm of lawsuits | McClatchy -  President Trump promised to grow jobs by rolling back Obama-era energy and pollution rules. And he’s fulfilling his pledge, but not how he intended. In just six months, Trump’s policies have resulted in a surge in employment — for environmental lawyers. Since Trump took office, environmental groups and Democratic state attorneys general have filed more than four dozen lawsuits challenging his executive orders and decisions by the U.S. Environmental Protection Agency, Interior Department and other agencies. Environmental organizations are hiring extra lawyers. Federal agencies are requesting bigger legal defense budgets. The first round of legal skirmishes has mostly gone to the environmentalists. Earlier this month, the U.S. Court of Appeals for the D.C. Circuit blocked the administration from delaying Obama-era rules aimed at reducing oil industry releases of methane, a potent greenhouse gas. On June 14, a federal judge ruled against permits issued to complete construction of the Dakota Access pipeline, a partial victory for the Standing Rock Sioux tribe, which claims its hunting and fishing grounds are threatened by the oil pipeline. Abigail Dillen, a vice president of litigation for Earthjustice, a nonprofit organization that filed the Dakota Access lawsuit, said her group and others are girding for years of court battles over bedrock environmental laws, such as the Clean Water Act and Clean Air Act. Earthjustice has increased its staff of lawyers since November to 100, and is planning to hire another 30 in coming months.“What we are seeing is unprecedented,” said Dillen, whose California-based organization was previously known as the Sierra Club Legal Defense Fund. “With this administration, we face a disregard to basic rules of environmental decision making.” 

A solar eclipse could wipe out 9,000 megawatts of power supplies - The eclipse set to darken skies next month threatens to sideline solar farms and rooftop panels in a wide swath of the U.S., wiping out enough power generation to supply about 7 million homes. This rare event, during which the moon will completely obscure the sun, will cast a shadow along a 70-mile-wide (113-kilometer) corridor stretching from Oregon to South Carolina on Aug. 21. Based on a Bloomberg calculation of grid forecasts, more than 9,000 megawatts of solar power may go down. That’s the equivalent of about nine nuclear reactors. The impact is a testament to the ninefold increase in solar installed in the U.S. since 2012 and highlights the risks associated with relying on an intermittent resource such as the sun for power. The onslaught of wind and solar resources is already regularly contributing to wild swings in power supplies across grids, sending wholesale electricity prices below zero on some days. On Thursday, PJM Interconnection LLC, operator of the nation’s largest power grid covering parts of the eastern U.S., estimated the eclipse could take out as much as 2,500 megawatts of solar generation on its system from about 1:30 p.m. to 3:40 p.m. North Carolina and New Jersey may bear the brunt because so many panels are installed in those states. PJM said rooftop solar panels will account for 80 percent of the anticipated outages. The duration of the eclipse (12:05 p.m. to 4:09 p.m. New York time) is too short to meaningfully boost demand for fossil fuels. But it could trigger spikes in wholesale power prices, especially since demand tends to surge in the summer as people blast their air conditioners. The last time the contiguous U.S. saw a total eclipse was in 1979, according to NASA. 

Tesla to build world’s biggest storage battery in S. Australia - The South Australia government has announced that its 100MW battery storage tender – which it says is the world’s largest – has been won by Tesla and French renewable energy developer Neoen. The 100MW/129MWh battery bank will be built at Neoen’s huge Hornsdale wind complex near Jamestown, where the last stage of a 309MW project is currently being completed. Premier Jay Weatherill said the Hornsdale Power Reserve will become the state’s largest renewable generator, and while the lithium battery would be the biggest in the world. “South Australian customers will be the first to benefit from this technology which will demonstrate that large-scale battery storage is both possible and now, commercially viable.” The announcement was made jointly with Tesla founder and CEO Elon Musk, who flew into Adelaide for the announcement. Musk said the installation would be three times bigger than the next installation. “This is a chance to show you can really do a heavy duty, large-scale utility battery and battery system, and South Australia was up to the challenge. If South Australia is willing to take a big risk then so are we,” he said.  Neoen deputy CEO Romain Desrousseaux said the company had been “aggressive and very positive” in its bid with Tesla. He told RenewEconomy Neoen would provide all the equity for the project, and then seek bank finance once it was up and running. “There was no time to talk to the banks,” he said. “What we are showing today is that this is only the beginning for more renewables. Everyone wil be looking at South Australia, hoping to replicate this at other projects.  We hope to replicate it at many other projects.”

There’s Less To Tesla’s Big Australian Battery Deal Than Meets The Eye - As the initial flurry of excitement generated by Musk's offer began to dissipate,serious people attempted to determine exactly what Musk and Rive had promised to do and to estimate how much the project would cost. On Twitter, Musk had made an attractive, but guardedly qualified price estimate of $250/kw-hr for installations larger than 100 MWhr. He quickly admitted that price does not include shipping, installation, taxes or tariffs. He failed to state that the price likely does not include site specific engineering, site appropriate cooling systems or site specific grid connection infrastructure.Adequate cooling systems are important for high power, energy-dense battery installations. High discharge rates generate enough heat to damage the battery and its supporting electronics. Fires and explosions are more frequent occurrences than desired and are a high risk for improperly cooled or controlled systems.With those additional installation investments, an estimate of $500-$600  per kilowatt-hour of storage is probably closer to reality. An installed 100 MW/300 MWhr lithium-ion power station would cost somewhere between $150 million -$180 million (200 million Australian dollars to A$240 million)  Within the context of addressing South Australia's electric power system stability needs, a 300 MW-hr installation appears to have been unaffordable. Premier Jay Weatherill has a total of A$550 million available, and Tesla's massive battery is only a part of the necessary capability. As Gizmodo has reported, the system that Tesla will be installing will provide 129 MW-hr of energy storage capacity, less than half of what Rive originally hinted could be delivered. At a discharge rate of 100 MW, the battery will be totally depleted in less than 80 minutes. As all cell phone, tablet or laptop computer owners should know, it isn't advisable to fully discharge a Li-ion battery. It can dramatically reduce battery lifetime.

Houston startup plans to store wind energy underground -- Texans have long stored oil, natural gas and other forms of energy in underground salt caverns, so it’s only natural that a Houston startup wants to store wind energy there, too. The method is in the company’s name, Apex-CAES, where CAES stands for compressed air energy storage. The company plans to use electricity at night, when it’s cheap, to compress air into an underground cavern. The company then releases the air through turbines to generate electricity when the price is right. The only thing holding back this 30-year-old technology has been the economics. The difference between the high and low prices in a 24-hour period has not been large enough to generate a reasonable return on the capital investment. Texas’ wholesale electricity market and huge nightly wind resource, though, make compressed air energy storage viable, said Jack Farley, CEO of Apex CAES. Build enough compressed air energy storage, and Texas would never have to burn coal again, and consumers would enjoy even lower electricity prices, he told me.

Getting Rid of Wind Energy in Europe - Recently, I heard two representatives of the wind power industry argue for more grid capacity for export of Danish wind energy. In 2009 the CEPOS report, “Wind Energy The Case of Denmark” [1] assumed that parts of the increasing wind energy production was exported. This caused an indignant academic criticism [2]. Since then, the share of wind energy has doubled, and it has been clearly demonstrated that there is a high correlation between Danish wind power output and Danish exchange of electricity with the neighbouring countries. The intentions of developing flexible electricity demand for absorbing the wind power variations did not yet materialize. Wind energy has become a Danish speciality. The cost of wind energy has fallen considerably. This development encourages the installation of more wind power. New interconnections to the Netherlands (CobraCable) and to Great Britain (Viking Link) are expected to absorb the future Danish wind power peaks. Large amounts of wind power are being installed in other European countries. This note is an attempt to describe how the present European grids and markets distribute the wind energy. 

Rooftop Solar Is No Match for Crony Capitalism - -- The New York Times ran an article over the weekend about efforts by utility companies to fight the spread of rooftop-solar power:[Rooftop solar panel] growth has come to a shuddering stop this year, with a projected decline in new installations of 2 percent, according to projections from Bloomberg New Energy Finance…Since 2013, Hawaii, Nevada, Arizona, Maine and Indiana have decided to phase out…programs that spurred explosive growth in the rooftop solar market. (Nevada recently reversed its decision.) Many more states are considering new or higher fees on solar customers.The article chronicles how utility companies have engaged in an extensive lobbying campaign against rooftop solar at the federal and state level. These companies are big campaign donors with deep political influence. They have also been receiving assistance from the American Legislative Exchange Council and the Institute for Energy Research, two think tanks funded by the Koch family, whose sprawling company Koch Industries makes much of its money from fossil-fuel energy. With that kind of political clout, the fledgling rooftop-solar industry looks overmatched.The clobbering of rooftop solar should cause dismay not just among environmentalists worried a bout global warming, but also among economists, policy makers and anyone who cares about economic efficiency. This is a case of an incumbent industry using the power of government to suppress a revolutionary new technology. That’s not good for anyone except the incumbent.

The World Is on the Brink of an Electric Car Revolution - On Monday, Tesla announced that the Model 3, its mass-market electric car, would start rolling off production lines this week with the first handful delivered to customers later this month. Then on Wednesday, Volvo announced that every car it produces will have a battery in it by 2019, putting it at the forefront of major car manufacturers. Then came France’s announcement on Thursday that it would ban the sale of gas-powered cars by 2040. All this news dropped just in time for Bloomberg New Energy Finance’s latest electric car report, which lays out why electric cars are the way of the future and when they’re projected to take over the market. The authors said although electric vehicles are currently a tiny fraction of the car market, that market could reach an inflection point sometime between 2025-2030. After that, electric car sales are slated to increase rapidly. Driven by the falling cost of batteries and the growing number of automakers producing a wider variety of electric cars, Bloomberg NEF expects that electric cars will account for 54 percent of all car sales globally by 2040. That’s a huge uptick from its forecast last year of electric vehicles accounting for 35 percent of all sales. The shift to electric vehicles will disrupt the fossil fuel industry. The 530 million total electric cars forecast to be on the road by 2040 will require 8 million fewer barrels of oil a day to run. One of the big pitches for electric cars is their positive benefit for the climate because they reduce the use of oil. But they will require a lot more power from the electric grid. Energy use from electric vehicles is expected to rise 300 times above current demand, putting more strain on power generation.  How that energy is produced will go a long ways toward determining how climate-friendly electric cars actually are. A recent Climate Central analysis looked at all 50 states and found that the energy mix was clean enough in 37 of them to ensure electric cars are more climate friendly than their most fuel-efficient combustion engine counterparts.

Nobody in Hong Kong wants a Tesla anymore - Hong Kong has long been one of Tesla’s biggest markets, but it may not be for much longer—not a single newly purchased Tesla model was registered in April, according to data from Hong Kong’s transport department. The plunge in interest in Tesla cars came after the government eliminated tax breaks for electric-vehicle (EV) owners, a policy that went into effect on April 1 and is expected to last until March next year. Now, the city has capped the tax waiver at HK$97,500 ($12,500) on private EVs, and is only applicable to first-time owners. There were 2,939 first-time Tesla registrations in March just before the new tax rules kicked in, around five times that of the number in February.As a result, it now costs HK$925, 500 ($118,400) for a Tesla Model S 60, compared to HK$570,000 ($72,900) before the new tax policy—giving it little or no price advantage over a Mercedes-Benz. First-time registrations don’t exactly equal to sales, but is nevertheless a useful proxy as the car needs to be registered in order to run on the road in Hong Kong, said (paywall) the Wall Street Journal, which first reported the story. Hong Kong had 11,004 EVs in use as of May this year, including privately owned and public transport vehicles, according to Hong Kong’s Environmental Protection Department.

Time for President Trump to end ethanol charade --- President Trump changed his mind on many issues since taking office — China is no longer a currency manipulator, and NATO is an important institution. So there’s still hope he’ll dump the renewable fuel standard. It mandates that refiners blend ethanol — a biofuel mostly made from corn — into the gasoline that goes into our gas tanks. On the campaign trail, candidate Trump praised the mandate. And he recently reiterated that support in a letter to the National Ethanol Conference. But thankfully, the president has demonstrated he can learn on the job. So maybe he’ll recognize the problems with the RFS. For example: Ethanol is not necessary for “our energy independence.” U.S. crude oil production began declining in 1974, forcing us to increase imports. At the same time, Arab members of the Organization for Petroleum Exporting Countries imposed an oil embargo on the United States during the Arab-Israeli War. That embargo led to nationwide gasoline shortages and long waiting lines at the pump. In an effort to reduce the need for foreign oil and promote energy independence, Congress began subsidizing ethanol in 1980. In 2005, Congress eliminated most ethanol subsidies and simply mandated that refiners blend it into gasoline. In 2007, it passed new legislation that expanded the amount of ethanol used. Since then, U.S. crude oil and natural gas production have exploded, thanks to hydraulic fracturing. The problem these days isn’t so much a shortage of oil, often it’s a glut. Corn must be purchased, planted, watered, fertilized, irrigated, harvested, transported, processed into ethanol and transported to a refinery that can blend it with gasoline. That process has numerous costly steps, most of which require fossil fuels. In short, we spend a lot of time and money to make ethanol. And ethanol is not the green energy once thought. Ethanol was once thought to be a relatively clean-burning renewable fuel. Now, not so much. 

Biofuels needed but some more polluting than fossil fuels, report warns - Biofuel use needs to increase to help fight climate change as liquid fuels will be needed by aircraft and ships for many decades to come, finds a new report requested by the UK government. The Royal Academy of Engineering report says, however, that some biofuels, such as diesel made from food crops, have led to more emissions than those produced by the fossil fuels they were meant to replace. Instead, the report says, rising biofuel production should make more use of waste, such as used cooking oil and timber.  Ten years ago biofuels were seen as ideal, low-carbon, replacements for the liquid fossil fuels that power the majority of the world’s transport systems. But concerns grew that first-generation biofuels, made from food crops, were increasing food prices and were often as polluting as fossil fuels when all factors in their production were considered. The new report combines more than 250 analyses of the impact of biofuels around the world, including how demand for food-based biofuels drives the destruction of forests and peatlands when farmers expand into additional areas – the most contentious issue.  It also warns that the promise of clean biofuels from algae remains far off, with current versions much worse than diesel. The researchers found that when land use changes were accounted for, all the significant types of biodiesel – palm oil, soybean, rapeseed and sunflowers – caused more carbon emissions than diesel itself.  Accounting for land use change is complex, but even if this factor is ignored only palm oil has led to a reduction of 50% in emissions compared with diesel, the level required by EU rules.

A reality check on power-to-liquids: How not to use renewable energy -- By encouraging the use of clean energy sources to produce fossil fuel for cars, the proposed revision of the EU Renewable Energy Directive (RED II) opens the door to massive public subsidies for costly, inefficient and polluting ‘solutions’, warns Jonas Helseth. The revised EU Renewable Energy Directive (RED II) proposes to introduce a certain amount of “renewable liquid and gaseous transport fuels of non-biological origin” to boost the use of renewable energy in transport. In a nutshell, this means using vast amounts of (in the best case) renewable energy to produce hydrogen, pair it with fossil CO2 from emitting industries and, finally, emit that same fossil CO2 from a car, calling it ‘low-carbon’ and ‘renewable’. Although its contribution to climate change mitigation is limited at best, the technology is being presented as a ‘breakthrough’ that will help decarbonise both industry and transport. If such a target were to be approved, what would be its real-world implications? Bellona’s latest report tackles this question by reviewing some of the alleged benefits of using synthetic fossil fuels. While industry companies might get a piece of cake, both our society and our environment could pay a high price for their production. Bellona is strongly in favour of supporting European industry, but not at the cost of the climate, let alone using climate mitigation instruments when any positive climate impact is at best dubious. To begin with, just like a conventional petrol-powered car, a vehicle running on synthetic fossil fuels would emit a similar amount of CO2. Calling the fuels ‘low-carbon’ not only gives false impressions about their potential to address climate change but also sustains the use of fossil-fuelled engines in cars, undermining car makers’ incentives to cut emissions. Maintaining conventional engines will distract from the development of real low-carbon solutions, such as electro-mobility. Instead of using renewable electricity to power our homes, businesses and electric vehicles, vast amounts of electricity would be gobbled up in the production of these fossil fuels. As production is unlikely to be switched off whenever the wind isn’t blowing or the sun isn’t shining, this increased electricity demand might also end up prolonging the use of coal and imported fossil gas that ensure grid baseload. In other words, this ‘breakthrough technology’ is likely to encourage all the technologies we’re trying to break away from. 

Perry: Coal-fired power plants important in U.S. future - U.S. Energy Secretary Rick Perry said Thursday that coal-fired power plants are important for the country’s future, and he suggested that energy supply will spark demand. After touring a coal-fired power plant, Perry was asked about the economics of coal when natural gas is far cheaper. West Virginia currently has a boom in gas production but needs more shipping capacity. Several pipeline projects are under way. “Here’s a little economics lesson, supply and demand: You put the supply out there and the demand will follow that,” Perry said. “The market will decide which of these they’re going to pick and choose.” After touring one of the few recently built coal-fired power plants in the U.S., Perry said the plant’s technology provides “the ability to deliver a secure, economical and environmentally good source of energy.” He said the nation needs a stable baseload of electricity.

 Coal projected to be US' top generating fuel in 2017: EIA -  Coal is projected to provide the majority of US power generation in 2017, retaking the crown from natural gas, according to the US Energy Information Administration's monthly Short Term Energy Outlook released Tuesday. The agency projects coal will fuel 31.3% of the US' electricity in 2017 compared with 31.1% for gas. In 2016, gas surpassed coal as the nation's primary fuel for the first time, totaling 33.8% of generation compared with 30.4% for coal. The agency has projected gas to be the top fuel in 2017 in most of their reports so far this year, including June's edition, but increasing gas prices as well as higher hydro generation have pushed gas below coal for the first time. The EIA said the averaged delivered price for gas to US utilities through June was $3.59/MMBtu, compared with $2.57/MMBtu during the same period last year.  For comparison, the average delivered price for coal was $2.12/MMBtu during the first half of 2017, compared with $2.14/MMBtu in the year-ago period. The agency projects the average delivered price for power generation for gas will be $3.61/MMBtu in 2017, and $3.98/MMBtu in 2018.

Environmental groups say power plant ash is polluting lake  (AP) — Environmental groups have filed a lawsuit alleging a Kentucky power plant is illegally releasing pollutants from coal waste storage sites into a recreational lake. The Kentucky Waterways Alliance and Sierra Club say in the federal suit that the E.W. Brown plant near Harrodsburg is not authorized to discharge pollutants from coal ash storage sites into Herrington Lake. The plant, built in the 1950s, is run by Kentucky Utilities. The environmental groups said the discharges at two ash sites are violating the federal Clean Water Act. One of the sites dates back to the 1950s and was capped off in 2008. The utility is rejecting the lawsuit, and a spokeswoman said Thursday that Kentucky Utilities is in full compliance with environmental laws. "We're prepared to defend our case in court," said KU spokeswoman Chris Whelan. Whelan said the state's Energy and Environment Cabinet did a survey at the lake and found no evidence of contamination to the drinking water supply. The lake in central Kentucky is a popular fishing and boating destination, and it is a source of drinking water for nearby towns. The environmental groups said in the suit filed Wednesday that the utility should be ordered to stop the flow of pollutants into the lake. They argue that the utility is releasing pollutants that exceed the authorization in its state permit. There are "significant concentrations" of arsenic, selenium and lead in springs connected to the ash ponds through the ground water, the lawsuit said.

Nation's Largest Utility Wants Customers to Pay for Coal Ash Cleanup -- Duke Energy —the nation's largest electric company—is being criticized for trying to pass along its coal ash cleanup efforts to customers in the form of rate hikes. The Associated Press reports that this is the first time the $59 billion electricity company has sought permission to have North Carolina consumers pay part of its costs of disposing the waste, a toxic byproduct of burning coal for power. Duke Energy Progress, a Duke subsidiary that serves parts of North Carolina, filed for a rate increase with the North Carolina Utilities Commission on June 1. If approved, its 1.3 million customers would see their electricity bills increase about 15 percent. The rate hike would generate an extra $477 million in annual revenue for the company. Duke said the money would be used to upgrade the state's electric system and repair damage from major storms, like Hurricane Matthew. Controversially, a $66 million slice of that revenue would recoup costs already spent on coal ash cleanup, and $129 million more will go towards future cleanups.  Coal ash has been a contentious issue ever since Duke's 39,000-ton ash spill into North Carolina's Dan River in 2014. While none of the money from the proposed rate hikes will be used for that specific accident, Duke has also been ordered to close dozens of its coal ash storage basins in the Carolinas—an effort that's expected to cost about $5.1 billion. 

Global Coal Power Keeps Advancing in the Wake of Paris - While the global political establishment vilifies President Trump for pulling out of the Paris climate accord, the more important issue for people concerned about global warming is the future state of coal power after Paris. Coal power is the most carbon-intensive widely used electricity source, and U.S. and global coal power trends will play a central role in future carbon dioxide trends. What are global coal power trends in the wake of Paris, and how will Trump’s decision impact those trends? As recently as 2008, coal powered approximately half of U.S. electricity production. 2008 marked a turning point in U.S. electricity production, as technological advances in hydraulic fracturing (fracking) and directional drilling dramatically reduced the price of U.S. natural gas. As a result, coal powered less than 30 percent of U.S. electricity in 2016. Moreover, despite Trump’s easing of regulatory burdens on coal mining and coal power production, no new coal power plants are scheduled to be built in the United States. At least eight more coal power plants are currently scheduled for closure, and more will surely join the list. In contrast, global coal power is trending in the other direction. The percentage of global electricity generated by coal power has increased from 38 percent to 41 percent since the turn of the century. Left-leaning politicians and their media allies have been fawning over China recently, especially after China cancelled plans for 103 new coal power plants. Nevertheless, China still has plans to build over 1,100 new power plants, increasing the number of Chinese power plants by 50 percent. By cancelling plans for 103 new power plants, China merely put a small dent in its massive projected increase in coal power. China is not alone in its plans to accelerate coal power production. India plans to add another 446 coal power plants, increasing its number of coal power plants by 75 percent. On top of that, more than 300 new coal power plants are planned in other nations. The problem with the Paris accord regarding carbon dioxide emissions is it does nothing to stem the construction of coal power plants around the world.

French minister says up to 17 nuclear power reactors could close: — France's environment minister says that as many as 17 nuclear reactors might be closed as part of efforts to move away from nuclear power dependency. Speaking on RTL radio Monday, Nicolas Hulot said there were no fixed plans yet but he would shut "a certain number" of France's 58 working reactors. [Native Advertisement] Hulot has laid out ambitious plans for the world's No. 6 economy — and on Thursday pledged that by 2025 the amount of France's electricity produced by nuclear plants would be capped at 50 percent. Last week, Hulot said that no more gasoline or diesel cars will be sold in France by 2040 — to wean the country's economy from fossil fuels.

 U.S. trade group says no nuclear power plants have been hacked - No U.S. nuclear power plant has been penetrated in a cyber attack, an industry spokesman said on Saturday, when asked to comment on a U.S. government warning last week about a hacking campaign targeting the sector. The U.S. Department of Homeland Security and Federal Bureau of Investigation said in a report dated Wednesday that nuclear sector was among those targeted in a hacking campaign data back to at least May. Hackers used "phishing" emails to obtain credentials to gain access to networks of their targets, according to a report from the two agencies, which Reuters reported on Friday. “None of America’s 99 operating nuclear plants have been penetrated by a cyber attack," said John Keeley, a spokesman for industry trade group Nuclear Energy Institute. If a plant's operations had been breached, that would require mandatory notification to the Nuclear Regulatory Commission, which would notify the public, he said. Those requirements do not cover cyber intrusions on business networks of firms that operate nuclear power plants, said Keeley. He said had no information as to whether such attacks had occurred. Nuclear Regulatory Commission spokesman Victor Dricks declined to comment on the joint report, saying the agency does not comment on security-related issues.The report from the FBI and Homeland Security, which was reviewed by Reuters on Friday, did not identify any victims or describe the impact hackers had on targeted networks. 

FBI-DHS “amber” alert warns energy industry of attacks on nuke plant operators -- The Department of Homeland Security and FBI have issued a joint report providing details of malware attacks targeting employees of companies that operate nuclear power plants in the US, including the Wolf Creek Nuclear Operating Corporation, The New York Times reports. The attacks have been taking place since May, as detailed in the report issued by federal officials last week and sent out to industry. The "amber" alert to industry—the second-highest level of severity for these types of reports from the FBI and DHS—noted that the attacks had been focused on employees' personal computers but had not managed to jump to control systems. Administrative computers and reactor control systems in most cases are operated separately, and the control networks are generally "air-gapped"—kept disconnected from networks that attach to the Internet.There is no evidence that information on plant operations was exposed. FBI and DHS analysts have not been able to determine the nature of the malware planted by the attempted hacks, which used a "spear-phishing" campaign targeting senior industrial control engineers at nuclear facilities. The tailored e-mails contained fake résumés and appeared to be from people seeking control engineering jobs, according to the report seen by the Times. While nuclear power plant industrial controls are "air-gapped," that doesn't necessarily mean that they are secure. A 2015 study by the British think-tank Chatham House found nuclear control systems to be "insecure by design" and vulnerable to attack. Some did not keep control systems isolated from administrative networks connected to the Internet, and others were vulnerable despite air-gaps because of the heavy use of USB thumb drives to move data and install software updates. Many of these systems run on older operating systems that are not regularly updated.

Nuclear Weapons Site Alarms Shut Off, Scientists Inhale Uranium - The government scientists didn’t know they were breathing in radioactive uranium at the time it was happening. In fact, most didn’t learn about their exposure for months, long after they returned home from the nuclear weapons research center where they had inhaled it. Here’s how it happened:  In April and May 2014, an elite group of 97 nuclear researchers from as far away as the U.K. gathered in a remote corner of Nye County, Nev., at the historic site where the U.S. had exploded hundreds of its nuclear weapons. With nuclear bomb testing ended, the scientists were using a device they called Godiva at the National Criticality Experiments Research Center to test nuclear pulses on a smaller and supposedly safe scale.But as the technicians prepared for their experiments that spring—under significant pressure to clear a major backlog of work and to operate the machine at what a report called Godiva’s “upper energy range”—they committed several grievous errors, according to government reports.The machine had been moved to Nevada nine years earlier from Los Alamos, N.M. But a shroud, descriptively called Top Hat, which should have covered the machine and prevented the escape of any loose radioactive particles, was not reinstalled when it was reassembled in 2012.Also, because Godiva’s bursts tended to set off multiple radiation alarms in the center,  the experimenters decided to switch the alarm system off. But because the alarms were connected to the ventilation and air filter system for the room, those were shut off as well. The only ventilation remaining was a small exhaust fan that vented into an adjacent anteroom where researchers gathered before and after experiments.

  Hinkley Point C is £1.5bn over budget and a year behind schedule, EDF admits -- The UK’s first nuclear power station for more than two decades is at least £1.5bn over budget and could be completed 15 months behind schedule, its developer has admitted. French state-owned EDF said the cost overrun for two new reactors at Hinkley in Somerset could hit £2.2bn, taking the total spend to £20.3bn, up from £18bn previously. EDF confirmed the first reactor – originally due to become operational by the end of 2025 – risked being 15 months late and might not start generating electricity until 2027. The second unit is estimated to face a nine-month delay. In a review of costs for Hinkley, EDF said £1.5bn of the increase was due to a “better understanding” of the construction work needed and UK regulatory requirements. The estimated delay on completing the reactors – which are meant to set a new standard for nuclear safety – would add a further £0.7bn in cost. But the company insisted it was still aiming for a delivery date of the end of 2025, and said it was on track to pour the concrete for the first reactor in 2019.

 Locals Furious At Plan To Dump Radioactive Water From Fukushima Into Pacific Ocean --In the latest sign that the area surrounding the destroyed Fukushima power plant is far from ready for the return of human inhabitants, locals and fishing groups are criticizing a plan to release water containing radioactive tritium from the ruined Fukushima power plant into the ocean, according to the Telegraph. Officials of Tokyo Electric Power Co., the operator of the plant, say tritium poses little risk to human health and is quickly diluted by the ocean. But for some, the plan undoubtedly dredges up uncomfortable memories from 2013, when it was revealed that 300 tonnes of radioactive material had been leaking into the Pacific Ocean from the devastated plant every day. It was also revealed that TEPCO had known about the leaks, but had tried to cover them up. TEPCO has been tasked with decommissioning the plant, and has been using robots to find and clean the melted nuclear fuel debris that is believed to be creating exorbitant levels of radiation in the area surrounding the plant.  Takashi Kawamura, chairman of TEPCO, told local media "The decision has already been made” regarding the tritium infused water. He added, however, that the utility is waiting for approval from the Japanese government before going ahead with the plan and is seeking the understanding of local residents.

Ohio orders pipeline to builder to clean up after its spills  (AP) — Ohio's environmental agency is ordering a company building a natural gas pipeline across Ohio to come up with a plan to clean up its spills from drilling and get rid of diesel-soaked mud. The Ohio Environmental Protection Agency also wants the state to pursue a proposed fine of $900,000 against Dallas-based Energy Transfer Partners. The company's $4.2 billion Rover Pipeline project is being built to carry gas from Appalachian shale fields to other states. The head of the Ohio Environmental Protection Agency said Monday that Energy Transfer officials are refusing to negotiate over the cleanup from several spills in the spring. One spill heavily damaged a wetland in northeastern Ohio. The company said Monday that it's trying to comply with the state EPA's directives while also working with federal regulators.

Major Crack Down on Energy Transfer's 'Perilous Behavior' During Rover Pipeline Construction - The Ohio Environmental Protection Agency (OEPA) announced Monday an unprecedented unilateral order in response to Energy Transfer Partner's fracked gas Rover pipeline's 27 violations. The announcement comes after the Rover pipleine had more spills last week near the Tuscarawas River.  OEPA's unilateral order includes requiring Energy Transfer to establish a stronger contingency plan for when disasters occur; removal and proper disposal of the diesel spilled in quarries near Massillon and Canton as well as along the Tuscarawas; groundwater monitoring near the multiple spill sites; and to create a remediation plan for the spill of more than 2 million gallons of clay and diesel fluid in a rare high-quality wetland in Stark County.  Additionally, the OEPA referred the nearly $1 million in fines to the state's Attorney General. In Monday's press conference, the OEPA stated that it is prepared to defend this unilateral order in state and federal courts, if Energy Transfer would challenge their authority to protect Ohioans' rights to clean air, water and land.  "The Sierra Club applauds Ohio EPA for taking action against Energy Transfer's reckless construction of a dirty and dangerous fracked gas pipeline," Sierra Club Ohio Director Jen Miller said . "We've always said that it's never a question of whether a pipeline will spill, but rather a question of when. Energy Transfer has proven that it's not merely an operational pipeline that threatens our communities and waterways, but one in construction too."  "Energy Transfer has proven that it cannot be trusted with our clean air, clean water, or our communities. As strong as OEPA has come down on this company, ultimately, the only way to protect Ohio is to stop this project," Miller added. "We call on the Ohio's Attorney General Mike DeWine and FERC to follow OEPA's lead in ensuring that the people of Ohio are protected by this irresponsible, rogue company. The Sierra Club remains ready to support OEPA in state and federal legal battles, if necessary."

Feds tell Rover Pipeline to clean up waste -- Rover Pipeline must clean up drilling waste contaminated with diesel fuel before it can operate the natural gas pipeline it’s building, federal regulators said Wednesday.The Ohio Environmental Protection Agency has accused Rover of numerous environmental violations during its construction of the $4.2 billion pipeline across the state, including Stark, Tuscarawas and Carroll counties. The biggest incident happened in April in Bethlehem Township where workers were drilling under the Tuscarawas River south of Navarre.When Rover’s path crosses a highway, river or other obstacle, workers drill a horizontal path beneath the surface. Bentonite clay slurry — commonly called drilling mud — is used to lubricate the drill. Sometimes the slurry inadvertently comes to the surface through cracks in the soil. According to the Ohio EPA, Rover spilled more than 2 million gallons of slurry into a wetland next to the Tuscarawas River on April 13, coating 6.5 acres in mud. Another 3 million gallons of slurry could remain underground.Testing by Ohio EPA later revealed the slurry was contaminated with low levels of diesel fuel.  In a letter on Wednesday, Terry L. Turpin, director of FERC’s Office of Energy Projects, told Rover to:

  • Remove and properly dispose of diesel-contaminated waste in the quarries.
  • Remove all slurry and drill cuttings from the Tuscarawas River site.
  • Plan to restore the wetland.
  • Plan to monitor private and public water wells near the quarries and the wetland for at least two years, and possibly longer, if contamination is found.

A message seeking comment was left with a Rover spokeswoman. Rover must take those steps to get FERC’s permission to use the pipeline, according to the letter. The interstate pipeline will carry natural gas produced by wells in the Utica and Marcellus shales.

Well pad fire reported - Steubenville Herald Star: — Area firefighters were called to a natural gas well pad near Stanley Lane and Genteel Ridge after receiving reports of lightning hitting a storage tank containing material involved with hydraulic fracturing. Bob Fowler, Brooke County director of emergency management, said the blaze was extinguished in less than two hours due in part to the efforts of firefighters from Franklin Community, McKinleyville and other departments and a mechanism on the tank that released pressure to prevent it from exploding. Fowler said several homes on nearby Hervey and Churchman lanes were evacuated as a precaution. He said the fire departments, the county’s ambulance service and the Brooke County Sheriff’s Department were at the scene within 15 minutes after the fire was reported. Tanker trucks from various departments also were called to provide water because there is no hydrant in the rural area where the pad is located.

Elections board rejects proposed Athens County charter for third time - For the third year in a row, the Athens County Board of Elections has rejected as invalid a proposal to create a county charter government. The rejected charter proposal also would include strong regulations discouraging oil and gas development in the county. The board accepted the validity of the petition signatures Monay morning, but rejected the charter proposal itself as invalid on the grounds that it did not include a county executive position required under Ohio Revised Code statute for alternative forms of government. Members of the Athens County Bill of Rights Committee who submitted the petitions said after the unanimous vote that the elections board erred in its decision. They charged that the charter proposal falls under Ohio constitutional guidelines and not the Ohio Revised Code statute that covers alternative forms of government. The ACBORC argued that charters formed under the state constitution are distinct and separate from alternative governments established under Ohio Revised Code. Members of the county Board of Elections said, on the other hand, that charters formed under the state constitution must still conform with the laws for alternative government put forward in the ORC. ACBORC spokesperson Dick McGinn called the decision a "travesty" and said that the group will file a protest with the elections board. The Board of Elections would then be required to bring the matter to the Athens County Common Pleas Court within three days of the protest being filed.

Elections board nixes county charter; next stop the courts - For the third year in a row, the Athens County Board of Elections has rejected as invalid a proposal to create a county charter government. The rejected charter proposal also includes strong regulations discouraging oil and gas development in the county.The board accepted the validity of the charter’s petition signatures Monday morning, but rejected the proposal itself as invalid on the grounds that it did not include a county executive position required under Ohio Revised Code statute for alternative forms of government.Members of the Athens County Bill of Rights Committee who submitted the petitions charged after the three-person unanimous vote that the elections board erred in its decision. They argued that the charter proposal falls under Ohio constitutional guidelines and not the Ohio Revised Code statute that covers alternative forms of government.The Bill of Rights Committee argued that charters formed under the state constitution are distinct and separate from alternative governments established under Ohio Revised Code. Members of the county Board of Elections said, on the other hand, that charters formed under the state constitution must still conform to the laws for alternative government set fourth in the ORC.Committee spokesperson Dick McGinn called the decision a “travesty” and said that the group will file a protest with the elections board. The Board of Elections would then be required to bring the matter to the Athens County Common Pleas Court within three days of the protest being filed. If the court determines the proposal to be valid, the Athens County Commissioners must certify it by resolution to the elections board no later than July 19. “We feel the decision was based on a faulty interpretation of law,” McGinn said. “Ohio Revised Code addresses an alternative form of statutory government. That’s not what a charter is. They’re saying that we have to follow the alternative form of statutory government when we produce a charter, which is simply not the case, and the (Ohio) Supreme Court has never held that.”

State criticized for shifting millions from oil-and-gas fund to settle unrelated lawsuit - Columbus Dispatch -- With three legislators objecting to the "raid," a state board on Monday approved appropriating $15 million from an oil-and-gas fund designated by law to protect Ohioans and the environment, to be used to pay a settlement of an unrelated lawsuit. The Controlling Board voted 4-3 to remove the money from the fund, which is used in part to seal "orphan" natural-gas and oil wells, to fund a settlement with landowners near Grand Lake St. Marys whose properties have flooded since a widening of the dam spillway in 1997. In response to questions about the legality of the move, Department of Natural Resources officials said temporary language long inserted in state budgets permits money to be withdrawn from an assortment of funds to pay legal settlements. Rep. Jack Cera, D-Bellaire, objected to using the fund for an unrelated purpose. “This multimillion-dollar cash grab by the state shows where Columbus politicians’ priorities are — not with hardworking taxpayers and property owners in eastern Ohio,” Cera said. “After almost 10 years to plan for a lawsuit settlement in the western part of Ohio, state officials failed to responsibly plan for the future and instead are robbing our area of what’s rightfully ours.” Last month, Cera was thwarted in his bid to take $10 million from the fund to repair roads and other infrastructure damaged by fracking in eastern Ohio.Sen. Charleta B. Tavares, D-Columbus, and Rep. Scott Ryan, R-Newark, joined Cera in his protest. Tavares said the fund should not be viewed as a "cash cow" that can be tapped for purposes other than intended. The oil-and-gas fund, generated by severance taxes imposed on drillers, can easily withstand the $15 million withdrawal, said Tom Johnston, the natural resources agency's chief financial officer. The fund took in $52.1 million last fiscal year, and spending totaled $17.1 million, he said. Last month, the legislature authorized removing $10 million from the oil-and-gas fund to prop up spending in the new state budget that took effect July 1.

Will Ohio Senate Greenlight Oil and Gas Drilling in State Parks? - Ohio lawmakers could soon greenlight oil and gas development in Ohio state parks and public lands. Last week, the Ohio House voted to override a veto that would have allowed Gov. John Kasich to retain appointment authority for members of the Oil and Gas Leasing Commission – the group that makes decisions about drilling on state-owned public lands. If Senate lawmakers also override the veto, that authority would go to the Ohio General Assembly. Cheryl Johncox, the Dirty Fuels campaign organizer for the Sierra Club in Ohio, says lawmakers are troubled that Kasich hasn't appointed anyone to the commission. "Folks in Ohio are very aware that the General Assembly wants to frack on our public lands, even though there are polls that say that 70 percent of Ohioans are in opposition to opening our public lands for fracking," she states. Public lands and trusts across the state could be affected, Johncox adds, including lands maintained by Ohio State University and Ohio University, as well as Mohican State Park, Hocking Hills State Park and the Shawnee State Forest. Julie Weatherington-Rice, a hydrogeologist from Worthington, explains that researchers have documented land use changes in parts of Southeastern Ohio and Pennsylvania due to fracking. She adds a good deal of deep forest cover has been lost to roads, compressor stations and other drilling infrastructure. "You lose an entire population of life in that region,” she states. “It's the first loss for which there is no economic valuation. “Nobody talks about that. Nobody assumes that the deep-forest biosphere has a value, but it does." Supporters of oil and gas drilling argue it could provide a significant economic benefit for communities near public lands. But Johncox counters that state parks and lands belong to Ohioans who cherish those areas for hiking, hunting, fishing and other recreation. "Toxic benzene, cancer-causing stuff comes out of the ground during this fracking process and is released into the air,” she stresses. “And families that are just camping with their kids could then be exposed to this toxic stuff, while they're enjoying themselves."

 Pennsylvania Townships Allege Fracking Contamination - Construction Equipment -- Twelve households in West Whiteland and Uwchlan townships in Pennsylvania reported contaminated well water in Chester County, Pennsylvania, causing Sunoco Pipeline LP to temporarily halted construction on its Mariner East 2 pipeline last Friday.Sunoco tested private water wells in the area to determine if its horizontal directional drilling caused the murky water by introducing bentonite clay into water supplies.  Five families with contaminated water were relocated to local hotels after alerting the company and the EPA about the water problem. Other families affected were given additional filtration supplies and bottled water. Results from the recent water well tests have not yet been delivered but George Turner, a township supervisor, said “Our concern is to make sure that our residents have a permanent solution to this so it doesn’t recur.”In the meantime, West Goshen Township has filed a petition for an injunction against Sunoco Pipeline LP, accusing the company of violating a settlement agreement regarding the Mariner East 2 natural gas liquids pipeline.Sunoco's actions have already angered at least one local lawmaker, Pa. Sen. Andy Dinniman, who requested the company halt its work until tests of the water were complete. “You tell the residents it’s going to take a week to get the results back,” Dinniman said. “The next day, to the best of our knowledge, without the test results you start the drilling again but you publicly state that you’re awaiting the test results that are going to help us resolve the issues. So where are the test results? Did you get them done in a day or was your initial comment a puff kind of a comment? I don’t see how you get them back in a day.”

Release of treated wastewater from hydraulic fracturing contaminates lake --  Although the hydraulic fracturing technique has resulted in a shift away from coal, which could reduce greenhouse gas emissions, it produces large amounts of wastewater containing radioactive material, salts, metals, endocrine-disrupting chemicals and polycyclic aromatic hydrocarbons that could pose risks to the environment and human health. A Pennsylvania report estimates that in 2015, 10,000 unconventional oil and gas wells in the Marcellus Shale produced 1.7 billion gallons of wastewater. The facilities that collect the water provide only limited treatment before releasing it into surface waters. Bill Burgos and colleagues at Penn State, Colorado State and Dartmouth wanted to see what impact this strategy of treating and releasing fracking wastewater might be having. The researchers sampled sediments and porewaters from a lake downstream from two facilities that treat fracking wastewater in Pennsylvania. Their analysis detected that peak concentrations of radium, alkaline earth metals, salts and organic chemicals all occurred in the same sediment layer. The two major classes of organic contaminants included nonylphenol ethoxylates, which are endocrine-disrupting chemicals, and polycyclic aromatic hydrocarbons, which are carcinogens. The highest concentrations coincided with sediment layers deposited five to 10 years ago during a peak period of fracking wastewater disposal. Elevated levels of radium were also found as far as 12 miles downstream of the treatment plants. The researchers say that the potential risks associated with this contamination are unknown, but they suggest tighter regulations of wastewater disposal could help protect the environment and human health.

Fracking can contaminate rivers and lakes with radioactive material, study finds - The vast amount of waste water produced by fracking can contaminate rivers, lakes and other waterways with radioactive material and hormone-affecting chemicals, according to new research. The study tested sediments and groundwater downstream of a treatment plant in Pennsylvania that was designed to make the water used as part of the fracking process fit for release into the environment. The scientists, from Pennsylvania State University and other academic institutions, discovered that despite this process there were “high loads of chloride, barium, strontium, radium and organic compounds” in the Conemaugh River watershed.Stream sediments in Blacklick Creek, just downstream from one treatment plant, were found to contain about 200 times the level of radium upstream of the plant.The highest concentration of radium found was just 14 per cent below the level at which it would have to be treated as radioactive waste in some US states. However the researchers said the risks of the pollutants discovered were “difficult to assess”.Writing in the journal Environmental Science & Technology, the scientists said: “Large quantities of oil-and-gas wastewater with high loads of chloride, barium, strontium, radium, and organic compounds have been discharged into the Conemaugh River watershed.“Stream sediments in Blacklick Creek immediately downstream of centralised waste treatment plant number one were found to contain [radium] levels that were about 200 times greater than activities measured in upstream and background sediments. “Elevated concentrations of radium and other alkaline earth metals have now been detected in reservoir sediments about 19km farther downstream of this plant.“Despite several other sources of contaminants such as coal bed methane, coal mine drainage, and flue gas desulfurization releases that can impact surface water quality, we document multiple lines of evidence that indicate the legacy of unconventional oil-and-gas wastewater disposal has impacted stream sediments and porewater [groundwater] on a watershed-scale.” They said while the amount of fracking wastewater was “relatively small” compared to the volume of the stream it “nonetheless had a measurable impact”.

Fracking waste contaminates Penn. watershed with radioactive material - Stream sediments in Pennsylvania downstream from two fracking wastewater treatment facilities were found to contain radioactive material and carcinogens, according to study scientists from Penn State, Colorado State and Dartmouth universities. The study’s findings, published Thursday, came after Penn State’s Bill Burgos and his fellow scientists sought to discover what had been the effect of the strategy of treating and releasing fracking wastewater, according to the Independent.They sampled sediments and groundwater from the Conemaugh River water, downstream from two facilities that were created to make the water used in the fracking process fit for release into the environment.“Isotopic ratios of 226Ra/228Ra and 87Sr/86Sr identified that peak concentrations of Ra and Sr were likely sourced from wastewaters that originated from the Marcellus Shale formation,” according to the study Watershed-Scale Impacts for Surface Water Disposal of Oil and Gas Wastewater in Western Pennsylvania.Their analysis detected peak concentrations of radium, chloride, barium, strontium, radium and organic compounds in Conemaugh River watershed. The two major classes of organic contaminants included nonylphenol ethoxylates, endocrine-disrupting chemicals, and polycyclic aromatic hydrocarbons, known carcinogens.When scientists examined steam sediments in Blacklick Creek, just downstream from one treatment plant, it was found to contain about 200 times the level of radium found upstream of the plant. The highest concentration of radium was just 14 percent below the level at which it would have to be treated as radioactive waste in some US states.

Royalties Can Make You Rich -- WSJ -- July 10, 2017 --One study estimated that in 2012 private owners earned some $22 billion in royalties. Link hereOne often-overlooked benefit of the U.S. energy boom: The federal government receives billions of dollars in royalties annually. Thanks to property rights, so do millions of Americans. Over the past decade, for example, Cabot Oil & Gas Corp. has dished out $1 billion in royalties and $500 million in signing bonuses to Pennsylvania landowners in Susquehanna and Wyoming counties. In fiscal 2016, Washington collected $3.9 billion in royalties from oil and gas production on federal land and offshore—and that’s down from $6.6 billion in 2015, according to a new report from the Government Accountability Office. Lower energy prices contributed to the decline, but so did the Obama administration’s roadblocks on drilling-permit applications. The Congressional Research Service reports that federal lands produced 1.57 million barrels of crude oil a day in 2008. By 2015 that had risen 25% to 1.955 million. But over the same period production on nonfederal land more than doubled from 3.467 million barrels a day to 7.46 million. The contrast was starker for natural gas. Federal lands produced 6,471 billion cubic feet in 2008, but that number shrank to 4,594 billion by 2015. Over the same period production on nonfederal lands grew from 14,523 billion cubic feet to 24,143 billion.  The difference is even more pronounced when you realize that the royalty rate is typically much higher on state and private land. Oil and gas producers are required to pay 12.5% to drill on federal land. Royalties on state land are usually in the range of 16% to 18%. In Texas, the largest producer, the typical rate is 25%. Royalties on private land often reflect the state rate.   The Bureau of Land Management took an average of 307 days in 2011 to process applications for drilling permits. States can give approval within a few months.  Based on what I see at the NDIC, it looks like North Dakota can process applications in less than one month in established drilling areas. .

Fracking Boom Hushes Ky. Oil and Gas Action - Kentucky’s oil and gas industry has had a rough several years. Activity has been trending downward for over a quarter of a century, although promising new drilling targets were discovered just a few short years ago and hopes were high. That all came crashing down in late 2014, when the prices of oil and gas plummeted. Experience shows the market shifts, but for now, with oil prices sitting at about $45 a barrel and projected to drop even lower, and natural gas prices at about $3 per million BTU, Kentucky permits for oil and gas drilling are at a record low and are likely to stay that way for some time. Kentucky ranks 20th in the nation for crude oil production, and 18th for natural gas, according to 2012 U.S. Energy Information Administration data, the latest available. But the oil and gas industry is overshadowed by its behemoth cousin, coal, for which – along with horse racing and bourbon – Kentucky is synonymous. (The commonwealth is the nation’s fifth largest producer of coal.) “The oil and gas situation is not good,” Drilling permits issued by the Kentucky Division of Oil and Gas have been steadily declining since 2008 when oil peaked at over $130 a barrel, but the past few years have been particularly low. So far this year, only 59 permits for oil and gas drilling have been issued. KGS predicts the total number of permits for 2017 will be 50 percent less than the number issued in 2016, making it the third year in a row permitting will have declined by 50 percent or more. “The production numbers will typically lag behind the permitting numbers,” Harris said. “As soon as permitting goes down, you’re almost always guaranteed to see a decline in production. It’s been a pretty devastating change for the oil and gas industry.”

Nuns Protest Atlantic Sunrise Pipeline by Building Chapel on Proposed Route -- An order of Catholic nuns and the grassroots coalition Lancaster Against Pipelines have built an open-air chapel in Columbia, Pennsylvania along the proposed route of the Atlantic Sunrise Pipeline to stall construction of the $3 billion project. The St. Louis-headquartered Adorers of the Blood of Christ own a strip of land in Pennsylvania where the pipeline is set to go through. The nuns consider the fracked gas pipeline, a project of Oklahoma-based pipeline developer Williams Partners, a violation of their beliefs and environmental values, UPI reported. "The Adorers received a request from the grassroots coalition, Lancaster Against Pipelines, to install and use, and to invite other people of faith to use, a portable prayer 'chapel' on their land," the Adorers said in a statement . "The hope is that the structure can draw people to prayer and reflection about just and holy uses of land." The simple wooden alter was constructed on a grove just feet from where the pipeline would cut through a corn field, explained Karen Feridun, a founding member of Pennsylvanians Against Fracking and founder of Berks Gas Truth . The 180-mile Atlantic Sunrise Pipeline is an expansion of the existing 10,200-mile Transco pipeline network. According to the Sierra Club , the project would clear cut its way through 10 Pennsylvania counties, impacting 2,000 acres of forested land and crossings hundreds of wetlands and water bodies. The proposed route includes nearly 200 miles of new pipeline which would supply gas exports out of Maryland and gas plants in North Carolina and Florida.  The Federal Energy Regulatory Commission approved the pipeline earlier this year and ruled that Williams Partners has the right to construct, maintain and operate the pipeline on the private land.

Putin Is Funding Green Groups to Discredit Natural Gas Fracking – Newsweek  - Forget about allegations of Russian interference in U.S. presidential elections for a moment, or even “collusion” between Russian officials and Trump campaign operatives. The real action is in the European and U.S. energy markets, according to a letter from two Texas congressmen to Treasury Secretary Steven Mnuchin that details what they call “a covert anti-fracking campaign” with “little or no paper trail.” The Daily Signal obtained a copy of the June 29 letter to Mnuchin from Reps. Lamar Smith and Randy Weber, both Republicans who chair energy-related House panels. (See the full letter below.) Smith and Weber quote sources saying the Russian government has been colluding with environmental groups to circulate “disinformation” and “propaganda” aimed at undermining hydraulic fracturing. Commonly called fracking, the process makes it possible to access natural gas deposits.The sources include a former secretary-general of NATO, who is quoted by the GOP congressmen as saying: Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called nongovernmental organizations—environmental organizations working against shale gas—to maintain dependence on imported Russian gas. This anti-fracking campaign seizes upon environmental issues and health concerns that could be used to constrain U.S. drilling and fracking exercises, the letter explains. Gazprom, a large Russian oil company, stands to benefit if Russian-funded environmental activism results in reduced levels of fracking and natural gas production in the United States, Smith and Weber tell Mnuchin. Top U.S. government officials who have acknowledged the connection between Russian and environmental groups include former Secretary of State Hillary Clinton, the Democratic nominee for president in 2016. In 2014, Clinton delivered a “private speech” in which she discussed Russia’s financial support for environmental groups, the letter says. The speech was included in documents released by WikiLeaks, it says.

Lamar Smith Says Russians Are Behind Sierra Club, Other Environmental Groups Against Fracking | Houston Press -- It was only a matter of time before Representative Lamar Smith found a new hobby.After all, a person can only spend so much time as the chairman of the House Committee on Science, Space and Technology attacking anything that even hints at confirming climate change or looking for yet another way to weaken the federal Environmental Protection Agency. Heck, even attempting to get a "Secret Science Reform Bill" slammed through Congress can only occupy an elected official for so much of the day. But, luckily, Smith has cooked up another cause to keep himself busy. This time he's blaming the Russians. That's right, the Republican congressman from San Antonio now officially believes that the Russian government has been funneling money to environmental groups in the United States in return for the efforts of those groups to get in the way of the U.S. oil industry. Smith and Representative Randy Weber, another Republican on the House Science, Space and Technology Committee, recently sent Treasury Secretary Steve Mnuchin a six-page letter on the topic. In the letter Smith and Weber ask Mnuchin to investigate “what appears to be a concerted effort by foreign entities to funnel millions of dollars through various non-profit entities to influence the U.S. energy market.”  See, while Smith and the other House Republicans have continued to insist that the Russians did not muck around in the 2016 presidential election, they are entirely willing to entertain the notion that the Russians are involved in a dastardly scheme to make it more difficult for the United States to produce oil. Smith states that Russia is doing this because the glut of natural gas brought into the world market by shale plays in Texas and across the United States made natural gas dirt-cheap. This has, in turn, resulted in Russia losing some of its share of the global market, according to Smith's letter. The letter claims Russia has been sending environmental groups money through Bermuda-based shell companies. The environmental groups have then, Smith alleges, been using the money to push for restrictions on oil and gas drilling activities.  By way of proof, Smith cites reports in conservative publications like the Washington Free Beacon and former Secretary of State Hillary Clinton's emails (because apparently no Republican can resist trying to tie it all back to the emails released by Wikileaks).

A Russia collusion story worth pursuing - Power Line - The mainstream media may be looking for evidence of Russian collusion in all the wrong places. So far, despite its epic search, the media has uncovered no evidence that the Trump campaign colluded with Russia in the 2016 presidential election.  There is evidence, though, that Russia has colluded with U.S. environmental groups. Lamar Smith, chairman of the House Science Committee, tells James Freeman of the Wall Street Journal:If you connect the dots, it is clear that Russia is funding U.S. environmental groups in an effort to suppress our domestic oil and gas industry, specifically hydraulic fracking. They have established an elaborate scheme that funnels money through shell companies in Bermuda. This scheme may violate federal law and certainly distorts the U.S. energy market. The American people deserve to know the truth and I am confident Secretary Mnuchin will investigate the allegations. To help Sec. Mnuchin conduct such an investigation, Rep. Smith, along with Energy Subcommittee Chairman Randy Weber, sent him a letter. They noted:According to the former Secretary General of NATO, “Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called nongovernmental organizations – environmental organizations working against shale gas – to maintain dependence on imported Russian gas.” Other officials have indicated the same scheme is unfolding in the U.S.  Reps. Smith and Weber add that, according to public sources including a 2014 report from Republican staff on the Senate Environment and Public Works Committee, “entities connected to the Russian government are using a shell company registered in Bermuda, Klein Ltd. (Klein), to funnel tens of millions of dollars to a U.S.-based 501(c)(3) private foundation,” which supports various environmental groups. Klein denies this allegation.

Spy drones, blast zones, treetop sit-ins: getting fracking gas to Scotland -- How far would you go to protect your way of life? For rural homesteaders Ellen and Elise Gerhart, you trade a quiet retirement for jail time, camp out in a tree as chainsaws growl around you, and come under surveillance from drones.If you’re attorney Michael Bomstein, you spend a sunny Sunday in your office preparing a case pro bono, even though it’s a long shot. If you are Eric Friedman, you spend all your spare time attending meetings, collecting documents, and talking to reporters and government leaders.  And if you’re Allison Chabot, a clinical psychologist with two young children, you get ready to sell your home and move away. All of these people live near the path of  Sunoco Logistics’ massive Mariner East 2 pipeline (ME2) project now under construction across Pennsylvania’s southern belt to bring fracking gas to Scotland. Spanning 350 miles, by 2018 the $3 billion twin ME2 pipelines plus an existing ME1 pipeline are slated to bring 345,000 barrels per day of ethane, propane, and butane – classified as “hazardous liquids” by the US Department of Transportation – from the Marcellus Shale region across 17 counties to a storage facility at Sunoco’s Marcus Hook Industrial Complex. From there, the ethane will set sail for the Ineos petrochemical complex at Grangemouth on “dragon ships” to build the company’s proposed plastics empire.  In the first part of a major US fracking investigation funded by the digital campaign group, 38 Degrees, The Ferret reported in May that eyes teared up with fear and sadness in the western part of Pennsylvania. But farther east in Huntingdon County and the Philadelphia suburbs, jaws are set in anger. Campaigners say their basic rights are being trampled – no small thing in the state where the US Constitution was born – and they are fighting to halt this pipeline and others like it. Or at least, to win the safeguards to which they believe they’re entitled.

Actor James Cromwell Speaks Out Before Jail Time for for Peaceful Anti-Fracking Protest (Democracy Now! interview & transcript) - Oscar-nominated actor James Cromwell is reporting to jail at 4 pm Friday in upstate New York after he was sentenced to a week behind bars for taking part in a nonviolent protest against a natural gas-fired power plant. Cromwell said he'll also launch a hunger strike. He was one of six activists arrested for blocking traffic at the sit-in outside the construction site of the 650-megawatt plant in Wawayanda, New York, in December of 2015. The activists say the plant would promote natural gas fracking in neighboring states and contribute to climate change .  James Cromwell is known for his roles in some 50 Hollywood films, including Babe , The Artist , The Green Mile and L.A. Confidential , as well as many television series, including Six Feet Under. Democracy Now! spoke to him Thursday along with one of his co-defendants, Pramilla Malick. She is the founder of Protect Orange County , a community organization leading the opposition of the fracked gas power plant. She ran in 2016 for the New York state Senate.

Williams' Dalton expansion and the shifting Transco gas price spread - For much of the past few years, natural gas at Northeast demand market hubs has been priced at deep discounts, particularly in the low-demand summer months, because of the flood of Marcellus Shale gas that couldn’t go anywhere else. But now, those markets could soon see some upward pressure as pipeline projects that will expand takeaway capacity from the region come online. One of those projects is Williams’s Transco Pipeline Dalton Expansion, which includes an expansion of Transco’s mainline as well as a new, “greenfield” lateral. The project has already commenced partial-path service to move as much as 448 MMcf/d south on the mainline from Transco’s Zone 6 in New Jersey to its Zone 4 segment in Mississippi. And just yesterday (Thursday, July 13), Transco submitted a request with the Federal Energy Regulatory Commission (FERC) to place the remaining portion — the new Dalton Lateral pipeline extension and related connections — into service less than three weeks from now (on August 1). Today, we provide an update on the project and potential market effects.

Florida’s Sabal Trail pipeline and associated natural gas pipeline projects begin service - On July 3, the Federal Energy Regulatory Commission (FERC) authorized Phase I of the Sabal Trail pipeline to begin full operation. Sabal Trail is a 515-mile interstate natural gas pipeline transporting natural gas from an interconnection with the Transco pipeline in Tallapoosa County, Alabama, to the Central Florida Hub in Osceola County, Florida. Sabal Trail is one part of the Southeast Market Pipelines, three pipeline projects designed to increase natural gas transport capacity to Florida.  Much of the additional natural gas expected to flow into Florida will be transported to its power plants. Since the beginning of 2016, Florida has added 3.4 gigawatts (GW) of natural gas-fired electricity generating capacity, which is more than any other state. Another 3.9 GW of natural gas-fired capacity is planned to come online in Florida over the next six years, based on data reported to EIA by project developers.  Increases in Florida’s natural gas capacity have come as older coal- and oil-fired capacity has been retired. Unlike many states that have been building new natural gas generators, Florida is not located near a major source of natural gas production, and Florida’s geology is not conducive to underground natural gas storage. As a result, the natural gas needed to meet increasing demand is transported by pipeline.Sabal Trail Phase I is designed to have a total capacity of 810 million cubic feet per day (MMcf/d) and began partial service on June 14, with only two of three Phase I compressor stations operating. The next two phases will increase Sabal Trail’s total capacity to 1,050 MMcf/d. Phase II, when completed in 2020, will add 170 MMcf/d of capacity with the addition of two new compressor stations, and Phase III, scheduled for 2021, will add 70 MMcf/d of capacity through expansions to existing compressor stations. Two other projects associated with the Southeast Market Pipelines are Transco’s Hillabee Expansion Project and NextEra’s Florida Southeast Connection. Phase I of the Hillabee Expansion added 800 MMcf/d of capacity to the Transco line in Alabama to provide natural gas to Sabal Trail. Phases II and III of the Hillabee Expansion Project will add 200 MMcf/d and 100 MMcf/d of capacity, respectively, in 2020 and 2021.

Stop Dumping Offshore Fracking Waste Into Gulf of Mexico - A Trump administration proposal to continue allowing oil companies to dump unlimited amounts of offshore fracking chemicals into the Gulf of Mexico violates federal law and threatens imperiled marine wildlife, the Center for Biological Diversity warned this week. In a letter to the U.S. Environmental Protection Agency's (EPA) Region 6 office on its proposed wastewater-discharge permit for offshore oil and gas drilling activities off the coasts of Louisiana, Texas and Mississippi—where thousands of offshore drilling platforms are located—the Center for Biological Diversity explained that the proposed permit violates the Clean Water Act because it causes an undue degradation of the marine environment. The Center for Biological Diversity's letter notes that "scientific research has indicated that 40 percent of the chemicals used in fracking can harm aquatic animals and other wildlife ." "The Trump administration is letting the oil industry dump unlimited amounts of toxic fracking chemicals into these wildlife-rich waters," said Center for Biological Diversity attorney Kristen Monsell. "The EPA is supposed to protect ocean water quality, not turn a blind eye as oil companies use the Gulf as a garbage dump for fracking waste." Earlier this year the EPA's Region 6 office responded to a Freedom of Information Act request from the Center for Biological Diversity for records analyzing the effects of fracking chemicals on Gulf water quality and marine life. Officials said they didn't have any responsive records, meaning the agency has been allowing the oil industry to dump its fracking wastewater into the Gulf without studying its environmental impacts, as federal law requires. Federal waters off Texas, Louisiana and Mississippi host the largest concentration of offshore oil and gas drilling activities in the country. Previous records requests revealed that oil companies dumped more than 75 billion gallons of wastewater into these waters in 2014 alone.  At least 10 fracking chemicals routinely used in offshore fracking could kill or harm a broad variety of marine species, including marine mammals and fish, Center for Biological Diversity scientists have found . The California Council on Science and Technology has identified some common fracking chemicals to be among the most toxic in the world to marine animals.

Oil Spills Can Disrupt Entire Aquatic Food Web, New Study Shows - From dead fish to beaches covered in sludge, the immediate damage from an oil spill is easy to see. But a new study , published this week in the journal Archives of Environmental Contamination and Toxicology (AECT), found that the damage caused by these spills are much wider in scope and can indirectly disrupt the entire aquatic food web. The 2010 Deepwater Horizon oil spill , which released 134 million gallons of oil into the Gulf of Mexico, killed thousands of marine mammals and contaminated their habitats. But researchers in the AECT study found that the mass mortalities also led to a dramatic spike in forage fish populations such as menhaden in the years after the blowout. Menhaden are tiny fish that are prey to a wide range of marine predators such as larger fish, birds and cetaceans such as fin whales and dolphins. With many of their predators gone, these tiny fish were able to quickly multiply. According to the study, "these releases from predation led to an increase of Gulf menhaden biomass in 2011 to 2.4 million t, or more than twice the average biomass of 1.1 million t for the decade prior to 2010." "Our discovery suggests that the structure of food webs change after an oil spill, which may be much more damaging to fish and other aquatic fauna than the direct impacts of the spilled oil itself," explained lead researcher Jeffrey Short.  The new analysis "underscores the need to study not just those species obviously affected, but also the entire food web, during oil spill assessments," a press release for the study states.

Trump Administration Approves Exploratory Drilling in Arctic Ocean - The Trump administration on Wednesday approved a plan submitted by Eni US to drill for oil in the Arctic Ocean, setting the stage for a devastating oil spill in one of the most biologically rich areas in America's Arctic. The company, a U.S. subsidiary of the Italian oil and gas giant, has sat on its leases in the Beaufort Sea since acquiring them more than a decade ago. The leases would have expired at the end of this year if Eni did not act on them. The Trump administration provided the public only 21 days to review and comment on the exploration plan and only 10 days to comment on scoping for an environmental assessment under the National Environmental Policy Act. "Approving this Arctic drilling plan at the 11th hour makes a dangerous project even riskier," said Kristen Monsell, an attorney with the Center for Biological Diversity . "An oil spill here would do incredible damage, and it'd be impossible to clean up. The Trump administration clearly cares only about appeasing oil companies, no matter its legal obligations or the threats to polar bears or our planet." Under the approved plan, Eni US will drill extended reach wells into federal waters in the Beaufort Sea from an existing facility in Alaska state waters. Eni's proposed wells would be the longest extended reach wells in Alaska, reaching out more than six miles. The drilling is planned in Harrison Bay next to the Colville River Delta. The area is home to many imperiled marine mammals , including bowhead whales , polar bears and ringed seals. Birds from all over the world, including spectacled eiders and longtailed ducks, spend summers near where Eni will drill.  The Outer Continental Shelf Lands Act requires the Bureau of Ocean Energy Management to reject an exploration plan if it "would probably cause serious harm or damage to life (including fish or other aquatic life)" or to "the marine, coastal or human environment."

Dozens testify against Trump administration’s proposed delay of key methane rule -- Dozens of people showed up at the Environmental Protection Agency’s headquarters on Monday to speak out against the agency’s proposed two-year delay in the implementation of its methane rule for new and modified oil and gas drilling wells.Opponents of the agency’s proposed delay dominated the public hearing. They cited health concerns and a lack of action by state regulators in their calls to keep enforcement of the methane rule on schedule. Only a small number of supporters of the delay, who complain the Obama-era rule will be costly and duplicative, showed up to testify at the hearing.The Obama administration finalized the rule, known as the New Source Performance Standards, in 2016 as part of a federal effort to reduce the release of methane, a greenhouse gas with 25 times the warming potential of carbon dioxide. The oil and gas sector is the largest U.S. industrial emitter of methane, which is the second-biggest driver of climate change after carbon dioxide. When the EPA announced the proposed delay last month, the agency said the extra time would allow it to review the rule’s potential negative impact on oil and gas drilling activities. Under the proposed two-year delay, companies would not need to comply with the requirements.

Monster oil rigs draw attention in Texas for faster drilling -- Oil companies are shelling out more cash and signing long contracts for a limited supply of monster rigs that drill wells much faster than the older models that led the U.S. first shale boom. The Houston Chronicle reports some rig suppliers have recently signed 18-month and two-year contracts for these so-called super-spec rigs, collecting up to 20 percent more in daily rates as U.S. producers scramble to lock down the most efficient rigs in the nation's fleet. Earlier this year, oil producers had resisted entering higher-priced long-term contracts, but these new agreements with Houston's Nabors Industries and others signal oil field contractors have regained some clout in a market that earlier forced deep discounts, squeezed profit margins and forced them to cut thousands of jobs during the oil downturn. "Every single one of the super-spec rigs that can work is working today,". "Now we're seeing that exploration and production companies can't get these rigs if they don't sign contracts." Rig contractors have dispatched hundreds of these machines across the country in a record 23-week upward streak in the U.S. rig count this year, which ended June 30 as the count fell by one to 940, according to the Houston oil services giant Baker Hughes. In recent weeks, oil prices have fallen to around $45 a barrel, which may discourage shale drillers from bringing on additional rigs. If oil stays cheap, the nation's rig count could drop about 20 percent next year from an expected 1,000 at the end of 2017. But even then, oil companies aren't likely to give up the super-spec rigs that can drill a well in less than 10 days, shaving more than a week from the average drilling time in 2010.

Understanding Permian Gas Takeaway Capacity at Waha Hub, Part 4 -- The Waha Hub in West Texas figures to play a prominent role in supplying natural gas to Mexico soon, as pipelines connecting the Permian Basin to the international border are now complete and supplying small volumes to Northwest Mexico. As additional pipelines and power plants come online south of the border over the next 12 months, a meaningful ramp-up in flows from Waha to Mexico is expected. Facilitating those flows will be a Waha-area header recently built by a consortium of Carso Energy, MasTec and Energy Transfer Partners for Mexico’s Comisión Federal de Electricidad (CFE). With 6 Bcf/d of capacity and multiple pipeline interconnects, the header stands to dramatically improve interconnectivity among gas pipelines at Waha, but it has largely stood in the shadows of Mexico’s pipeline buildout. Today we continue our series on the Waha Hub with a look at CFE’s Waha header and its expected role in handling Permian-sourced gas. In Part 1 and Part 2 of this series we highlighted how Permian gas flows to the Waha Hub and we explored the paths out of the basin. In Part 3 we looked at new intra-basin infrastructure designed to get gas from Permian production areas to Waha. We also covered how all of the new takeaway projects are aimed at moving gas either south to Mexico or east into Texas intrastate markets. Following up on that analysis, we now take a look at CFE’s Waha header and how it will facilitate flows to new pipelines in Mexico and potentially South Texas too.

Existing and planned gas pipelines out of the Permian, part 2 - Production of associated natural gas in the Permian’s Midland and Delaware basins is forecasted to continue rising through the early 2020s, challenging existing pipeline takeaway capacity out of the region. There also are limits to how much gas can flow northeast into the Midcontinent and the Upper Midwest — after all, those regions have access to gas from other areas too, including the Rockies, western Canada, the Marcellus/Utica and the Midcon itself. The same holds true for Texas’s Gulf Coast, which has emerged as another battleground for gas producers. Today we continue our series on the ability of existing pipes out of the Permian to move natural gas to market and the enhancements that will be needed to allow Permian production to keep growing.  In Part 1 of our series, we said that the pace of Permian production growth will be influenced by many factors, including the degree to which the market price for crude oil exceeds the play’s breakeven prices and the ability of midstream companies to add incremental pipeline takeaway capacity as that capacity is needed. While the pursuit of crude oil is driving drilling and production activity in the Permian, rapid growth in crude output is being accompanied by large volumes of associated gas and natural gas liquids (NGLs) that also must be dealt with. Fortunately, the Permian has been a major production area for decades — a lot of crude, gas and NGL pipeline infrastructure is already in place. But, as we’ll get to, it won’t be enough. Part 1 built on our It Was Good Living With You, (W)aha series, which described the hub-and-spoke pipeline networks in West Texas that play critical roles in transporting large volumes of Permian gas to customers as far away as Southern California and Minnesota.

Halliburton hiring 100 per month to meet Texas fracking demand - Houston Chronicle: -- Halliburton has hired about 100 new workers each month this year to keep up with surging demand for fracking in West Texas, a sharp turnaround after the job-killing oil bust. The Houston oil field service company has expanded its active fleet of fracking trucks and pumps by 30 percent in recent months, and its workforce in the region has grown by more than a third to 2,700 employees, said Chris Gatjanis, who runs Halliburton's operations in the Permian Basin, in a recent interview. To keep that hiring spree going, the largest U.S. fracking company has had to recruit a large commuter workforce from outside of West Texas, holding job fairs in places like Alabama, Mississippi and Nevada. "We have a real bottleneck with people out here," Gatjanis said. "This market has been saturated. Most people out here are already in the business. And it's not the most beautiful place in the world to live. It becomes a challenge to get people to work here." U.S. oil producers locked in higher prices for their crude when oil prices climbed above $50 a barrel earlier this year, and the number of rigs in the Permian Basin surged, particularly in the Delaware Basin in Pecos County, where there are fewer roads and less equipment to carry the oil to market. Fifty-man frack crews have followed behind those rigs, pumping sand and water down the wells companies drilled to crack open multiple layers of dense oil-soaked rock, and the surge has allowed oil field service companies to raise their prices for frack jobs, lifting profits and easing financial stress after a brutal energy-market downturn.But U.S. oil prices have fallen into the mid-$40 a barrel range again, and it's not yet clear whether oil companies in the Permian will retreat again: many operators have already set their annual budgets based on oil hedging that locks higher prices in place for future production, Gatjanis said. "New oil that's coming onto the system, though, comes in at spot price and it's not hedged, so that's where you start to see the pinch," he said. "What you're going to see is really prudent operators out here are not going to outspend cash flow. They'll run their economics based on (lower oil price) and see what it does from a cash flow perspective -- and if that means they need to pull back, they'll pull back."

Small Permian producers feel pinch of $45 oil - For some small oil companies in West Texas, low crude prices are beginning to sting. Green Century Resources, a private oil company in Midland, is weighing an investment in a drilling project that appeared profitable a few months ago when crude prices hovered above $50 a barrel. Now, with U.S. prices under the $45-a-barrel mark, the small company may have to hold off on its plans, said James Mayer, founder and chief executive of Green Century. "If oil holds under $45, that would make a difference to us," Mayer said, adding his company is working to whittle down its projected capital and operating costs.  Several small operators in West Texas told the Houston Chronicle they're face increasing pressure from rising oil field service costs, particularly in hydraulic fracturing, in part because the downturn wiped out some of the service companies and allowed rivals to raise prices. That oil prices are falling now has convinced some to rethink their expansion plans for the year, which were set at a time when oil prices were higher. "You can see even the difference in traffic out here in Midland," Mayer said. "You can feel it slowing down." Larger, publicly traded oil producers in West Texas locked in higher prices for future output earlier this year, and so far, they haven't signaled plans to reduce drilling activity in the region. Houston-based Noble Energy, for example, has amassed a large footprint in the Delaware Basin through two multibillion-dollar acquisitions, and it plans to expand its drilling fleet there later this year even if oil stays cheap, said Donnie Moore, vice president of the Noble's Marcellus and Texas business units, in an interview at the Houston firm's field offices near Pecos, Texas. Nearly two-thirds of Noble's inventory of oil wells in the Delaware Basin breaks even around $40 a barrel, and the company plans to boost its U.S. onshore oil production 40 percent in the second half of 2017 compared to the same period last year, he added.  "We'll always be looking at the market, and activity, and what's needed, but right now, we're still at five drilling rigs, two frac crews and we're planning a sixth rig later in the year." But for smaller oil producers, cash flow determines drilling plans.

Court allows EPA to delay methane rules as it considers appeal - A federal appeals court on Thursday allowed the Trump administration to hold off on implementing emission rules for natural gas and oil drillers as it decides whether to appeal an earlier court decision that denied it from delaying the rules. The D.C. Circuit Court of Appeals said it would delay its order from last week rejecting the Environmental Protection Agency's delay of the Obama administration methane regulations while the administration considers its options on appealing the earlier decision. The court delayed the methane rules up to 14 days while the administration seeks an appeal. Delaying the regulations "for longer would hand the agency, in all practical effect, the very delay in implementation this panel determined to be [illegal]." The court ruled July 3 that the EPA had no authority under the Clean Air Act to halt the Obama administration standards for controlling methane emissions from drilling and hydraulic fracturing, or fracking. The decision was immediately followed by the court's mandate to implement the ruling. EPA had argued in response to the quick mandate that it needed time to consider its options.

Trump denies disaster declaration for Dakota Access pipeline - The Trump administration has denied a request from Republican North Dakota Gov. Doug Burgum for a "major disaster declaration" to help cover some of the estimated $38 million cost to police protests of the Dakota Access pipeline. Burgum spokesman Mike Nowatzki says the governor was notified in May that the request had been denied. The office didn't announce the denial until reporters asked about it this week. The declaration would have allowed the state to pursue reimbursement for the costs it incurred during the months-long protest against construction of the pipeline. The $3.8 billion pipeline, built and operated by Energy Transfer Partners, began moving oil from North Dakota to a shipping point in Illinois last month.

US approves oil drilling in Alaska waters, prompting fears for marine life -  An Italian multinational oil and gas company has received permission to move ahead with drilling plans in federal waters off Alaska which environmental campaigners say will endanger polar bears, bowhead whales and other marine mammals. Late on Wednesday, the federal Bureau of Ocean Energy Management announced conditional approval of an exploratory drilling plan submitted by a US subsidiary of the company Eni. The company plans to drill four exploration wells from the Spy Island drill site, an 11-acre artificial gravel island constructed in Alaska state waters 6-8ft deep. Spy Island is one of four artificial islands in the Beaufort Sea, off Alaska’s north coast, that support oil production.  Barack Obama last year banned oil and gas exploration in most of the Arctic Ocean. Donald Trump in April ordered the interior secretary, Ryan Zinke, to review the ban, with the goal of opening offshore areas. Environmental and Alaska Native groups sued to maintain it. Environmental groups say potential spills put marine wildlife at risk. Eni’s leases would have expired at the end of 2017, said Kristen Monsell, an attorney for the Center for Biological Diversity, in a prepared statement. Eni’s plan calls for extended-reach wells that could stretch more than six miles into federal waters.  The Trump administration provided the public only 21 days to review and comment on the exploration plan and only 10 days to comment on scoping for an environmental assessment, Monsell said. “Approving this Arctic drilling plan at the 11th hour makes a dangerous project even riskier,” Monsell said. “An oil spill here would do incredible damage, and it’d be impossible to clean up.”  Personnel at Eni’s office in Anchorage said they could not comment and forwarded a request for comment to company officials in Milan.

U.S. petroleum refinery capacity continues to increase - As of January 1, 2017, U.S. operable atmospheric crude distillation capacity reached 18.6 million barrels per calendar day (b/cd), 1.6% higher than at the beginning of 2016, according to EIA's annual Refinery Capacity Report. This increase in operable capacity was slightly lower than last year’s increase of 2.0%.  The capacities of secondary units that support heavy crude oil processing and production of ultra-low sulfur diesel and gasoline, including thermal cracking (coking), catalytic hydrocracking, and hydrotreating/desulfurization, also increased. Catalytic hydrocracking and deasphalting units experienced the largest capacity increases over the past year, rising by 4.5% and 6.1%, respectively. EIA's Refinery Capacity Report measures refinery capacity in b/cd and barrels per stream day (b/sd). Calendar-day capacity is a measure of the amount of input that a distillation unit can process in a 24-hour period under usual operating conditions, taking into account both planned and unplanned maintenance. Stream-day capacity is the maximum number of barrels of input that a distillation facility can process within a 24-hour period when running at full capacity under optimal conditions with no allowance for downtime. Stream-day capacity has historically been 6% higher than calendar-day capacity. The refinery capacity reported for the start of 2017 includes one new unit, the 42,500 b/cd Magellan Midstream Partners LP condensate splitter in Corpus Christi, Texas. Condensate splitters are distillation units that process condensate, which is lighter than crude oil. Splitter capacity is categorized as atmospheric distillation units in EIA data. The Magellan Midstream Partners LP unit, which began operating in 2017, was operable but not running at the start of the year, so its capacity was listed as idle in the Refinery Capacity Report. Overall, the percent of idle distillation capacity as of January 1 was 1.6%, a slight increase from last year’s relatively low 0.8%.  Gross inputs to refineries, also referred to as refinery runs, averaged a record-high 16.5 million barrels per day (b/d) in 2016. U.S. crude oil production was 0.5 million b/d lower in 2016 than in 2015, the first annual decline since 2008. To offset the decline in production, net imports of crude oil increased by a similar amount. Despite the increase in refinery runs, atmospheric crude distillation capacity increased even more, lowering refinery utilization in 2016 compared with 2015.

Tide turns for sulphur-rich oil in a sea of light crude | Reuters: (Reuters) - The world is awash with oil, but in pockets of the market lower-quality, sulphur-rich crude is limited and buyers are competing for cargoes. Lacklustre gasoline demand growth, particularly in the United States, and fears of a repeat of last year's poor summer gasoline profits, led refineries in the Atlantic Basin to skew their yields in favour of distillates, by running heavier oil. Strong profits for fuel oil has also encouraged refineries to run sour crudes. This has compounded supply cuts, which were concentrated in heavier oils, to keep sulphur-rich crudes, normally shunned for lighter, easier-to-process alternatives, at the top of the heap. Since OPEC-organised cuts began siphoning some 1.8 million bpd from the market in January – nearly all of it medium and heavy oil – the so-called "heavy" or "sour" grades have become the most sought-after barrels. Normally, refineries would snap up easier to process light grades before the summer, when they aim to run the gasoline-rich crude so they can sell the fuel to holidaying drivers. But now, in the middle of July, sour grades are still so sought after that differentials are hitting multi-year highs. "Sour grades are like gold dust at the moment," one oil trader said. "There's a need to fill in more sour grades heading to the U.S. and there is huge demand from the East."Differentials for Urals, a sour grade exported from the Baltics and the Black Sea, are trading at their highest level versus dated Brent in two years, while light grades nearby such as CPC Blend and Azeri are at two-year lows. 

 Energy commodity prices declined more than other commodities in the first half of 2017 --The energy component of the Standard and Poor’s Goldman Sachs Commodity Index (GSCI) fell 11% during the first half of 2017, the largest decline for any commodity group in the index. Other components of the index—livestock, industrial metals, precious metals, and agriculture—had end-of-June prices that were higher than at the beginning of the year. Supply-side developments unique to energy commodities likely contributed to the divergence.  Because two major crude oil price benchmarks, West Texas Intermediate (WTI) and Brent, account for 70% of the weighting in the S&P GSCI energy index, the energy index tends to follow major price movements in the crude oil market. During the first half of 2017, WTI crude oil prices declined by 12%, while Brent prices fell 14%.  Oil production cuts agreed to among several countries within and outside the Organization of the Petroleum Exporting Countries (OPEC) at the end of 2016 were generally complied with over the first six months of 2017, but the drop in production did not significantly reduce global liquid fuels inventories. The cuts have been partially offset by production gains in certain OPEC countries not subject to restrictions, as well as production growth in Brazil and the United States. Recently, the production cut agreement was extended through March 2018.  Petroleum-based products such as reformulated gasoline blendstock for oxygenate blending (RBOB), ultra-low sulfur diesel (ULSD), and gasoil make up 24% of the S&P GSCI energy index. RBOB, essentially the petroleum-based component of motor gasoline, declined the least among petroleum products in the S&P GSCI energy index year to date, declining 7% through June 30. Gasoline prices exhibit seasonality and typically increase ahead of the summer driving season, which likely contributed to less of a decline in prices compared with crude oil and other petroleum products.  Natural gas accounts for the remaining 6% of the S&P GSCI energy index. Natural gas prices declined the least among energy commodities, albeit with significant volatility throughout the first six months. Prices declined as much as 23% from the beginning of the year through mid-February ($3.33 per million British thermal units (MMBtu) to $2.56/MMBtu) because of a relatively warm winter in the United States. Natural gas prices then increased to $3.42/MMBtu in mid-May before falling to about $3.00/MMBtu by the end of June. Natural gas prices have largely been affected by increasing U.S. natural gas exports and relatively flat natural gas production.

U.S. drilling costs start to rise as rig count climbs: Kemp (Reuters) - U.S. oil and gas exploration and production companies are paying more to hire drilling rigs as the number of rigs still idle after the slump declines.Drilling costs were up by 8 percent in June 2017 compared with their recent low in November 2016, according to preliminary data from the U.S. Bureau of Labor Statistics published on Thursday.The rise in drilling costs has barely started to reverse the previous 34 percent decline reported between March 2014 and November 2016, but it does mark an important turning point in the oilfield services costs cycle.Drilling costs have been rising year-on-year since March and in June were almost 3 percent higher than in the corresponding month a year earlier ( costs are cyclical and follow changes in the rig count with a lag of a few months, but so far cost increases have been very modest compared with the resurgence in drilling activity ( number of active rigs has more than doubled over the last year, according to oilfield services company Baker Hughes, while costs have risen by less than 3 percent.Drilling costs have remained low as rig owners have engaged in deep discounting to win contracts following the worst slump for more than a generation.In the early summer of 2016, there were 2,100 rigs available for use in the United States, but just 455 were operating, according to an annual census conducted by National Oilwell Varco (NOV) ( defines a rig as "available" as one that is currently active or ready to drill without significant capital expenditure ("63rd Annual Rig Census", NOV, 2016).The utilisation rate of 22 percent was the lowest in over six decades, and down from 51 percent in 2015 and 70 percent in 2014 ( be considered still available, a land rig must not have been idle for more than three years, or five in the case of offshore units. Badly damaged rigs, those which have been cannibalized for spare parts, and any in long-term storage are excluded.

When will the US fracking spree finally slow down? - Not in the sense of pumping rock full of fluid until it fractures to release petroleum. But as in, when will the US shale oil industry’s fracking spree finally slow down? The discussion has become more urgent since West Texas Intermediate crude tumbled below $50 a barrel. Independent companies exploring shale in aggregate act like a precision valve in the oil supply machine, increasing output as prices rise and decreasing it when they fall. Yet Wall Street seems to have miscalculated the point at which lower oil prices force producers to constrict this valve. This week Andy Hall of Astenbeck Capital Management, famed as a resolute oil bull, warned in a letter that the “long-term price anchor for oil has moved lower” because the cost for extracting shale oil has become surprisingly cheap. The shale industry’s recovery from the market plunge of 2014-16 is one of the two main influences on today’s oil market. The other is Opec, whose decision with allies including Russia to cut output, inadvertently helped rescue shale producers last year.  After declining in 2016, US crude oil production returned to growth this year. The government’s latest forecast projected volumes would reach a record above 10m barrels per day (b/d) in 2018, led by drilling in places such as the Permian Basin of west Texas and the Scoop and Stack areas of Oklahoma.  The expansion followed a doubling of oil prices from the sub-$30 depths of early 2016 to $55 in January. But on Friday WTI was just above $44, with prices dropping over the past month. At that price, operators in less attractive basins struggle to make money, analysts say.

First tech, now financing: U.S. shale firms get creative to pump more oil | Reuters: (Reuters) - U.S. shale producers survived an oil price crash and confounded OPEC's efforts to drain a global glut by employing innovative drilling and production techniques. Now, some of these producers are turning to creative investments to pump more oil. Drilling joint ventures, called "DrillCos" for short, combine cash from investors like Carlyle Group LP (CG.O) with drillable-but-idle land already owned by producers. Investors get a pledge of double-digit returns within a few years, while producers can raise productivity without spending more of their own money. The total raised by these ventures - at least $2 billion in the last 24 months - is a small part of overall shale financing. But they represent another way for Wall Street and shale producers to increase the flow of oil, and frustrate plans by the Organization of the Petroleum Exporting Countries to prop up prices. Private equity this year has showered more than $20 billion on U.S. energy ventures. Driven by shale expansion, U.S. oil production this year is forecast to increase by 570,000 barrels per day (bpd) to 9.9 million bpd, the U.S. Energy Information Administration estimates.Drillcos take control of drillable land and generally turn over 100 percent of the cash flow from oil and gas production to investors until they earn a 15 percent return. At that point, control reverts to the producer, with the investor's stake shrinking to about 10 percent of remaining production. 

 Is Wall Street Funding A Shale Failure?  -- The latest figures from the EIA show that despite some hiccups, the shale rebound is still on track. Last week, the sharp drawdown in inventories made headlines, but buried within the weekly figures was a bounce back in oil production, reigniting fears that the market will take much longer to balance.The U.S. shale industry has already added almost a half million barrels per day since the end of last year, taking production up to 9.3 million barrels per day (mb/d). But production is expected to continue to grow rapidly, with projections putting output at a record-high 10 mb/d by next year.The coming wave of new supply will only be possible with the generous help of Wall Street. According to the Wall Street Journal, major banks and investors have showered the industry with credit and equity, pouring an estimated $57 billion into the sector over the past 18 months. All of that money is being translated into a sharp rise in drilling even as oil prices slump.But while individual companies hope to attract investors and boost profits by ratcheting up production, the industry as a whole is shooting itself in the foot. Some less efficient drillers are increasing production but losing money on every barrel produced.There is a growing recognition that loose money and easy credit is helping contribute to another downturn in prices. “The biggest problem our industry faces today is you guys,” the CEO of Anadarko Petroleum, Al Walker, said at an investor’s conference in June, according to the WSJ. “It’s kind of like going to AA. You know, we need a partner. We really need the investment community to show discipline.”Investors hungry for yield are throwing money into companies who then drill more, and the surge in production is hurting the industry as a whole. Despite efficiency improvements, the shale industry is expected to be cash flow negative by a combined $20 billion this year as oil prices sink.The energy sector, by some estimates, has been the worst performer this year for investors, so many are getting burned even as they keep the money taps open.Whether in terms of commodity prices (energy fell 11 percent in the S&P Goldman Sachs Commodity Index) or individual companies (73 of the 90 companies in the MSCI World Energy Sector Index saw their share prices decline in the second quarter), the oil and gas industry has not been a great space to be in.

U.S. oil producers paying off debt, but higher costs restrict cash flow growth -- EIA’s review of first-quarter 2017 financial results for 54 publicly traded U.S. oil and gas producers indicates that these companies, in aggregate, are paying off debt while funding investment through the sale of assets and the issuance of equity. In recent years, investment had been more heavily funded through the issuance of debt. Although revenue for these companies has grown over the past year with higher oil prices, net cash from operations has grown more slowly because of increased upstream costs. The 54 companies included in the analysis are listed on U.S. stock exchanges and are required to submit financial reports to the U.S. Securities and Exchange Commission. They operate largely in U.S. onshore basins, but some also have operations in the Federal Offshore Gulf of Mexico, Alaska, and various other regions across the globe. Aggregate global crude oil and other liquids production for these companies averaged 5.3 million barrels per day (b/d) during the first quarter of 2017. For these publicly traded companies, capital expenditures on exploration and development totaled $16 billion in the first quarter of 2017. This level is $8 billion lower than the 2012–16 quarterly average spending related to these activities by these companies, but is almost $3 billion higher than the first quarter of 2016. Many companies have announced that they expect to increase full-year 2017 capital expenditures when compared with 2016 levels by adding rigs for drilling new wells across various basins. Capital expenditures can be funded from cash from operating activities, the assumption of debt (bank financing or bonds), the issuance of equity, or asset sales. From 2012 through the end of 2015, debt was a significant source of capital for the producers included in the analysis, with the addition of a cumulative $55.3 billion in net debt. Since the beginning of 2016, however, these producers have reduced debt by $1.4 billion (Figure 1). The combination of higher equity and lower debt has resulted in the long-term debt-to-equity ratio, a measure of financial leverage, declining from 88% to 80% for the group of companies as a whole between the first quarter of 2016 and the first quarter of 2017.

EIA's Short-Term Outlook -- July 11, 2017 -- Oil, Very, Very Bearish --- EIA's short-term outlook:

  • A lower forecast for crude oil prices is expected to shave a little off projected growth in U.S. oil production next year compared with the previous forecast, but annual output is still on track to reach a record high in 2018.
  • A revised oil price forecast that is $2 to $4 per barrel lower for late 2017 and during 2018 than the prior forecast will make it less profitable for some U.S. producers to drill for oil.
  • The United States will account for almost 90% of the increase in global production of crude oil and other liquid fuels by non-OPEC countries in 2018.
  • The price U.S. consumers are expected to pay for gasoline this summer has been revised down as lower crude oil costs provide a break at the pump.
  • The price of crude oil, which accounts for about half the retail price of gasoline, has declined in recent months on rising U.S. crude oil production and high petroleum inventories.
  • U.S. natural gas production is expected increase through the rest of this year and during 2018 in response to higher natural gas prices and growing liquefied natural gas exports.
  • The United States will become a net exporter of natural gas this year, and U.S. liquefied natural gas exports in 2018 are expected are expected to increase 45% from this year’s levels.
  • U.S. natural gas inventories at the start of the upcoming heating season this November are expected to be lower than last year, but still 2% above the five-year average.

U.S. to become top 10 oil exporter by 2020 - Jul. 11, 2017: U.S. oil production is booming. The next step: conquering the export market. Increased shale production will transform the U.S. into one of the world's top oil exporters in just a few years, according to a new forecast by the consultancy PIRA Energy Group. PIRA estimates that American crude exports will grow to 2.25 million barrels a day by 2020, a four-fold increase from 2016. The boom would put the U.S. in roughly the same league as major oil exporters including the United Arab Emirates and Kuwait. "In the years ahead, these developments position the U.S. to potentially be one of the 10 largest exporters of crude oil in the world," wrote analyst Jenna Delaney. The major increase in supply would further undermine the strength of OPEC, which was exporting an average of 25 million barrels a day in 2016. Saudi Arabia topped the cartel's list of exporters last year, sending of 7.5 million barrels abroad each day. The U.S. vaulting into the top ranks of exporters would have been unthinkable even a few years ago. The U.S. had been out of the oil exporting business for 40 years when a ban on foreign shipments was lifted in 2015. The restrictions had been introduced in 1975, two years after OPEC banned oil sales to the U.S. Delaney said the growth in exports will be driven primarily by increased shale production. 

Energy Independence: Chimera or Chameleon? -- The Wall Street Journal says the US is beyond mere Energy Independence, emerging as "the world's energy superpower." But Geologist Art Berman points out that it's the world's biggest importer of oil: "Saudi Arabia and Russia- the real oil superpowers– import no oil." Mother Jones says "America is inching closer to Energy Independence". The Washington Times says Energy Independence is "achievable." Yet other recent articles speak of the "'Energy Independence' Myth", and liken it to the promise of perpetual economic growth. In corporate press releases, says one, "Optimism is more important than facts. And, it’s essential for attracting investors." Who can you believe? All of them, more or less. But watch the details, because at least two concepts of "energy independence" are in play:

  • (1) No imports of oil, coal or natural gas. That's what President Carter had in mind when he set Energy Independence as a national goal. But today we're importing about 8,000,000 barrels of oil - four supertankers full - every day.
  • Or (2) Some trade analysis that shows the U.S. as a net exporter of energy. Different analysts go at this in different ways. Some include trade in finished energy products such as gasoline and jet fuel. Some use physical units, others use dollars. The answer depends on how you set up the analysis.

So WSJ can say that the U.S. only imports 25% of its oil (oil and oil products, net) and Berman can reply it really imports 47% (of the crude oil flowing to US refineries). Checking US EIA figures for the latest 4 weeks, I got 48%.  But an export surplus isn't "independence" - it reflects a mutual dependence with our trading partners. Since our civilization is addicted to oil, "codependency" might be more accurate.  Experts have called Energy Independence a "chimera". Which is either a phantom, a will-o-the-wisp, or a fire-breathing three headed monster; not a good object to pursue in any case. But in political discourse, it becomes a chameleon: a wily lizard that changes color to blend with its context.

 US Natgas Output Seen Up in 2017, but Still Below 2015 Record  (Reuters) - U.S. dry natural gas production in 2017 was forecast to rise to 73.30 billion cubic feet per day (bcfd) from 72.29 bcfd in 2016, according to the Energy Information Administration's (EIA) Short Term Energy Outlook (STEO) on Tuesday. The latest July output projection was unchanged from EIA's forecast in June but falls short of the record high 74.14 bcfd produced on average in 2015.EIA also projected U.S. gas consumption would fall to 72.86 bcfd in 2017 from a record 75.11 bcfd in 2016. The 2016 high was the seventh annual demand record in a row. That 2017 consumption projection in the July STEO report was down from EIA's 73.41-bcfd forecast for the year in its June report.

U.S. on track to be world's No.2 LNG exporter by end-2022: IEA | Reuters: (Reuters) - The United States is on track to have capacity to become the world's second largest exporter of liquefied natural gas (LNG) by the end of 2022, just behind Australia and ahead of Qatar, the International Energy Agency (IEA) said. Overall, global LNG export capacity would reach 650 billion cubic meters (bcm) a year by the end of 2022, compared to less than 452 bcm a year in 2016, the IEA said in its annual report on gas markets. Of that amount, Australia would have capacity to export 117.8 bcm a year of LNG, followed by the United States with 106.7 bcm a year and Qatar with 104.9 bcm a year, it said. Australia would stay top by adding 30 bcm a year of capacity by the end of 2022 to its existing capacity, but the United States, which has seen shale gas output surge, would add about 90 bcm a year to its capacity of about 14 bcm a year now. "By the end of our forecast period, the United States will be well on course to challenging Australia and Qatar for global leadership among LNG exporters," the report said. However, the new LNG capacity is being added to an already well-supplied market, while demand is falling in some of the traditionally large importing nations, such as Japan, it said. With demand expected to reach 460 bcm a year by 2022, the market would have 190 bcm a year in excess capacity, putting pressure on gas prices and discouraging new upstream investment. Current low LNG prices are already making it tougher for exporters, and competition is loosening the typically rigid contracts that have dominated the long-distance trade. "This change will be further accelerated by the expansion of U.S. exports, which are not tied to any particular destination and so will play a major role in increasing the liquidity and flexibility of LNG trade," the IEA said.

 Slow down on the LNG exports - President Trump has stated, "We are sitting on massive energy, and we are now exporters of energy. So if one of you need energy, just give us a call." This is simply not true for natural gas, or from the perspective of companies who invest capital building manufacturing facilities to last 50 years or more. The Energy Information Administration (EIA) indicates that the U.S. has only 2,196 trillion cubic feet of technically recoverable natural gas in the lower 48 states. Eighty-five percent of natural gas resources are unproven. Also, technically recoverable does not mean it is economically recoverable. The EIA's AEO 2017 forecast tells a compelling and worrisome story for all consumers, not just domestic manufacturers. EIA's forecasted cumulative domestic natural gas demand, which includes LNG and pipeline exports, would consume 56 percent of all technically recoverable resources in the lower 48 by 2050, only 33 years away. Over these 33 years, LNG exports are forecasted to increase to only 12 Bcf/d, which is a low estimate. The past and current administrations have already given breathtaking approval of LNG exports to free trade agreement (FTA) and non-free trade agreement countries (NFTA) in the volume of 54 Bcf/d, which is 71 percent of 2016 U.S. natural gas demand. This is worrisome since EIA is also forecasting Henry Hub natural gas prices will rise 87 percent by 2020. If domestic prices rise to global levels long-term, the U.S. will have lost its competitive advantage, and the incentive to invest in the U.S. would be gone and on-shoring would stop. While Japan and EU leaders have signed an MOU on a major trade deal, the U.S. is giving away LNG to countries without considering bilateral negotiations to open those markets to U.S. manufactured goods. This is inconsistent with President Trump's fair-trade and "America First" policies. LNG exports lower other countries' natural gas costs and increase natural gas and electricity costs for domestic consumers long-term. The common-sense policy is to be cautious as to how many terminals are constructed over time and put consumer safeguards in place. We should learn from the mistakes of Australia whose domestic consumers are paying exorbitant natural gas prices due to LNG exports. If we do not act prudently, and prices rise, it will put trillions of dollars of manufacturing assets at risk. This is an unacceptable gamble.

Why tracking Strategic Petroleum Reserve stocks matters more now -  The weekly estimate of commercial crude oil inventories in the U.S. Department of Energy’s Weekly Petroleum Status Report — and the week-on-week change in those inventories — are among the most closely watched numbers in the oil sector. And for good reason. After all, the numbers help the market assess shifts in the supply/demand balance, a critical consideration in determining crude oil prices and signaling the need for more — or less — imports, exports, and of course production. In 2017, with a mandated drawdown in the Strategic Petroleum Reserve, it is now important to track weekly withdrawals from the SPR as well because of the effect they can have on commercial stocks. Today we discuss recent and planned SPR drawdowns and their effect on the supply/demand balance and crude oil prices. The U.S. Strategic Petroleum Reserve (SPR) is the largest government-owned crude oil stockpile in the world with a mission to protect the country during severe supply interruptions. The facility was developed in three phases from 1977 through 1991. In its current form, the SPR is comprised of four oil-storage sites along the U.S. Gulf Coast; the sites were chosen largely because of  their proximity to much of the nation’s refining capacity and access to underground salt deposits that can be mined to create storage space for hydrocarbons (see Smoky and the Salt Caverns). Two sites, Bryan Mound and Big Hill, are located in Texas, and the West Hackberry and Bayou Choctaw sites are in Louisiana. In total, these sites offer storage capacity of 713.5 million barrels (MMbbl) through 60 operational underground salt caverns. As we said in Part 1 and Part 2 of our “Need You Now” series, the SPR system is designed for an initial maximum drawdown rate of just over 4.4 MMbbl/d that could be sustained for up to 90 days. Each of the four storage sites was originally configured with the capability to deliver drawdown barrels to their designated distribution terminals and pipelines to then be sold in a competitive sales process in the event of a supply crisis. As discussed in Part 1, purchasers are then responsible for making their own transportation arrangements via three major pipeline and refinery distribution systems: Seaway, Texoma, and Capline.

Moniz: We need a modernized strategic reserve, not a smaller one - In late 2015, the Congress found that the Strategic Petroleum Reserve was, "one of the nation's most valuable energy security assets." Why would the Trump Administration conclude, just a little over a year later, that the SPR is not so valuable after all? The rationale for the administration's current budget recommendation - selling off more than half of the SPR's current inventory, shutting down two of four storage sites in Texas and Louisiana, and eliminating the Northeast Gasoline Reserve - was supported by Energy Secretary Rick Perry in congressional testimony last month.  The SPR - its value to domestic and global energy security, U.S. consumers and our economy - needs to be viewed instead through the lens of the dramatic changes that have taken place in the last 40 years.First, while it's true that domestic oil production has substantially increased, key oil data then were not dramatically different than now. In 1973, daily crude and oil product net imports were about 6 million barrels and in 2016 they were about 5 million; consumption back then was 17 million barrels per day and today, it is about 19 million (for a population that has grown by 50 percent).Second, there was no global oil market 40 years ago. The WTI futures contract had been introduced just a few years earlier, and federal price controls discouraged surplus domestic production capacity. These market features virtually ensured that the OPEC oil embargo of 1973-74 would have an outsized impact on U.S. oil - and gasoline - prices. Today, oil prices are deregulated, and spot cargoes move around the globe.Third, our crude oil and product imports and exports link us to global oil markets. Even with no net imports, when global prices spike, ours will, too. World GDP growth fell from 4 percent to 2 percent after prices spiked in 1999-2000. On the flip side, using the SPR provides benefits to the U.S. economy. After an announced swap of 30 million barrels of SPR oil in 2000 when spare capacity was tight and heating oil inventories were low, oil prices immediately dropped by more than 20 percent.Fourth, much of the increase in U.S. unconventional oil production is occurring in unconventional locations such as North Dakota. This has reversed traditional pipeline flows; crude oil is now moving from north to south into the Gulf of Mexico where the SPR's storage and distribution systems and 60 percent of the nation's refining capacity are located. The result is a congested system in which SPR oil released in an emergency could be displacing commercial oil volumes, not providing much-needed incremental oil to the marketplace. Infrastructure upgrades are called for.Finally, reserves in the ground can't provide us oil we need in an emergency disruption - increased domestic production does not equate to emergency surge capacity.

‘Big oil’ dismisses predictions of collapse in demand - Two of the world’s largest oil companies have hit back against predictions that electric vehicles threaten a collapse in demand for hydrocarbons and warned that global energy security would be at risk if investment is withdrawn from fossil fuels too soon.Saudi Aramco and Royal Dutch Shell acknowledged that a shift towards renewable energy — including battery-powered cars — was under way but said oil and gas would remain indispensable for decades to come.“There seems to be a growing belief that the world can prematurely disengage from proven and reliable energy sources like oil and gas, on the mistaken assumption that alternatives will be rapidly deployed,” Amin Nasser of Saudi Aramco told an energy conference in Istanbul.  Addressing the same event, Ben van Beurden of Shell said the transition to low-carbon technologies would “take place over generations” rather than as a rapid “revolution”.

Fears of looming oil shortage wildly overstated, Citi’s Morse says - Houston Chronicle - Scattered across a sprawling Houston ballroom, dark-suited energy executives listened earlier this year as officials from OPEC, Saudi Arabia and the International Energy Agency warned of a looming oil supply shortage that could force oil prices to spike in a few years, despite rising U.S. production.On Monday, the CEO of Saudi Aramco repeated the idea that dramatically lower capital spending levels during the oil bust will mean the industry will have to replace 20 million barrels a day from declining oil fields over the next five years. The U.S. oil industry won't be able to fill that gap alone, Saudi Aramco CEO Amin Nasser argued, according to media reports.But some analysts are skeptical. Ed Morse, global head of commodities research at Citigroup, said his team believes the supply gap will only come to about 10 million barrels a day over the next half-decade. "That's not a big number to replace," Morse said in a recent interview. Through 2019, he added, growing oil production in the United States, Canada and Brazil should be able to cover rising global demand. Let's look at the math. Nasser has previously said the drop in oil spending means companies will have to replace 30 million barrels a day over the next five years. That assumes oil fields producing roughly 100 million barrels a day will decline at a rate of 6 percent a year for five years. Morse believes that's a wild overestimate. In recent years, the global oil-production decline rate, he argued, has been inflated by shut-in oil fields, and that statistical effect will fizzle out soon. So analysts should use 5 percent, he said, as the world's base decline rate in oil production, not 6 percent.And, he said, they shouldn't use 100 million barrels a day in the equation, because roughly 20 million barrels a d ay are natural gas liquids or not refined for some other reason. Roughly 32 million barrels a day belong to OPEC countries, which can keep oil production going longer than their rivals, and another 5 million barrels a day come from Canadian oil sands or other fields that don't fall off rapidly.  So if you cut that remaining 40 million barrels a day by about 5 percent a year, it comes to 2 million barrels a day each year, or 10 million barrels a day over the next five years – half of Nasser's estimate. That means in coming years, growing oil production from the United States, Canada and Brazil could still outpace demand, Morse said.

Tillerson gets oil industry award, says he misses colleagues - U.S. Secretary of State Rex Tillerson took a brief break from his diplomatic duties on Sunday, returning to his Exxon Mobil comfort zone to bask in the glow of approval from his former colleagues in the oil sector. Accepting a lifetime achievement award from the World Petroleum Congress, the former Exxon CEO reminisced about his more than 41 years as an oilman, calling the energy industry “marvelous” and the people in it some of the most talented in any business. He also took time to meet with Turkey’s president and foreign minister. “I miss all of you,” he said wistfully to his former colleagues in the oil business. “I miss you as colleagues, I miss you as partners, I miss you as competitors.” Tillerson said he learned he would be honored with the WPC’s Dewhurst Award before then-President-elect Donald Trump chose him to be America’s top diplomat and thought his trip to Istanbul to accept it would be a pleasurable interruption of a fishing trip in his planned retirement followed by a “leisurely journey back home.” “It didn’t quite work out that way,” he said to laughter from the crowd of oil executives and top government energy officials from dozens of nations. Tillerson arrived in Istanbul after attending the Group of 20 summit in Germany and a brief visit to Ukraine. He departs Monday for what may be a week of grueling shuttle diplomacy in the Middle East. Tillerson has been criticized for leading Exxon during a period when the company downplayed climate change and global warming but nonetheless argued unsuccessfully for Trump not to pull the U.S. out the Paris climate accord. “Energy is fundamental to economic growth and prosperity, it’s fundamental to lifting people out of poverty the world over,” he said, adding “that it requires massive investments over long periods of time and requires enormous risk-taking and risk management.”

Desjardins Suspends New Pipeline Investments - Montreal-based Desjardins Group, North America’s biggest association of credit unions, decided Friday to suspend new investments in energy pipelines, citing concerns about their environmental impact.The mega-investment house, one of more than two dozen institutions that have helped finance Kinder Morgan’s Trans Mountain pipeline expansion, “temporarily suspended lending for such projects and may make the decision permanent” in September, Reuters reports, citing company spokesperson Jacques Bouchard. “That would likely mean Desjardins would not help finance other major Canadian pipelines projects, including TransCanada Corporation’s Keystone XL and Energy East and Enbridge Inc.’s Line 3,” the news agency notes.The announcement followed ING Group’s confirmation that it won’t directly finance any of the four pipelines.“This decision shows that astute financial institutions are becoming increasingly wary of financing fossil fuel projects,” said Greenpeace Canada Climate and Energy Campaigner Patrick Bonin in Montreal.“Tar sands pipelines pose major risks, whether you are concerned about profits, human rights, the environment, or all three. Desjardins has made the right decision by announcing a moratorium on investments in and financing of oil pipelines, and we look forward to it becoming permanent.”A Greenpeace release Saturday encouraged Desjardins to “take the logical next steps: to sell its existing $145-million stake in the $5.5-billion credit facility Kinder Morgan recently obtained to fund the Trans Mountain expansion project, and to make their newly-announced moratorium permanent.” Reuters reports that a coalition of more than 20 environmental and Indigenous groups, including Greenpeace, has been pushing the 28 institutions backing Trans Mountain to withdraw their support. Greenpeace noted that fossil financing by 37 of the world’s largest banks fell 22% last year.

Kinder Morgan's Trans Mountain Pipeline Financing at Risk - Kinder Morgan, Inc.’s KMI Trans Mountain pipeline expansion may not receive funding from Canadian lender, Desjardins, which cited concerns about the project’s impact on the environment. Desjardins had committed $145 million to Kinder Morgan’s Trans Mountain pipeline expansion. Desjardins, the largest association of credit unions in North America, is no longer contemplating on funding energy pipelines. Per the sources, on Jul 7, the company temporarily suspended lending for such projects and stated that it could finalize the decision. However, a final statement would be made by the lender in September. Per sources, Desjardins, a financier of Kinder Morgan Canada Ltd's expansion of Trans Mountain pipeline, has been appraising its policy for such lending for months. If Desjardins sticks to its decision permanently, the association will stop funding other major Canadian pipeline projects, including TransCanada Corp's Keystone XL, Energy East and Enbridge Inc's ENB Line 3. Such a move would follow that of Dutch lender ING Groep NV, which has a long-standing policy of not backing projects directly linked to oil sands. It is the latest indication that pipelines could face difficulty while applying for funds as banks face pressure from withdrawals. Per the regulatory filings, Desjardins is among 24 financial institutions that approved to lend money to a subsidiary of Kinder Morgan Canada, majority of which is owned by Kinder Morgan.In June, an alliance of over 20 indigenous and environmental groups, including Greenpeace, urged 28 major banks to pull funding for Trans Mountain. They mentioned the risk of pipeline spills and their potential contribution to climate change. ING, which was under attack by the coalition, explained it will not finance any of the major Canadian pipelines. 

Can Mexico spur gas production in its Burgos Shale play? - It may take a number of years to pan out, but Mexico is taking steps to accelerate the development of its natural gas-rich Burgos Shale region, which lies just across the Rio Grande from South Texas’s newly resurgent Eagle Ford play. Today (July 12, 2017), Mexico’s Secretaría de Energía (SENER) is expected to name the winners of a competitive bidding process for the rights to drill for natural gas within 1,500 square miles in the states of Nuevo Leon and Tamaulipas. If the effort to juice Burgos drilling activity and production proves successful, it could affect how much natural gas Mexico needs to import from the U.S. Today we discuss the prospects for reversing gas production declines south of the border and the challenges that exploration and production companies (E&Ps) face in Mexico’s most promising shale play. In the past few years, exports of natural gas from the U.S. to Mexico have soared, driven by a combination of rising Mexican demand for gas (mostly to fuel a fast-growing fleet of new gas-fired combined-cycle power plants) and declining Mexican gas production. The statistics are eye-catching. In 2016, exports of U.S. natural gas to Mexico via pipeline averaged almost 3.8 billion cubic feet/day (Bcf/d), compared with only 913 million cubic feet/day (MMcf/d) in 2010, and in the first four months of 2017 pipeline-gas deliveries from the U.S. to Mexico averaged 4 Bcf/d. Mexico also has been the Numero Uno recipient of liquefied natural gas (LNG) shipped from Cheniere Energy’s Sabine Pass LNG facility since the southwestern Louisiana liquefaction plant and export terminal started up last year, receiving more than two dozen LNG cargoes to date.

Talos, Premier make 1 billion-barrel oil find offshore Mexico -- US independent Talos Energy and its partners scored a home run offshore Mexico, unveiling on Wednesday what they called a "world class" oil discovery holding more than 1 billion barrels of resource with their first exploration well. The Zama-1 well on Block 7 found up to 650 feet of net oil bearing reservoir holding light crude of 28 to 30 API gravity after drilling an initial shallow target depth of 3,383 meters (11,100 feet), the companies said. Initial gross original oil in place estimates for the find are over 1 billion barrels, which could extend into a neighboring block, the companies said. The find is sited in 546 feet of water. Pablo Medina, senior analyst for Latin America upstream for energy consultants Wood Mackenzie, said it is significant that a company "that isn't [Mexican state company] Pemex" has turned up a large field in the country's offshore. "The Zama discovery by Talos is the most important achievement so far of Mexico's energy reform," Medina said in a Wood Mackenzie podcast. "According to our data, it is one of the 15 largest shallow-water fields discovered globally in the past 20 years." Moreover, "Zama is the first find by a private company in Mexico in almost 80 years," Medina added. 

Oil Discoveries Suggest Mexico's Bet to Open Energy Sector Is Paying Off -- When Mexico gambled on ending decades of state control of its energy industry, officials said they hoped the move would promote investment and give the country access to technical expertise. That wager now appears to be paying off.The government began auctioning off rights two years ago to drill in parts of the Gulf of Mexico. On Tuesday, an international consortium of energy companies said they had discovered a large oil field, and another firm said it had discovered more oil than expected in a separate area.The overhaul of the Mexican oil and gas sector in recent years eventually ended the state energy company’s seven-decade domestic monopoly on exploration and production. The aim was to arrest years of declining oil output, blamed on a slow-moving public sector that lacked the technology to exploit opportunities in deep-sea drilling, or shale oil and gas.The two announcements on Tuesday appeared to suggest that Mexico’s strategy, which was met with criticism when it was first pushed through, was succeeding.The consortium, made up of Premier Oil of Britain, as well as Talos Energy of Texas and the Mexican company Sierra Oil and Gas, said that it had discovered a field containing more than one billion barrels of oil in shallow water 40 miles off the Mexican coast. Riverstone Holdings, an American private equity firm that specializes in energy investments, owns 45 percent of Talos Energy and 43 percent of Sierra Oil and Gas. “This is the most important achievement” so far in Mexico’s overhaul, said Pablo Medina, a Houston-based analyst at the consulting firm Wood Mackenzie. The companies won the rights to drill in the zone in 2015, during Mexico’s first auction of exploration rights.

Oil Fields Pumping a Third of Supply Die Fastest in 24 Years -- The tussle for supremacy between OPEC and U.S. shale drillers is killing off older oil fields at the fastest pace in almost a quarter century. That could hurt the industry once the current glut has faded.  The three-year price slump triggered by the battle for market share choked off funds for aging deposits elsewhere, accelerating their decline. Output at older fields from China to North America -- making up a third of world supply -- fell 5.7 percent last year, the most since 1992, according to Rystad Energy AS. It’ll drop about 6 percent in 2017 if oil stays at current prices, the consultant said. Oil fell from above $100 a barrel in 2014 to as low as $26 in 2016 as the Organization of Petroleum Exporting Countries opened the taps in an effort to stem the surge in shale production. That set off the worst industry downturn in a generation, forcing cost-cutting companies to focus on higher-margin assets at the expense of older, costlier fields. While OPEC changed course last year and curbed output to boost prices, shale was the main beneficiary and resurgent U.S. output has kept crude below $50.“A lot of the focus is on OPEC and shale and not on the decline at these mature fields, where supply is struggling,” said Espen Erlingsen, a partner at Oslo-based Rystad. “We’re starting to see the long-term impact of lower oil prices.”Though new projects mean total global production continues to rise, the slide at aging fields may give OPEC a helping hand by reducing surplus supply today, according to Erlingsen. The danger for major oil companies -- many of which are gathering in Istanbul this week for the World Petroleum Congress -- is that the decline may be difficult to reverse, increasing the risk of future supply shortfalls as spending cuts take their toll for years to come.

National Grid to import LNG from US shale for the first time: The US shale boom will reach British homes and power plants for the first time this weekend as National Grid prepares to take delivery of its first US cargo of liquefied natural gas. A UK-bound LNG carrier is scheduled to arrive at the Isle of Grain port in Kent on Saturday, carrying enough gas to meet around half the UK’s average daily summer demand. The sighting of the long-awaited inaugural cargo comes amid rising gas supply concerns after British Gas owner Centrica said it would shut the country’s most important gas storage facility after 30 years of use. As North Sea reserves continue to decline the UK is increasingly reliant on long-term contracts for pipeline gas from Norway and imports of LNG from Qatar. Last year the UK relied on Norwegian imports for 34pc of its demand but this has already climbed to 42pc, according to market data provider ICIS. By contrast the US is fast emerging as a major energy export force after years of reliance on imports due to the boom in shale gas production. “The delivery adds more diversity to the sources of gas we rely on,” said Simon Culkin, Grain’s terminal manager. “This year we have brought in shipments from Algeria, Qatar and South America too. The more sources you can draw on, the better.” The Grain LNG terminal is able to release the gas into the national gas system with only an hour’s notice from the buyer. National Grid would not reveal which company bought the cargo but it is likely to be one of its six primary customers: BP, Centrica, Algeria’s Sonatrach, Spain’s Iberdrola, France's Engie, or Germany’s Uniper. 

U.S. Fracked Gas Hits the UK -- Soon British consumers will be cooking and heating their homes with American fracked gas for the first time. But there is growing evidence that fracked U.S. gas—and the infrastructure being built to supply it—has a huge ecological, social and personal impact back in the U.S., which British consumers may not know about. In a great new investigation, the Ferret , an independent award-winning journalistic platform, has published an article on the problems of fracked gas headed to the UK. The must-read investigation, published Tuesday, focuses on Sunoco Logistics' massive Mariner East 2 pipeline (ME2), which is under construction across southern Pennsylvania's belt, to bring fracked gas to Scotland. When completed, the multi-billion dollar pipeline will bring up to 70,000 barrels per day of ethane, propane and butane to a storage facility at Sunoco's Marcus Hook Industrial Complex. From there, the ethane will be transported by tanker to Scotland and the vast sprawling petrochemical complex at Grangemouth in Scotland owned by the chemical company Ineos. While Ineos is leading the UK fracking push, it is also leading the way to import gas from the U.S. Indeed, earlier this year, Ineos received its first cargo of ethane gas from the U.S. for its Grangemouth plant. The Ferret reports about the anger and resentment brewing against the ME2 pipeline back home. Local campaigners "say their basic rights are being trampled—no small thing in the state where the U.S. Constitution was born—and they are fighting to halt this pipeline and others like it. Or at least, to win the safeguards to which they believe they're entitled." It is easy to see why people are outraged. Due to arcane laws in the U.S., where companies can seize property via a legal manoeuver called an "eminent domain," l ocals have had their property seized.

 UK LNG stocks hit 6-month high on recent arrivals- The amount on natural gas equivalent held in tank in the UK's three LNG terminals combined rose to a six-month high at the beginning of the week due to several arrivals at the start of June allied to weak regasification levels, data from National Grid showed Wednesday. Total LNG stocks in the UK began Tuesday's gas day at 893 million cu m of natural gas equivalent -- about 70% of total combined capacity -- after having started July with 507 million cu m in tank, and were more than treble the 250 million cu m multi-year low seen at the beginning of March. So far this month, four LNG tankers have berthed at UK facilities, three Qatari vessels at South Hook (Zarga on July 3, Aamira on July 7, Al Mafyar on July 9) and the first vessel from Sabine Pass at Isle of Grain (Maran Gas Mystras on July 8). Due to the three Q-Max tankers arriving at South Hook in a short space of time, stocks at the Qatari-owned facility rose to a nine-month high of 420 million cu m -- about 85% of total capacity -- as a result, after having been down at 53 million cu m on July 3. More LNG tankers are expected to berth in the UK before the beginning of August, with the Adam LNG -- hailing from Nigeria -- set to arrive at the Isle of Grain on Friday and two more Qatari Q-Max tankers due at South Hook (the Lijmiliya on July 20 and the Shagra on July 29). This would mean seven July tankers in total after only four arrived during June.

Drilling rig owned by UK fracking firm Cuadrilla 'seriously vandalized’ --A drilling rig owned by one of the UK’s most prominent fracking firms has been seriously vandalised, in a move seemingly intended to slow down the country’s embryonic shale industry. Derbyshire police said that between 18 and 24 May, a person illegally entered a facility near Chesterfield run by PR Marriott, Britain’s largest onshore deep drilling company, which stores and maintains the rig on behalf of shale gas firm Cuadrilla. Once inside, they caused what the authorities described as “a large amount of criminal damage” to the rig. Police are investigating but there have been no arrests so far. According to a source with knowledge of the matter, the rig was attacked with sledgehammers to smash its touchscreen computers and windows. Components were drilled out, while pneumatic pipes and electrical cables were cut. In January, Cuadrilla started work on a site in Fylde, Lancashire, where later this year it hopes to frack the first well in the UK since 2011. Anti-fracking campaigners have staged daily protests outside the fences of the site on Preston New Road, which Cuadrilla’s chief executive has said have been largely peaceful but occasionally tipped into intimidation and harassment. Activists have also successfully pressured subcontractors into ending their agreements with Cuadrilla.The Guardian understands that the damage at PR Marriott was to a Drillmec HH220, a mobile rig which it is believed was intended for use during the main drilling stage at Preston New Road. The yard in Danesmoor, between Sheffield and Nottingham, has been the target of protests by anti-fracking protestors. Campaigners have blockaded the company several times – 11 people were arrested at one demonstration there in April and two more were arrested on 30 June, one on suspicion of aggravated trespass. 

Fracking protester run over by truck after 'slow walking' in front of vehicle during controversial demonstration - Mirror Online: A fracking protester stood in the middle of road 'slow walking' has been run over by a pick-up truck at the location of a controversial demonstration. A video of the accident - filmed by campaigners who have been camping out near the Cuadrilla site in Little Plumpton, Lancashire - shows the man falling to the floor. Witnesses said the man sustained minor injuries after pacing along Preston New Road practising a form of peaceful protest known as 'slow walking'. The road - which has become the focal point for demonstrators since energy firm Cuadrilla set up on its shale gas site there in January - was closed by Lancashire Police after the incident. Officers confirmed the driver had been spoken to about the alleged collision but said no arrests had been made. Cuadrilla said the truck was not one of its vehicles, nor was the driver one of its employees. A protester who filmed the incident claimed campaigners used the 'slow walking' tactic as it is recognised as a method of lawful protest, but still manages to cause disruption. Unemployed Danny Llew, 31, said: "[The protester] was doing slow walking. I've done it before. It has been used for quite a few years as a peaceful protest method. 

Fracking Companies to Government: We Are 'Suffering' as Financing Dries Up -- Fracking companies in Britain privately admit they are "suffering" and struggling to secure finance, according to government documents obtained via freedom of information.  In a meeting last May with then-business minister Anna Soubry, the Onshore Energy Services Group (OESG) said raising the money needed to develop a wide-scale fracking infrastructure was proving difficult.  "Industry are finding it a challenge to get support from British banks ... all funding therefore comes from overseas and self-growth," the group said, according to the government's minutes of the meeting.  "British banks are saying the companies are too small."  The documents were released just weeks after leading UK shale explorer Cuadrilla posted multimillion pound losses for the third year running.  The trade association, which represents small and medium-sized oil and gas companies [SMEs] in Britain, also raised concerns that if fracking takes off, supply chain companies won't be ready to provide the equipment needed to build the infrastructure to support the industry.  It told government that "incremental gains" will be made in making individual fracking sites operational, but that the "social license will be more important when this industry scales up."  In other words, getting public support will be key.

It Makes No Sense To Say Fracking Can Be Safe, No Matter What Guidelines Are In Place -  Can fracking be safe? A new study suggests how fracking – the process of extracting oil and gas trapped in rocks deep underground by blasting water into the rock at high pressure – can be conducted without causing earthquakes, which is one of the most well known concerns. While this kind of research can help produce guidelines to reduce the risks associated with fracking, ultimately, it makes no sense to talk of fracking being entirely “safe”.You might as well ask whether you can ensure your journey to work is safe. There are rules designed to reduce the risks, such as speed limits and the highway code, but there will always be the chance of human error or equipment failure. Venturing onto the roads is an inherently unsafe business. Of course, that doesn’t mean we should never do it. The risks involved in any industrial activity mean that we need to think carefully about how to manage them, rather than trying to claim it is safe or not. Fracking or hydraulic fracturing involves pumping up to 16 Olympic swimming pools’ worth of water, chemical additives and sand into shale rocks lying between 2km and 3km underground. This creates a dense network of small fractures in the rocks, releasing gas or oil that moves into the water stream and is pumped or carried to the surface. Earthquakes can occur when fracking takes place near a geological fault. It’s a bit like how a hovercraft works, by pumping air to produce a cushion so it can slip more easily over the land surface. If frack fluid is pumped into a geological fault, it can also slip more easily. Fracking can also change the stress on the fault, causing it to release, and a big enough fault shift will be felt as an earthquake. The new paper, published in Geomechanics and Geophysics for Geo-Energy and Geo-Resources, tries to predict how far from a geological fault it is safe to frack a well without causing an earthquake.  The results show any fracking site needs to be at least 63 metres away laterally from any fault, and perhaps as far as 433 metres. They haven’t estimated by how much this would reduce the chance of an earthquake.

Labour to bring forward Bill to ban fracking in Scotland -- Labour is to bring forward a Bill aimed at banning fracking in Scotland. The Scottish Government introduced a moratorium barring the controversial method of extracting gas in January 2015, but ministers have still to decide if this should be made permanent. Labour environment spokeswoman Claudia Beamish will announce today that she will press ahead with a Member’s Bill that would outlaw it. She said: “The SNP has repeatedly failed to ban on-shore fracking in Scotland – so Labour will do it.” Ms Beamish added: “The climate science is irrefutable. Scotland does not need a new fossil fuel as we shift towards a low carbon economy.”

Ukrgazvydobuvannia announces tender for 40 more hydraulic fracturing projects: Public joint-stock company Ukrgazvydobuvannia has announced a tender to carry out 40 more hydraulic fracturing projects for the total cost of up to UAH 195 million (VAT included). Ukrgazvydobuvannia said in the ProZorro e-procurement system that the tender is divided into two lots 20 hydraulic fracturing projects each for one year each with the expected cost of up to UAH 97.5 million. Bids can be submitted by July 20. Hydraulic fracturing will be conducted at the gas and gas condensate wells of Shebelynka and Poltava gas divisions in the depths of 2,800-5,000 meters.

 Construction starts on gas pipeline linking Australia's Northern Territory to east coast - Construction has started on Australia's Northern Gas Pipeline, which will connect the Northern Territory to the eastern seaboard's gas market, the Northern Territory government said Wednesday. The planned 622-km long pipeline will link Tennant Creek in the Northern Territory to Mount Isa in Queensland, connecting, for the first time, the Territory to the Eastern Gas Pipeline Grid, which spans across the Australian states of Queensland, Victoria, New South Wales and Tasmania. The pipeline, which operator Jemena has scheduled to flow first gas late in 2018, may bring some relief to the tight gas situation on the east coast and relieve some of the pressure on the region's LNG exporters. "Our modelling suggests that the pipeline can be relatively easily expanded and extend to transport up to, or beyond, 700 Tj of gas per day. This far exceeds gas used on an average day in the New South Wales and Queensland markets," Jemena managing director Paul Adams was quoted to say by The Australian."The pipeline will also benefit Australian households and businesses in the southern states, as it will free up gas currently flowing north to supply LNG plants in Queensland, making this gas available for use in New South Wales, Victoria, and South Australia," he said. The Australian Energy Market Operator earlier this year warned that the east coast could face some gas supply issues in the next couple of years, which led to the federal government implementing LNG export restriction measures.

How energy-rich Australia exported its way into an energy crisis - On a sweltering night this February, the world’s No. 2 exporter of liquefied natural gas didn’t have enough energy left to keep its own citizens cool. A nationwide heat wave in Australia drove temperatures above 105 degrees Fahrenheit around the city of Adelaide on the southern coast. As air-conditioning demand soared, regulators called on Pelican Point, a local gas-fueled power station running at half capacity, to crank up.It couldn’t. The plant’s operator said it wasn’t able to get enough natural gas quickly to run its turbines fully. At 6:03 p.m., regulators cut power to 90,000 Adelaide homes to prevent a wider blackout.Resource-rich Australia has an energy crisis, one that offers lessons for America as it prepares to vastly increase natural-gas shipments abroad. Australia now exports so much liquefied natural gas, or LNG, it may overtake No. 1 exporter Qatar within several years. It exported 62% of its gas production last year, according to the BP Statistical Review of World Energy. Yet its policy makers didn’t ensure enough gas would remain at home. As exports increased from new LNG facilities in eastern Australia, some state governments let aging coal plants close and accelerated a push toward renewable energy for environmental concerns. That left the regions more reliant on gas for power, especially when intermittent sources such as wind and solar weren’t sufficient. Shortages drove domestic gas prices earlier this year in some markets in eastern Australia to as high as $17 per million British thermal units for smaller gas users such as manufacturers. On the spot market, gas prices have gone from below $1 in 2014 to roughly $7 today—well above the roughly $3 that prevails in the U.S.—causing havoc around the country. In March, Australia’s largest aluminum smelter cut production and laid off workers because it said it couldn’t secure enough cheap energy. During one blackout last year, some families lost embryos in an in-vitro-fertilization clinic with no backup generation, according to a government-commissioned report. In February, some tuna fishermen watched catches rot because freezers shut off.

India buys first ever U.S. crude oil, to step up purchases --India, the world's third-largest oil importer, will import crude oil from the United States for the first time after Indian Oil Corp bought a cargo that will be delivered in October. The purchase comes after Indian Prime Minister Narendra Modi's visit to the U.S. in June when President Donald Trump said his country looked forward to exporting more energy products to India. IOC bought 1.6 million barrels of U.S. Mars crude, a heavy, high-sulfur grade, and 400,000 barrels of Western Canadian Select that will be delivered onboard a Very Large Crude Carrier, IOC's head of finance, A.K. Sharma, told Reuters. PetroChina was awarded the tender to sell the cargoes and is expected to load the oil off the U.S. Gulf Coast, said a trading source with direct knowledge of the sale. The cargo was priced on a delivered ex-ship basis, which is "very competitive" to that of Basra Light, Sharma said. "So long as the prices remain competitive, we will buy more of the U.S. crude," he said. IOC had to obtain special permission from the shipping ministry to buy the cargo on a delivered basis as local regulations favor the use of Indian flagged carriers for imports, Sharma said. India is the latest Asian country to buy U.S. crude after South Korea, Japan, China, Thailand, Australia and Taiwan as the countries seek to diversify oil imports from other regions after the OPEC cuts drove up prices of Middle East heavy-sour crude, or grades with a high sulfur content.

Cheaper options knock Gulf's share of Indian June oil imports to 19-mth low  (Reuters) - India's reliance on Middle East oil imports shrunk in June to the smallest since October 2015 as the world's third-biggest importer tapped other sources amid OPEC supply cuts, ship tracking data from industry sources and data available on Thomson Reuters Eikon showed. India's imports of Middle Eastern crude oil shrunk in June to the smallest since October 2015 as the world's third-biggest importer tapped other sources amid OPEC supply cuts, ship tracking data available with Reuters showed. Middle East imports fell 7.6 percent in June from the previous month, partly driven by declines from Kuwait, Iraq and Saudi Arabia as the production cuts by the Organization of the Petroleum Exporting Countries (OPEC) made more of a dent in supply. The cuts also drove up Middle East crude prices, prompting price-sensitive Indian buyers to seek substitutes from Russia and Latin America as the world remains awash with oil. Gulf crude accounted for about 58.5 percent of India's imports compared with about 66 percent in May, while the share of oil from Latin America, Africa, and Central Asia, including Russia, rose, according to ship tracking data obtained from sources and data compiled by Thomson Reuters Oil Research & Forecasts. "The choices have increased and crude is available at competitive prices," said M. K. Surana, chairman of oil refiner Hindustan Petroleum Corp."There are high supplies of low-sulphur crude because Nigeria is exempted" from the OPEC cuts, he said. Even as OPEC and some non-OPEC producers cut output to shore up prices, global oil output in June is 1.2 million barrels per day above a year ago, the International Energy Agency said on Thursday in its latest monthly report. The weight of supplies has forced sellers to cut prices allowing Indian refiners to snap up cargoes in the spot market. 

This Nation Just Became The World's Newest Energy Superpower - Lots of news this week on energy companies from one particular spot on Earth.India.In Lebanon — where reports suggest Indian state oil firm ONGC will bid for offshore blocks. In Canada — where Indian officials are said to be negotiating coking coal supplies. And even in Venezuela, where the cash-strapped government is seeking to sell ONGC a 9 percent stake in the key San Cristobal oil field.And a new study released this week suggests it’s not coincidence we’re hearing so much about Indian companies on the energy stage.In fact, India has quietly become one of the world’s biggest energy investors.That revelation came from the International Energy Agency (IEA) — which released a report yesterday on energy investment trends for 2016. Showing that India’s investment in energy projects surged during the past year.All told, India’s spending on electricity, oil and gas, coal and renewables jumped by 7 percent in 2016, as compared to the previous year. Reaching nearly $100 billion. As the chart below shows, that rise was enough to vault India into third place globally for energy investment. Edging out oil giant Russia.   India moved into third place globally for energy spending in 2016. Of course, India’s energy spending is still a long way off second-place U.S. and top investor China. But the rapid rise of energy investment here shows this is an up-and-coming spot for project funding in oil and gas, and beyond. IEA attributed India’s ascent to new government policies helping to modernize and expand the economy. Further evidence the country is “getting its act together” in becoming a true natural resource superpower.

Venezuela’s oil reserves kick into reverse - Venezuela’s claim of being home to the world’s largest oil reserves based on its massive Orinoco heavy oil belt has been the subject of industry skepticism for years. The South American producer estimates it has over 300 billion barrels of proven oil, a figure naysayers believe is grossly overstated as much of its huge bitumen resources are tricky, and hence too costly, to produce. Venezuela's official reserves vs productionNow two years after the biggest oil price collapse in a generation, Venezuela’s world-beating oil reserve claims are not only looking increasingly shaky but the country’s current economic and political quagmire means its recoverable oil reserves are now firmly in retreat, according to an independent study. Norwegian oil consultancy Rystad Energy last week estimated that Venezuela’s total recoverable oil resources stand at 75 billion barrels, 24% below ago levels and less than a quarter of the official 302.3 billion barrels figure for proven reserves. The shortfall is even more dramatic given Rystad’s approach to classifying recoverable oil resources. Unlike BP’s touchstone annual Statistical Review, which presents a mix of resource categories based on opaque official sources as “proven”, Rystad claims to take a more rigorous approach by applying Society of Petroleum Engineers (SPE) standards. On this basis, Venezuela’s proved reserves actually stand at just 8 billion barrels, a fraction of the claimed total and less than neighboring Brazil. Even on a more generous proved and probable basis—equivalent to 2P reserves cited by oil companies as the most likely estimate of their recoverable oil—Venezuela holds 17 billion barrels, Rystad believes.

  Venezuela oil production dives as big debt bills loom -  Venezuela's only source of cash is quickly dwindling as the country faces mounting unpaid bills, violent political protests and citizens starving due to food shortages. Oil makes up nearly all of Venezuela's exports, and with the country in a full-blown crisis, oil is only thing it can sell. But production is down to its lowest levels since 1989 -- excluding an oil strike in 2002 -- according to data compiled by Rice University professor Francisco Monaldi. Production has declined 10 out of the last 11 years, according to BP statistics. And in the first half of this year, it was down sharply, 12 percent, compared to the same time last year, OPEC numbers released on Wednesday show. Central to its production problem is that oil service providers, such as Halliburton and Baker Hughes, have cut back on pumping out oil until President Nicolas Maduro pays them back for millions of dollars in unpaid bills. Venezuela separately owes about $5 billion in outstanding debt payments to investors this year. Fears are rising that Venezuela can't pay, and S&P downgraded the nation's credit rating on Tuesday deeper into junk status. "This is much worse than we ever expected," says Monaldi, a former consultant to the World Bank. "It really takes some special talent to destroy an economy in such a way." Venezuela has more oil than any country in the world. But the South American nation is enduring a self-inflicted economic crisis. Extreme government overspending, mismanagement of natural resources and corruption pushed Venezuela into a recession in 2014. The country's political opposition have staged months of street protests against socialist President Maduro, claiming he has abandoned democracy and violated human rights. Nearly 100 Venezuelans have died in demonstrations and clashes with police since late March.

China wraps up combustible ice mining trial, setting world records - Xinhua | (Xinhua) -- China on Sunday completed a 60-day trial of mining gas hydrates, commonly known as combustible ice, in the South China Sea, marking breakthroughs in human's search for alternative clean energy sources. Started from May 10, the mining operation in waters near the Pearl River estuary has beaten previous expectations and set world records in both the length and total amount of extraction, according to the China Geological Survey Bureau. The trial exploration produced over 300,000 cubic meters of gas - mainly methane, with an average daily extraction of more than 5,000 cubic meters of high purity gas, and a highest daily output of 35,000 cubic meters, said the bureau. Meanwhile, 6.47 million sets of experimental data were recorded. China declared its first success in collecting samples of combustible ice in the South China Sea on May 18, which usually exists in seabed or tundra areas with the strong pressure and low temperature necessary for its stability. The substance can be ignited like solid ethanol, which is why it is called combustible or flammable ice. One cubic meter of combustible ice, a kind of natural gas hydrate, is equal to 164 cubic meters of regular natural gas. China Geological Survey Bureau's deputy director Li Jinfa said combustible ice will play a vital part in China's energy security and economic development. "It is considered a strategic alternative to oil and natural gas in the future," Li said. "Not just China, the world at large sets eyes on it."

OPEC forecasts 2018 call on its crude oil at 32.2 mil b/d, down 60,000 b/d from 2017 - OPEC's analysis arm on Tuesday offered a bearish 2018 outlook for the producer bloc, projecting that global demand for its crude would fall by 60,000 b/d from this year to average 32.2 million b/d. That is 400,000 b/d below its June output level of 32.6 million b/d, according to OPEC's secondary sources, meaning that if OPEC holds output steady, the market's supply glut would continue through next year. Related article -- Oil markets currently in balance, set to tighten in H2 2017: BP's Dudley In offering its first forecasts of 2018 market fundamentals, OPEC said its projections of non-OPEC oil supply and OPEC NGLs growth next year "will slightly outpace incremental world oil demand." OPEC would therefore hope that "a better-than-expected improvement in the global economy could contribute further to oil demand growth in the coming year, accelerating the ongoing rebalancing in the oil market and supporting market momentum in 2018," its analysts wrote in their monthly oil market report. OPEC forecast a significant market tightening in the months ahead, with demand for OPEC's crude expected to average 33.34 million b/d in the third quarter, significantly above the second-quarter call of 31.55 million b/d, as non-OPEC supply will not be as robust as previously forecast. But supplies start to grow again in 2018, the analysts projected. Non-OPEC supply will average 58.96 million b/d in 2018, a 1.14 million b/d rise from the estimate for 2017 of 57.82 million b/d, which was revised downward by 300,000 b/d from last month's report. OPEC NGLs production, which was expected to average 6.31 million b/d in 2017, will rise to 6.49 million b/d, largely due to the addition of Equatorial Guinea to OPEC, the report stated. The country was voted in as a full member during OPEC's May 25 meeting. Meanwhile, global demand in 2018 is expected to average 97.6 million b/d, up 1.26 million b/d from OPEC's 2017 forecast, which it kept unchanged from last month's estimate of 96.4 million b/d.

 OPEC oil supply is lost in a fog of data: Kemp - (Reuters) - The Organization of the Petroleum Exporting Countries coordinates the policies of its members by giving each of them a production allocation rather than limiting how much they can export.OPEC agreements have been specified in terms of output rather than exports since the first allocations were agreed in March 1982 (“Annual Statistical Bulletin”, OPEC, 2017).Quotas, as the production allocations are informally known, apply to crude oil but not to condensates or other natural gas liquids.The system originally made sense but now appears increasingly outdated because of the rising production of natural gas liquids and the growing oil consumption within OPEC countries themselves.Between 1980 and 2016, OPEC’s crude production increased by 31 percent from 25.4 million barrels per day to 33.3 million bpd.But OPEC’s output of natural gas liquids sextupled from 1.0 million bpd to 5.8 million bpd over the same period.And OPEC’s internal oil consumption more than tripled from 2.6 million bpd in 1980 to 9.0 million bpd in 2016.In fact, OPEC’s own members have reported some of the fastest growth in oil consumption over the last four decades owing to population expansion and increasing prosperity.OPEC’s share of world oil demand has climbed from just 1.8 percent in 1973 and 4.1 percent in 1980 to peak at 9.9 percent in 2015 before edging down to 9.5 percent in 2016.OPEC’s internal demand has risen from 18 percent of its crude oil production in 1982 to as much as 28 percent in 2016.At the same time, some OPEC members have invested heavily in refineries and petrochemical plants to capture more value-added from their exports.OPEC’s refining capacity has grown from 5.3 million bpd in 1980 to 11.8 million bpd in 2016, according to the organisation’s data. The result of these changes is that crude production is less and less relevant to the volume and composition of the crude and refined products that OPEC exports to the rest of the world. Exports, net of any imports, rather than crude production, are what matters for the world supply-demand balance and global oil inventories.

Oil traders succumb to a dangerous despond: Kemp (Reuters) - U.S. Independence Day marked a turning point in the oil market, when a short-covering rally ran out of momentum and gave way to a renewed and very aggressive bear market.Hedge funds and other money managers increased their net long position in futures and options contracts linked to Brent and WTI by 46 million barrels in the week leading up to July 4 ( increased their net long position for the first time after reducing it by a cumulative 231 million barrels over the previous four weeks, according to data from regulators and exchanges ( move had all the characteristics of a short-covering rally, with crude prices rising steadily between June 21 and July 4 (  Even so, only a small number of short positions had been closed out by July 4. But then something very unexpected happened. Instead of prices continuing to climb as more short positions were closed, prices began to sink in the second half of last week.From a positioning perspective, the balance of risks remained tilted to the upside, with a small number of long positions left to liquidate and a large number of shorts still needing to be closed out.So the renewed decline in oil prices therefore marked an unusual and aggressive move, with extra selling from unknown traders pushing prices lower.Oil prices continued to slide despite an unusually large drawdown in U.S. commercial crude stocks reported on July 6.From a positioning perspective, positions still appear very stretched on the downside. There is still a very high risk of the trade becoming crowded. But sentiment in the oil market has become exceptionally bearish, with most traders concluding OPEC won't, or can't, do anything to support prices, and U.S. shale producers can't, or won't, moderate the drilling boom.

Why Crude Oil Trades So Poorly --- Crude oil is the new widow maker.  It trades heavier than a wet dawg in a New York thunderstorm.    Rallies have no legs and its seems the only bid these days are the shorts with their family jewels caught in a vice grip. Note the recent lower highs and lower lows and stiff  resistance at the 50 and 200-day moving averages.  OPEC is fighting the same forces that did “John Henry, the steel driving man” in.  And, for that matter, the same changes that have wiped out most of the floor traders on the NYSE.  Technology.  We came across this Foreign Affairs piece yesterday that absolutely floored us (be sure to click Foreign Affairs to read full article), The technology revolution has transformed one industry after another, from retail to manufacturing to transportation. Its most far-reaching effects, however, may be playing out in the unlikeliest of places: the traditional industries of oil, gas, and electricity.…These technologies have helped drive oil prices down from an all-time high of $145 per barrel in July 2008 to less than a third of that today, and supply has become much more responsive to market conditions, undercutting the ability of OPEC, a group of the world’s major oil-exporting nations, to influence global oil prices.…. As the price of oil tumbled from above $100 per barrel in early 2014 to below $50 per barrel in January 2015, many of these projects [deep water] stalled. By early 2016, companies had put on hold an estimated four million barrels per day of new oil output, 40 percent of it from deep-water sources.…As drilling stalled, oil and gas operators, desperate to cut costs, began to rethink the complex systems they used.…Today, thanks to these innovations, the average breakeven prices of new deep-water projects have fallen, to just $40–$50 per barrel in the Gulf of Mexico—an important global bellwether because it is one of the most responsive regions in the world to changes in market conditions. –Foreign Affairs  Technology only moves forward unless the Luddites take power, which given recent events can’t be entirely dismissed.   So, our guess is the long-term pressure on crude prices is lower.

Oil Bulls, Stand Aside - Bloomberg Gadfly -- Oil bulls got their first ray of hope last week from the U.S. Energy Information Administration. Weekly data showed a sharp fall in inventories, appearing to support the notion that OPEC is finally taking chunks out of the global crude glut. But surging exports from North America mean the market should treat that idea with some caution. Stockpiles aren't coming down because the oil is being used, it's just being moved overseas.  Six months of OPEC cuts have done little to drain U.S. oil inventories  The EIA reported the biggest drop in combined crude and refined-product stocks (including those held in the Strategic Petroleum Reserve) in four years for the last week of June. In the four months through June, when any cuts in OPEC crude deliveries to the U.S. should have begun to show up in lower import numbers, the oil stockpile tumbled by almost 21 million barrels.That doesn't seem like a lot. At that rate, it would take two-and-a-half years to get total inventories back to their five-year average level.It does start to look better, though, if you compare that with what normally happens over the period.This is the first year since at least 2000 that total U.S. oil inventories have fallen between the end of February and June 30. The average increase in stockpiles over that period has been 54 million barrels. But what has happened to all that oil?  The short answer is that the oil has been sent elsewhere. The U.S. is a big net importer of oil -- dreams of energy independence have yet to be realized -- but the excess of imports over exports has slipped after the ban on overseas sales was lifted last year. The U.S. exported 149 million more barrels of crude and refined products in the four months through June than it did in the same period of 2016. Had those barrels not been exported, U.S. inventories would have risen by another 129 million barrels.

WTI Tumbles Back To $43 Handle After Saudis Breach OPEC Agreement --Having v-shaped recovered yesterday after disappointing Russian comments (on no news whatsoever), crude prices are tumbling once again this mornig, WTI back to $43 handle, after Saudi Arabia told OPEC it pumped 10.07 million barrels a day in June, a person with knowledge of the data said, exceeding its production limit for the first time since brokering a deal to curb global crude supply to counter a glut.As Bloomberg reports, the world’s biggest oil exporter boosted output from 9.88 million barrels a day in May, surpassing the limit of 10.058 million it accepted in an agreement between OPEC and other major suppliers including Russia. Under the deal reached in December, Saudi Arabia agreed to reduce production by 486,000 barrels a day, the most of any country participating in the cuts. The person with knowledge of the June data asked not to be identified because the information isn’t public. And the result is yet more downward pressure on cride prices...

Goldman Warns Oil Could Plunge Below $40 Absent OPEC "Shock And Awe" - Goldman has done it again: less than two weeks after the bank said "oil prices have likely hit bottom of the price range, and look attractive" when it slashed its WTI price target from $55 to $47.50 (and every other Wall Street bank promptly followed), in a note released overnight by its analysts including Damien Courvalin and Jeffrey Currie, the central banker incubator has effectively thrown in the towel, and writes that while its 3 month base case price target remains$47.5, it warns that absent a "shock and awe" production cuts from OPEC, oil could tumble below $40/barrel. First, Goldman explains that the market remains, gasp, volatile and could move down as well as well as up:While US oil inventories posted a large draw last week, we find that high frequency oil data is not yet providing a clear signal for oil prices to move sharply out of their recent trading range. As a result, we see symmetrical risks of higher or lower moves in the short term as data volatility continues to impact sentiment. As we laid out last week, we believe that sustained trends in inventory draws and US rig count declines or evidence of further OPEC actions will be required for prices to rally, which remains our base case with our 3-mo WTI forecast at $47.5/bbl. And then the punchline: Given the recent rebound in net speculative length from its 18-month lows, we believe, however, that a failure for these shifts to materialize soon could push prices below $40/bbl as the market tests OPEC’s and shale’s reaction functions. Importantly, we wouldn’t expect such a move to be volatile, as it is not driven by storage concerns like last year (with available storage capacity given the 2017 draws) but the ongoing search for a new equilibrium. Goldman specifically envisions the growing output from Libya and Nigeria, and warns that unless OPEC engages in further "shock and awe" cuts, the next stop is lower: OPEC production and exports increased in June, driven by Libya and Nigeria which have sustained production above our expectations over the past few weeks. While OPEC has yet to address this increase in production, the group has invited both countries to participate in the next compliance committee meeting on July 24. We continue to believe that there is another opportunity for OPEC to increase the cuts, but that this should be done in a “shock and awe” manner, with little public announcement. This requires further patience in assessing the group’s response to higher aggregate production and lower prices.

Saudi Arabia curbs oil shipments to United States: Kemp (Reuters) - Saudi Arabia is trying to support oil prices by reducing its crude shipments to the United States in a bid to cut the amount of oil in commercial storage.U.S. crude imports from Saudi Arabia averaged less than 900,000 barrels per day (bpd) in the four weeks ending on July 7, according to the U.S. Energy Information Administration.U.S. imports from Saudi Arabia are running at the slowest rate since 2015, and the slowest for the time of year for over five years ( and from Saudi Arabia will fall even further to less than 800,000 bpd in August, according to a Saudi industry source familiar with the kingdom's oil policy."Saudi Arabia is keen to see an improvement in the oil market and accelerate the balancing process," the source told Reuters on Wednesday ("Saudis to cut August oil exports to lowest level this year", Reuters, July 12).Saudi Arabia is cutting exports to all destinations but reducing shipments to the United States is especially important because U.S. stocks are the most visible and have the biggest impact on prices.The United States accounts for more than 40 percent of the commercial crude and product stocks held in the OECD and its stocks are reported weekly rather than monthly as in most other countries.U.S. crude and product stocks therefore receive disproportionate attention from oil traders and analysts, and can have a major impact on global oil prices.Changes in U.S. crude and products stocks are often (misleadingly) interpreted to reflect changes in the global supply-demand balance.Saudi Arabia is the largest supplier of crude oil to the United States after Canada, providing an average of 1.1 million bpd to U.S. refiners in 2016.By restricting shipments, Saudi Arabia hopes to reduce U.S. stocks and demonstrate to sceptical traders that the long-awaited rebalancing of the global market is finally underway.The strategy seems to have had some early success with U.S. crude stocks falling earlier and faster than normal so far in the second and third quarters of 2017. U.S. crude stocks have fallen by 40 million barrels since the end of March, compared with a drawdown of just 8 million barrels over the same period in 2016.

Oil Rises Despite Gloomy Outlook - Oil moved down in early trading on Tuesday as Goldman Sachs warned that oil could fall below $40 if bullish catalysts don’t emerge soon, prompting other banks to review their oil price forecast. Prices recovered somewhat on Tuesday afternoon as the EIA’s STEO report reflected a small drop in U.S. crude oil production in June. U.S. crude oil production decreased 0.02 kb/d to 9.22 mmb/d in June compared with May. Output has increased 0.66 kb/d since the low in September 2017. Production, however, is forecast to increase 1.01 mmb/d in 2017 and 0.34 mmb/d in 2018 and reach 10.13 mmb/d by December 2018. It should increase +0.91 mmb/d from June 2017 to December 2018.   The IEA published its annual Energy Investment report, detailing investment trends in the energy sector. Upstream oil and gas saw investment plunge by 44 percent between 2014 and 2016, but will see a slight uptick this year. However, the expected 3 percent global increase in investment is mostly due to U.S. shale, which will see investment expand by 53 percent.   OPEC is reportedly considering taking the exemption away from Libya and Nigeria, forcing the two OPEC members to limit their production as part of the cartel’s collective reductions. Libya and Nigeria had been given exemptions because both countries have suffered from instability and attacks on oil infrastructure, forcing large volumes of capacity offline. But both have seen a sharp resurgence in output. The restored supply is undermining the efficacy of the cuts from other OPEC members. It is still early, but sources told the WSJ that OPEC officials have been inquiring about production data from Libya and Nigeria, which could be a prelude to production caps, perhaps at the next meeting in November in Vienna. Meanwhile, Russia’s energy minister hinted that the OPEC and non-OPEC countries could theoretically extend and deepen their cuts, comments likely intended to reverse the dramatic bout of pessimism throughout the global market.

Oil rises 2.5 percent after surprisingly large U.S. crude stock draw | Reuters: Oil prices climbed more than 2.5 percent on Tuesday along with rising heating oil futures on reports showing cuts in U.S. oil production and declines in U.S. crude and European product stockpiles. U.S. crude stocks plunged almost three times more than forecast in the latest week, while gasoline inventories decreased unexpectedly and distillate stocks built, industry group the American Petroleum Institute said Tuesday. Crude inventories fell by 8.1 million barrels in the week to July 7 to 495.6 million, compared with analysts' expectations for a decrease of 2.9 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 2 million barrels, API said. Benchmark Brent LCOc1 futures rose 64 cents, or 1.4 percent, to settle at $47.52 a barrel. U.S. West Texas Intermediate crude CLc1 also rose 64 cents, or 1.4 percent, to settle at $45.04 per barrel. After the close and the supportive API data, Benchmark Brent LCOc1 futures rose $1.25, or 2.7 percent, to $48.12 a barrel. U.S. West Texas Intermediate crude CLc1 rose $1.31, or 2.9 percent, to settle at $45.71 per barrel. U.S. heating oil HOc1 futures, meanwhile, gained 1.6 percent on Tuesday, boosting the products crack spread CL321-1=R, a measure of refinery margins, to the highest since late May. European refineries increased crude oil intake in June, but stocks of oil products, particularly diesel, slid, Euroilstock data showed on Tuesday. "That tells you demand globally is a lot stronger than people thought it was going to be and that is having a net positive effect on heating prices,"

WTI Pops After Huge Crude Inventory Drawdown --WTI prices have roller-coastered (generally lower) since last week's inventory(lower)/production(higher) data back to unchanged but as API printed a massive 8.133mm crude drawdown (vs 2.45mm exp), the biggest since Sept 2016 if DOE confirms, WTI prices quickly jumped higher. Gasoline also saw a bigger than expected draw while Distillates built. API:

  • Crude -8.133mm (-2.45mm exp) - biggest draw since Sept 2016
  • Cushing -2.028mm - biggest draw since Feb 2014
  • Gasoline -801k (-534k exp)
  • Distillates+2.079mm

Big drawdowns across the board last week from API and DOE added to in crude and gasoline this week...A lot of hope today as EIA cut its 2018 crude production forecast (modestly) - “This pull-back in production is kind of wake-up call to people who thought that shale was going to be viable no matter what OPEC did,” Phil Flynn, senior market analyst at Price Futures Group in Chicago, says by phone, adding "If output doesn’t rise as much as previously anticipated, “then it’s time for the bears to start questioning their religion again."Notice that WTI was trading at the same level as it was when last week's API data hit before the print...once the data hit, WTI was bid above $45.50...Deja vu all over again

Oil rises above $48 as API reports drop in U.S. fuel stocks | Reuters: (Reuters) - Oil rose above $48 a barrel on Wednesday in response to a fall in U.S. fuel inventories and a cut in the U.S. government's forecast for crude output and despite OPEC suggesting the oil market will see a surplus next year. U.S. crude inventories fell by 8.1 million barrels, industry group the American Petroleum Institute said on Tuesday, much more than the forecast. Official inventory data from the Energy Information Administration is due at 1430 GMT. Brent crude LCOc1, the global benchmark, was up 62 cents, at $48.14 a barrel by 1130 GMT. U.S. crude CLc1 gained 67 cents to $45.71. "While further upside could be expected in the short term amid the speculations of a cut in U.S production, gains may be limited by the firm oversupply dynamics of the markets," FXTM analyst Lukman Otunuga said. The U.S. crude stocks drop will raise hopes that a long-awaited market rebalancing is under way. A supply glut has stuck around for three years, despite an OPEC-led output cut in 2017, keeping oil at less than half its price of mid-2014. Also supporting prices, the EIA said on Tuesday it expected U.S. crude oil production to rise by less than previously forecast next year due to a lower price outlook. The lower 2018 forecast of 9.9 million barrels per day will ease concerns that the OPEC-led supply cut will lead to a flood of competing U.S. shale supplies, swamping the OPEC effort.

The Major Wildcard That Could Send Oil To $120 --The latest rally in oil prices ran up against a wall yet again, and the same fears about oversupply have not receded in the slightest. The expectation from most oil analysts is that there is very little room on the upside for oil prices and that we will have to wait until 2018 at the earliest before the market gets closer to “balance.” But the one major wildcard for oil prices is geopolitics, which, however unlikely given the degree of supply overhang that still exists, could send prices up. But how high? The latest blockade of Qatar, which has mushroomed into a regional political crisis in the Middle East, would have caused a severe spike in oil prices in the past, even though Qatar is a relatively minor producer. However, the simmering standoff not only failed to register, but occurred at a time of falling oil prices.If a crisis involving heavyweight oil producers was shrugged off by the market, it is hard to imagine some other event causing a sharp price spike, even if more barrels were on the line.But that is exactly what some analysts are afraid of, warning that the markets are overlooking some potentially massive geopolitical problems looming just over the horizon."Venezuela's 2 million barrels of oil a day could literally go any day. Mexico looks poor. Azerbaijan's in trouble. China's own production is collapsing rapidly," Neil Dwane, the chief investment officer of European equity at Allianz Global Investors, told CNBC last week."One only has to have one mistake and the only thing you'll be talking about all morning is oil at $120."Herman Wang of S&P Global Platts agreed with that sentiment, although he expects the price spike to be less severe."There are plausible scenarios where you could see, perhaps not $120 a barrel, but an elevated oil price, say $70 to $80 on some of these geopolitical and some of the supply concerns. Venezuela certainly is a mess right now," Wang told CNBC's Squawk Box last week.

Saudi Arabia: Saudi Arabia's June oil output up on domestic summer crude burning - source - Times of India: (Reuters) - Saudi Arabia's crude oil production in June rose to 10.07 million barrels per day due to a domestic increase in crude burning during the hot summer months, an industry source familiar with the kingdom's output figures said on Tuesday. The amount of crude supplied to the market - both domestically and for exports - was also slightly up at 10.1 million bpd, the source said. The rise in production from Saudi Arabia last month is only 12,000 bpd above its output target under the OPEC deal which is 10.058 million bpd. But crude exports in June were below 7 million bpd, the source said and the increase in output and supply was seasonal. The top oil exporter is still committed to the OPEC agreement. Supply to the market may differ from production depending on the movement of oil in and out of storage. The kingdom burns some 700,000 bpd of crude during the summer months when usage of air conditioners increases as temperatures rise.

Which oil exporters are most desperate for higher prices? -- The price of oil and natural gas has roughly halved in the past three years. That’s redistributed about $1 trillion in yearly export earnings — more than 1 per cent of global gross domestic product — from net producers to net consumers.*  A new report from Brad Setser and Cole Frank of the Council on Foreign Relations explains which countries have had to adjust the most in response, which have yet to adjust, and which remain the most vulnerable to further price drops.  Setser and Frank analysed what they call the “external breakeven”: the current account deficit minus the oil and gas trade surplus, divided by net oil and gas exports in barrels of oil equivalent. . Here’s what the external breakevens of the major oil and gas exporters look like as of 2015:

OPEC's Barkindo says all producers should help balance market | Reuters: All global oil producers should help balance the market, OPEC's Secretary General Mohammad Barkindo told reporters on Tuesday when asked what else the Organization of the Petroleum Exporting Countries could do to ease a global oil glut. "It is beyond any group of stakeholders, it has to be a collective responsibility of all producers," he told reporters on the sidelines of an industry conference in Istanbul.

WTI Slips As Inventories Draw But Production Hits New Cycle High -  WTI has extended gains (on weaker dollar) from last night's 'bullish' API data in a deja-vu of last week, and DOE data (showing large draws in Crude and Gasoline) confirmed continued rebalancing. However, once again mimicking last week's action, prices were not exuberant asanother surge in production - to new cycle highs - stymied some of the excitement. DOE:

  • Crude -7.564mm (-2.3mm exp) - biggest draw since Sept 16
  • Cushing-1.948mm - biggest draw since Feb 14
  • Gasoline -1.697mm (-682k exp)
  • Distillates +3.131mm (+728k exp)

The question heading into this week was whether last week's bigger than expected draw was a one-off, or the start of rebalancing. This week, we get some answers and it seems like the rebalancing is continuing...

 Oil settles higher as EIA confirms a drop in U.S. crude stockpiles - Oil prices settled higher Wednesday as U.S. government data confirmed a sharp decline in domestic crude supplies for a second week in a row. Prices, however, ended off the session’s best levels, as rising production in the U.S. and elsewhere continue to prevent the market from reaching a lasting balance between supply and demand. August West Texas Intermediate crude climbed 45 cents, or 1%, to settle at $45.49 a barrel on the New York Mercantile Exchange. Prices pulled back from the $46.17 level they traded at before the data, but the settlement was still the highest since July 3, FactSet data show. September Brent crude on London’s ICE Futures exchange added 22 cents, 0.5%, to $47.74 a barrel. On Wednesday, the U.S. Energy Information Administration reported that domestic crude supplies dropped 7.6 million barrels for the week ended July 7. That topped a forecast for a decline of 2.6 million barrels by analysts surveyed by S&P Global Platts, but came in a bit less than the decline of 8.1 barrels reported by the American Petroleum Institute late Tuesday. Crude stockpiles had dropped by 6.3 million barrels in the prior week, according to the EIA. “Crude inventories have dropped below 500 million barrels for the first time since late January, and are just above year-ago levels, after the biggest draw since last September,” said Matt Smith, director of commodity research at ClipperData. The EIA pegged last week’s total crude stocks at 495.4 million. But total U.S. crude production edged up by 59,000 barrels a day to 9.397 million barrels a day last week, according to the EIA figures.

Oil Rises As Robust Chinese Demand Seen Helping Drain Glut (Reuters) - Oil prices rose 1.3 percent on Thursday after much stronger demand in China overshadowed a downbeat report by the International Energy Agency (IEA) that showed higher production by key OPEC exporters. Brent crude settled up 68 cents or 1.42 percent at $48.42 a barrel. U.S. light crude settled up 59 cents at $46.08 a barrel. "The market is trying to stabilize," said Gene McGillian, manager of market research at Tradition Energy. Prices had responded only minimally to data Wednesday showing U.S. crude oil inventories dropped last week by the most in 10 months. "The market is having difficulty picking its head up," McGillian said. Oil prices have dropped in recent weeks to levels not seen since the end of last year as investors lost faith in a deal between OPEC and non-OPEC producers to reduce output, while U.S. shale oil production has risen sharply. But there is evidence world oil demand is picking up, notably in the United States and China, the world's two biggest oil consumers. China imported 8.55 million barrels per day (bpd) of oil in the first half of this year, up 13.8 percent from the same period in 2016, making it the world's biggest crude importer ahead of the United States.

Opec: IEA says OPEC compliance with oil cuts at lowest in 6 months - OPEC's compliance with production cuts fell in June to its lowest levels in six months as several members pumped much more oil than allowed by their supply deal, thus delaying market rebalancing, the International Energy Agency said on Thursday. OPEC's compliance with cuts slumped to 78 percent last month from 95 percent in May as higher-than-allowed output from Algeria, Ecuador, Gabon, Iraq, the UAE and Venezuela offset strong compliance from Saudi Arabia, Kuwait, Qatar and Angola. "Each month something seems to come along to raise doubts about the pace of the rebalancing process. This month, there are two hitches: a dramatic recovery in oil production from Libya and Nigeria and a lower rate of compliance by OPEC with its own output agreement," the Paris-based IEA said. The Organization of the Petroleum Exporting Countries and several non-OPEC producers including Russia have agreed to cut production by around 1.8 million barrels per day until March 2018 to ease a global crude glut spurred by booming U.S. output. OPEC members Libya and Nigeria were exempted from the cuts due to years of unrest that have sapped their output. The two countries have managed to increase their combined production by more than 700,000 bpd in recent months, the IEA said. "For fellow OPEC members, who agreed to reduce production by 1.2 million bpd, to see their cut effectively diluted by nearly two-thirds must be very frustrating, especially as their pact has, hitherto, been well observed by historical standards," the IEA said. The cuts have stabilised oil at around $45-50 per barrel, but prices have come under renewed pressure in recent weeks due to growing U.S. output and little evidence of global stocks falling from record highs above 3 billion barrels. 

OPEC compliance issues, non-OPEC surge hamper rebalancing: IEA - Weaker compliance by OPEC producers with the group's output pact, together with surging non-OPEC supply raised global oil output by 720,000 b/d in June to 97.46 million b/d, the International Energy Agency said Thursday. However the IEA also raised its estimate of oil demand growth this year to 1.4 million b/d, from 1.3 million b/d, offering some comfort to those worried about low oil prices, after a "dramatic acceleration" in the second quarter. In its monthly oil market report the IEA estimated total oil demand was 97.44 million b/d in the second quarter, and supply 96.77 million b/d, implying a stock draw in the period of 670,000 b/d. However the IEA noted that "actual stocks numbers do not support this picture," adding that the data for the quarter was not yet complete. "We need to wait a little longer to confirm if the process of re-balancing has actually started in 2Q17," it said. The report said commercial oil stocks in OECD countries had fallen by 6 million barrels in May to 3.05 billion barrels which was 266 million barrels above the five-year average, compared with 300 million barrels above in April. It said OPEC output had risen 340,000 b/d in June to 32.6 million b/d due to a combination of higher Saudi output and a resurgence in Libya and Nigeria, which are exempt from the group's self-imposed production cuts. Also, compliance with the agreement fell from 95% in May to 78% in June, the lowest since it came into force in January, the IEA said. Iraq's compliance had fallen to just 29%, with a cut of just 60,000 b/d from its baseline, while Iran's crude output had crept up, to 3.79 million b/d. Overall, OPEC's production cut amounted to 470,000 b/d in June, compared with the 1.2 million b/d envisaged by last year's production cut agreement.

IEA Less Confident on Oil Rebalancing as OPEC Supply Rises (Bloomberg) -- The rebalancing of global oil markets has become less certain, with OPEC production rising and little evidence that bloated stockpiles are shrinking as expected, the International Energy Agency said. While world demand is climbing faster than initially estimated, OPEC’s implementation of the supply cutbacks needed to clear the inventory surplus has faltered to its lowest level since the group began in January, the Paris-based agency said. That’s a change from two months ago when the IEA said the “ rebalancing is here” and was accelerating in the short term. “We need to wait a little longer to confirm if the process of rebalancing has actually started in the second quarter,” said the IEA, which advises most of the world’s major economies on energy policy. The agency’s supply and demand estimates suggest fuel inventories should be shrinking steadily but “for now, actual stocks numbers do not support this picture.” Oil prices have lost about 16 percent in New York this year on signs that supply curbs by the Organization of Petroleum Exporting Countries and Russia aren’t deep enough to eliminate a glut built up during three years of over-production. The initial price boost from the agreement on the cutbacks last year also encouraged more output from shale-oil drillers in the U.S., further diluting OPEC’s efforts. The IEA’s global supply and demand estimates suggest oil stockpiles should have declined at a rate of 700,000 barrels a day in the second quarter, but it’s uncertain whether that actually happened, the agency said. Currently available data indicate that over the first half of the year inventories in developed nations actually increased by 215,000 barrels a day. The rebalancing is being aided by strength in fuel consumption. The IEA raised estimates for global oil demand growth in 2017 by about 100,000 barrels a day to 1.4 million a day, the strongest in two years. Consumption surged by 1.5 million a day in the second quarter compared with a year earlier amid surprising resilience in developed nations, and will average 98 million barrels a day for the full year. Rising production from OPEC is threatening that progress, the IEA warned.  

Report: Saudi Aramco's Manifa Oilfield Production Hit by Technical Issue (Reuters) - Output from Saudi Aramco's massive Manifa oilfield has been hit by a technical problem, the International Oil Daily reported on Tuesday, citing unnamed sources. Manifa is one of state-run Aramco's biggest oilfields and latest expansions, with a production capacity of 900,000 barrels per day. Aramco brought the field online in two phases. The industry publication reported that it was unclear how much production was removed as a result of corrosion of the water injection system used to maintain pressure in the reservoir. It added, quoting sources, that the losses were likely to be in the "millions of dollars". Saudi Aramco did not immediately respond to an emailed request for comment. The offshore oilfield - made of rigs on manmade islands linked by 41 km (25 miles) of causeways and bridges over the Gulf - was discovered in the 1950s. "Corrosion control in the water injection system is not a technical challenge but it can be expensive to repair the water injection lines. They will probably have to shut down the field for maintenance," said Sadad al-Husseini, a former executive vice president at Saudi Aramco.

The Technical Failure That Could Clear The Oil Glut In A Matter Of Weeks -- OPEC exports have come under pressure this week from technical threats to oil fields, with Saudi Arabia’s Manifa problems grabbing the headlines. Saudi Aramco CEO Amin Nasser, while addressing the World Petroleum Congress in Istanbul, stated that the outlook for oil supplies is “increasingly worrying”, due to a loss of $1 trillion ($1000 billion) in investments last year. The skepticism shown by a majority of financial analysts and oil commentators about the real threat to global oil (and gas) production volumes was countered by the news that the production at Saudi Aramco’s main offshore oil field, Manifa, has been hit by technical problems. News sources reported that the output from Saudi Aramco's massive Manifa oilfield has been hit by a technical problem. The impact of this possible technical mishap is not to be underestimated. Aramco’s Manifa is one of its biggest oilfields, with a targeted production capacity of around 900,000 bpd, to be brought onstream in two phases. At present, the main issue being reported on is that there has been corrosion of the water injection system, which is used to keep pressure in the reservoir. No facts have emerged about the total impact on the Manifa production capacity, but unnamed sources are already quoting ‘millions of dollars’ of losses. The current reports are not really worrying, as corrosion control in a water injection system is only a technical challenge. Maintenance of the field is expected, resulting in a shut-down of production – something that has been confirmed by Sadad Al Husseini, former VP Aramco. If the all production needs to be shut-down, Saudi Aramco’s overall production capacity will be cut by 900,000bpd. The current corrosion problem at Manifa is not new when looking at the overall situation of some giant fields in the Kingdom. Aramco has been fighting an uphill battle for years to counter existing corrosion threats to the Ghawar, Manifa and other fields. The problem is immense, as main production wells could be completely blocked if no solutions are found for corrosion and scaling issues. Until now, no real solutions have been found, except the traditional mitigation in place. At the same time, Saudi Arabia’s export volumes have been hit by high local summer demand for crude oil and products. The Kingdom already stated that it will cut overall crude oil shipments by around 600,000 bpd in August to balance the rise in domestic consumption during the summer.

OilPrice Intelligence Report: Oil Posts Solid Gains Despite Downward Pressure: Oil prices posted steady and solid gains this week, clawing back some of the most recent losses and moving back up into the upper-$40s per barrel. The concerns about oversupply have not gone away, so there are questions about how much more room oil has to run from here. The IEA said in its latest Oil Market Report that the higher production from OPEC is likely going to delay the rebalancing of the oil market. Saudi Arabia increased production by 120,000 bpd in June, and the sharp increase in output from Libya and Nigeria led to a decline in the group’s compliance rate to just 78 percent, down from 95 percent a month earlier. Meanwhile, Saudi Arabia is hoping to cut oil exports to the U.S. in a bid to drain American oil inventories, a strategy that could see the U.S. imports of Saudi crude dropping to just 800,000 bpd in August.  The news about higher OPEC production made more headlines, but oil traders took solace in another aspect of the latest IEA report: Oil demand is growing faster than previously expected. The agency said that demand would expand by 1.4 mb/d this year, or about 0.1 mb/d faster than it previously thought. But within that annual figure is a more “dramatic acceleration,” as the IEA put it. Demand grew at a meager 1 mb/d pace in the first quarter, but surged to a 1.5 mb/d annualized rate in the second quarter, giving the market momentum and offering a signal that stronger inventory declines are likely forthcoming. In a research note earlier this week, Barclays slashed its three-month oil price forecast from $57 to $49, the latest in a series of price downgrades at major investment banks. “The recent weakness reflects the market’s need to price in a lower [U.S.] shale break-even and absorb the unexpected return of around 300-400 [kbpd] of Libyan and Nigerian oil,” Barclays said in the report. “With inventories still quite high, government stockpiles available, DUCs standing ready, and cuts providing OPEC with additional spare capacity, there are plenty of plugs to fill any hole,” they added.

Oil Prices Hold Steady As U.S. Oil Rig Count Rise -- The number of active oil and gas rigs in the United States was flat this week overall, after gaining 505 rigs in the last 12 months. But on the oil side, the number of rigs still increased—this week by two—while gas rigs decreased by 2 for a net growth of zero. Combined, the total oil and gas rig count in the US now stands at 952 rigs.Prices rose by mid-day on Friday with Shell’s declaration of a force majeure on Nigeria’s Bonny Light grade, and on yesterday’s IEA report showing a forecast for increased global demand this year. WTI was up .89% at 12:31 pm EST at $46.46—almost $2 above last-week’s levels. The Brent crude benchmark was up .93% at $48.87, also a near-$2 gain per barrel. By 12:59pm, prices were even higher, with both benchmarks trading up over 1% for the day.During 2017—a year of tumultuous prices that began on January 3, 2017, at $58.30 per barrel for WTI and fell almost $10 to today’s $46.46—the number of US rigs have increased almost 50 percent. Of the 14 major US basins for oil and gas, 7 have seen over a 100 percent increase in the number of active oil and gas rigs. The largest basin—the Permian—has seen a total increase of 213 oil and gas rigs in 2017, bringing the Permian’s 2017 growth to 133 percent o verall.Since the advent of the OPEC agreement, oil rigs in the United States have increased by 288, and have only taken on losses in two weeks out of the 32 weeks since the deal was sealed—a fact that OPEC is finding it increasingly hard to ignore as it considers next steps. At 16 minutes after the hour, WTI and Brent prices started to fall and were trading at $46.54 and $48.90 respectively.

Rig Count Rises To April 2015 Highs As Analysts Warn "Oil Market Rebalancing Hasn't Even Started Yet" - After falling for the first time this year two weeks ago, Baker Hughes reports US oil rig count rose once again (up 2 to 765) for the 24th week in the last 25, to the highest since April 2015. "The so-called re-balancing is likely to happen later than earlier," Michael Poulsen, an analyst at Global Risk Management Ltd, said on Friday. It does appear we have reached an inflection point in the rig count numbers (if the historical relationship with crude holds)... While EIA cut its 2018 production outlook, this week saw the effect of field maintenance in Alaska and Tropical Storm Cindy in the Gulf of Mexico fall away and production surged once again this week - to new cycle highs... And the lagged rig count trend suggests crude production has further to rise yet... Crude prices have been active today with macro headlines hurting and machines helping ramp any dip... the rig count create iunstant selling which was instantly bid back upo,,, And while US crude production just jumped to cycle highs (and shale production we believe reached a record high),'s Nick Cunningham notes the oil market rebalancing hasn't even started yet... Global oil production surged in June “as producers opened the taps,” according to a new report from the International Energy Agency (IEA). OPEC was a major culprit, with Libya and Nigeria doing their best to scuttle the production cuts made by other members. But it wasn’t just those two countries, who are exempted from the agreed upon reductions. OPEC’s de facto leader, Saudi Arabia, also boosted output by an estimated 120,000 bpd in June, from a month earlier. That put Saudi production above 10 million barrels per day (mb/d) for the first time in 2017.

OPEC Admits It Has A Problem: It Is Still Producing Too Much Oil -- In its just released latest market report for the month of July, OPEC admitted it has a problem: more than six months after the Vienna deal that was supposed to bring supply and demand in balance, the oil cartel confirmed it is pumping too much, not only in 2017, but also in 2018, blaming shale production as the primary reason behind the oversupply. First, looking at historical data, according to secondary sources, production among the 14 OPEC member states rose by a whopping +394k b/d in June to 32.611mb/d.  The biggest monthly increases took place in those nations that had previously been supply constrained and which are exempt from the output cut accord: Libya +127k b/d, and Nigeria +97k, although even Saudi Arabia saw a substantial pick up in production, which rose by +51k b/d m/m to 9.95m b/d, the highest since the start of the year. More ominously, in direct communications to OPEC, Saudi reported a monthly increase of +190k b/d m/m, up to 10.07m b/d, suggesting that as discussed yesterday, Saudi commitment to production cuts may be "waning.  In total, OPEC admitted that output exceeded demand in 1H this year and was set for overproduction in 2018: the total output of 32.6m b/d in June was more than the 32.2m b/d it expects will be needed in 2018.Just as striking was the report’s suggestion that OPEC and non-OPEC’s accord to cut production was not deep enough according to Bloomberg calculations: despite reducing production, the organization’s data show it oversupplied markets by ~700k b/d in 1H this yr. And the punchline: OPEC expects to oversupply global markets markets by ~900k b/d in 1Q next year, with US shale scapegoated as the culprit for OPEC's failure to bring the market back into equilibrium: Non-OPEC supply to grow by 1.14m b/d in 2018, up from 800k b/d in 2017.

Nigeria Politely Declines OPEC Invitation To Cap Production --The fractures within OPEC's precarioua production cut agreement are becoming increasingly more visible.Following last weekend's report that OPEC will invite Nigeria and Libya - two cartel member states whose output was not capped as part of the Vienna agreement - moments ago Nigeria's oil minister Emmanuel Ibe Kachikwu has politely declined such an overture, saying that his country will "miss" the ministerial meeting in Russia on July 24, adding that it will eventually find the time to meet Saudi and Russian oil ministers (just not now), and that his country has no set timeframe to join OPEC oil production cuts."Hopefully in the next two to three months we can see how predictable the production return has been and then can say we feel stabilized and need to make the corresponding cuts," Emmanuel Ibe Kachikwu told reporters cited by Reuters. And while Kachikwu said that Nigeria will support a cap on its production, this won't happen for a while: he said that while his country is currently producing 1.7mmbpd of crude, it will (maybe?) impose a cap only when it can stably pump 1.8 million barrels per day. He also said that he will hopefully know in "two to three months" whether oil output has stabilized before agreeing on production cuts. Faced with the prospect of even more supply output out of Nigeria, oil is once again on the back foot.

Saudis to cut August oil exports to lowest level this year - (Reuters) - Saudi Arabia will cut crude oil shipments to its customers in August by more than 600,000 barrels per day to balance the rise in domestic consumption during the summer, while staying within its OPEC production commitment, a Saudi industry source said. "There is strong demand for our crude but we are sticking to our OPEC commitments," the source, who is familiar with the kingdom's oil policy, said on Wednesday. "In order to meet its OPEC quota and meet its domestic demand during summer, Saudi Arabia has made big cuts in allocations internationally by more than 600,000 bpd for the month of August," the source said. Crude exports for August will fall to their lowest level this year at around 6.6 million bpd, the source added. Crude allocations to Asia for August will be reduced by about 200,000 bpd to 3.5 million bpd, while allocations to Europe will be down by around 70,000 bpd at 520,000 bpd. Oil majors were allocated some 200,000 bpd less in August at 780,000 bpd. Exports to the United States will be below 800,000 bpd in August, the source said. Saudi Arabia told the Organization of the Petroleum Exporting Countries its oil production in June rose to 10.07 million bpd, slightly above its OPEC target, mainly due to an increase in domestic crude burning for power during summer. The source also cited late May port closures as pushing some cargoes into June, which may have resulted in higher June exports. The source said July oil output would be lower than June, without providing details. "Saudi Arabia is keen to see an improvement in the oil market and accelerate the balancing process, and expects other producers to do the same," the Saudi source said, adding that there are signs of improvement in market fundamentals.

Saudi-led blockade will continue to have limited impact on Qatar's oil, natural gas trade: minister - The current economic and diplomatic blockade on Qatar imposed by Saudi Arabia, Egypt, Bahrain and the UAE, will continue to have a limited impact on its oil and gas trade, the country's energy and industry minister Mohammed al-Sada said Monday. "Despite the illegal siege currently enforced on Qatar, [it] has never failed a single shipment and has not compromised on its longstanding image of being a reliable supplier of energy to all corners of the world," Sada said, speaking at the World Petroleum Congress in Istanbul. Qatar is the world's largest LNG supplier, having exported 78.8 million mt of LNG in 2016, more than 30% of global supply of 257.8 million mt, according to S&P Global Platts Analytics, and an increasing share of its production has been delivered to emerging Middle Eastern buyers including Egypt and the UAE. But Sada assured the conference that the blockade would not have a wide impact as "total exports in trade to Saudi Arabia, UAE and Bahrain account for less than 8%" of its total global trade.  This unjust blockade is demonstrating our economic strength, diversity and resilience," he added. He emphasized that total trade flows of energy to Japan, India, South Korea and China -- the main centers of oil demand growth -- account for three quarters of its exports and trade to these nations "remain unchanged." Meanwhile, Qatar's oil output has remained steady at 610,000 b/d since April, according to the Platts OPEC survey.

After Iran move, Total seen in pole position to snap up Qatar gas deals - Total is well placed to take a lead role in helping Qatar expand output from the world's largest gas field, largely thanks to its involvement in the Iranian side of the shared deposit, two sources familiar with Doha's thinking said. That puts the French oil major ahead of rivals like Exxon and Shell in the early running for developing the expansion, which the tiny Gulf state announced as it seeks to counter growing isolation caused by a regional diplomatic rift. Total boss Patrick Pouyanne signed a deal this month to develop the South Pars field, as Iran's part of the shared reserves are known, becoming the first oil major to return to the country since the lifting of sanctions. As he was ironing out details of that agreement, he was careful to keep Qatar in the loop. "Of course, I won't go to the same field in Iran without telling Qatar," Pouyanne told Reuters. "The Iranian block where we are supposed to produce is next to the border with Qatar. When I traveled to Doha I discussed it with the (Qatari) authorities and they told us: 'It is ok - we know you'." On one level, working with both countries who share a prized gas asset seems obvious. But it is not without risks for Total. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have imposed political and economic sanctions on Qatar, demanding that it stops fostering terrorism and courting Iran, Riyadh's main rival. Qatar denies the accusations. Besides Iran and Qatar, Total also has large projects in Saudi Arabia and the UAE, highlighting the complexity of investing in the Middle East.

The special ingredient that helps explain Saudi Arabia’s diplomatic war on Qatar  Saudi Arabia says it’s waging diplomatic war against Qatar because of its support for terrorism. But if you drill below the surface, there’s actually something else that helps explain the crisis: Qatar’s hugely valuable natural gas reserves. Enormous amounts of natural gas, not oil, have fueled Qatar’s rise to become one of the world’s wealthiest nations in per capita terms It’s also the special ingredient that helps explain how it has become a renegade state in the Gulf region — and the target of an isolation campaign that marks the most acute diplomatic crisis in the Middle East in decades. The fact that Qatar’s economy isn’t as beholden to oil means that it isn’t as beholden to Saudi Arabia, the world’s largest oil exporter and the leader of the Organization of the Petroleum Exporting Countries (OPEC), a group that acts in unison to influence oil prices. Qatar generates four times more export revenue from natural gas than it does from oil, and doesn’t need to follow Saudi’s dictates the way it would if its survival were predicated on it. In addition to this, the natural gas Qatar exports is liquefied, meaning it is compressed and shipped around the world, and isn’t primarily distributed through pipelines that are vulnerable to being meddled with by angry neighbors. Then there’s the issue of the origins of Qatar’s natural gas: It gets most of it from an offshore gas field in the Persian Gulf that it shares with Iran. Which is to say Qatar has every interest in maintaining harmonious ties with Saudi Arabia’s nemesis. Qatar’s economic independence has translated into an independent-minded foreign policy. The tiny former British protectorate has evolved in recent decades into a global player that competes with and defies Riyadh on several fronts, whether through the popularity of its robust international media operation Al Jazeera; its backing of groups like the Muslim Brotherhood, which Saudi Arabia and its allies consider to be an existential threat to their own regimes; or its friendly relationship with Saudi’s regional rivals, Iran and Turkey. Since Saudi Arabia can’t rein in Qatar using its dominance over oil, it’s using its immense diplomatic influence in the region to hurt Qatar’s economy in other ways. Saudi Arabia and its allies Egypt, the United Arab Emirates, and Bahrain have severed all diplomatic ties with Qatar and suspended air, land, and sea travel to and from the country. Other countries in the region have since joined. It’s a bold — and risky — attempt to make Qatar fall in line after marching to its own beat for decades.

Saudi blockade backfires as Qataris hail emir - A plan hatched by Arab allies to destabilise the small but wealthy desert state of Qatar with a punitive blockade has backfired, triggering a personality cult around the country’s 33-year-old emir. The standoff between Saudi Arabia, Egypt, the United Arab Emirates (UAE) and Bahrain, on the one hand, and one of the world’s richest countries is now well into its second month with little sign of compromise. Rex Tillerson, the US secretary of state, flew to Kuwait yesterday to try to broker peace talks. The quartet accuse Qatar of funding Sunni extremism and appear to hope that by cutting off Doha from its neighbours they might topple the emir, Sheikh Tamim bin Hamad al-Thani. However, rather than weaken Sheikh Tamim domestically, the five-week dispute has forged a cult around him. Abdulrahman al-Kuwari, 27, a student who was visiting an exhibition of hagiographic works in the royal family’s honour by the local artist Ahmed al-Maadheed, said: “This has made me realise we should all support our country more.” The exhibition is called Tamim the Glorious. Qatar’s two main telecom companies have changed their official network name to “Tamim al-Majd” — Tamim the Glorious. It is impossible to avoid the image of the emir, whose face stares down from office blocks. It is always the same picture, a screenprint by Maadheed of the emir’s face in profile. Saudi Arabia, the UAE, Egypt and Bahrain have led a blockade of the country, aimed at changing its foreign policy. They issued 13 demands that included closing Al Jazeera, a Qatari-owned broadcaster that they blame for inciting pro-democracy protests, and to stop harbouring Iranian-backed terror groups such as Hezbollah. However, the emir ignored them in a move that many believe has confounded the newly promoted Saudi crown prince and his allies. The tiny, gas-rich emirate claims that its critics do not know what to do next.

Qatar threatens to withdraw from GCC if conditions not met - (Xinhua) -- Qatar threatens Monday to withdraw from Gulf Cooperation Council (GCC) by setting conditions for the Saudi-led bloc, state news agency MENA reported. Qatari Minister of Foreign Affairs Mohammed bin Abdulrahman al Thani on Monday sent a letter to Secretary General of the GCC Abdul Latif Bin Rashid Al Zayani, setting his country's conditions so as not to withdraw from the GCC. Al Thani said Qatar is committed to international laws and conventions, especially with regard to fighting terrorism and its financing, adding that Qatar will not negotiate on its sovereignty. He added that his country would give a three-day notice to the Gulf countries to lift the "siege" imposed on Qatar and compensate it for the political and economic losses. Following the deadline, Qatar will officially announce its withdrawal from the GCC, according to the letter. Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt issued a list of 13 demands to Qatar later last month, including closing Al-Jazeera TV station, stopping financing and supporting terrorism, and downgrading its ties with Iran, as major preconditions for ending their boycott. The four countries vowed to take further political, economic and legal steps to tighten the screws on Doha after the latter refused to accept demands. They are scheduled to hold another foreign ministers' meeting, after the one held in Cairo, Egypt on July 5, in Bahrain soon to discuss the next steps. In response, Qatar has dismissed as "baseless" the Saudi-led bloc's accusations that it supports terrorism and interferes in their internal affairs.

Got Milk? First 165 Cows Airlifted To Qatar - It appears that the Gulf blockade against Qatar will remain in place for the foreseeable future after representatives from Saudi Arabia, Egypt, Bahrain and the UAE dismissed Qatar's response to their 13 demands as “not serious” and pledged to continue to keep the Gulf state under political and economic sanctions until it changes its policies.And after a local businessman said he would import 4,000 cows to the gulf desert late last month, the first cows are already starting to arrive. As CNN Money reports, Qatar has taken delivery of 165 cows that were airlifted into the Gulf state to ease a milk shortage caused by sanctions imposed by Qatar’s neighbors. They are the first shipment for local dairy company, Baladna, which is ramping up production just weeks after Qatar's four Arab state antagonists cut off diplomatic ties. Qatar has repeatedly denied allegations that it supports terrorism, and has said it would not comply with the gulf state’s other demands, including shuttering its media properties, including Al Jazeera. The first cows, purchased from a German supplier, arrived Tuesday on a Qatar Airways flight from Budapest, Hungary. Other cows are expected to be sourced from the Netherlands, the U.S. and Australia. Most of Qatar's fresh milk and dairy products, meant for Doha’s more than 1 million residents, came from Saudi Arabia up until the sanctions were declared. That supply was cut off after the kingdom and its allies cut transport links with "a country that spends $500 million a week to prepare stadiums and a metro before the soccer World Cup in 2022. In an act of generosity toward its distressed Gulf neighbor, Iran dispatched four cargo planes of food to Qatar and plans to provide 100 tons of fruit and vegetable every day. Qatar has also been holding talks with Iran and Turkey to secure food and water supplies after Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut links, accusing Doha of supporting terrorism.

Turkey Deploys "Fifth Batch" Of Troops To Qatar -- While Rex Tillerson was actively seeking to resolve the Qatar crisis with his "shuttle diplomacy" tour across the Gulf, signing a memorandum of understanding with Qatar on fighting terrorism in Doha on Tuesday  after spending Monday in Turkey and Kuwait, Qatar said more Turkishtroops had arrived at a Turkish military base in Doha after Ankara fast-tracked legislation in June expanding the troop deployment to Qatar.  According to Gulf Times, the Directorate of Moral Guidance at the Ministry of Defence has announced the arrival of the fifth batch of Turkish troops in Qatar.According to the directorate, the batch is joining the Turkish forces currently in Doha (Tariq Bin Ziyad battalion camp). Arrival of the batch will boost training tasks within the framework of military co-operation between Qatar and Turkey and to activate the terms of defence agreements between the two countries.The latest "training" exercise at the Qatari base - which houses Turkish soldiers under an agreement signed in 2014 - has been ongoing since June 19, with the continued base existence one of the key demands in the recently rejected Saudi ultimatum. As a reminder, at the end of June, Riyadh laid down a list of 13 demands for Qatar, including the closure of Al-Jazeera television, a downgrade of diplomatic ties with Iran and the the closure of the Turkish military base in the emirate. The UAE warned that Qatar should take the demands seriously or face a "divorce" from its Gulf neighbors. Ten days later, Qatar denied the accusations, calling the move "unjustified."Even as the diplomatic crisis escalated, Turkey has been trying to do its best to mediate. Ankara displayed its support to Qatar as Parliament approved two deals to deploy troops to an air base in Qatar. Ankara's latest troop deployment to Qatar is meant to increase stability and help Turkish peacemaking efforts function better according to Reuters. The deal to deploy troops to Qatari soil, which is expected to improve the country's army and boost military cooperation, was signed in April 2016 in the Gulf country's capital Doha. The deal was approved by Parliament after a period of one year.

Are The Arab Nations On The Brink Of War? The Rift Between GCC Monarchies Saudi Arabia and Qatar -- Almost five weeks have passed since Saudi Arabia, its Gulf allies, and Egypt announced the start of a diplomatic boycott against Qatar—a fellow Arab monarchy which, the boycotters contend, encourages sectarianism in the Middle East and sponsors terrorist organizations.Doha has refused to comply with KSA and friends’ demands that it shut down renowned news outlet Al-Jazeera, end the construction of a Turkish military base inside Qatar, and cut off ties with Hezbollah and terrorist organizations. The whole list of demands includes 13 points, each one bent on curbing the Qatari diplomatic initiatives that contradict the Saudi Arabian foreign policy agenda. Risk consultancy Shadow Governance talks to OilPrice about the political players driving the landmark rift between GCC monarchies that has shaken Middle Eastern alliances without causing volatility in oil and natural gas prices. (Q & A)

The Recapture of Mosul - Iraq is declaring victory over Isis in Mosul as the Prime Minister Haider al-Abadi, wearing black military uniform, arrived in the city to congratulate his soldiers at the end of an epic nine-month long battle.Elite Iraqi government forces raised the Iraqi flag on the banks of the Tigris River this morning, though Isis snipers are still shooting from the last buildings they hold in the Old City.The magnitude of the victory won by the Iraqi government and its armed forces, three years after they suffered a catastrophic defeat in Mosul, is not in doubt.A few thousand lightly equipped Isis fighters astonished the world by routing in four days an Iraqi garrison of at least 20,000 men equipped with tanks and helicopters. The recapture of Mosul now is revenge for the earlier humiliation.The devastation in the city is huge: the closer one gets to the fighting in the centre, the greater the signs of destruction from airstrikes. Wherever Isis made a stand, Iraqi forces called in the US-led coalition to use its massive firepower to turn whole blocks into heaps of rubble and smashed masonry.A volunteer medical worker, who wished to remain anonymous, said that on bad days  “some 200 to 300 people with injuries had turned at my medical centre. I hear stories of many families dying, trapped in basements where they had been sheltering from the bombs.” Isis gunmen have slaughtered civilians trying to escape from areas they held.

CNN Hired Top al-Qaeda Propagandist for Award-Winning Syria Documentary and Wants to Cover Its Tracks --On June 16, an American media activist living in rebel-held Syrian territory sat down before a camera to vent his frustration with a former employer. Bilal Abdul Kareem described how he and his online outlet, On the Ground News, had been contracted by CNN to film the documentary Undercover in Syria.“This was with CNN and their correspondent Clarissa Ward, which I have big-time respect for, big-time respect as a journalist, as a person,” Abdul Kareem remarked.With a sardonic grin, Abdul Kareem described how he was slighted: “This Undercover in Syria, you can Google it — it won the prestigious Peabody Award, and it won the prestigious Overseas Press Club Award, which are basically the highest awards in journalism for international reporting. Now, [CNN] barely mentioned my name! I’m telling you, somehow CNN must have forgotten that I was the one that filmed it, I guess they forgot that.”Indeed, Abdul Kareem’s name was a mere footnote in the Peabody Awards press release on its honoring of CNN. The organization praised Clarissa Ward for “[going] undercover into northern Syria to document Russian influence on the fighting and to navigate the ongoing devastation,” but credited Abdul Kareem only in small print, despite the fact that he was responsible for providing CNN with its on-the-ground footage.

US-Russian Ceasefire Deal Goes Into Effect In Southwest Syria --A U.S.-Russian brokered ceasefire in southwest Syria was holding several hours after it took effect according to Reuters, the latest international attempt to restore peace in the six-year Syrian war. The truce, which took effect across southwest Syria on Sunday at noon Damascus time (09:00 GMT), extends to Syrian government forces and rebel groups in the provinces of Deraa, Quneitra, and Sweida where western-backed rebels control swathes of territory and form a center of the insurgency south of the capital Damascus.Last week, shortly after the first meeting between Trump and Putin, the United States, Russia and Jordan announced they had reached a ceasefire and "de-escalation agreement" with the aim of paving the way for a robust truce to deliver aid to war-torn areas and end hostilities; it will be enforced by the three countries’ militaries.The Syrian Observatory for Human Rights told Reuters that "calm was prevailing" with no air strikes or clashes in the southwest since the truce began at noon on Sunday."The situation is relatively calm," said Suhaib al-Ruhail, a spokesman for the Alwiyat al-Furqan rebel group in the Quneitra area. Another rebel official, in Deraa city, said there had been no significant fighting. It was quiet on the main Manshiya front near the border with Jordan, which he said had been the site of some of the heaviest army bombing in recent weeks. A witness in Deraa said he had not seen warplanes in the sky or heard any fighting since noon.Separately, a Syrian official indicated that Damascus approved of the ceasefire deal, describing the government's silence over it as a "sign of satisfaction"."We welcome any step that would cease the fire and pave the way for peaceful solutions," the government official told Reuters.

Secret Details of Trump-Putin Syria Cease-fire Focus on Iranian Proxies - A confidential U.S.-Russian cease-fire agreement for southwestern Syria that went into effect Sunday calls for barring Iranian-backed foreign fighters from a strategic stretch of Syrian territory near the borders of Israel and Jordan, according to three diplomatic sources. President Donald Trump hailed it as an important agreement that would serve to save lives. But few details of the accord have been made public. U.S. Defense Department officials — who would have responsibility for monitoring the agreement — appeared to be in the dark about the pact’s fine print. The pact is aimed at addressing demands by Israel and Jordan — the latter is a party to the agreement — that Iranian forces and their proxies, including Hezbollah, not be permitted near the Israeli-occupied Golan Heights, which separates Syria from Israel, or along the Jordanian border. But former U.S. diplomats and observers question whether the agreement is truly enforceable, expressing doubts that Russia could act as a reliable guarantor for a cease-fire involving the Syrian regime, Iran, and its proxies. “The question is, ‘Who is going to enforce that?’ Is Russia going to take on the responsibility for telling Iran what to do?” said Gerald Feierstein, a veteran U.S. diplomat who retired last year, noting that a peace deal without Iranian buy-in is untenable. “Iranians are much closer to Assad’s position on the way forward in Syria than the Russians are.” 

War & Cholera Decimate Yemen, But Saudi Bombing Gets More US Help - In this Real News Network interview, AlterNet reporter Ben Norton calls out US complicity in the Saudi-led war against Yemen. This conflict has spawned a  humanitarian crisis, including a cholera epidemic and a famine that threatens millions. (video & transcript)

Yemen cholera cases pass 300,000 mark, ICRC says -  A 10-week cholera epidemic has now infected more than 300,000 people in Yemen, the International Committee of the Red Cross (ICRC) said on Monday, a health disaster on top of war, economic collapse and near-famine in the impoverished country. "Disturbing. We're at 300k+ suspected cases with ~7k new cases/day," ICRC regional director Robert Mardini said in a tweet. The World Health Organization has said there were 297,438 suspected cases and 1,706 deaths by July 7, but it did not publish a daily update on Sunday, when the 300,000 mark looked set to be reached. A WHO spokesman said the figures were still being analyzed by Yemen's health ministry. Although the daily growth rate in the overall number of cases has halved to just over 2 percent in recent weeks and the spread of the disease has slowed in the worst-hit regions, outbreaks in other areas have grown rapidly. The most intense impact has been in areas in the west of the country which have been fiercely contested in the two-year war between a Saudi-led coalition and armed Iran-aligned Houthi rebels. The war has been a breeding ground for the disease, which spreads by faeces getting into food or water and thrives in places with poor sanitation. In the past week a first few cases have appeared in Sayun city and Mukalla port in Hadramawt region in the east. Yemen's economic collapse means 30,000 healthworkers have not been paid for more than 10 months, so the U.N. has stepped in with "incentive" payments to get them involved in an emergency campaign to fight the disease.The WHO has said its response, based on a network of rehydration points and the remnants of Yemen's shattered health system, has succeeded in catching the disease early and keeping the death rate from the disease low, at 0.6 percent of cases. 

Radiation and ringworm: a tale of social policy, racism, and health care -- On June 14, 2017, the Israeli newspaper, Israel Hayom, published an extraordinary report documenting medical experiments on mostly Yemenite children who subsequently “disappeared”; those who died were autopsied without parental consent, the parents were often not allowed to see their dead children, and no death certificates were provided. Since Operation Magic Carpet, 1949 to 1950, when 49,000 Jewish Yemenites were airlifted to Israel to grow the Jewish population and counteract the procreating Palestinians, there have been three official inquiries exploring egregious and unethical patterns of behavior towards Yemeni children by the medical and social service communities. Previous Israeli committees concluded that no children were kidnapped, although some children died or were adopted by Ashkenazi families without the birth parents’ consents. Parents were simply told their children had died. Israel Hayom also documented an experimental treatment on four malnourished babies who subsequently died from the injection of a “dry protein” created from plasma as well as an attempt to prove (using faulty assays and assessments) that Yemenite children were of African descent by testing dead children for sickle cell anemia, again without consent. (There was no evidence for sickle cell but the researcher published a scientific paper before he was proven wrong.) Despite the Israeli state’s efforts to delegitimize and silence this information, (no investigation, no crime), the kidnapping of up to ten thousand Yemenite babies in immigrant absorption camps for adoption by Ashkenazi families was well documented in 2013 and 2014 by the Israeli webzine +972.  In the 2013 article, the information is based on the 2009 book by Shoshana Madmoni-Gerber, Israeli Media and the Framing of Internal Conflict: The Yemenite Babies Affair.  While the Israeli press largely stood by the official state narrative (nothing could have happened and besides, data was classified or lost), this attitude was reinforced by racist stereotypes towards Yemenites as primitive, ignorant, and uncaring towards their children. In short, adoption was “doing them a favor.” Additionally, the fact that the cover-up persisted for decades reflects the continued racism within Israeli society and the medical establishment. The forcible transfer of babies is also defined by the UN as genocide and clearly no one in Israel is going to admit to that.

U.S. Oil Exports Reduce Trade Deficit with China -There's a really exciting story developing in the international trade between the United States and China, two of the world's largest trading partners.  Here, the legalization of oil exports in 2016 from the United States has subsequently led to a rather dramatic surge in exports of petroleum products from the U.S. to China in 2017. China imported nearly 100,000 barrels of crude oil per day from the U.S. in the first five months of 2017, 10 times the average in 2016, according to data by the Chinese customs. The upward trend seems to be picking up speed. In April and May, imports surged to more than 180,000 barrels per day on average. In February, China became the biggest buyer of U.S. crude oil, surpassing Canada, at a time when OPEC was scaling back its output, according to Bloomberg. China's own falling production, political uncertainty in the Middle East – on which China has long depended for fuel – and the cheaper price of US oil have contributed to the increase in imports. According to the U.S. Census Bureau's data on international trade, China imported nearly $496 million of U.S. crude oil, refined oil and other petroleum derived products in May 2017, which was more than double the $214 million of these goods that it imported from the U.S. in May 2016. Altogether, these petroleum exports accounted for 5.2% of all the oil that the U.S. exported to all other countries during May 2017, and 4.9% of the value of all the goods and services that the U.S. exported to China during the month.  For the first five months of 2017, the Census Bureau reports that the cumulative value of U.S. crude oil, petroleum gases and refined petroleum to China totals over $2.76 billion. For just U.S. crude oil exports, China has purchased $1.6 billion, which represents 21% of all U.S. crude oil exports to the world from January through May 2017.

China sets up base in Djibouti - (Xinhua) -- Ships carrying Chinese military personnel departed Zhanjiang in southern China's Guangdong Province on Tuesday to set up a support base in Djibouti.Shen Jinlong, commander of the People's Liberation Army (PLA) Navy, read an order on constructing the base in Djibouti, and conferred military flag on the fleets.The establishment of the PLA Djibouti base was a decision made by the two countries after friendly negotiations, and accords with the common interest of the people from both sides, according to the PLA navy.The base will ensure China's performance of missions, such as escorting, peace-keeping and humanitarian aid in Africa and west Asia.The base will also be conducive to overseas tasks including military cooperation, joint exercises, evacuating and protecting overseas Chinese and emergency rescue, as well as jointly maintaining security of international strategic seaways.

China sends troops to open first overseas military base in Djibouti  (Reuters) - Ships carrying personnel for China's first overseas military base, in Djibouti in the Horn of Africa, have set sail to begin setting up the facility, as China's rapidly modernizing military extends its global reach. Djibouti's position on the northwestern edge of the Indian Ocean has fuelled worry in India that it would become another of China's "string of pearls" of military alliances and assets ringing India, including Bangladesh, Myanmar and Sri Lanka. China began construction of a logistics base in Djibouti last year. It will be used to resupply navy ships taking part in peacekeeping and humanitarian missions off the coasts of Yemen and Somalia, in particular. It will be China's first overseas naval base, though Beijing officially describes it as a logistics facility. State news agency Xinhua said late on Tuesday the ships had departed from Zhanjiang in southern China "to set up a support base in Djibouti". Navy commander Shen Jinlong "read an order on constructing the base in Djibouti", but the news agency did not say when the base would begin operations. Xinhua said the establishment of the base was a decision made by the two countries after "friendly negotiations, and accords with the common interest of the people from both sides". "The base will ensure China's performance of missions, such as escorting, peace-keeping and humanitarian aid in Africa and west Asia," it said. "The base will also be conducive to overseas tasks including military cooperation, joint exercises, evacuating and protecting overseas Chinese and emergency rescue, as well as jointly maintaining security of international strategic seaways," Xinhua said.

Russia-China Alliance Is Real – and the US is the Big Loser -- Whether or not Official Washington fully appreciates the gradual – but profound – change in America’s triangular relationship with Russia and China over recent decades, what is clear is that the U.S. has made itself into the big loser.Gone are the days when Richard Nixon and Henry Kissinger skillfully took advantage of the Sino-Soviet rivalry and played the two countries off against each other, extracting concessions from each. Slowly but surely, the strategic equation has markedly changed – and the Sino-Russian rapprochement signals a tectonic shift to Washington’s distinct detriment, a change largely due to U.S. actions that have pushed the two countries closer together. But there is little sign that today’s U.S. policymakers have enough experience and intelligence to recognize this new reality and understand the important implications for U.S. freedom of action. Still less are they likely to appreciate how this new nexus may play out on the ground, on the sea or in the air.  Instead, the Trump administration – following along the same lines as the Bush-43 and Obama administrations – is behaving with arrogance and a sense of entitlement, firing missiles into Syria and shooting down Syrian planes, blustering over Ukraine, and dispatching naval forces to the waters near China. But consider this: it may soon be possible to foresee a Chinese challenge to “U.S. interests” in the South China Sea or even the Taiwan Strait in tandem with a U.S.-Russian clash in the skies over Syria or a showdown in Ukraine. A lack of experience or intelligence, though, may be too generous an interpretation. More likely, Washington’s behavior stems from a mix of the customary, naïve exceptionalism and the enduring power of the U.S. arms lobby, the Pentagon, and the other deep-state actors – all determined to thwart any lessening of tensions with either Russia or China. After all, stirring up fear of Russia and China is a tried-and-true method for ensuring that the next aircraft carrier or other pricey weapons system gets built.

China says 'China responsibility theory' on North Korea has to stop | Reuters: China hit back on Tuesday in unusually strong terms at repeated calls from the United States to put more pressure on North Korea, urging a halt to what it called the "China responsibility theory", and saying all parties needed to pull their weight. U.S President Trump took a more conciliatory tone at a meeting with Chinese President Xi Jinping on Saturday, but he has expressed some impatience that China, with its close economic and diplomatic ties to Pyongyang, is not doing enough to rein in North Korea. That feeling has become particularly acute since Pyongyang launched an intercontinental ballistic missile that some experts believe could have the range to reach Alaska, and parts of the U.S. West Coast. Asked about calls from the United States, Japan and others for China to put more pressure on North Korea, Chinese Foreign Ministry spokesman Geng Shuang said it was not China ratcheting up tension and the key to a resolution did not lie with Beijing. "Recently, certain people, talking about the Korean peninsula nuclear issue, have been exaggerating and giving prominence to the so-called 'China responsibility theory,'" Geng told a daily news briefing, without naming any parties. "I think this either shows lack of a full, correct knowledge of the issue, or there are ulterior motives for it, trying to shift responsibility," he added.

China Says Trade With North Korea Grew Only 10.5% In First 6 Months Of 2017 --New data released by the Chinese government suggests trade with its restive neighbor, North Korea, has only increased by a modest degree since the beginning of the year, rebutting criticisms from President Donald Trump and UN ambassador Nikki Haley that the world's second-largest economy is undermining US efforts to curb trade with the North. A Chinese official said Thursday that China's trade with isolated North Korea rose more than 10 percent in the January-June period from a year earlier, according to Reuters. The data show a sharp decline in trade in April, May and June after data released by China Customs in April showed a 37.4 percent increase in trade with North Korea in the first quarter of 2017. However, data released a week ago by China's Ministry of Commerce show trade between the two countries grew by 13.7 percent from January to May,suggesting a significant dip since April, according to CNBC.

North Korea Warns US Bombing Drill Risks Provoking "Nuclear War" -- Following North Korea’s first confirmed test of a medium-range ICBM earlier this week, the hermit kingdom and the US have continued to trade provocations and threats, with the North warning on Sunday that the bombing drill led by two US B-1B Lancers in South Korea on Saturday risked sparking an all-out nuclear conflict on the peninsula.In an editorial published in the North Korean state-run newspaper, the North Korean government said the drill was "a trivial misjudgment or mistake could lead to the outbreak of a nuclear war, resulting in a world war,” and that it posed a direct, and continuing, threat to the DPRK, according to South Korea’s Yonhap News.“The Korean peninsula is the largest gunpowder area in the world with the highest risk of nuclear war, and is the largest hot spot in the world where there is always a risk of nuclear war. [The US] is surely spreading into a new world war,” the piece reads.The editorial also accuses the Trump administration of using the Korean peninsula to distract from the US president’s “serious crisis of power” at home.The drill posed “a continued threat to the DPRK,” according to the official Korean Central News Agency.

A tiny detail from North Korea's missile launch points to an even more dangerous threat - Business Insider: North Korea demonstrated its ability to reach the continental US with a nuclear-capable ballistic missile on July 4, but close analysis of launch footage may point to another dangerous technological development. Unlike other North Korean missiles, the intercontinental-range Hwasong-14 missile uses a "shroud," or a hollow cover instead of a more solid nosecone, researchers have discovered. ICBMs generally use shrouds if one is "planning on launching multiple reentry vehicles or added countermeasures," David Schmerler, a research associate at the James Martin Center for Nonproliferation Studies told Business Insider. Shrouds usually indicate that a missile has multiple, independent reentry vehicles for a payload, according to Schermler. A missile with multiple nuclear warheads can not only do more damage to its target, but also pose a greater challenge for missile defenses. While Schmerler said there is "no indication" that North Korea has developed technology to miniaturize warheads such that it could fit multiple nukes in a single missile, it could have installed countermeasures in the shroud that would render US defenses all but useless.

What is True and Not True About North Korea’s Hwasong-14 ICBM: A Technical Evaluation - After the frenzy of technical speculation over the successful launch of North Korea’s Hwasong-14 intercontinental ballistic missile (ICBM), the dust seems to be clearing and the emerging reality is that the North has an unreliable missile that can reach Alaska or Hawaii with a single nuclear warhead, and would be lucky to hit even a city-sized target. However, with a year or two of additional testing and development, it will likely become a missile that can reliably deliver a single nuclear warhead to targets along the US west coast, possibly with enough accuracy to destroy soft military targets like naval bases. In perhaps five years, North Korea may be able to incorporate a modest suite of decoys and penetration aids to challenge US missile defenses. Let’s hope US missile defenses are up to that challenge.  Contrary to the assertions of some analysts that the missile is currently capable of carrying several warheads, not just one, it may eventually be able to carry a modest suite of decoys or penetration aids, though probably not for several years. A multiple warhead capability, while theoretically possible, would require a very lightweight warhead, which will require a lot more nuclear testing and is probably a decade in the future at best. That said, the Hwasong-14 that flew last week was surprising in several respects. On the surface, it appeared to be a completely different missile than the one North Korea rolled out under the name of “Hwasong-14” back in 2015. On close examination, however, this new Hwasong-14 appears to be closely based on elements of several previous North Korean missiles. In fact, very little of the Hwasong-14 is truly new: it uses the same engine as the Hwasong-12, a structural technology first developed for the original Hwasong-14 and demonstrated on the Hwasong-12; it also featured an upper stage very similar in size and performance to the Hwasong-13 (itself derived from the upper stage of the Unha space launch vehicle), and probably a reentry vehicle (RV) derived from the original Hwasong-14. An estimate of how all these parts come together is shown below.

BOJ widens negative rates net - The Japan News: The Bank of Japan has begun applying negative interest rates on money that overseas central banks and international organizations deposit in the BOJ, it has been learned. Although it had set the annual interest rate at zero until May, the BOJ decided to cut the rate from June to reflect the actual situation of the market for short-term interest rates, where rates are hovering around below zero. In the aftermath of the BOJ’s introduction of a negative interest rate policy in February 2016, the BOJ could be seen as charging a commission from overseas banks that deposit money in the BOJ. This could affect cooperation among the world’s central banks. The central banks of each country put their money in the central banks of others so they can smoothly implement such measures as lending money to financial institutions in their own country in case an economic crisis hits their country and institutions have trouble procuring foreign currencies. The BOJ, which holds about ¥13 trillion in deposits from about 90 central banks and international bodies around the world, decided to adopt negative interest rates on the portion of deposit balances over a certain level. The targeted organizations have not been disclosed, but the main targets are presumed to include the People’s Bank of China and the European Central Bank, which are believed to deposit a lot of money into the BOJ. The negative interest rate for central banks has been set at “0.05 percent lower” than the actual market figures of short-term interest rates. As short-term interest rates recently changed from between minus 0.05 percent and minus 0.1 percent, the rates applied on overseas central banks appear to be from minus 0.1 percent to minus 0.15 percent.

Vietnam tugs India into the South China Sea | Asia Times: In a move with significant geopolitical implications, Vietnam has formally asked India to play a greater role in the South China Sea, a bilateral invitation New Delhi seems willing to oblige with a wary eye cast towards China. Hanoi’s proposal, made last week at the Delhi Dialogue IX, a regular meeting between India and the Association of Southeast Asian Nations (Asean), aims to counterbalance Beijing’s rising assertiveness in the maritime region without breaking its fragile peace.India’s involvement in the region is in-line with its “Act East” foreign policy, a gambit that envisions a more wide-reaching role in regional affairs like disaster relief and humanitarian assistance. India said at the same meeting that greater engagement with Asean is a key part of the policy initiative. Some analysts describe the policy as India’s own “pivot”, the Asia-centric policy of previous US President Barack Obama that aimed to engage Asian nations while positioning 60% of America’s naval fleet and air force in the Asia-Pacific region. The policy pronouncement arguably intensified US-China competition for influence, particularly in the South China Sea. While the Donald Trump administration’s commitment to that plan is in doubt, evidenced to some by reduced freedom of navigation patrols in the maritime since his election last year, the region’s geopolitics have always been more multilateral in nature than a mere bilateral struggle for power and influence. “Asean supports India to play a greater role in the political and security domain, and create a rule-based region,” said Vietnamese Foreign Minister Pham Binh Minh at the meeting. “We hope India will continue to partner our efforts for strategic security and freedom of navigation in the South China Sea on the basis of international law and legal convention.” 

Still counting notes deposited after demonetisation: RBI Governor Urjit Patel -- Reserve Bank of India Governor Urjit Patel on Wednesday told a Parliamentary panel that they were still counting the currency deposited after Rs 500 and Rs 1,000 notes were scrapped in November 2016. He said there was no final figure on how much currency had been deposited with the bank. The panel questioned Patel for more than three hours on Wednesday, The Hindu reported. He told the panel that the RBI has been using several counting machines to quickly finish calculating how much money had been submitted, and that the bank was planning to rent more such machines. However, he added that he could not provide a date by which the RBI can submit such a figure. The English newspaper report added that a panel member asked Patel if the figure could be ascertained before the next Parliamentary election. Patel did not respond to the question.  The central government was massively criticised after it announced the demonetisation of the notes on November 8 last year. It had said the move was done to smoke out black money holders, though Opposition parties and some economists had said the decision had impacted Indians and the economy negatively.

Lynchistan: India is the Lynching Capital of the World -- A spate of lynchings of Indian Muslims has highlighted the religious violence that has been rampant in India for decades. The 2014 election of Hindu Nationalist leader Narendra Modi to the office of Indian Prime Minister has further emboldened the Hindu Nationalists who have been the main planners, instigators and perpetrators of murderous rampages against India's religious minorities. Modi was shunned by much of the world for over a decade for his part in the 2002 Gujarat massacre of Indian Muslims. His policies as prime minister indicate that he's not a changed man. Yet, he is now being embraced by the western leaders who claim to uphold human rights and religious freedoms. A Pew Research report from data collected in 2015, about a year after Modi rose to power, found that the level of hostility against religious minorities is "very high". In fact, it said India scores 9 for social hostilities against religious minorities on a scale of 0-10.   Other countries in "very high" category for social hostilities include Nigeria, Iraq and Syria. Pakistan's score on this scale is 7 while Bangladesh is 5.5. The situation for India's minorities, particularly Muslims, has become a lot worse in the last two years with Hindu mobs lynching Muslims with impunity. Recent election of anti-Muslim radical Hindu priest Yogi Adiyanath as Chief Minister of Uttar Pradesh, India's most populous state, is seen as a clear signal from Mr. Modi that his anti-Muslim policies will continue.

Calibri in spotlight as ‘Fontgate’ could leave Pakistan sans Sharif -- A typeface has sparked uproar in the country after documents using the font were produced in a corruption case against Prime Minister Nawaz Sharif — despite being dated a year before the design was released.Microsoft’s Calibri font was used to type certified papers naming PM Nawaz’s daughter Maryam Nawaz as a trustee for several of the ruling family’s high-end London properties. The plush apartments are at the heart of the case against the Sharif family, with authorities and the opposition questioning the legitimacy of funds used to buy them via offshore companies.The identity of the legal beneficiaries has formed part of the probe, and the documents were meant to show that Maryam, who is Nawaz’s presumptive political heir, was a trustee only. But the papers were dated February 2006 — a year before the font in which they are typed was in widespread commercial use, according to its creator.  The same conclusion was drawn by a six-member joint investigative team (JIT) tasked by the Supreme Court with examining the corruption claims, which had London’s Radley Forensic Document Laboratory assess the documents. Based on that assessment, the JIT rejected the papers as ‘falsified’ in its final report issued earlier this week. The conclusion, dubbed #Fontgate, set social media alight with jokes and memes, and was widely repeated in mainstream press, adding fuel to opposition calls for the prime minister to step down. “Today #calibri was searched more than porn in Pakistan”, wrote one Twitter user, Sherry. Journalist Mubashir Zaidi said the PM should now write his resignation “in #Calibri font”.

Boiler blast kills again! | The Daily Star: Six boiler inspectors for 5,500 factories in the country! One would have thought that the Tamapaco Foils factory fire last September that killed some 41 workers (although authorities contend that the fire was the result of a gas fire leak and not a boiler explosion) would have woken up policymakers to the dangers posed by the literally zero monitoring over boilers in industries. We have been reporting on the issue extensively over the last few years and going by data published in this paper, there have been between five to nine boiler accidents per year since 2012, totalling some 33 incidents that have killed 41 and injured 237 others. And this is not counting the latest incident in Gazipur that killed 13 people last Tuesday or those who died in the Tampaco incident. We were assured by the Office of the Chief Inspector of Boiler that a proposal had been sent last March to the ministry of industry to expedite recruitment of 100 inspectors. The ministry forwarded the proposal to the public administration ministry for recruitment of 71 inspectors which, for whatever reason, was not acted upon. We are informed that the proposal has been sent back to the Office of Boiler last week with queries and now that we have another 13 dead on our hands, perhaps a fresh proposal is going to be sent for more manpower. This back and forth movement of proposals is an insult to the memory of those who continue to die or suffer injury because the paperwork gets bumped from one desk to another between ministries.The latest explosion in the garments factory may have carried a higher death toll but for the fact that it had just reopened after Eid festivities and not all sections were operational. Every factory needs a boiler to generate steam for sterilisation, drying, power generation, etc. and with the paltry number of inspectors we have, every date expired boiler or one that is run by untrained hands is an accident waiting to happen. 

Oil No Longer Decisive Factor In Emerging Market Performance -- Oil is increasingly losing relevance in the performance of emerging market assets including, equities—and now, bonds and currencies. What’s more, the technology sector is apparently taking the space freed by oil—a trend whose implications have yet to fully manifest themselves. In any case, emerging markets are undergoing a significant transformation.A recent Bloomberg analysis found that the performance of emerging market bonds in local currencies is diverging from the movement of oil prices. The author, Srinivasan Sivabalan, notes that previously, local-currency emerging market bonds and oil prices moved in sync. Now, bonds are going up while the price of crude is falling.Currencies are also moving away from oil: the MSCI Emerging Markets Currency Index has been moving higher so far this year, while the Bloomberg Commodity Index has been declining. This split could have important implications for emerging economies that are major oil producers, including Russia and Brazil, as well as China.Sivabalan notes that this split could have a negative effect on emerging market currencies if oil prices start to recover, but this is by no means a certainty. It’s difficult to imagine a scenario where rising oil prices push down the Russian ruble, for example. Such a scenario is counterintuitive, and although this does not necessarily mean wrong, there seems to be no reasonable argument to the contrary. The same is likely to be true for the currencies of other emerging economies where oil plays a big part in state revenues and the value of the local currency.

In Victory For Merkel, G20 Reach Compromise On Trade But Trump Holds Out On Climate -- World leaders meeting at the G-20 summit in Germany have agreed on almost every aspect of the joint communique, where in a victory for Merkel they vowed to fight protectionism and secure fair trade seeking to defuse President Donald Trump’s threats of unilateral measures the WSJ reported; they have so far failed, however, on a compromise position in the section on climate where the United States is pushing for a reference to fossil fuels, European Union officials said according to Reuters. In the end it was "all against Trump": as the WSJ puts it,"securing Mr. Trump’s support for the G-20 communiqué, to be released later Saturday, as the president threatens to undermine the international order with his “America First” policies, is emerging as a rallying cry as the two-day gathering in Germany draws to a close."  The communique comes after weeks of fears that Merkel, this year’s G20 president, might fail to achieve an agreement in the face of the disputes generated by Donald Trump by his criticisms of free trade and international cooperation and, especially, his decision to pull out of the Paris climate change accord, which the other 19 G-20 states support. The consensus statement was drafted after "marathon meetings" resulted in compromises on deploying defensive measures for balanced trade and a recognition of the U.S.’s split from the other G-20 members on climate change. The officials said aides had worked until 2 a.m. to finalize the G-20 communique, overcoming differences on trade after U.S. officials agreed to language on fighting protectionism.

G20 leaders miss the mark on North Korea as historic nuclear weapons treaty reached --OVER the weekend, more than 120 countries adopted a treaty at a UN conference that prohibits the production, stockpiling, use or threatened use of nuclear weapons or other nuclear explosive devices. Australia was a notable absentee. So were the nine countries that possess nuclear weapons.While the UN conference was taking a major step toward the elimination of nuclear weapons, the US and its allies – notably Japan, South Korea and Australia – were hoping to use the G20 summit in Hamburg to focus attention on the danger North Korea’s nuclear ambitions pose. However, the declaration issued at the end of the G20 does not even mention the issue. We can now expect a UN Security Council resolution that condemns North Korea’s latest missile test and applies slightly tougher sanctions.The glaring contradiction between the boycott of the nuclear ban negotiations and the preoccupation with the North Korean nuclear threat does not seem to have dawned on the US and its allies. In North Korea’s eyes, its nuclear program is the only guarantee of regime survival.North Korea’s apparently successful intercontinental ballistic missile test last week is widely seen, and portrayed by the regime itself, as part of a relentless drive to develop a reliable long-range nuclear weapon capable of striking the US. The US responded to the latest test by declaring the policy of “strategic patience” is now over. In a speech delivered in Poland prior to the G20, US President Donald Trump warned he is considering “some pretty severe things” in response to North Korea’s “very, very bad behaviour”.

Hamburgdämmerung: The End of G20 as a “Premier Forum for International Economic Cooperation”? -- The strangest aspect of the G20 communiqué, and the part that has dominated media coverage, is the section on the Paris climate agreement. The strangeness arises not because of the topic—the G20 has always played second fiddle to the UN on climate issues—but because, for the first time, a whole paragraph is devoted solely to one member, the USA, explaining why it doesn’t agree with the others, followed by a paragraph by the others explaining why they will go ahead without the USA anyway, including through agreeing a “G19” action plan on energy and climate for growth.The climate change issue is a jarring symbol of the G20’s difficulty in reaching agreement. However, the Trump administration’s “America first” stance and resulting lack of movement on economic issues—the raison d’etre of the G20—is evident throughout the document. Two things stand out. Firstly, many key economic issues receive very little attention. The opening paragraphs on the global economy, trade and investment are masterpieces of bureaucratic obfuscation, offering something for everyone, while saying very little, and presenting no new initiatives. Financial sector reform—an issue at the centre of G20 work since the global financial crash of 2007/8—merits one short paragraph, with no new promises. The Action Plan which accompanies the communique has a more detailed summary of work in this area, highlighting that the G20 has essentially outsourced this work to the Financial Stability Board (FSB)—a worrying development given the major governance problems with that institution. Secondly, the continued expansion of G20 interest into a whole host of issues outside its traditional mandate is striking, with the G20 concerning itself with, for example, health, women’s empowerment, food security, rural youth employment, and marine pollution.

Turkey "Turns Away" From NATO, Buys Russian Advanced Missile System For $2.5 Billion -- In a move that Bloomberg has defined as "signalling a turn away from the NATO military alliance that has anchored Turkey to the West for more than six decades" Turkey agreed to pay $2.5 billion to acquire Russia’s most advanced missile defense system, a senior Turkish official told Bloomberg on Thursday. The proposed deal which was first reported here back in November 2016, has been finalized and the preliminary agreement sees Turkey receiving two S-400 missile batteries from Russia within the next year, then producing another two inside Turkey. For Ankara, which has had a dramatic falling out with its NATO partners over the past year, the missile deal with Russia “is a clear sign that Turkey is disappointed in the U.S. and Europe,” said Konstantin Makienko, an analyst at the Center for Analysis of Strategies and Technologies, a Moscow think-tank. “But until the advance is paid and the assembly begins, we can’t be sure of anything.” Furthermore, the Russian system would not be compatible with other NATO defense systems, but just as importantly wouldn’t be subject to constraints imposed by the alliance, which prevent Turkey from deploying such systems on the Armenian border, Aegean coast or Greek border. The Russian deal would allow Turkey to deploy the missile defense systems anywhere in the country, a move which will prompt a cry of outrage from Turkey's neighbors, especially Greece.

Erdogan Could Face Arrest In Sweden After Officially Being Accused Of Genocide -- Marking the first time Sweden - the country - has ever lodged a complaint against a head-of-state, this week five members of parliament (MPs) from the Scandinavian country officially accused Turkish President Recep Tayyip Erdogan of genocide. The MPs’ complaint alleges Erdogan has committed war crimes, genocide, and crimes against humanity against the Kurdish majority in Turkey’s southeast region since a truce between the outlawed Kurdistan Workers Party (PKK) and government forces fell apart in 2015.T he official complaint was filed in the Swedish International Public Prosecution Offices.If that department decides to move forward with an investigation, warrants could be issued for the arrest of Erdogan and several other Turkish officials, such as Prime Minister Binali Yildirim.MP Carl Schlyter says he likes the idea of Erdogan potentially having limited freedom of movement in his part of the world and hopes neighboring countries will follow suit:“If [Mr Erdogan] is hindered from roaming around in Europe and influencing European countries the way he wants, then I hope that this will affect his politics.” Such a move against President Erdogan was only made possible by a Swedish law passed in 2014 that allows the country to hold and judge its own court cases involving genocide and crimes against humanity, regardless of where those crimes took place.

US Approves $3.9 Billion Patriot Missile System For Romania; Putin: "We Will Be Forced To Respond" -- On Tuesday the State Department approved the sale of $3.9 billion in patriot missile systems to NATO-member Romania after prior Russia warnings that such actions could be met with severe reprisals. The announcement, issued through the Pentagon's Defense Security Cooperation Agency, is sure to be a huge shot across the bow following on the heels of Russian President Vladimir Putin's earlier unambiguous words (issued in May) regarding further NATO build-up in the large Balkan country: If yesterday in those areas of Romania people simply did not know what it means to be in the cross-hairs, then today we will be forced to carry out certain measures to ensure our security. We won't take any action until we see rockets in areas that neighbor us. We've been repeating like a mantra that we will be forced to respond... Nobody wants to hear us. Nobody wants to conduct negotiations with us.  Romania's US-built $800 million ballistic missile defense shield came online for the first time in May, just prior to Trump's meeting with Romanian President Klaus Iohannis early the following month, where the two discussed defense spending and other economic concerns. Romania has been a NATO member only since 2004, but has steadily attracted the attention of Western defense companies – it has increased its defense budget to equal 2% of its GDP this year (approximately 4 billion US dollars) – one of only 5 NATO members to hit that target.

The Real Colluder With Russia Isn’t Trump — It’s Germany - Russia and Europe, with the United States on the sidelines, have engaged in pipeline warfare throughout Vladimir Putin’s tenure in the Kremlin. Europe’s leaders have understood that a unified Europe requires a unified and diversified energy market that operates according to common rules of conduct. Supporters of the European experiment, the most vocal being Germany, would be expected to oppose Russian attempts to dominate Europe’s natural gas market. Think again. Germany is a vocal supporter of Nord Stream 2, a second pipeline proposed by Russia to be built under the Baltic Sea to deliver Russian natural gas to Germany. The Nord Stream 2 agreement, signed without consultation with EU partners and institutions, violates goals of EU energy policy, such as diversification, avoiding energy conflicts among member countries, ensuring that smaller EU countries have independent sources of supply, and promoting a common EU policy toward Russia and Ukraine. While German media promote fantastic stories of a Trump-Russian nexus, it is oblivious to its own deep nexus with Russia that stretches across the political spectrum. Former chancellor Gerhard Schroeder is a board member of Gazprom, Russia’s state-owned natural gas monopoly. The German government’s economics minister and foreign minister (both members of the German Grand Coalition) openly favor deeper business ties with Russia despite its illegal Crimean annexation, armed conflict in Ukraine, and clandestine cyberattacks throughout Europe. To these misdeeds, Germany’s powerful Putin Versteher (“Understanders”) say that politics should not stand in the way of business.

The Japan EU trade treaty sucks - not that you'd know that from the nyt - The NYT - in mourning for the TPP - casts its lonely eyes on the European-Japanese treaty and finds it a shining symbol of all that is good and right. Actually, it is a shining symbol that the EU's elite never learns anything. Negotiated in secret, full of the kind of mulitnational corp goodies that are the new road to serfdom, its benefits will flow to the top 1 percent, while undermining the bottom 99 percent. This article in Libe is of interest. Trade treaties are always sold as being so ultra beneficial to the "poor" - which is what we call the laboring class in these neo-liberal times. It is odd that no representatives of the "poor" are ever allowed to shape them, then. But what do the poor know? Best keep these things secret.

Chechen Sharia Police Terrorize Berlin --  A hundred Islamists are now openly enforcing Sharia law on the streets of Berlin, according to local police who are investigating a recent string of violent assaults in the German capital. The self-appointed morality police involve Salafists from Chechnya, a predominantly Sunni Muslim region in Russia. The vigilantes are using threats of violence to discourage Chechen migrants from integrating into German society; they are also promoting the establishment of a parallel Islamic legal system in Germany. German authorities appear unable to stop them. The Sharia patrol came to public light in May 2017, when Chechen Salafists released a video warning other Chechens in Germany that those who fail to comply with Islamic law and adat, a traditional Chechen code of behavior, will be killed. The video's existence was reported byMeduza, a Russian-language independent media organization based in Latvia. The video, which circulated through WhatsApp, an online messaging service, showed a hooded man aiming a pistol at the camera. Speaking in Chechen, he declared:"Muslim brothers and sisters. Here, in Europe, certain Chechen women and men who look like women do u nspeakable things. You know it; I know it; everybody knows it. This is why we hereby declare: For now, there are about 80 of us. More people are willing to join. Those who have lost their national identity, who flirt with men of other ethnic groups and marry them, Chechen women who have chosen the wrong path and those creatures who call themselves Chechen men — given half a chance, we will set all of them straight. Having sworn on the Koran, we go out onto the streets. This is our declaration of intent; do not say that you were not warned; do not say that you did not know. May Allah grant us peace and set our feet on the path towards justice."

Saudi Arabia exports extremism to many countries - including Germany, study says - DW | 09.07.2017: A British study has found that Saudi Arabia plays a key role in the radicalization of Muslims. The Wahhabi influence, fueled by oil money, can be seen in Germany as well, says researcher Susanne Schröter.

  • DW: After the bloody terror attacks in Great Britain, there are an increasing number of studies being conducted on the cause of radicalization. Britain's Henry Jackson Society, a think tank, has published a report on foreign funding for extremist branches of Islam in Great Britain. Saudi Arabia has been clearly named as one of the greatest supporters. In the past 50 years, Riyadh has invested at least 76 billion euros ($86 billion) in Wahhabi extremism, the ideological basis of extremist and jihadist movements throughout the world. Are you surprised about these findings?
  • Susanne Schröter: The findings do not surprise me at all. It has long been known that Saudi Arabia has been exporting Wahhabist ideology - largely similar to the ideology of the so-called "Islamic State" (IS). Propaganda material and organizational expertise are being sent along with money. People are being hired to build mosques, educational institutions, cultural centers and similar organizations, so that Wahhabist theology can reach the public – with great success.

Germany: Social Media Platforms to Be Held Accountable for Hosted Content Under “Facebook Act” - On June 30, 2017, the German Bundestag (parliament) adopted the Act to Improve the Enforcement of Rights on Social Networks (Network Enforcement Act, the so-called Facebook Act), which aims to combat hate speech and fake news in social networks. (Gesetzesbeschluss des Deutschen Bundestages. Gesetz zur Verbesserung der Rechtsdurchsetzung in sozialen Netzwerken [Netzwerksdurchsetzungsgesetz] [NetzDG] (Network Enforcement Act or NetzDG), DEUTSCHER BUNDESRAT: DRUCKSACHEN [BR-Drs.] 536/17 (June 30, 2017), Deutscher Bundesrat website.)The Bundesrat, the constitutional body through which the German states participate in the legislative process, approved the Network Enforcement Act in its session on July 7, 2017. (Beschluss des Bundesrates. Gesetz zur Verbesserung der Rechtsdurchsetzung in sozialen Netzwerken (Netzwerkdurchsetzungsgesetz – NetzDG) Act [Decision of the Bundesrat. Act to Improve the Enforcement of Rights in Social Networks (Network Enforcement – NetzDG) Act], BR-Drs. 536/17 (Beschluss) (July 7, 2017), Deutscher Bundesrat website.) The Act will enter into force on October 1, 2017. (Network Enforcement Act, art. 3.) The Network Enforcement Act is only applicable to social media networks that have two or more million registered users, for example, Facebook, Twitter, and Youtube. (Id. art. 1 § 1 ¶ 2.)  Social media networks are defined as tele-media service providers that operate online platforms with the intent to make a profit and on which users can share content with other users or make that content publicly available.  (Id. art. 1 § 1 ¶ 1.)  The Act does not apply to email or messaging services.  (Id. art. 1 § 1 ¶ 1 sentence 3.)  Every social media network is required to designate a domestic agent for service of process and that will answers requests from law enforcement authorities.  (Id. art. 1 § 5.)

People Not Amused by EU Efforts to “De-Cash” their Lives -  Don Quijones - In January 2017 the European Commission announced it was exploring the option of imposing upper limits on cash payments, with a view to implementing cross-regional measures as soon as 2018. To give the proposal a veneer of respectability and accountability the Commission launched a public consultation on the issue. Now, the answers are in, but they are not what the Commission was expecting.A staggering 95% of the respondents said they were opposed to a cash ceiling at EU level. Even more emphatic was the answer to the following question: “How would the introduction of restrictions on payments in cash at EU level benefit you, or your business or your organisation (multiple replies are possible)?” In the curious absence of an explicit “not at all” option, 99.18% chose to respond with “no answer.” In other words, less than 1% of the more than 30,000 people consulted could think of a single benefit of the EU unleashing cross-regional cash limits. Granted, 37% of respondents were from Germany and 19% from Austria (56% in total), two countries that have a die-hard love for physical lucre. Even among millennials in Germany, two-thirds say they prefer paying in cash to electronic means, a much higher level than in almost any other advanced economy with the exception of Japan. Another 35% of the survey respondents were from France, a country that is not quite so enamored with cash and whose government has already imposed a maximum cash limit of €1,000. By its very nature the survey almost certainly attracted a disproportionate number of arch-defenders of physical cash. As such, the responses it elicited are unlikely to be a perfect representation of how all Europeans would feel about the EU’s plans to introduce maximum cash limits. Nonetheless, the sheer strength of opposition should (but probably won’t) give the apparatchiks in Brussels pause for thought.

 France to push ahead with tax cuts in 2018 after Macron overrules PM | Reuters: France will press ahead with tax cuts promised by new President Emmanuel Macron, a finance ministry source said on Monday, despite warnings from the official state audit body about an 8 billion euro ($9.1 billion) hole in the budget. Macron insisted at a meeting on Sunday that plans to rein in France's wealth tax and scrap local property taxes for 80 percent of those currently paying them begin to take effect in 2018, the ministry source said, confirming earlier French media reports. The president's intervention comes just days after his Prime Minister Edouard Philippe had suggested the cuts would be postponed into 2019 as France struggles to contain its public deficit. In an alarming report last month, the Court of Auditors said a budget shortfall left by former president Francois Hollande's government would result in a deficit of 3.2 percent of national output this year compared with the Hollande government's forecast of 2.8 percent. Macron has promised to meet the EU's 3 percent target in 2017. His pledges to cut local property taxes and limit the scope of the wealth tax to property could put a strain on revenues in the years ahead. French business leaders have bridled at the proposed delay, warning that the country needs urgent action on tax reform to restore competitiveness.

ECB Officials Disagree on How Much Is Too Much for Stimulus Plan - European Central Bank policy makers continued to air their differences over when to rein in stimulus, sending conflicting signals on whether pumping cash into the economy for much longer will help the euro area or hurt it. “Underlying inflationary pressure remains subdued” and “we still need a long period of accommodative policy,” Executive Board member Peter Praet, the ECB’s chief economist, told Belgian newspaper De Standaard in an interview published on Saturday. “Inflation is picking up, but that is a process that is a long way from completion,” Praet said. “From an inflation perspective, we cannot be satisfied yet.” Governing Council member Klaas Knot, speaking on Dutch television on Friday night, warned that the central bank is “very close to the point” of keeping quantitative easing for too long. Knot, noted that the last financial crisis was partly caused by too much money being pumped into the system, and so the ECB should be wary of going too far with stimulus. “If we carry on with this policy for too long, that is absolutely a potential danger,” he said. “The difficulty is that one cannot determine objectively when the moment is when we have continued with this policy for too long. I think that we have gotten very close to that moment.”  “Inflation is picking up, but that is a process that is a long way from completion,” Praet said. “From an inflation perspective, we cannot be satisfied yet.”

 Brexit: France to cut income tax and open international schools to entice London’s bankers to Paris  - The French Prime Minister on Friday laid out a raft of measures aimed at boosting Paris's attractiveness to high finance in order to cash in on Britain's exit from the European Union, including cutting income tax for high earning bankers and opening international schools. France continues to make eyes at London's bankers and on Friday the Prime Minister Edouard Philippe laid out a raft of measures to attract financiers who may have to leave London when the UK leaves the EU. Among them are scrapping a plan to widen a current 0.3 percent tax on financial transactions, eliminating the top income tax bracket for top earning bankers (those picking up over €150,000 a year), and keeping bonuses out of the calculation of severance pay for "risk-takers" such as stockbrokers in order to make redundancies less expensive. Those measures might have been unthinkable in France under the previous government of former President François Hollande, who famously declared the world of finance was his "enemy", but given the fight for the scraps from the Brexit fallout, France under former banker Emmanuel Macron seems prepared to do whatever it takes to fight off the competition. "You can regret this (Brexit) decision or welcome it, but it's a fact," said Philippe, speaking on the roof of the Monnaie de Paris -- the national mint -- with the city's glass-and-steel La Defense financial district visible in the distance. "You have to deal with it." 

Dimon warns EU could force banks to move staff out of UK - FT - JPMorgan chief executive Jamie Dimon has warned that US banks would have to uproot their London-based staff if the EU orders them to do so after the UK leaves the political bloc, underscoring the potential impact of Brexit on the City of London. While JPMorgan currently plans to shift “several hundred” of the bank’s 16,000 UK staff to the continent as soon as the UK leaves the EU, Mr Dimon said the bank would have no choice but to move more people if European banking supervisors insisted.  “If the EU determines over time that they want to move a lot more jobs out of London into the EU, they can simply dictate that,” he told European finance executives and politicians gathered in Paris on Tuesday. “If regulators say one day we’re not comfortable with your risk people, your lawyers, your compliance being in the UK, they can make us move it,” he said.

Brexit: German business warns May its priority is to protect single market, not a good trade deal with UK | The Independent: German business leaders have cast doubt on claims that the country's manufacturers will help secure a Brexit trade deal, instead warning Theresa May it will be "extraordinarily difficult" to protect UK industry. Ministers have frequently claimed that German carmakers, along with other key European industries such as French farmers and winemakers, would lobby their governments to agree a comprehensive deal which maintains tariff-free trade between the UK and the other 27 EU member states. But the leaders of two of Germany's main business organisations said the priority for them was maintaining the integrity of the single market for the 27 remaining members of the European Union. Dieter Kempf, president of the BDI, the federation of German industries, told the Observer: "Defending the single market, a key European project, must be the priority for the European Union. Europe must maintain the integrity of the single market and its four freedoms: goods, capital, services, and labour. "It is the responsibility of the British Government to limit the damage on both sides of the Channel. Over the coming months, it will be extraordinarily difficult to avert negative effects on British businesses in particular." Ingo Kramer, president of the confederation of German employers' associations (BDA), told the newspaper: "The single market is one of the major assets of the EU. Access to the single market requires the acceptance of all four single market freedoms. 

UK business group: Government has no ‘clear plan’ for Brexit -- The U.K. government has no “clear plan” for Brexit and needs a “serious fact-based discussion about what the future looks like” outside the EU, Paul Drechsler, president of the Confederation of British Industry lobby group, said Sunday. Speaking on Sky News’ Sophy Ridge on Sunday show, Drechsler said that although the U.K.’s exit date of March 29, 2019 was “firmly in the ground” the government should “continue to operate to the principles and rules that we apply today” until it can figure out how to transition to a new system. “We are no wiser today than we were 12 months ago in terms of what conditions business will be able to plan on for the future,” said Drechsler, just days after CBI Director General Carolyn Fairbairn made the argument for staying in the single market in a speech at the London School of Economics. Prime Minister Theresa May had been clear the U.K. would leave the single market and customs union, making traders wary of mile-long queues at ports and the prospect of an investment cliff-edge. Last week, the Engineering Employers’ Federation warned a “tipping point” could come in 2018 as companies tweak their investment plans for 2019. On the subject of striking a free-trade deal with the U.S., Drechsler warned of rushing into a “bear hug” too quickly with one of the “best negotiating teams in the world” for trade deals. “A trade deal is a dog eat dog activity, it’s not a diplomatic activity,” said Drechsler.

Theresa May plays G20 Trump card in attempt to quell Tory rebellion -- Theresa May has seized on the “optimism” of Donald Trump and world leaders over Brexit to face down a growing rebellion from Cabinet colleagues and backbenchers. The Prime Minister revealed that the heads of the biggest economies globally had agreed to deepen trade with the UK in a “powerful vote of confidence” in its post-Brexit future. President Trump personally assured Mrs May that a “powerful” trade deal between the US and the UK would be completed “very, very quickly”, as they met at the G20 in Hamburg.  In a pointed rebuke of critics, Mrs May played up the prospects of increasing trade with “old friends and new partners” after leaving the EU, including China, India and Japan.It will be seen as a dismissal of Philip Hammond, the Chancellor, who said that not remaining as close as possible to the EU would be “madness”, and business leaders lobbying to stay in the single market and customs union.  The intervention comes as a new front to the Tory Brexit rebellion emerged on Sunday, with MPs publicly criticising Mrs May’s stance on the European Court of Justice [ECJ]. Three former ministers – Ed Vaizey, Dominic Grieve and Nicky Morgan – tell the Telegraph that they have concerns about ruling out any links with the ECJ after Brexit.  The Prime Minister continues to be dogged by leadership speculation despite public support from the Cabinet after losing her Tory majority in the Commons at the election.

Business Casts Doubt on Post-Brexit Trade Deal Between U.S. and U.K. - The transatlantic trade deal U.S. President Donald Trump is offering U.K. Prime Minister Theresa May will ultimately prove easy to promise and hard to deliver. That’s the warning of business leaders and trade analysts after Trump told May last week that the post-Brexit accord she hankers after can be lined up "very, very quickly."The challenge for the U.K. with talks set to begin this month is that America boasts more leverage and negotiating know-how than the U.K. does. That will potentially force May to compromise on areas such as financial regulation and food standards to land the agreement she needs.“The U.K. must be absolutely desperate to demonstrate that it’s able to get something from the United States,” said Peter Holmes, an economist at the Trade Policy Observatory, a research group. “The U.S. will make demands that even a desperate British government won’t be able to accede to.”While the U.K. can’t formally sign deals with other countries until it leaves the EU in March 2019, it can prepare the groundwork in the hope of ratifying them soon after. Conversations with the U.S. are set to begin on July 24. Trade between the U.S. and the U.K amounted to a surplus 37 billion pounds ($47.6 billion) a year as of 2015, according to Britain's statistics office. By contrast, the U.S. Bureau of Economic Analysis calculated a surplus of $11.9 billion in the same year, providing an awkward starting point, with both countries claiming to export more than they import from each other.“The U.S.A. has one of the best negotiating teams in the world in terms of trade deals,” Paul Drechsler, president of the Confederation of British Industry, a lobby group, told Sky News. “We don’t want to walk into a bear hug and I would be wary of trying to be too fast. A trade deal is a dog-eat-dog activity; it’s not a diplomatic activity.”The U.K. may already have a taste of things to come from the inability of the EU and U.S. to agree a trade deal. Those talks have been on hold since Trump took power in January amid differences over data privacy and the rolling back of financial regulations among other issues.

Corbyn to Talk Brexit With EU’s Barnier, Sensing May Won’t Last - U.K. Labour Party leader Jeremy Corbyn will meet with the European Union’s chief Brexit negotiator Michel Barnier next week as he stands ready for a snap election that could make him prime minister. The “extended meeting” with Barnier on July 13 will give Corbyn the chance to “outline what our issues are,” he said in an interview with Bloomberg Television in London on Thursday. An EU official confirmed the meeting and said it was Corbyn who requested it. The announcement points to the confidence that Corbyn, an old-school Socialist once considered the underdog, has that he can exploit the weakness of his Conservative rivals and come to power on a call to end austerity. “He is trying to create the impression of a prime minister in waiting,” Mujtaba Rahman, Eurasia Group’s managing director for Europe, said in an email. “It sends a terrible signal to the EU about the U.K.’s overall stability and the government’s mandate and survivability. It suggests Corbyn is going to play dirty and use his presence in parliament to disrupt the Article 50 negotiations.” Labour erased Prime Minister Theresa May’s parliamentary majority last month and she has what Corbyn called a “very strange” arrangement with Northern Ireland’s Democratic Unionists that he expects will unravel and trigger another election. The U.K. has had three major votes -- including the EU referendum -- in as many years.

 More Brexit Backpedaling, UK May Relent on ECJ Red Line for “Transition Period” - Yves Smith - This is a big week for Brexit, with Theresa May scheduled to present the outlines of her Great Repeal Bill on Thursday. Pressure on May is building as she will finally be forced to abandon grand platitudes and start putting more concrete Brexit positions on the table. And this is taking place as the polls show support for Brexit having fallen to a minority and businesses more and more worried as they realize even a soft Brexit won’t be a good outcome for many of them. The Government has already had to retreat from its bluster about what it could get from the EU merely by stomping its feet and pouting. May insisted that the UK would negotiate a Brexit only if it could also work on a trade deal in parallel. That went out the window the day the negotiations started. The UK insisted it wouldn’t accept a Brexit tab. That was and remains one of the first items to be settled.  In another major backpedal, flagged by the Financial Times, the Government has now admitted its red line on the European Court of Justice, that the ECJ would have no say after Brexit, which has been an idee fixe of the hard-core Brexiteers, is untenableEuropean judges could continue to have sway over Britain for a “limited time” after Brexit, the British government has conceded, in a development that could pave the way for a softer exit with the UK retaining closer ties to the EU.. Many Eurosceptic Conservatives have long argued that the ECJ — which as the bloc’s highest court has sway over the UK legal system on matters of EU law — is an affront to British sovereignty. However, on Monday Mrs May’s spokesman said: “The transition rules could involve the ECJ for a limited time. That’s a matter for negotiation.” The EU side had meanwhile dismissed the idea of a “bespoke” transition for Britain, making European courts a clear redline. In their Brexit negotiating guidelines, EU leaders insist that any “time-limited prolongation” of EU rules would “would require existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply”. While the Government may actually believe the ECJ shift is only a minor concession, in fact, the UK has no way to escape the ECJ continuing to play a significant role in UK affairs. If the UK is to keep selling goods into the EU, its manufacturers will have to comply with EU standards. For the overwhelming majority of goods, having separate products for the EU and UK would be a costly nuisance. The EU product would be the one also sold in the UK. Likewise, UK financial institutions will have to comply with European banking regs when operating in the EU, just as they have to adhere to US regulations in the US and Japanese regulations in Japan.

Boris Johnson says EU can ′go whistle′ on Brexit settlement bill | Europe | DW | 11.07.2017: British Foreign Secretary Boris Johnson has told fellow MPs that the EU can "go whistle" if it demands an "extortionate" final payment for leaving the EU. This stole the limelight from a keynote speech by PM Theresa May.Boris Johnson was fielding questions in parliament about the UK leaving the EU on Tuesday when a euroskeptic Conservative ally, Philip Hollobone, urged him to tell leaders in Brussels that they could "go whistle" if they wanted "a penny piece more" than the money the UK had already paid to the EU since joining in the 1970s. "I am sure that my honorable friend's words will have broken like a thunderclap over Brussels," Johnson began in response. "He makes a very valid point, and I think that the sums that I have seen that they propose to demand from this country seem to me to be extortionate, and I think that to 'go whistle' is an entirely appropriate expression." Another MP could be heard issuing a brief wolf whistle as Johnson concluded his comment. The question of a so-called "divorce bill" for the UK leaving the EU is among the top items on the negotiating agenda. Some reports have put a possible bill as high as 100 billion euros, although mooted costs have varied wildly. The UK government has distanced itself from all reported figures, but has said it intends to settle its "obligations" on leaving. Johnson also told the House that the government was confident of reaching a deal with Brussels and that it had "no plan" for a breakdown in negotiations.

The Great Repeal Bill – which does the opposite of what it says – could be the Brexit act that finishes off Theresa May | The Independent: Theresa May’s appeal for opposition parties to cooperate with her minority government didn’t just produce the inevitable raspberry from Labour. It also went down very badly with Conservative MPs, who gave the Prime Minister another black mark just when she hoped she was stabilising her position. “She only advertised her weakness,” one grumbled. Only the most sycophantic and ambitious Tories went on the airwaves to defend May’s plea.  May’s overnight conversion from control freak dictator to consensual leader will fool no one; only two months ago, her allies were talking about a landslide that would crush Labour and keep it out of power for a generation.  Although many Tory MPs want May to see the Brexit negotiations through to their close in 2019, it is only because they fear a change of leader would fuel demands for another general election.The PM’s fragility will be underlined on Thursday with the publication of the Repeal Bill: the first of eight pieces of Brexit legislation. The mammoth Bill would have been complicated enough even if May had won her landslide. Now opposition parties and Tory pro-Europeans will be able to wage parliamentary guerrilla war against the Government – not exactly the cross-party co-operation May had in mind.The Government is so nervous about rebellions that it will delay any debate on the Bill until October. There are between 20 and 30 pro-European Conservatives; only seven need to vote with all the opposition parties to muster 320 votes and defeat the 319 from the remaining Tory MPs and 10 Democratic Unionists. The Bill really does the opposite of what it says on the tin. While it will abolish the 1972 European Communities Act which took us into the EU, it will transpose 44 years of EU legislation, including 19,000 regulations, directives and other rules, into UK law. (They are still coming: another 1,200 are expected before we leave in 2019). This would give ministers time to decide which EU rules to keep, which Whitehall officials believe could take 10 years.

 Brexit: The UK's key repeal bill facing challenges - BBC News: The Scottish and Welsh governments have threatened to block the key Brexit bill which will convert all existing EU laws into UK law. The repeal bill, published earlier, is also facing opposition from Labour and other parties in the Commons. Ministers are "optimistic" about getting it through and have promised an "ongoing intense dialogue" with the devolved administrations. No 10 said it had to be passed or "there will be no laws" after Brexit. Brexit Secretary David Davis called it "one of the most significant pieces of legislation that has ever passed through Parliament". He rejected claims ministers were giving themselves "sweeping powers" to make changes to laws as they are repatriated. It will be up to MPs if they want a say on the "technical changes" ministers plan to make to legislation, he told the BBC.Labour says it will not support the bill in its current form and is demanding concessions in six areas, including the incorporation of the European Charter of Fundamental Rights into British law. The party wants guarantees workers' rights will be protected and also want curbs on the power of government ministers to alter legislation without full parliamentary scrutiny. Leader Jeremy Corbyn, who was in Brussels earlier for a meeting with the EU's chief negotiator Michel Barnier, said: "Far too much of it seems to be a process where the government... will be able to bypass Parliament. "We will make sure there is full parliamentary scrutiny. We have a Parliament where the government doesn't have a majority, we have a country which voted in two ways on Leave or Remain. "The majority voted to leave and we respect that, but they didn't vote to lose jobs and they didn't vote to have Parliament ridden roughshod over." 

Brexit: EU negotiator Barnier firm on citizens' rights - BBC News: The EU's top Brexit negotiator has said there are still major differences between the EU and UK on the rights of EU citizens living in Britain. "The British position does not allow those persons concerned to continue to live their lives as they do today," Michel Barnier said. Mr Barnier said the European Court of Justice (ECJ) must have jurisdiction to guarantee citizens' rights. He also said it was essential that the UK recognise its financial obligations. If Britain did not accept it had some financial obligations, there would be no basis to discuss other issues, he said.Ahead of the second round of talks next week, Mr Barnier said the EU had made its stance on the issues clear and was waiting on Britain to do the same. "Our team is ready," he said. " I'm ready. I'm very prepared and willing to work on this very quickly - night and day, the weekend." "We want EU citizens in Britain to have the same rights as British citizens who live in the EU," he told a news conference. That would require the ECJ to be the "ultimate guarantor" of those rights, he said, because Britain could simply change its laws later, creating uncertainty. UK law also imposes restrictions in areas such as reuniting families across borders, he said - something which was not applied to UK citizens living in Spain, for example. Michel Barnier's message to the UK was: it's time to get a move on, to provide more clarity about the British position on a range of issues.

EU wants legal jurisdiction over UK to last for years after Brexit: The European Commission’s chief Brexit negotiator is expected today to insist that the EU's highest court retains jurisdiction over all British trials until the moment the UK leaves the bloc. If the UK government caves into the demand, the European Court of Justice (ECJ) could hold sway over decisions by British courts for more than a decade after Brexit. The EU wants the ECJ to keep supremacy over all cases, even those that have not yet been appealed to the European court, active up to the UK's March 2019 withdrawal. Cases that reach the ECJ can take up to 15 years to resolve.Michel Barnier, who is leading Brexit talks on behalf of the bloc, will brief Jean-Claude Juncker and his commissioners in Brussels this morning. Mr Barnier, who plans to meet Jeremy Corbyn tomorrow, will hold an afternoon press conference ahead of next week’s second round of negotiations.

National Audit Office Warns of Brexit Customs IT Train Wreck….Nine Months After Naked Capitalism -- Yves Smith - The morning when Theresa May is about to unveil the first installment of her Great Repeal Bill, the press is reporting on full bore alarms from the National Audit Office about a Brexit disaster in the making: a sure to be failed Customs systems upgrade that will tie UK ports in knots.  Richard Smith flagged the Independent’s account:The UK’s spending watchdog has warned the Government’s post-Brexit IT system for customs is heading for a “horror show” that could risk £34bn of public income.In a scathing assessment, the National Audit Office said the computer system might not be ready by the time Britain leaves the EU, potentially plunging the UK’s ports into chaos.The £157m system is due to be completed just two months before Brexit in March 2019, but the NAO says delays common to new IT would cause massive disruption.In unusually tough language, auditor general Sir Amyas Morse said ministers were only beginning to understand the momentous task of Brexit and that without further resources would find that “at the first tap, this falls apart like a chocolate orange”…Publishing his report on the Customs Declaration Service, Sir Amyas said the IT system to record declarations on imports and exports threatened to become “a horror show”….Among risks outlined in the NAO’s report is the possibility that Britain’s final deal with the EU might require features in the IT system not yet anticipated by its designers – requiring last minute changes and causing more delays. Recall that during Obamacare, the reason the rollout was such a disaster was specs being changed six months before the launch date. Lambert was first to recognize the significance of that and correctly predict an IT disaster. And mind you, that was in the context of a presumably largely settled development plan. Based on a Financial Times story last November that didn’t get the attention it merited, we similarly predicted that the Customs rollout would be a mess and Brexit would only compound the magnitude of the damage in Another Huge Brexit Spanner in the Works: UK Faces Customs Train Wreck With Need for IT Upgrade:

Tony Blair says Brexit can be stopped if UK leaders realise the EU will ‘meet us halfway’ - Mr Blair said it is possible the will of the British people could change as the public becomes more aware of the potential economic damage of hard Brexit  ​Brexit can still be stopped if Britain’s leaders realise EU officials are prepared to “meet us halfway” on restricting the free movement of people, Tony Blair has said in his first intervention since the general election.While the former Labour Prime Minister admitted there is “no groundswell” for a second referendum on membership of the EU, Mr Blair said it is possible that the will of the British people could change as the public becomes more aware of the potential economic damage of hard Brexit.  He also appeared sceptical of a “soft Brexit”, which would mean Britain remaining in the single market and the customs union, adding the political difficulties are evident. “It would lead in short order to a scratch of the British collective head and feeling of ‘oh well, in that case, what’s the point of leaving?”.  In an eight-page article on Brexit and the centre in European politics, Mr Blair wrote: “Rational consideration of the options would sensibly include the option of negotiating for Britain to stay within a Europe itself prepared to reform and meet us halfway.” He continued, suggesting reform is now on Europe’s agenda and EU leaders are willing “to consider changes to accommodate Britain” including around the freedom of movement – one of the most contentious issues of the referendum last year.While EU leaders have consistently said on record that there will be no compromise on free movement – one of the bloc’s founding principles – Nick Clegg, the former Deputy Prime Minister, has also relayed similar discussions with EU officials willing to give ground to Britain.  Describing Britain’s exit from the European Unio