week ending Oct 21

The Other Side of the Fed's Balance Sheet -- Who controls the Fed's balance sheet? The answer may seem obvious. The Fed, after all, determines the size of its balance sheet. It also controls what happens to the asset side of its balance sheet. Its power over the liability side, however, is limited.This diminished control arises because the public's demand for currency, bank regulations, and U.S. Treasury cash balances all influence the composition of the Fed's liabilities.¹ These are exogenous forces that have the potential to create some economic bumps on the road ahead as the Fed normalizes the size of its balance sheet. So far, though, little attention has been paid to these liability-side issues. Most focus has been given to the asset side of the Fed's balance sheet. This focus, in my view, is misguided. I see the real dangers lurking on the liability side of the Fed's balance sheet--the very side where the Fed has less control. This post, then, is attempt to direct some attention to the liability side of the Fed's balance sheet. In it, I first explain how the public's demand for currency, bank regulations, and the U.S. Treasury cash balances are beyond the Fed's control but affect its balance sheet. I then explain how these forces and current Fed policy could interact in a disruptive manner.   Consider first the public's demand for currency. It grows as the dollar size of economy grows. This growing demand for currency is met by banks turning reserves into currency. Some of this growing demand for currency comes from foreigners and some from domestic residents. As seen in the figure below, both have grown over the past decade. In total, currency grew from around $800 billion in 2007 to $1.58 trillion today. The almost $800 billion increase in currency means a similar-sized decline in reserves over the same period

Incoming Data Supportive of December Rate Hike  - Tim Duy - If we ignore inflation, then nothing is really standing in the way of a rate hike in December. Of course, given that arguably the primary job of a central bank is to meet its definition of price stability, the Fed shouldn’t really ignore inflation. Policymakers, however, would counter that they are not ignoring inflation. They are simply favoring the inflation forecast over actual inflation. And they would further argue they have good cause – with the economy chugging along, it is only a matter of time before resource constraints become evident and price pressures rise. That’s their story, and they are sticking to it. Industrial production rebounded in September after an upwardly revised August drop. Hurricane activity took a bite out of the August number and continued to impact the data in September. The Fed estimates that the hurricanes dragged down production growth by 0.25 percentage points in the most recent report. The short story is that despite the recent storm impacts, the underlying momentum in the sector remains positive, boosted by the waning effects of the 2015 oil price and dollar shock and stronger global growth. Housing starts fell to a rate of 1.127 million units per year, compared to expectations of 1.17 million units. Here too the hurricanes had an impact, weighing on housing starts in the south. But the general upward trend of single family starts remains intact. Multifamily, however is a different story. It appears that peak multifamily is now behind us for this cycle, and the activity is being handed off to single family. Almost as might be expected as 1.) the Millennial bulge moved into their twenties and first non-parent housing and then 2.) as that same group ages and starts to turn their attention away from multifamily housing. The Fed released the Beige Book Wednesday, a precursor to the upcoming FOMC meeting. Similar to previous reports, growth remains modest to moderate across Fed regions, with expected hurricane disruptions. Labor markets reportedly remain tight, so tight that conditions hamper the expansion of business activity. But wage growth remains elusive.

Boston Fed’s President Makes Case for Interest Rate Hike - — Eric Rosengren, president of the Federal Reserve Bank of Boston, was a leading advocate for the Fed’s economic stimulus campaign after the financial crisis. Lately, he has been equally outspoken in arguing that the Fed must continue to raise its benchmark interest rate even though inflation remains sluggish. Mr. Rosengren, perhaps the Fed official whose views most reliably approximate those of Janet L. Yellen, the Fed chairwoman, argues that inflation will rebound as unemployment continues to fall. He also argues that raising rates slowly could prolong the economic expansion by averting any need to raise rates quickly. In an interview on Saturday at the Boston Fed’s annual conference, Mr. Rosengren said he favored raising the Fed’s benchmark rate later this year, and that the rate should rise to about 2 percent by the end of 2018. The conversation began on a broader subject: Policy rules. Republicans want the Fed to adopt a formula for moving interest rates up and down. Randal Quarles, sworn in Friday as the Fed’s vice chairman of supervision, favors that approach. So do some of the candidates to become the Fed’s next chairman. The transcript has been edited for length and clarity.

Fed Chair Janet Yellen "The Economy and Monetary Policy" -  From Fed Chair Janet Yellen: The Economy and Monetary Policy. A few excerpts on inflation: To be sure, our understanding of the forces that drive inflation is imperfect, and we recognize that this year's low inflation could reflect something more persistent than is reflected in our baseline projections. The fact that a number of other advanced economies are also experiencing persistently low inflation understandably adds to the sense among many analysts that something more structural may be going on. Let me mention a few possibilities of more fundamental influences.First, given that estimates of the natural rate of unemployment are so uncertain, it is possible that there is more slack in U.S. labor markets than is commonly recognized, which may be true for some other advanced economies as well. If so, some further tightening in the labor market might be needed to lift inflation back to 2 percent.Second, some measures of longer-term inflation expectations have edged lower over the past few years in several major economies, and it remains an open question whether these measures might be reflecting a true decline in expectations that is broad enough to be affecting actual inflation outcomes. Third, our framework for understanding inflation dynamics could be misspecified in some way. For example, global developments--perhaps technological in nature, such as the tremendous growth of online shopping--could be helping to hold down inflation in a persistent way in many countries. Or there could be sector-specific developments--such as the subdued rise in medical prices in the United States in recent years--that are not typically included in aggregate inflation equations but which have contributed to lower inflation. Such global and sectoral developments could continue to be important restraining influences on inflation. Of course, there are also risks that could unexpectedly boost inflation more rapidly than expected, such as resource utilization having a stronger influence when the economy is running closer to full capacity.

Yellen Calls Inflation the 'Biggest Surprise' in the Economy -  Federal Reserve Chair Janet Yellen said that the U.S. central bank expects to continue to raise interest rates gradually as solid growth, a strong labor market and a healthy global economy lift prices even as she recognized that inflation has been surprisingly low. “My best guess is that these soft readings will not persist, and with the ongoing strengthening of labor markets, I expect inflation to move higher next year,” Yellen said Sunday at the Group of Thirty’s Annual International Banking Seminar in Washington. Yellen’s term expires in February and she is said to be among the candidates President Donald Trump is considering to be his pick to lead the central bank. She has presided over a sustained recovery from the global financial crisis, though inflation has remained below the Fed’s 2 percent goal, a development that’s puzzled policy makers at a time when the unemployment rate has fallen past its pre-crisis low. “The biggest surprise in the U.S. economy this year has been inflation,” Yellen said on a panel that included Bank of Japan Governor Haruhiko Kuroda, People’s Bank of China Governor Zhou Xiaochuan and European Central Bank Vice President Vitor Constancio. While the Fed chair said she expects a pickup, she and her colleagues “recognize that this year’s low inflation could reflect something more persistent than is reflected in our baseline projections.” Inflation came in at 1.3 percent in August after stripping out volatile food and fuel, well below the Fed’s target. It has been headed in the wrong direction for months, and data through the end of the year will be unreliable, clouded by seasonal adjustment issues and price fluctuations wrought by hurricanes that hit the U.S. South late this summer. 

The Fed seems to have given up on a controversial but potent tool it may need to use again soon - It’s official: The Federal Reserve has decided to separate conventional interest rate policy from its recession-driven bond purchases, which it now intends to begin winding down more or less independently of economic conditions.  While Fed officials, including Janet Yellen, often stress that they are "data-dependent" in their outlook for monetary policy, their announcement about starting to unwind the central bank’s $4.4 trillion balance sheet came with an important caveat.  "Changing the target range for the federal funds rate is our primary means of adjusting the stance of monetary policy. Our balance sheet is not intended to be an active tool for monetary policy in normal times," she told reporters."We therefore do not plan on making adjustments to our balance sheet normalization program. But, of course, as we stated in June, the Committee would be prepared to resume reinvestments if a material deterioration in the economic outlook were to warrant a sizable reduction in the federal funds rate."  This view represents a distinct departure from earlier discussions of monetary policy within the Fed, with some officials like ex-Fed governor Jeremy Stein advocating a more active use of the balance sheet as an alternative and potentially more targeted lever of policy. Now, while the central bank does leave the door open to further use of its balance sheet in extreme cases, it makes clear this is something that it would only do in an emergency. Here’s why that’s a really bad idea: If the Fed’s more dovish policymakers are right, the central bank doesn’t have much further to go in raising interest rates, which are only in a range of 1% to 1.25% currently. Specifically, St. Louis Fed President James Bullard told Business Insider in an interview last week he wasn’t sure the Fed would need to hike rates much further, if at all, given a still low inflation backdrop and subpar economic growth.  Yellen herself has acknowledged being surprised by low inflation, though she still sees it as a temporary phenomenon.  US inflation has undershot the Fed's 2% target for much of the economic recovery, and has been moving lower this year. The central bank's preferred measure stood at 1.4% in August.

Central bankers have one job and they don’t know how to do it --Rightly or wrongly, most central bankers think their mission is to keep the growth rate of consumer prices slow and stable. Even in places, such as America, that also ask the central bank to promote “maximum employment”, the inflation mandate is paramount.The standard argument is that unemployment and living standards are real things outside the purview of the monetary authority, whereas “inflation is always and everywhere a monetary phenomenon”.The problem is no one seems to have figured out how central bankers are supposed to influence this “monetary phenomenon” using the tools at their disposal. That, at least, was one of the main takeaways we had from the Peterson Institute’s latest conference on “Rethinking Macroeconomic Policy”.  Lael Brainard recognises the problem. She is willing to acknowledge the decades of data disproving the model favoured by Blanchard, Fischer, and Yellen — even though this leaves her without a quick and ready way to explain where inflation “comes from”. (Empirically, the best predictor of future inflation is past inflation, with no insight gained by adding in the unemployment rate.) The challenge for her — and for everyone else who wants central banks to do the one thing they say they should be expected to do well — is to figure out what should replace the Phillips Curve framework. It’s appealing to say you will control inflation by controlling unemployment because it sounds straightforward. The problem is it’s bogus. Reality is a lot more complicated.

Yellen: "A Challenging Decade and a Question for the Future" From Fed Chair Janet Yellen: A Challenging Decade and a Question for the Future. Excerpt:  My colleagues on the FOMC and I believe that, whenever possible, influencing short-term interest rates by targeting the federal funds rate should be our primary tool. Where does this assessment leave our unconventional policy tools? I believe their deployment should be considered again if our conventional tool reaches its limit--that is, when the federal funds rate has reached its effective lower bound and the U.S. economy still needs further monetary policy accommodation.  Recent studies suggest that the neutral level of the federal funds rate appears to be much lower than it was in previous decades.  Indeed, most FOMC participants now assess the longer-run value of the neutral federal funds rate as only 2-3/4 percent or so, compared with around 4-1/4 percent just a few years ago.  With a low neutral federal funds rate, there will typically be less scope for the FOMC to reduce short-term interest rates in response to an economic downturn, raising the possibility that we may need to resort again to enhanced forward rate guidance and asset purchases to provide needed accommodation. Of course, substantial uncertainty surrounds any estimates of the neutral level of short-term interest rates. In this regard, there is an important asymmetry to consider. If the neutral rate turns out to be significantly higher than we currently estimate, it is less likely that we will have to deploy our unconventional tools again. In contrast, if the neutral rate is as low as we estimate or even lower, we will be glad to have our unconventional tools in our toolkit.  The bottom line is that we must recognize that our unconventional tools might have to be used again. If we are indeed living in a low-neutral-rate world, a significantly less severe economic downturn than the Great Recession might be sufficient to drive short-term interest rates back to their effective lower bound.

Taylor Impresses Trump for Fed Chairman, Warsh Slips - Stanford University economist John Taylor, a candidate for Federal Reserve chairman, made a favorable impression on President Donald Trump after an hour-long interview at the White House last week, several people familiar with the matter said.Former Fed board governor Kevin Warsh has meanwhile seen his star fade within the White House, three of the people said. They would not say why but Warsh’s academic credentials are not as strong as other candidates, and his tenure on the Fed board has been criticized by a diverse group of economists ranging from Scott Sumner to Nobel laureate Paul Krugman.Trump gushed about Taylor after his interview, one of the people said. The president has always been prone to hiring people with whom he has a good relationship. However, he told the Wall Street Journal in July that he would “like to see rates stay low,” and Taylor is the namesake of a well-known monetary policy rule that would generally advocate higher interest rates.  Warsh remains on Trump’s shortlist candidates to lead the central bank along with Taylor, the people said. The others are the current Fed Chair Janet Yellen, Trump’s chief economic adviser Gary Cohn and Fed governor Jerome Powell. Trump plans to interview Yellen on Thursday, a person familiar with the matter said. In addition to Trump’s deliberations on Fed chair, he is considering appointing Treasury Department official David Malpass to a governor’s seat on the Fed board, one person said. Malpass, an economist, was an economic adviser to Trump during his campaign and currently serves as Treasury undersecretary for international affairs.

WSJ Endorses Warsh, Taylor; Says Powell "Status Quo" Is Not What Trump Campaigned On --  Despite bookies' odds surging and Politico 'sources' suggesting Jerome Powell will be the next Fed head, it appears The Wall Street Journal Editorial Board is not buying it, and endorses Warsh or Taylor, saying that Trump needs a leader at the central bank who supports faster growth. President Trump is finishing his interviews to choose the next Federal Reserve Chairman, and the same voices who oppose him on everything are chanting in unison - reappoint Janet Yellen or choose her Republican running mate, Jerome Powell. Mr.Trump should consider the implications for the economy, which will be a major part of his legacy.The Yellen-Powell advocates are telling the President that they have avoided big monetary mistakes, that they favor low interest rates, and there is no reason to take a risk on someone new. Some in the Trump Treasury are also saying that Mr. Powell is someone they can dominate. So go with the status quo.But what someone should also tell Mr. Trump is that the monetary status quo won’t hold no matter who is Fed chair. Ms. Yellen has presided over an unusually placid financial period, not least because economic growth was so slow through the Obama Presidency.That isn’t likely to last—at least not if Mr. Trump’s tax and deregulatory policies succeed in spurring faster growth. The Yellen Fed is already raising rates and unwinding the $4.5 trillion balance sheet it built over eight years. The question Mr. Trump should ask is who should run the Fed during this uncertain monetary transition, especially if the economy leaves its slow-growth doldrums. One certainty is that the Yellen-Powell Fed believes in the Phillips Curve trade-off between unemployment and inflation. Once the economy hits what the Fed staff considers to be “full employment,” its economic models signal the need for higher interest rates.With the jobless rate already at 4.2%, the Fed staff are worried that rising wages will push up prices, and so interest rates will have to rise to prevent inflation. Yet as Ms. Yellen has acknowledged with some puzzlement, inflation has been remarkably contained. She can’t explain why because it doesn’t fit the Fed’s current economic models. Another issue is how much labor slack exists despite the low jobless rate. The labor participation rate remains at low levels not seen since the 1970s, and one reason is the departure of prime-age males from the workforce. Faster growth and rising wages might coax them out of dad’s basement or too-early retirement.

Trump is About to Own This Credit Cycle - President Donald Trump is about to select a new Federal Reserve chair. Whether it’s Jerome Powell, Kevin Warsh, or even current head Janet Yellen, the choice will mark a shift in Trump’s tenure leading the world’s biggest economy. That’s because the president, who railed against Yellen during his 2016 campaign, will now be assuming ownership of this credit cycle and however it’s dealt with going forward  If Trump decides to renominate Yellen, he’ll incur the wrath of conservative Congress members who think she’s gone outside her monetary policy mandate. They argue that her approach to regulatory enforcement has been overly expansive and has led to slower growth. But she’s a steady hand at an uncertain time, offering predictability to a market that’s come to expect it.She will likely err on the side of keeping rates lower, letting the U.S. economy accelerate for a longer period. If Powell is the ultimate choice, he’s similar to Yellen in many ways and his selection will imply that Trump endorses the Fed’s current path. Should Trump make a bigger change, say, by nominating Kevin Warsh, a former Fed governor, he’ll be viewed as somewhat responsible should the central bank raise rates too quickly, or make some policy error that craters the U.S. economy. Warsh is known for being critical of recent easy-money policies, arguing against a second round of quantitative easing in 2010. He also said in March 2007 that financial innovation had been an important source of strength. Months later, these innovative products ignited the worst financial crisis since the Great Depression.  Stanford University economist John Taylor is also in the running, as is Trump adviser Gary Cohn. Whoever he picks will have a tough job cut out for them. The central bank is embarking on a complicated period in its existence, raising short-term interest rates while also unwinding its $4.5 trillion balance sheet. It's doing so amid a relatively tepid economic recovery, without signs of significant inflation and amid lots of questions about the sustainability of growing debt loads, from emerging-markets nations to risky U.S. companies.

Fed's Beige Book: "Modest to moderate"expansion, Labor markets "Tight" -- Fed's Beige Book "This report was prepared at the Federal Reserve Bank of Minneapolis based on information collected on or before October 6, 2017" Reports from all 12 Federal Reserve Districts indicated that economic activity increased in September through early October, with the pace of growth split between modest and moderate. The Richmond, Atlanta, and Dallas Districts reported major disruptions from Hurricanes Harvey and Irma in some areas and sectors, including transportation, energy, and agriculture. Manufacturing activity and nonfinancial services expanded modestly to moderately in most Districts. Retail spending rose slowly, while vehicle sales and tourism increased in most Districts. Residential construction continued to increase, and growth in commercial construction was up slightly on balance. Low home inventory levels continued to constrain residential sales in many areas, while nonresidential real estate activity increased slightly overall. Loan demand was generally stable to modestly higher. Growth in the energy sector eased slightly. Agricultural conditions were mixed; while some regions were reporting better-than-expected harvests, low commodity prices continued to weigh down farm incomes. Employment growth was modest on balance, with most Districts reporting flat to moderate increases. Labor markets were widely described as tight. Many Districts noted that employers were having difficulty finding qualified workers, particularly in construction, transportation, skilled manufacturing, and some health care and service positions. These shortages were also restraining business growth. Firms in several Districts reported that scarcity of labor, particularly related to construction, would be exacerbated by hurricane recovery efforts. Despite widespread labor tightness, the majority of Districts reported only modest to moderate wage pressures. However, some Districts reported stronger wage pressures in certain sectors, including transportation and construction. Growing use of sign-on bonuses, overtime, and other nonwage efforts to attract and retain workers were also reported.

Conference Board Leading Economic Index: First Decline in Over a Year -  The latest Conference Board Leading Economic Index (LEI) for September decreased to 128.6 from 128.8 in August and saw its first decline in over a year, partially due to the impact of the hurricanes. The Coincident Economic Index (CEI) came in at 115.7, up fractionally from the previous month.  The Conference Board LEI for the U.S. declined slightly for the first time in over a year. Negative contributions from initial claims for unemployment insurance (inverted), building permits and average weekly manufacturing hours more than offset the positive contributions from the ISM® new orders index and the financial components. In the six-month period ending September 2017, the leading economic index increased 1.7 percent (about a 3.5 percent annual rate), slower than the growth of 2.2 percent (about a 4.4 percent annual rate) during the previous six months. In addition, the strengths among the leading indicators became somewhat less widespread. [Full notes in PDF] Here is a log-scale chart of the LEI series with documented recessions as identified by the NBER. The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale.

Q3 GDP Forecasts - From the Altanta Fed: GDPNow The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 2.7 percent on October 18, unchanged from October 13. The forecast of third-quarter real residential investment growth inched down from -4.1 percent to -4.3 percent after this morning's new residential construction release from the U.S. Census Bureau.  From the NY Fed Nowcasting Report  The New York Fed Staff Nowcast stands at 1.5% for 2017:Q3 and 2.6% for 2017:Q4  From Merrill Lynch:   We revise up our 3Q GDP forecast to 3.0% marking to market with our tracking estimate.  CR Note: The BEA is scheduled to release the advance estimate for Q3 GDP next week.  Based on the August report, PCE looks sluggish in Q3 (mid-month method at 1.7%).

Who Has the World's No. 1 Economy? Not the U.S. - What’s the most powerful country in the world? There’s a good case to be made that it’s China.There are many kinds of power -- diplomatic, cultural, military and economic. So an easier question to ask is: What’s the world’s largest economy? That’s almost certainly China.Many might protest when hearing this. After all, the U.S. still produces the most when measured at market exchange rates: But this comparison is misleading, because things cost different amounts in different countries. Gross domestic product is supposed to measure the amount of real stuff -- cars, phones, financial services, back massages, etc. -- that a country produces. If the same phone costs $400 in the U.S. but only $200 in China, China’s GDP is getting undercounted by 50 percent when we measure at market exchange rates. In general, less developed countries have lower prices, which means their GDP gets systematically undercounted. Economists try to correct for this with an adjustment called purchasing power parity (PPP), which controls for relative prices. It’s not perfect, since it has to account for things like product quality, which can be hard to measure. But it probably gives a more accurate picture of how much a country really produces. And here, China has already surpassed the U.S.:  If you don’t trust the murky PPP adjustments, a simple alternative is just to look at the price of a Big Mac. The same burger costs 1.8 times more in the U.S. than in China. Adjusting the market-exchange-rate GDP numbers by that ratio would put China even farther ahead. In some dimensions, China’s lead is even larger. The country’s manufacturing output overtook that of the U.S. almost a decade ago. Its exports are more than a third larger as well. American commentators may be slow to recognize China’s economic supremacy, but the rest of the world is starting to wake up to the fact:

US Spent A Record $4 Trillion In Fiscal 2017, Pushing Deficit To $666 Billion - One year ago, the CBO forecasted that Fiscal 2017 deficit (for the year ended September 30), would be in the mid-$500 billion range. It was not meant to be, however, and on Friday the Treasury reported that with outlays of $340 billion in the last month of the fiscal year, offset by $349 billion in receipts, the full year deficit grew to a nice, round and very memorable $666 billion in fiscal 2017, up $80 billion or 14% from fiscal 2016. The government ran an $8 billion surplus in September, much smaller than the $33 billion surplus in September 2016.Receipts fell 2% while outlays grew 5% last month compared with the same period a year earlier.  For the full year, federal tax receipts reached a record high $3.3 trillion, thanks to slightly faster growth, according to a senior Treasury official. But government outlays also hit a record high last year at nearly $4 trillion ($3.95 trillion to be precise), 3% higher than they were in the previous fiscal year, thanks to increased spending on Social Security, Medicare and Medicaid, as well as higher interest payments on the public debt. And that's with interest rates that were near all time lows. We can't wait until the $20+ trillion in Federal debt starts really hitting the bottom budget line as the Fed starts pushing rates higher.  As a percentage of gross domestic product, the deficit totaled 3.5%, up from 3.2% in fiscal year 2016. The good news is that after contracting for 4 consecutive months in early 2017, federal government receipts have once again started grown on a Y/Y basis.

Congress Rolls Toward Shutdown Fight Over Immigration, Obamacare - The year’s most divisive fights in Congress are set to converge in a bitter partisan clash in December that could result in a U.S. government shutdown. The unresolved battles -- over a wall on the U.S.-Mexico border, immigration, health-care subsidies, Planned Parenthood and storm relief -- are hanging over talks on must-pass spending legislation to keep the government open after Dec. 8. The spending measure is at risk of becoming so weighted with controversial items that it collapses. “The laundry list of things they want to put on it grows every day,” said Jim Dyer, a former House Appropriations Committee Republican staff director. Even without contentious issues, completing a trillion-dollar spending bill in time would be a tall order. The brewing battle could leave Republicans with no major accomplishments in President Donald Trump’s first year after they couldn’t find enough votes to repeal Obamacare. The more protracted the fight, the less time in 2017 to to overhaul the tax code, the GOP’s top priority. There also may be pressure to raise the federal debt limit as part of a year-end package, although the Treasury Department is likely to use its authority to delay the need for an increase into early next year. Unbridgeable policy differences might result in a push to simply extend current spending authority through fiscal 2018. That would limit military spending to $549 billion, leaving out the big boost sought by Senate Armed Services Committee Chairman John McCain of Arizona and other Republican defense hawks. McCain is among those threatening to take his year-end priorities to the mat. He said Wednesday that he won’t support any temporary extension of government agency spending unless the defense caps are lifted. He said a government shutdown -- for the first time since 2013 -- is possible. 

North Korea Warns That Nuclear War Could ‘Break Out Anytime -- Kim In Ryong, North Korea’s deputy ambassador to the United Nations, said on Monday that his nation had become a “full-fledged nuclear power which possesses the delivery means of various ranges” and warned that “the entire U.S. mainland is within our firing range.” He also called North Korea “a responsible nuclear state.”“As long as one does not take part in the U.S. military actions against the DPRK, we have no intention to use or threaten to use nuclear weapons against any other country,” Kim said, referring to his country’s formal name.The comments are similar to other warnings North Korea has made over the past few months as tensions have increased with President Donald Trump’s administration. Kim Jong Un’s regime has repeatedly said it needs the capability to strike the U.S. with a nuclear weapon in order to deter an American attack.“They just bluff to the extreme because they think that if enough people worry about what they’re saying, that would deter U.S.-South Korean action,” Bruce Bennett, senior defense analyst at Rand Corp., said in a Bloomberg TV interview. “The problem is North Korea is used to using very extreme words to deter by bluff and by bluster, and now they’re shocked that the Americans are using a similar approach.” Trump has said military force is an option to stop Kim and has ruled out talks with Pyongyang. Secretary of State Rex Tillerson said Sunday the president wants him to push forward on diplomacy with North Korea “until the first bomb drops.”

The True Danger Of The North Korea Crisis: It Could Cost America Its Allies -- Tough North Korea rhetoric from the U.S. administration continues. Major South Korean media increasingly talk as if U.S. air strikes are likely, and the expert community seems increasingly resigned to them as well. Despite constant criticism of his incendiary language, President Donald Trump continues to suggest that major action against North Korea is imminent—most recently by suggesting that we are now in a period of ‘calm before the storm.’  I have argued in these pages that such strikes would be an enormous risk. We do not know what the North’s redlines for retaliation against such a strike are. We do not know if the strikes would so unnerve the North’s elites that war was next, that they would respond with enormous force, possibly including nuclear weapons. An expert study of this scenario suggests appalling casualty numbers. We also do not know what China’s thresholds are for intervention. China is treaty-bound to help North Korea if it is attacked. Nevertheless, the pressure to something dramatic regarding North Korea is rising. If war is inevitable - it is not, but for the sake of the argument - it is better to fight now, before they have more weapons, and before those weapons can more evidently strike the continental United States. This question is now returning as Trump raises the rhetorical heat on Pyongyang.And this time, it involves Japan too, as it is now in range in range of North Korean missiles, and likely nuclear missiles. Japan has already practiced civil defense drills. But if the United States were today, as in 1994, to extend an, albeit unspoken, veto to South Korea, and now Japan too, war is unlikely. They do not want it.  First, it is South Koreans and Japanese who will bear the brunt of any North Korean retaliation for a U.S. strike. Yes, North Korea can, perhaps, now strike the U.S. homeland, but the North’s ability to devastate the United States is significantly lower than its ability to damage South Korea and Japan. If we are going to drag South Korea and Japan into a war that could result in hundreds of thousands—or even millions—of their casualties, plus irradiated blast zones, refugees, and the possibility of state collapse, we should at least get their permission. Second, if this normative argument is unpersuasive, then consider the impact on U.S. national interests if allies around the world saw the United States sacrifice, or risk sacrificing, South Korea and Japan without even soliciting their approval.

Experts at US hearing warn N. Korea EMP attack could kill 90% of Americans in year - Two analysts testifying at a US House subcommittee last week warned that North Korea could use an electromagnetic pulse (EMP) attack to shutdown the US power grid in an apocalyptic act that could cause the deaths of up to 90 percent of all Americans within a year.They said Washington was ignoring the threat and stressed there was an urgent need to harden the US utility infrastructure against such EMP attacks. Present US antimissile defenses were also termed inadequate in intercepting rockets fired at the US from the South Polar region or near Antarctica.William R. Graham, the chair of a former US commission that assessed the EMP threat to the US and its former chief of staff, Peter Vincent Pry, cited previous research by Ambassador Henry Cooper, former Director of the US Strategic Defense Initiative on the subject.If Pyongyang were to launch such an EMP attack, Cooper was quoted as saying:“The result could be to shut down the US electric power grid for an indefinite period, leading to the death within a year of up to 90 percent of all Americans — as the EMP Commission testified over eight years ago.” Graham and Pry were testifying before an October 12 House Homeland Security subcommittee hearing assessing North Korea’s threat to the US.The two experts also noted in a prepared statement that:“North Korea could make an EMP attack against the United States by launching a short-range missile off a freighter or submarine or by lofting a warhead to 30 kilometers burst height by balloon. While such lower-altitude EMP attacks would not cover the whole US mainland, as would an attack at higher-altitude (300 kilometers), even a balloon-lofted warhead detonated at 30 kilometers altitude could blackout the Eastern Electric Power Grid that supports most of the population and generates 75 percent of US electricity.” They added that an EMP attack might be made by a North Korean satellite “right now.”

 If North Korea Can Kill 90% Of Americans In A Year, Why Did DoD Just Defund The Congressional EMP Commission? -- At a House hearing yesterday, experts warned members of Congress that a North Korean EMP attack could kill 90% of Americans within one year, calling it an “existential threat.” But despite this looming crisis, the Department of Defense has decided now was the time to defund the Congressional committee that has been studying the threat since 2001. The Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack has been around for nearly two decades, but their efforts have mostly been restricted to making sure that the U.S. national command authority and U.S. strategic forces could continue to function. Meanwhile “no major efforts were then thought necessary to protect critical national infrastructures.” Apparently, the plan was that our defense would be so effective, no further steps were needed. This has all changed with recent strides in nuclear weaponry by North Korea. The results of an EMP strike could be apocalyptic. With the development of small nuclear arsenals and long-range missiles by new, radical U.S. adversaries, beginning with North Korea, the threat of a nuclear EMP attack against the U.S. becomes one of the few ways that such a country could inflict devastating damage to the United States. It is critical, therefore, that the U.S. national leadership address the EMP threat as a critical and existential issue, and give a high priority to assuring the leadership is engaged and the necessary steps are taken to protect the country from EMP. (source) What a lot of people didn’t know was that just a couple of weeks ago, Sept. 30, 2017, the Department of Defense terminated the funding for the EMP Commission. At the same time, “North Korea detonated an H-Bomb that it plausibly describes as capable of “super-powerful EMP” attack and released a technical report “The EMP Might of Nuclear Weapons” accurately describing what Russia and China call a “Super-EMP” weapon.”  The EMP Commission has been urging EMP preparedness on a national level for 17 years, but no one has been listening, despite alarming strides toward that goal in just the past six months.

Let’s Walk This Through: If North Korea Launches An ICBM, Then… How good is America’s homeland ballistic-missile defense? If a war broke out tomorrow, could it stop an attack from North Korea?  The short answer, despite many assurances from Defense Department officials, is that no one knows. Ballistic-missile defense, or BMD, is a stunningly ambitious and complex undertaking, unforgiving of the smallest problems. An attacker has many built-in advantages, and it is only because of North Korea’s supposed technological backwardness—a doubtful, increasingly out-of-date notion—that the existing defensive system has enjoyed any credence at all. Still, North Korea’s force of Hwasong-14 intercontinental ballistic missiles, or ICBMs, is a work in progress. In American terminology, it appears to be at a stage called “initial operational capability”—short of full-scale readiness, but available to some extent on an emergency basis. First, what does the American system look like today? It’s composed of a network of radars, space-based sensors, battle-management systems, and “hit-to-kill” interceptor missiles designed to smash an attacking warhead through the sheer force of the collision.  A total of 36 interceptors are currently deployed—four at Vandenberg Air Force Base in California, and 32 at Fort Greely in Alaska. Another eight are to be installed by the end of the year in silos at Fort Greely. Called the Ground-based Midcourse Defense, or GMD, the system is operated by U.S. Northern Command, which is charged with the defense of American homeland. The Pentagon’s authority for testing and evaluation rates the system as having “limited capability to defend the U.S. Homeland from small numbers of simple intermediate-range or intercontinental ballistic missile threats launched from North Korea or Iran.” But the evaluators decline to provide “quantitative” assessments of its performance, citing a lack of ground testing of key subsystems with “accredited” models and simulations.

Trump and Kim Madmen? Not So Fast - The seemingly accepted wisdom that President Donald Trump and North Korean leader Kim Jong-un are paired madmen on the edge of war has little to support it other than projected fears. There will be no war because war on the Korean peninsula benefits no one and is very bad for everyone. North Korea’s weapons, nuclear and conventional, are arguably the most defensive ever fielded. They have not been used offensively since 1953. They exist as a perfect example of how mutually assured destruction works. Mutually assured destruction (MAD) is what kept the Cold War cool: the understanding that if either the United States or Russia unleashed nuclear weapons, both sides would be destroyed. The same applies today on the Korean Peninsula, where any significant conflict, including an invasion of the South, would mean the end of the North and the Kim dynasty. The United States and its allies would win any fight. Kim and everyone else with any stake in the North knows that. The nation of North Korea exists to exist, living proof of its own juche philosophy of self-reliance. It has no reason to start a war that would end in its own destruction. Its nuclear weapons are only useful if they are never used. Talk of an American “surgical strike” ignores the reality that no amount of planning can ensure every weapon of mass destruction will be destroyed; if that was possible the United States would have done it years ago. Indeed, any attack on North Korea would result in a nuclear response—there is nothing “limited” for a cornered animal fighting for its life.  So while the American mainland is not under threat of destruction by Pyongyang per se, war on the Korean Peninsula would inevitably destroy American allies South Korea and Japan, unleash radioactivity across the Pacific, and cripple the global economy. From Washington’s point of view, this is a state of mutually assured destruction. Deterrence works. Ask the Cold War.

US official says not ruling out direct talks with N.Korea - France 24: The United States is not ruling out the eventual possibility of direct talks with North Korea, Deputy Secretary of State John J. Sullivan said on Tuesday, hours after Pyongyang warned nuclear war might break out at any moment. Talks between the adversaries have long been urged by China in particular, but Washington and its ally Japan have been reluctant to sit down at the table with Pyongyang while it continues to pursue a goal of developing a nuclear-tipped missile capable of hitting the United States. “Eventually, we don’t rule out the possibility of course of direct talks,” Sullivan said in Tokyo after talks with his Japanese counterpart. “Our focus is on diplomacy to solve this problem that is presented by the DPRK (North Korea). We must, however, with our allies, Japan and South Korea and elsewhere, be prepared for the worst should diplomacy fail,” he said.

If Kim Jong-un suddenly dies, don’t ask me about it, says CIA chief | South China Morning Post: The US Central Intelligence Agency thinks that North Korea’s Kim Jong-un is a rational actor who is focused on staying in power and “waking up in his own bed” each day. But if Kim should suddenly not show up for work, there is no point asking US spy chief Mike Pompeo about it. “With respect to … if Kim Jong-un should vanish, given the history of the CIA, I’m just not going to talk about it,” the CIA director said on Thursday, when asked what would happen if Kim suddenly died. “Someone might think there was a coincidence. ‘You know, there was an accident.’ It’s just not fruitful,” he said to laughs from national security officials at a forum held by the Foundation for Defence of Democracies.The US agency has a dark history of involvement in plots to overthrow or eliminate leaders in countries like Iran, Cuba, Congo, Vietnam and Chile. North Korea claimed earlier this year that the CIA working with South Korean intelligence had tried to kill Kim, 33, without providing any proof.“Kim Jong-un’s mission is just to stay in power,” he said.At the same Pompeo, who became director of the CIA in January, said he was revitalising the agency’s field missions. “We are going to become a much more vicious agency,” he said.

Beijing visit is central to Trump’s Asia tour, but diplomacy dictates Japan, South Korea must come first | South China Morning Post: US President Donald Trump will begin his five-nation Asia tour next month in Japan followed by a stop in South Korea, the White House said on Tuesday, a clear sign that Washington plans to uphold the diplomatic protocol of prioritising “allied” nations. However, putting the United States’ main Asian allies Japan and South Korea ahead of China was mostly symbolic, a diplomatic observer said. “Visiting Japan before China is a kind of an assurance to [the United States’] allies,” Rajeev Ranjan Chaturvedy, a research associate at the Institute of South Asian Studies at the National University of Singapore, said. “The sequence has symbolic importance. It reflects that Japan is and will remain important to the US.” Nonetheless, Trump will spend as much time in China – three days – as he will in Japan. His visit to Beijing and meeting with President Xi Jinping signal that Washington attaches equal importance to both nations.Washington has repeatedly called for Beijing to put more pressure on North Korea through tougher sanctions, but Beijing has maintained that it will not take action that would endanger the livelihoods of the North Korean people. On Monday, North Korea’s deputy ambassador to the United Nations warned that the situation on the Korean peninsula had “reached a touch-and-go point” and that “a nuclear war may break out any moment”. Liu Weidong, a US affairs expert from the Chinese Academy of Social Sciences, said Trump was likely to put more pressure on China to rein in North Korea as Washington thought Beijing “is not doing enough”. 

Opinion: America First. America Alone. - Donald Trump's decision to decertify the Iran nuclear deal is a slap in the face for America's allies. The president risks isolating the US for the sake of his own fans — and his own ego, writes DW's Carsten von Nahmen. Jutting chin. Clenched jaw. Narrowed eyes. Donald Trump played the strongman in his televised speech announcing the United States' new strategy on Iran. The protector of Americans against the big, bad world: that's how the president sees himself. And also how many of his supporters view him, and precisely why they voted for him. It was these supporters, more than anyone else, that Trump's speech was aimed at on Friday. It doesn't matter what the others think. America First. America Alone. Throughout the 2016 election campaign, Trump described the 2015 nuclear deal that his predecessor Barack Obama had reached with Iran alongside European, Chinese and Russian partners as a mistake and the "worst deal ever." This campaign cry has followed him to this day, as has his promise to end the deal as president.And still. Trump didn't go that far on Friday. Not yet. His most important foreign policy and security advisers, among them Defense Secretary Jim Mattis, Secretary of State Rex Tillerson and National Security Adviser H.R. McMaster, had strongly advised Trump against such a step, as Iran's nuclear armament ambitions could not be controlled at all without the deal.Strictly speaking, there is no reason to terminate the deal. The Iranian government is meeting the obligations that the treaty imposed upon it. European allies, the International Atomic Energy Agency (IAEA) and even Trump's generals have confirmed this. But always having to confirm to Congress and the American public every 90 days that Obama's central foreign policy legacy was actually working? That was just asking too much of Trump.

On Iran, Trump Follows Iraq War Neocons - naked capitalism - Yves here. Another very informative, if disheartening, analysis by Lawrence Wilkerson at the Real Network. Wilkerson argues that Trump is “making a play thing” of Iran for domestic political benefit. While it’s all too common for our foreign policy to wind up operating against our long-term interest via pandering to pet interest groups or even mere prejudices, the stakes are particularly high here.  (interview & transcript)

Iranian Parliament Speaker Says US "Will Regret" Withdrawing From Nuclear Deal - Iranian Parliament Speaker Ali Larijani said Monday that the US would face stiff consequences if it withdraws from the JCPA – informally known as the Iran deal. Speaker of Iran's parliament Ali Larijani said that Iran "had a developed plan and a certain law,” should the United States withdraw from the agreement on Tehran's nuclear program, adding that Washington would "regret it,” Sputnik reported. Larijani made the statement in St. Petersburg where he was taking part in a parliamentary forum. President Donald Trump elicited cries of protest from the US’s co-signers of the pact, after saying last week that his administration had decided not to certify Iran's compliance with the deal and would instead leave the final decision up to Congress. The Trump administration has repeatedly insisted that, while Iran is technically complying with the terms of the pact, it is more broadly violating the “spirit” of the agreement by allegedly continuing to fund terrorist groups and developing and testing ballistic missiles. Trump’s speech, in which he also accused Iran of being a threat to global security, elicited howls of disapproval from the US’s partners in negotiating the deal.

Ayatollah Blasts Trump's "Rants And Whoppers", Says Iran Will "Shred" Deal If US Pulls Out -- Iranian Supreme Leader Ayatollah Ali Khamenei - who famously waited three months before offering a tepid endorsement of the JCPOA – largely echoed the threats of other Iranian government officials when he said Wednesday that Iran would adhere to the terms of the deal if other world powers respected it, but would “shred it” if the US were to pull out. Speaking publicly about the future of the deal for the first time since President Donald Trump refused to decertify it five days ago, Khamenei confirmed that Iran would likely terminate the deal – and restart its nuclear program – if the US Congress decides to unilaterally rule that Iran is not in compliance, opening the door to reimposing sanctions. The ayatollah’s proclamation puts Iran at odds with the deals other signatories, who’ve maintained that the US doesn’t have the power to terminate a multilateral accord certified by the United Nations. Khamenei welcomed the support of the other signers - Britain, France, Germany, Russia, China and the European Union – but said it would not be enough to convince Iran to stay, Reuters reported.“Europe must stand against practical measures (taken) by America,” he said. If Trump ditched the deal, “Iran will shred it”. US lawmakers and President Donald Trump are presently pushing for a bill that would recertify the deal with one important caveat: Iran would be subject to “triggers” – like continued ballistic missile tests or evidence that it could build a nuclear weapon within a year’s time. Violating these conditions would lead to sanctions automatically being reimposed.However, Khamenei also vowed to continue Iran’s ballistic missile program, which the country claims is strictly for defensive purposes, suggesting that Iran wouldn’t brook the additional restrictions being considered by the US Congress."Or to ask why Iran has missiles - well, why do you have missiles? Why do you have nuclear weapons? We will not accept the Europeans going along with America's bullying."The ayatollah also dismissed Trump's attacks on Iran as "rants and whoppers", adding that Iran will continue to abide by its commitments under the nuclear deal."I don't want to waste my time on answering the rants and whoppers of the brute US president," Khamenei said in a speech to students in Tehran, published on his Telegram channel.

Ron Paul Warns "The American People Are Being Neo-Conned Into Another War" - by Ron Paul - President Trump has been notoriously inconsistent in his foreign policy. He campaigned on and won the presidency with promises to repair relations with Russia, pull out of no-win wars like Afghanistan, and end the failed US policy of nation-building overseas. Once in office he pursued policies exactly the opposite of what he campaigned on. Unfortunately Iran is one of the few areas where the president has been very consistent. And consistently wrong. In the president’s speech last week he expressed his view that Iran was not “living up to the spirit” of the 2015 nuclear agreement and that he would turn to Congress to apply new sanctions to Iran and to, he hopes, take the US out of the deal entirely. Nearly every assertion in the president’s speech was embarrassingly incorrect. Iran is not allied with al-Qaeda, as the president stated. The money President Obama sent to Iran was their own money. Much of it was a down-payment made to the US for fighter planes that were never delivered when Iran changed from being friend to foe in 1979. The president also falsely claims that Iran targets the United States with terrorism. He claims that Iran has “fueled sectarian violence in Iraq,” when it was Iranian militias who prevented Baghdad from being overtaken by ISIS in 2014. There are too many other false statements in the president’s speech to mention.How could he be so wrong on so many basic facts about Iran? Here’s a clue: the media reports that his number one advisor on Iran is his Ambassador to the UN, Nikki Haley. Ambassador Haley is a “diplomat” who believes war is the best, first option rather than the last, worst option. She has no prior foreign policy experience, but her closest mentor is John Bolton – the neocon who lied us into the Iraq war. How do these people live with themselves when they look around at the death and destruction their policies have caused?   Unfortunately the American people are being neoconned into another war. Just as with the disastrous 2003 US attack on Iraq, the media builds up the fear and does the bidding of the warmongers without checking facts or applying the necessary skepticism to neocon claims.

Trump Plans to Make It Easier to Kill Civilians with Drones. Sadly, We Can Thank Obama for That. -- Barely a month after President Donald Trump announced plans to deepen and extend the now 16-year-old U.S. war in Afghanistan, reports surfaced of plans to expand another signature Obama-era policy: the drone war. Specifically, The New York Times reported in late September that the administration is relaxing Obama-era restrictions on who can be targeted and removing a requirement that strikes receive high-level vetting before they’re carried out. According to the paper, the new rules would also “ease the way to expanding such gray-zone acts of sporadic warfare” into new countries, expanding the program’s already global footprint.Across administrations, the use of drones has increased exponentially throughout the course of the war on terror. Even before the rule change, Micah Zenko of the Council on Foreign Relations estimated that the pace of drone strikes and special forces raids had increased from one every 5.4 days under President Obama to one every 1.25 days under President Trump.In addition to increasing the pace of these operations, the Trump administration has also loosened guidelines designed to protect civilians in areas like Yemen and Somalia, and overseen a notable increase in civilian casualties in war zones like Iraq and Syria.In this environment, rescinding the Obama administration’s already lax restrictions on drone attacks — coupled with Trump’s overt and express disregard for human rights and the rule of law — is clearly cause for concern. But that also shouldn’t be a pathway toward normalizing the Obama administration’s own use of drones. Instead, we need to understand the excesses of the war on terror as a trajectory: The abuse of power under one administration leads to the abuse of power under another. Trump may be driving it more recklessly, but he’s still operating a machine the Obama administration built.

What Does the Latest F-35 Data Breach Teach Us About Defense Industrial Espionage? - The latest breach in the F-35 program has come out of Australia, where a subcontractor reportedly lost unclassified data on the fighter (and the P-8 maritime patrol aircraft) to a sophisticated hacking operation. The Australian government does not seem overly concerned about the incident, and the data does not apparently disclose anything particularly critical about the program. Unfortunately, increasingly severe problems of technology management are baked into the modern defense industrial cake. While defense industries were historically slow to adapt to the trans-national turn in corporate capitalism, in recent decades they have decisively moved in the direction of greater integration. Indeed, the development of a globally integrated system of technology transfer has sometime been cited as one of the causes for the massive advantage that Western technology enjoyed over its Eastern bloc counterpart towards the end of the Cold War. This process has only accelerated as defense budgets have declined, forcing national defense giants into collaboration with one another. The F-35 offers an object lesson in this regard. In order to generate sales, the United States developed an industrial plan that involved an array of international partners, divided into tiers based on their level of technology cooperation. The governments involved would be able to tell their constituents that they were bringing home jobs and technology, while also acquiring the world’s most advanced fighter. This has led to a dizzying array of subcontractors around the world, unfortunately accompanied by few strong constraints on cyber-hygiene. Thus, attackers can acquire pieces of the F-35 puzzle not simply by hacking the U.S. Department of Defense or Lockheed Martin, but also by breaking into small companies that have access to data on the production of the fighter.

Nafta Talks Left Reeling After Aggressive U.S. Proposals Land - After laying out the Trump administration’s most aggressive Nafta demands to date, chief U.S. negotiator John Melle was asked on Sunday how things are progressing. “Fabulous,” he said, smiling and shrugging before entering a negotiating room once more. The fourth round of negotiations is nearing an end amid rising tensions after the U.S. presented proposals that could be politically unfeasible for Canada and Mexico. U.S. industry and Congress, meanwhile, are mounting a more vocal defense for preserving regional trade ties as they sense the discussions could be in trouble. U.S. negotiators in recent days put forth a string of bold proposals -- on auto rules of origin, a sunset clause, government procurement, and gutting dispute panels seen by the other nations as core to the pact. The moves were long-signaled, as was Canadian and Mexican opposition to them. The proposals have spurred public warnings from prominent U.S. lawmakers and the private sector about the perils of scuttling a deal that over more than two decades has broken down trade barriers, including tariffs, for industries like manufacturing and agriculture. Nafta’s fate may now hang on how flexible the U.S. is about its demands heading into the fifth round of talks, scheduled for Mexico City around the first week of November. While the parties had wanted to reach a deal by December, officials familiar with the negotiations say the talks are likely to drag on for months. 

NAFTA Talks Heat Up As Trump Administration Takes Aggressive Stance On Autos - Trump's NAFTA negotiators in recent days put forth a string of bold proposals on everything from auto rules of origin, a sunset clause, government procurement, and gutting dispute panels seen by the other nations as core to the pact. The moves were long-signaled, as was Canadian and Mexican opposition to them, but with a more aggressive stance taken by U.S. negotiators in the 4th round of talks, which will continue today in Washington D.C., many are beginning to question whether a deal is ultimately feasible.  Per Bloomberg:The fourth round of Nafta talks will continue Monday at a Washington-area hotel, before a ministerial-level meeting on Tuesday. People familiar with the proceedings describe essentially a two-track process: legitimate progress being made to modernize the pact in less contentious areas, including topics like regulations and services, with essentially no progress on the most divisive U.S. proposals.Nafta’s fate may now hang on how flexible the U.S. is about its demands heading into the fifth round of talks, scheduled for Mexico City around the first week of November. While the parties had wanted to reach a deal by December, officials familiar with the negotiations say the talks are likely to drag on for months. Of course, hanging over the negotiations are Trump’s regular threats to walk away. One official familiar with the proceedings, who wasn’t authorized to speak publicly, said on Sunday that it seems more likely Trump will give the mandatory six months’ notice required to leave Nafta, though not necessarily end up backing out. Others were less sure. “He’s unpredictable, so I don’t know,” said Stephen Moore, a senior economic adviser during Trump’s campaign and chief economist at the Heritage Foundation. “I do feel, though, that his bark has been worse than his bite on trade..” Mexico has signaled that it won’t negotiate during the six-month window if Trump announces he’ll walk away, and it’s unclear what the next steps would be were that to happen. Congress and others are vowing legal and political fights if the president tries to pull out. If Trump manages to, though, Canada could still fall back on an existing bilateral deal with the U.S.; Mexico has no such previous deal.

Canada, Mexico to firmly reject US NAFTA proposals but will offer to keep negotiations going: Sources -- Top trade negotiators from Canada and Mexico will meet Tuesday with the U.S. trade representative, Robert Lighthizer, and firmly reject the protectionist U.S. proposals floated in the current round of NAFTA negotiations, according to three people briefed on the countries' positioning. In the last week, U.S. negotiators have formally tabled demands that a new trade deal with Canada and Mexico favor American manufacturing and expire after five years if all parties do not renew it. Those proposals have been called "poison pills" by the U.S. Chamber of Commerce and "nonstarters" by participants in the talks. Despite making clear their opposition to the above demands, Canada and Mexico will not walk away from the negotiating table, these people said. In public comments Tuesday, they are expected to tout the progress of negotiations in small business and competition. That move leaves the ball in the White House's court to decide how it wants to proceed with negotiations. The White House and the Office of the U.S. Trade Representative declined to comment.It remains to be seen how President Donald Trump, who has repeatedly slammed the 23-year-old trade agreement, will react to the position. In an Oval Office meeting with Canadian Prime Minister Justin Trudeau last week, Trump again threatened to scrap the free trade agreement if the countries cannot strike a deal to rework it. "If we can't make a deal, it'll be terminated and that will be fine," Trump said. "They're going to do well; we're going to do well, but maybe that won't be necessary. But it has to be fair to both countries." Most U.S. lawmakers and business trade groups have aligned themselves with Canada and Mexico in wanting to preserve the deal. A GOP aide told CNBC that the Ways and Means Committee has communicated with Lighthizer's office that a trade deal including the protectionist provisions put forward would not have enough support to pass Congress. Business lobbies representing auto manufacturers and retailers have pushed out statements establishing their support for preserving the deal, while making changes to modernize it.

How a group of Florida tomato growers could help derail NAFTA -- As the United States, Canada and Mexico prepare to wrap up a fourth round of talks Tuesday about revisions to the North American Free Trade Agreement, there is growing fear that the talks could collapse around one of several “poison pill” provisions. Those include the demands of the Florida tomato growers, who say Mexico is selling tomatoes in the United States at artificially low prices. With the support of some berry, melon and pepper producers, the Florida producers are pushing for stronger anti-dumping measures — an idea that has been soundly rejected by the Mexicans. The Florida growers’ high-stakes campaign for special anti-dumping measures for seasonal produce has also exposed sharp divisions with the rest of America’s farmers, who are generally strongly pro-NAFTA and whose livelihoods are on the line if the negotiations falter. “There’s a lot of political power resting with a small group of individuals who have a lot to gain,” said Joseph Glauber, a senior research fellow at the International Food Policy Research Institute and the former chief economist at the Agriculture Department. “Unfortunately, the special provision you carve out for one interest group can really backfire for others.” Agriculture is one of the sectors with the most to lose should NAFTA fall through — in large part because the trade deal has given farmers so much. Between 1993, the year before NAFTA went into effect, and 2016, U.S. agricultural exports to Canada and Mexico shot up by more than 400 percent, from $8.9­ billion to $38.1 billion. Mexico and Canada are now the principal foreign markets for such U.S. commodities as corn and soybeans, apples and high-fructose corn syrup. Those benefits have generated strong support for the trade agreement among farmers and ranchers over the years — and anxiety at the prospect that it could come to an end.

The next phase of NAFTA talks - The last full day of the fourth round of NAFTA talks passed with little fanfare and few visible fireworks at the Sheraton hotel just down the road from the Pentagon. But even if the overall U.S. strategy in negotiations is still to be determined, this latest round served to clearly mark where the major battles will be fought. U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Secretary Ildefonso Guajardo sit down this morning to assess where the talks go from here. Sources close to the action told Morning Trade those meetings will only be the prelude to the strategizing that will occur back in Ottawa and Mexico City to develop responses to U.S. demands on everything from auto content rules to dispute settlement. The cold exchange of technical detail this past week in which U.S. negotiators explained the mechanics of their proposals will soon give way to a more heated debate at the next rounds in Mexico and Canada, sources said.  The big question on everyone’s mind is whether the U.S. proposals represent a start to negotiations or an end to them. Another big one: Is Mexico or Canada willing to compromise on any of them? The answers to those questions may be best answered by understanding the mind of the man at the head of the U.S. table. Lighthizer may have an audience of one but in many ways his own ideology is driving the negotiating agenda. At a private lunch following a rare public speech at the Center for Strategic and International Studies on Sept. 18, Lighthizer told a group of about 25 people that he believed the size of the U.S. market was still the driving force for getting countries to meet U.S. demands, according to sources familiar with the meeting. And despite a global movement toward rules-based, regional trade deals, he said bilateral agreements are where the U.S. can better exert its leverage. As for rules, Lighthizer said they are generally weak and not easily enforced. In sum, they don’t matter, he said.  One source’s takeaway from the meeting: “I think he’s a true believer in this stuff.”

Goldman Expects Trump To Withdraw From NAFTA, Congress Readies For A Fight -- With NAFTA negotiations going badly, Goldman Sachs has published a report, “Thoughts on the Potential US Withdrawal from NAFTA”, that concludes that the US is likely to withdraw from the trade agreement next year “At this point, efforts at revising the agreement look likely to be unsuccessful, though a deal is still possible, in our view. If the talks do not result in a revised agreement by early 2018, we believe that the Trump Administration could announce its intent to withdraw from NAFTA.” The NAFTA agreement calls for a six-month notice period before a nation can withdraw and “we believe it would follow a similar pattern to the strategy the White House has used in recent decisions on immigration (the DACA program), Iran, and health subsidies. Each involved a disruption to the status quo pursuant to a campaign pledge, with delayed implementation and an expectation that a new arrangement might be negotiated in the interim.” Trump has threatened to pull out of the pact several times if “America First” demands are not met. Following an unsuccessful fourth round of discussions, the parties have accepted that end 2017 timeframe for reaching agreement will no longer be achieved and talks will extend into Q1 2018. According to Goldman, major sticking points in the talks are:

• 5-year sunset: The US has proposed that NAFTA would be terminated after 5 years unless all three parties agree to keep it in force. As a practical matter, this would result in a prescheduled renegotiation every five years and increase uncertainty while the agreement is in effect.
• Chapter 19: NAFTA allows member countries to settle anti-dumping and countervailing duty disputes through binational arbitration, which has been a priority for Canada in particular.  The US has called for Chapter 19 to be non-binding.
• Investor-state dispute settlement (ISDS): The US has called for the ISDS program to exist on an opt-in basis. ISDS allows companies to seek recourse against policy changes in NAFTA countries that infringe on property rights, such as expropriation of assets.
• Government procurement: The Trump Administration is seeking “dollar for dollar government procurement, which would mean that Mexican or Canadian companies could bid on US government contracts equal only to the amount of Mexican or Canadian contracts open to US companies. This would reduce the amount of US government contracts open to NAFTA partners to a fraction of the current amount.
• Rules of origin: NAFTA currently requires auto imports to include at least 62.5%n regional content, i.e., parts from NAFTA countries. The Trump Administration has proposed raising this threshold to 85%, and requiring 50% US content.  These levels seem unattainable, in our view, since the US applies only a 2.5% tariff on cars imported from outside NAFTA, and with such high content requirements auto companies would be better off paying the tariff instead.

While Goldman acknowledges that some of the demands might be merely part of a negotiating strategy, it cautions that some of them are of a binary nature, with little room for compromise versus the current agreement.

Internal White House documents allege manufacturing decline increases abortions, infertility, and spousal abuse - WaPo - White House officials working on trade policy were alarmed last month when a top adviser to President Trump circulated a two-page document that alleged a weakened manufacturing sector leads to an increase in abortion, spousal abuse, divorce and infertility, two people familiar with the matter said. The documents, which were obtained by The Washington Post, were prepared and distributed by Peter Navarro, director of the White House Office of Trade and Manufacturing Policy. They were presented without any data or information to back up the assertions, and reveal some of the materials the Trump administration reviewed as it was crafting its trade policy. Two administration officials confirmed the authenticity of the documents, which have emerged as the administration has threatened to withdraw from a free trade agreement with South Korea and is taking a hard-line stance against Canada and Mexico in renegotiating the North American Free Trade Agreement. The fourth round of talks wrapped up on Tuesday amid pointed remarks and with few signs of progress. Negotiators said the talks would have to be extended beyond the original deadline into 2018. The administration has repeatedly linked the decline in U.S. manufacturing to NAFTA and other trade agreements, claiming the deals were bad for U.S. workers. Navarro has urged Trump to favor bilateral trade agreements over regional ones such as NAFTA, and he supported the president’s decision to abandon the Trans-Pacific Partnership. His documents alarmed other White House officials, who worried that such unverified information could end up steering White House policy, the two administration officials said, speaking on condition of anonymity to discuss the documents, which were not released publicly.The documents list what Navarro alleges are the problems that have resulted from a “weakened manufacturing base.” Some of the consequences are economic, including “lost jobs,” “depressed wages,” and “closed factories.” 

‘Everyone is upset’: John Kelly’s push to fill vacant administration jobs rankles White House staff -- President Donald Trump’s chaotic, sparsely-staffed administration is being roiled by White House Chief of Staff John Kelly’s drive to fill the remaining positions left unfilled by the president.  According to Politico, the beleaguered White House’s decision to leave key federal positions unstaffed — including top-tier jobs at Secretary of State Rex Tillerson’s State Department and the Department of Homeland Security — has left the administration hobbled and beset by problems of its own making.  Kelly has granted Cabinet secretaries more autonomy to hire employees, reversing former Chief of Staff Reince Priebus’ orders that all appointments must be routed through the West Wing for the president’s approval.  This has been a priority of Kelly’s, said two sources to Politico’s Nancy Cook, since he was the head of Homeland Security and was frequently at odds with the White House over his choices of personnel.  Trump’s tangled snarl of grudges, grievances, past insults and petty political differences with other Republicans slowed hiring for the Trump administration to a crawl. Now, Kelly is reportedly trying to loosen that bottleneck, but not everyone is pleased.

Trump regularly mocks Pence’s religion — and even joked he wanted to ‘hang’ all LGBT people: report -- A new report from the New Yorker’s Jane Mayer claims that President Donald Trump regularly keeps Vice President Mike Pence in his place by mocking his Christian faith.According to Mayer’s sources, Trump enjoys ribbing Pence for his right-wing Christian views by portraying him as a Taliban-style fundamentalist who wants to execute all LGBT people.During a recent conversation on gay rights, for instance, Trump allegedly pointed at Pence and said, “Don’t ask that guy—he wants to hang them all!”Additionally, Trump likes to ridicule Pence’s commitment to overturning Roe V. Wade by noting that many blue states would simply vote to legalize abortion even if the Supreme Court overturned the landmark 1973 ruling that gave every woman in the United States the right to have an abortion.“You’ve wasted all this time and energy on it, and it’s not going to end abortion anyway,” Trump told Pence, according to two sources.  Mayer also reports that Trump asks people who have just come out of visiting with Pence if the vice president made them say prayers during their meeting.

The Danger of President Pence - On September 14th, the right-wing pundit Ann Coulter, who last year published a book titled “In Trump We Trust,” expressed what a growing number of Americans, including conservatives, have been feeling since the 2016 election. The previous day, President Trump had dined with Democratic leaders at the White House, and had impetuously agreed to a major policy reversal, granting provisional residency to undocumented immigrants who came to America as children. Republican legislators were blindsided. Within hours, Trump disavowed the deal, then reaffirmed it. Coulter tweeted, “At this point, who doesn’t want Trump impeached?” She soon added, “If we’re not getting a wall, I’d prefer President Pence.” Trump’s swerve did the unthinkable—uniting Coulter and liberal commentators. After Trump threatened to “totally destroy” North Korea, Gail Collins, the Times columnist, praised Vice-President Mike Pence as someone who at least “seems less likely to get the planet blown up.” This summer, an opinion column by Dana Milbank, of the Washington Post, appeared under the headline “ ‘President Pence’ is Sounding Better and Better.”  The worse the President looks, the more desirable his understudy seems. Pence, who declined requests for an interview, is also one of the few with whom Trump hasn’t overtly feuded. “The President considers him one of his best decisions,” Tony Fabrizio, a pollster for Trump, told me. Even so, they are almost comically mismatched. “You end up with an odd pair of throwbacks from fifties casting,” the former White House strategist Stephen Bannon joked, comparing them to Dean Martin, the bad boy of the Rat Pack, and “the dad on ‘Leave It to Beaver.’ ” Trump and Pence are misaligned politically, too. Trump campaigned as an unorthodox outsider, but Pence is a doctrinaire ideologue. Kellyanne Conway, the White House counsellor, who became a pollster for Pence in 2009, describes him as “a full-spectrum conservative” on social, moral, economic, and defense issues. Pence leans so far to the right that he has occasionally echoed A.C.L.U. arguments against government overreach; he has, for instance, supported a federal shield law that would protect journalists from having to identify whistle-blowers. According to Bannon, Pence is “the outreach guy, the connective tissue” between the Trump Administration and the most conservative wing of the Republican establishment. “Trump’s got the populist nationalists,” Bannon said. “But Pence is the base. Without Pence, you don’t win.”

Trump And McConnell Make A "Truce Of Necessity" To Save Tax Reform - In-between firing off tweets and defending his decision to end cost-sharing payments to insurance companies, sending healthcare stocks sliding and eliciting accusations of sabotage, president Trump reportedly swallowed his pride and did something he’s been loath to do for months: he called Mitch McConnell. Axios is reporting that, after months of frosty distance that was the subject of an anonymously sourced New York Times scoop back in August and has occasionally spilled into public view, President Trump picked up the phone yesterday and called the Senate Majority Leader ahead of what’s looking like a make-or-break weak for Trump’s legacy defining, narrative sustaining tax-reform program. While it may come as a surprise to some - such as Goldman, which still says odds of a tax deal are well over 50% - Axios says Republican insiders privately believe the future of tax reform looks bleak. But if Trump and McConnell can patch things up and work together, even temporarily, the GOP has a better chance at avoiding an embarrassing legislative shutout that could imperil the republican majority in Congress.

Trump Encourages Detente Between Bannon And McConnell As Tax Reform Deadline Looms -- After yesterday’s Rose Garden press conference, where President Donald Trump and Majority Leader Mitch McConnell assured reporters that they have a “good” relationship, they appear to have put their widely publicized feud behind them. But having patched things up with McConnell, Trump is now reportedly trying to convince his one-time employee, former White House Chief Strategist Steve Bannon, to temporarily suspend his attacks on “establishment” Republicans while Trump tries to unify Republicans around his tax-reform plan and the administration scrambles to meet its self-imposed year-end deadline to pass what would be its first major legislative achievement. However, despite Trump’s public pleas for Bannon to stand down, the Breitbart chief is refusing to play ball. Bloomberg is reporting, citing anonymous sources who are presumably close to Bannon, that the former Trump campaign chief executive has refused to abandon his war against congressional Republican incumbents, further imperiling Trump’s tax-reform plans.

Trump, Democrats spar over whether tax plan will help middle class: (Reuters) - Middle-class Americans’ incomes would eventually rise more than $4,000 if corporate tax cuts were enacted, the Trump administration said in an analysis released on Monday to counter Democratic criticisms that its tax proposals overwhelmingly benefit the rich. The White House and top Republicans in Congress have unveiled a broad framework for tax reform but lawmakers have yet to work out details of a legislative proposal. President Donald Trump has said he would like to see the U.S. corporate income tax rate reduced to 20 percent from the current 35 percent rate. An analysis by the White House Council of Economic Advisers said lower corporate taxes would give companies incentive to invest in new machines that would require more skilled workers, who would then be paid higher wages. Senate Democratic Leader Chuck Schumer accused the administration of “deliberate manipulation of numbers and facts” in its analysis and said companies already are sitting on a lot of cash. “As the president likes to point out, the stock market is at record highs and companies are raking in unprecedented profits, yet wages have remained relatively flat,” Schumer said in a statement on Monday. “That’s proof positive that companies already have a cash windfall but they’re not using it to boost wages.”

I got issues with the new CEA report -- Jared Bernstein -- First, full disclosure: Kevin Hassett, the chair of Trump’s CEA, is an old friend, a good dude, and a guy I’m happy to see in this prominent post. But even as I endorsed him for the job, I publically worried about one area of his research where his claims go way beyond the evidence and ignore the counter-evidence. That area is the impact of tax cuts on growth, jobs, and particularly wages and incomes. Thus, CEA’s new report on the wage-boosting effects of the proposed cut in the corporate rate from 35 to 20 percent looks fatally flawed to me. It is a literature review that picks only the ripest of cherries, ignoring the large body of literature that goes hard in the other direction.A particularly notable example of this problem is a citation of one study by tax analyst Jane Gravelle (et al) that CEA uses to support their thumb-on-the-scale results, while ignoring another Gravelle (et al) study that directly debunks CEAs main thesis that corporate rate reductions boost workers wages.Worse, the Gravelle (et al) study that CEA ignores specifically and critically reviews the papers upon which CEAs work depends, including one by Hassett (et al) himself:Cross-country studies to provide direct evidence showing that the burden of the corporate tax actually falls on labor yield unreasonable results and prove to suffer from econometric flaws that also lead to a disappearance of the results when corrected, in those cases where data were obtained and the results replicated. One of those cases, as noted, was the Hassett study. As CEA notes, this is a study that tracks many countries over many years, and such studies are always sensitive to how the analysis is specified. That doesn’t mean they’re wrong, but it does mean you have to check as many of the model’s assumptions you can to ensure that your findings are robust. When Gravelle et al do so, they quickly find the wage effect to disappear:

Trump’s top economist’s tax analysis isn’t just wrong, it’s dishonest - Lawrence Summers, WaPo - Kevin Hassett, the White House’s chief economist, accused me of an ad-hominem attack against his analysis of the Trump administration’s tax plan. I am proudly guilty of asserting that it is some combination of dishonest, incompetent and absurd. Television does not provide space to spell out the reasons why, so I am happy to provide them here. I believe strongly in civility in public policy debates, and before the Trump administration do not believe I have ever used words like “dishonest” in disagreeing with the policy analyses of other economists. Part of my rationale for speaking so strongly here is that Hassett questioned the integrity of the Tax Policy Center — a group staffed by highly respected former civil servants — by calling their work “scientifically indefensible” and “fiction.”  Then, Hassett invokes Art Okun as support for his spurious arguments.  I worked with Art Okun; I knew Art Okun; Art Okun was my friend. Kevin, you are no Art Okun.As CEA chairman, Okun stood for honest, objective economic analysis rooted in the professional consensus. In the last year of his life, he made clear how dubious he found the claims of supply side economics. In contrast, Hassett throws around the terms scientific and peer-reviewed, yet there is no peer-reviewed support for his central claim that cutting the corporate tax rate from 35 percent to 20 percent would raise wages by $4,000 per worker.The claim is absurd on its face. The cut in corporate tax rates from 35 percent to 20 percent would cost slightly less than $200 billion a year. There is a legitimate debate among economists about how much the cut would benefit capital and how much it would benefit labor. Hassett’s “conservative” claim that the cut would raise wages by $4,000 in an economy with 150 million workers is a claim that workers would benefit by $600 billion — or 300 percent of the tax cut! To my knowledge, such a claim is unprecedented in analyses of tax incidence. Hassett doubles down by holding out the further possibility that wages might rise by $9,000.

White House fears Senate will sink tax cuts -  Trump, his administration and even some senators are increasingly worried that taxes will go the way of Obamacare repeal in the Senate: Months of bickering ending in extreme embarrassment. Story Continued Below The debate hasn’t even started on the GOP’s plan, yet some senators are pushing their own tax proposals, while others are increasingly emboldened to defy the Republican president. It’s a dangerous mix considering that McConnell can lose only two votes assuming Democrats band together in opposition. “We look at the Senate and go: ‘What the hell is going on?’” White House budget director Mick Mulvaney said in an interview Friday. “The House passed health care, the House has already passed its budget, which is the first step of tax reform. The Senate hasn't done any of that. Hell, the Senate can’t pass any of our confirmations,” Mulvaney fumed in an interview, slapping a table for emphasis. “You ask me if the Republican-controlled Senate is an impediment to the administration’s agenda: All I can tell you is so far, the answer’s yes.” The revulsion for the Senate’s age-old traditions and byzantine procedure boiled over in public repeatedly on Monday. Trump complained in front of TV cameras that the Senate is “not getting the job done” and said he sees where Steve Bannon — his former chief strategist now planning to run primary challengers against incumbent Republican senators — “is coming from.”

49 percent of the income Republicans claim as “small business” already goes to the top 1 percent - The Republican tax plan claims to be helping small businesses with a new loophole that’s actually tailor-made for the rich. The loophole is a new 25 percent top tax rate for pass-through businesses. Pass-through businesses are those that retain no earnings and pay no taxes at the business level. Instead, all profits are “passed-through” to the business owners, who then pay their individual income taxes, just like you and me. This means that while almost all genuine small businesses are pass-throughs, not all pass-throughs are genuine small businesses. For example, pass-through income has exploded in recent decades, and most of this increase is not attributable to mom-and-pop stores, but to hedge funds and law firms and private equity partners. In fact, 49 percent of all pass-through income goes to just the top 1 percent of households. This makes pass-through income one of the most concentrated-at-the-top income categories in the entire economy. This also means that the only straightforward tax cut provided by the loophole proposed in recent Republican tax plans is for rich households, not most small businesses. For example, take a married couple whose small restaurant made them $150,000 in net profits. They will not be helped by this proposal because they’re already paying a 25 percent marginal income tax rate. 86 percent of households with pass-through income already pay 25 percent or less, so will see nothing from this Republican tax plan. The people this pass-through loophole helps wealthy people like President Trump, whose top tax rate on income from more than 500 pass-through businesses would fall from 39.6 to 25 percent.

Treasury Secretary Mnuchin's Forked Tongue on Tax Cuts for the Wealthy - Linda Beale - Shortly before the inauguration, Steve Mnuchin discussed the incoming administration's tax plans and announced the Mnuchin Rule--that "[a]ny reductions we have in upper-income taxes will be offset by less deductions so that there will be no absolute tax cut for the upper class."   EXCLUSIVE: Steve Mnuchin says there will be 'no absolute tax cut for the upper class', CNBC Squawk Box (Nov. 30, 2016).  At the same time, he argued that those who foresaw a tax cut for the rich accompanied by a tax increase for many in the middle class were wrong:  "When we work with Congress and go through this, it will be very clear.  This is a middle-income tax cut." Id. Contrast that with the so-called "tax reform" "framework" that the Trump administration has put out with the GOP establishment in Congress and for which both the House and Senate have made provisions in their budget document by including a (likely significantly underestimated) tax-cut-caused federal deficit of 1.5 trillion dollars. As this blog and many tax and economic experts have noted (see, e.g., Nunns et al, An Analysis of Donald Trump's Revised Tax Plan, Tax Policy Center (Oct. 18, 2016), Trump's tax plan has always favored the wealthy.   And these "massive" tax cuts for the wealthy, combined with massive increases in the deficit (and borrowing) to fund the tax cuts, likely won't even trickle down as more jobs for working Americans.  There's very little support from past tax cuts for businesses and for the wealthy for any kind of economic stimulus, either in terms of more jobs or higher wages.  See, e.g., White House math on corporate tax cuts is 'absolutely crazy', Mother Jones (Oct. 17, 2017).   In fact, there is much more support for tax increases on the wealthy resulting in more jobs than vice versa. A year after his claim that there would not be a tax cut for the upper class, Mnuchin has flipped.  He now says that there will be tax cuts for the wealthy (though he still hasn't admitted the degree of his forked tongue on this issue).  His excuse now--"when you're cutting taxes across the board, it's very hard not to give tax cuts to the wealthy with tax cuts to the middle class.  The math, given how much you are collecting, is just hard to do." See Steven Mnuchin: Of course tax cuts will help the wealthy!, Salon.com (Oct. 18, 2017). Sounds like Mnuchin just can't do basic math, since it appears that Mnuchin wants to be able to claim that any tax reform that cuts taxes for the middle class will inevitably give tax cuts to the rich.  But that's simply not true. 

The Politics Of Tax Reform: 101 - President Trump and congressional Republicans are ramping up their push to pass tax reform. What, exactly, “reform” means is still an open question; as my colleague Perry Bacon Jr. has detailed, different Republican factions put a higher priority on different elements of a possible bill. There are divides, for instance, over how regressive any measure should be and how much emphasis to put on tax cuts versus deficit reduction. With the policy details still in flux, let’s take a step back to consider a few broad facts on how the American public thinks about taxes. Consider this “The Politics of Taxes: 101.”

• 1. Tax reform is not a top priority for most Americans, which might make it less divisive than health care. The various Republican health care bills that Congress considered were all unpopular. Taxes are different. Just 2 percent of Americans rate it as the nation’s most important problem, according to Gallup. And while 53 percent of Republicans rated Obamacare repeal as an “extremely important” priority for Congress this year in a Harvard T.H. Chan School of Public Health survey, only 34 percent of Republicans felt the same way about “reducing federal taxes on individuals and businesses.” Meanwhile, only 4 percent of the most active members of the “Resistance” movement against Trump rated the economy as their No. 1 voting issue, according to a nonscientific Lake Research Partners poll.
• 2. Taxes are a top priority for business groups and GOP donors, which could skew the legislation in their favor. An overhaul of the tax system is reportedly a huge priority for conservative interest groups, including the Koch network. The Kochs are investing more than $10 million to advocate for a tax bill, including ads on television to pressure members to vote for the legislation.
• 3. Republicans start off in a much better position on taxes than on health care. On taxes, Republicans are on a much more level playing field. The same Gallup poll found that 45 percent felt Democrats could deal better with taxes, while 43 percent said the Republicans could. When it came to the national debt — which might become a Democratic line of attack against the eventual GOP bill — 49 percent said Republicans could better deal with it to just 35 for the Democrats. If Republican legislators can agree on a plan, the public is likely to be more willing to listen to the party’s pitch on taxes than on health care.

Senate Republicans appear to have votes to pave way to tax reform  (Reuters) - U.S. Senate Republicans appeared to have enough votes on Wednesday to pass a budget measure that is crucial to President Donald Trump’s hopes of enacting tax reform legislation before the end of the year. Senate Republican whip John Cornyn, who is in charge of marshalling votes for legislation, said he expected the fiscal 2018 spending blueprint to draw the support necessary to unlock a legislative tool enabling Republicans to move a tax reform bill through the Senate without help from Democrats. Asked if Republicans had enough votes to pass the budget measure, Cornyn told Reuters: “I believe we do.” The resolution requires approval from at least 50 lawmakers in the 100-seat chamber, with Vice President Mike Pence able to cast a tie-breaking vote. The Senate is expected to vote on the budget resolution on Thursday. Republicans control the Senate by only a 52-48 margin, and with Democrats largely opposed to Trump’s plan to deliver up to $6 trillion in tax cuts to businesses and individuals, Republicans can afford to lose few votes among their own.

John McCain Says He Will Vote 'Yes' On Crucial Budget Bill --Confirming rumors that had circulated earlier in the day, Sen. John McCain said Tuesday evening that he would ‘yes’ on a budget bill that once passed will unlock reconciliation, allowing the senate to pass President Trump’s tax reform plan with a simple majority. While it’s still unclear if the budget bill has enough votes to pass, McCain’s support is a crucial obstacle and follows similar declarations by Maine Sen. Susan Collins and Alaska’s Lisa Murkowski – two other holdouts who had opposed the Republican plan to repeal and replace Obamacare. “For too long, draconian budget cuts to the military have crippled readiness and put the lives of our service members in danger,” McCain said in a statement. "At the end of the day, we all know that the Senate budget resolution will not impact final appropriations." McCain had been holding out support based on an insistence that defense spending increase by billions of dollars. Final spending numbers for the year are expected to be negotiated between congressional Republicans, Democrats and the White House ahead of a Dec. 8 funding deadline, the Hill reported.

Senate to Vote on Budget Resolution - A couple of weeks ago, the House passed a Tax Reform Budget Resolution. Today, the Senate will take a vote on its Tax Reform Budget Resolution. Once passed, the differences will need to be resolved by both legislative bodies. President Trump met with the Senate Committee which included 6 Democratic Senators of which 5 are up for re-election in 2018. Trump impressed upon Senator Wyden the need for support of the Republican Tax Reform measure. Except the call by President Trump did not get a favorable response. Senator Ron Wyden of Oregon called the President and the Republican’s bill a “con job” stating; there is a Grand Canyon-sized gap between the rhetoric surrounding this plan and reality.” “All the happy talk about helping the middle class and avoiding a giveaway to the wealthy sounds great, but it is not what the White House and Republicans have on offer.”Going forward, the content of both Resolutions will have to be reconciled and the differences between the House and the Senate’s Tax Reform Budget Resolution assumptions resolved. The House Resolution assumes the tax plan will generate economic growth and calls for $203 billion in miscellaneous spending cuts over a decade, while the Senate Resolution assumes no economic growth and creates a deficit of ~$1.5 trillion over a 10 year period. Most likely, greater importance will be placed on the Senate’s Resolution by Republicans due to their slim majority. Passing Tax Reform before 2018 elections has taken a priority for Republicans after doing so poorly with revising, repealing, and/or replacing the ACA. Little concern is given to its long term impact. In the end and the same as the 2001/2003 tax breaks, any deficits created after 10 years result in a sunset of the bill. After the House and the Senate agree on a Budget Resolution, the House Ways and Means Committee will release a detailed tax bill and schedule a committee vote. The Tax Reform bill will go to the House and the Senate to be passed under Reconciliation rules (a majority) vote disallowing a filibuster effort by the Dems in the Senate. This will be the same as what occurred with the ACA although the Republican Senators who opposed the ACA legislation such as Collins and McCain will support Tax Reform.

What To Expect During Today's Tax Reform 'Vote-A-Rama' - Since the federal government has been operating under a series of continuing resolutions for the last four years, it’s been a while since the Senate held an old-fashioned “vote-a-rama” – and yes, that is the technical term (have you not read Robert’s Rules?). Bloomberg describes this hoary legislative ritual as “an overnight vote-till-you-almost-drop ordeal that’s part of adopting a budget.” And, because a budget bill is needed to unlock the special reconciliation provisions that would allow Senate Republicans to circumvent a Democratic filibuster and pass tax reform with a simple majority, GOP lawmakers are bracing for what’s likely to be a long, dark night of the soul. If the GOP fails to pass the budget bill, they risk derailing what the White House has touted as the first comprehensive tax reform program since the Reagan era (the Bush tax cuts don’t count, of course). But thanks to President Donald Trump’s penchant for burning bridges, victory is far from assured. And as if the Republicans’ razor-thin two vote majority (further weakened because of the illness of Thad Cochrane) wasn’t tenuous enough, “vote-a-rama” tradition requires lawmakers to vote on amendments offered by Republicans and Democrats alike – virtually guaranteeing that the process will be fraught with disruptive tangents as members try to address the myriad legislative priorities that have foundered since the inauguration. Several amendments have already been offered. Democrat Maria Cantwell of Washington has filed an amendment to force Republicans to go on record about whether to eliminate the state and local tax deduction - an issue that’s prompted a bipartisan outcry over the possibility that it could raise taxes on nearly 30 million American households, Bloomberg reported. Democrats have also proposed amendments on whether tax cuts should benefit the rich and increase the deficit. Non-binding policy votes on gun control and police brutality are expected – providing grist for campaign ads in 18 months’ time. By sometime early Friday, the senators should be worn out and ready for a final vote on the budget. But even President Donald Trump doesn’t know if Mitch McConnell will be able to pull it off.

 Mortgage deduction alternative emerges in tax reform talks - — Some housing industry groups are warming to a tax-reform alternative to the mortgage interest deduction that they say could help more Americans benefit from housing-related subsidies.The GOP tax blueprint released last month drew fire from housing groups because it would effectively reduce the use of the mortgage interest deduction by doubling the standard deduction. But some have changed their tune and are exploring ways to trade the mortgage interest deduction for a housing tax credit. The plan that was released last month by Trump administration officials and congressional leaders would effectively make itemizing deductions less appealing for the middle class, which would opt for a higher standard deduction.Some housing groups now say the mortgage deduction could benefit mostly high earners with expensive homes, while a higher standard deduction combined with a housing tax credit could spread the subsidy to more taxpayers. Yet discussions around adding a housing tax credit to the mix are still preliminary. “We looked at the money that would be funneling into the economy and our belief is that under the plan what is left of the mortgage interest deduction is geared at such high-income taxpayers that it’s not really a very effective means of either promoting homeownership,” said Jerry Howard, chief executive officer at the National Association of Homebuilders.  “Although the [GOP] plan doesn’t touch the mortgage interest deduction at all, it does ultimately dilute the effectiveness of the mortgage interest deduction by creating a tax system where only the wealthiest people would be left as itemizers,” Howard said. He said an alternative plan would be to create a housing subsidy that could be used by itemizers as well as people who take advantage of the larger standard deduction.

Financial industry worried GOP tax plan will change 401(k)s - Financial industry groups and Democratic lawmakers are concerned that Republicans’ forthcoming tax-reform bill could make a big change to the taxing of retirement funds. Stakeholders say they’ve heard that Republicans are considering significantly lowering the amount of money people can tuck into their traditional 401(k) plans on a pretax basis. Currently, people under the age of 50 can contribute up to $18,000 annually to their traditional 401(k) plans. Those contributions are paid before taxes, meaning people don’t pay taxes on the money until they pull it out of their account. The potential change that people following the tax bill are hearing about would lower the maximum annual contribution to $2,400. Amounts over $2,400 could be put into Roth 401(k)s, where the money is taxed upfront but not when it’s withdrawn. It’s unclear how seriously lawmakers are considering reducing the cap on pretax contributions to 401(k)s. But industry groups are worried that dramatically lowering it would reduce the amount that people save for their retirement. Jill Hoffman, vice president of government affairs at the Financial Services Roundtable, said that this option is “something that’s a cause of great concern” both for those managing retirement plans and for those who are recipients. The tax framework c ongressional GOP leaders and the White House released last month said that legislation would retain tax benefits that encourage retirement security and that lawmakers were encouraged to simplify the benefits. 

Senate Passes 2018 Budget Paving Way For $1.5 Trillion In Tax Cuts, Sending Yields, Dollar Sharply Higher --Senate republicans took a major, if relatively easy, step toward passing Trump's tax plan on Thursday night with the critical passage of a budget blueprint that would protect a $1.5 trillion tax cut from a Democratic filibuster. Senators narrowly voted 51-49 to pass the fiscal year 2018 budget after a several hour-long marathon on the Senate floor. The budget resolution could also pave the way for opening up the Arctic National Wildlife Refuge in Alaska to oil exploration by ensuring that drilling legislation can pass with only Republican votes according to the NYT. With a 52-seat majority, Mitch McConnell had a narrow path to getting the 50 votes needed to clear the budget through the upper chamber. But GOP leadership caught a break this week when Sen. John McCain, a holdout over defense spending, announced he would vote yes, and Sen. Thad Cochran, recovering from health issues, returned early to Washington.The budget’s passage could keep Republicans on track to pass a tax package late this year or early in 2018. That said, there are still plenty of possible complications, not least of all bickering within the GOP over the final shape of the tax package - where the fate of state and local tax exemptions has still to be decided - as the following Goldman flowchart shows: the steps that were successfully passed tonight are shown in green. The House could pick up the Senate-passed budget as early as next week and give final approval to parliamentary language protecting the Republicans’ coveted tax effort. If House Republicans instead insist on negotiating a compromise that melds the Senate and House budget plans, tax legislation could be delayed.The Senate gave its approval to the budget blueprint on Thursday night after considering a flurry of amendments, a tedious process that gives the minority party an opportunity to force the majority to endure politically difficult votes. One Democratic amendment that was rejected sought to stop tax cuts from going to the top 1 percent; another would have restored cuts to Medicare. The Senate approved the budget after the previously discussed so-called vote-a-rama, a legislative whirlwind in which amendments are considered one after another

 The Senate Has Passed the GOP’s $4 Trillion Budget Blueprint - — Republicans on Thursday muscled a $4 trillion budget through the Senate in a major step forward for President Donald Trump's ambitious promise of "massive tax cuts and reform." The 51-49 vote sets the stage for debate later this year to dramatically overhaul the U.S. tax code for the first time in three decades, cutting rates for individuals and corporations while eliminating trillions of dollars of deductions and special interest tax breaks. The tax cuts would add up to $1.5 trillion to the deficit over the coming decade, however, as Republicans have shelved fears about the growing budget deficit in favor of a once-in-a-generation opportunity to rewrite tax laws. Divisions within the GOP indicate the process won't be easy despite the political imperative. The upcoming tax measure, always a top item on the GOP agenda, has taken on even greater urgency with the failure of the party to carry out its longstanding promise to dismantle former President Barack Obama's signature health care law. Republicans have said failure on taxes would be politically devastating in next year's midterm elections, when control of the House and Senate are at stake. When reconciled with the House budget plan, the nonbinding measure would set up special procedures to pass follow-up tax legislation without the threat of a filibuster by Senate Democrats. Pressure is mounting, however, on the House to simply adopt the Senate budget plan rather than risk lengthy negotiations that could delay the tax measure. The House measure calls for a tax plan that wouldn't add to the deficit, as well as $200 billion worth of cuts to benefit programs that the Senate has rejected.

Trump’s Tax Plan Takes a Big Step Forward, But What Comes Next Won’t Be Easy -- President Donald Trump’s top legislative priority took a major step forward as the Senate narrowly approved a budget vehicle for tax cuts -- but sharp divides over an array of non-binding amendments revealed the towering challenge he faces from here. Senator Rand Paul split from the GOP to vote against the budget resolution, which squeaked by on an all-Republican vote of 51-49 Thursday night and unlocked the Senate’s special procedure to pass a tax bill with only 50 votes. Paul objected to a provision to raise military spending by $43 billion, and also broke with his party by voting with Democrats against an amendment to reduce the state and local tax deduction, which could raise tax bills for some. “Rather than bicker over raising tax on some people and lowering taxes on other people, we should cut everyone’s taxes,” the Kentucky senator said. He has insisted that no middle-class taxes go up, a high bar for a complex bill to meet. Amendments that were offered during a so-called vote-a-rama revealed a sharply divided Senate that leaves Republican leaders with few votes to spare in order to claim their first big legislative victory in the Trump administration. Still, GOP senators united to defeat Democratic measures that would have slapped restrictions on the yet-to-be-written bill to prevent higher deficits, block tax cuts for the top 1 percent of earners, and bar any tax hikes on incomes under $250,000. Republicans tacked on an amendment to the Senate budget that will enable the House to adopt it without the need for a messy conference committee before the legislating can begin, said a House GOP leadership aide. It could happen as soon as next week. The two chambers are poised to take their own separate paths on an actual tax bill, and -- if each passes -- combining those into one that can clear both houses of Congress will be their greatest challenge. 

Why US Tax Reform Will Put Even More Pressure On Dollar Funding Markets -- On Wednesday, we noted the renewed tightness developing in dollar funding markets. Ignoring embryonic signs of stress in the financial “plumbing” can be dangerous. The divergence of LIBOR from Fed Funds on 9 August 2007, which occurred two months prior to the peak in the Dow, always comes to mind. Fast-forwarding to the present when Mark Cabana, Bank of America’s head of US STIR, has been fielding client questions about the impact of proposed US tax reform. In particular, clients asked for Cabana’s view on what effect dollar repatriation by US corporates might have on funding markets if favorable tax treatment is forthcoming.   Spoiler alert – negative for dollar funding markets (and of course positive for the dollar). Cabana explains “As Washington has increasingly focused on tax reform, clients have asked questions about how repatriation might impact the front end of the US rates curve. While there are still many unknown elements of the plan, we believe repatriation could provide modest upward USD funding pressure for foreign banks but likely leave the overall stock of commercial paper outstanding little changed.”  There is the potential for at least $1.5 trillion in offshore funds to be repatriated, but Cabana notes that a large portion of offshore dollars are already invested in intermediate tenor Treasury, agency and corporate holdings. If pertinent legislation was passed, he believes that dollar repatriation would occur relatively quickly, as there would be limited incentive for funds to remain offshore. Here is his view summarized...

1. Offshore USD holdings analysis shows limited allocation to very front-end of curve and EU banks largest unsecured borrowers.
2. Repatriation would lead to dollar funding pressure “as corporates trim unsecured bank lending, both outright and through offshore MMF.”
3. Cross currency basis swaps – notably EUR/USD and JPY/USD - would move further into negative territory with FRA-OIS spread widening by 2-6bp.

Cross currency basis swaps are negative and trending downwards, but are still some way from signalling the extreme shortage of dollar liquidity, especially in the Yen, at the end of 2016.

The Dangerous Myth of ‘Taxpayer Money’ - When Vice President Mike Pence flew home to Indiana earlier this month, it was to pull off a publicity stunt censuring protests against racist policing. Rather than dragging him for this, however, take after take after takezoomed in on a different offense altogether: Pence’s wasting of “taxpayer money.”The writers in question may have told themselves they were hurting Pence by exposing his hypocrisy, but by using the “taxpayer money” frame, they were spreading, however unwittingly, a racist, sexist, classist myth. Although most of us pay taxes of some kind, every time we say “taxpayer money” we prolong the illusion that society depends on certain kinds of people so we can have nice things.One quick exercise shows why. Picture a “taxpayer.” What does one look like? A homeless Black trans teen? An immigrant day laborer waiting on the corner? A young mom trying to cobble together enough income to feed her family, while languishing on the disability backlog? Unlikely. Let’s be honest: We know what sort of people “taxpayers” are supposed to be, and they’re not the ones we should be casting as the aggrieved parties. Calling public money “taxpayer money” implicitly affirms that taxation is theft: If the money is taxpayers’ by right, what business does the government have using it for healthcare, jobs, or clean water? If we’re looking out for “taxpayers” and not the public as a whole, we are favoring wealthier groups over poorer ones—white people over Black people, men over women, U.S.-born people over immigrants, and so forth. We’re hiding how the economic order relies not merely on the sacrifices of “taxpayers,” but the contributions of debtors, tenants, workers, and countless other actors. We’re perpetuating the politics behind the 1970s California “taxpayer revolt,” the 1980s demonization of “welfare queens,” and the Make America Great Again movement—faux-populism that suggests the great majority rely on the wealthy, rather than vice-versa.

What We Know About Trump’s Twin Blows to Obamacare - President Trump signed an executive order on Thursday morning that he said would begin “saving the American people from the nightmare of Obamacare.” On Thursday evening, he announced he would stop making scheduled payments to insurance companies that help them lower deductibles for low-income customers. There’s a lot that’s still uncertain about how the two actions will change the health law. Here’s what we know so far.  The Affordable Care Act remains the law of the land, and none of the proposed changes would substantially alter its main provisions. The funding cut and executive order could result in higher insurance premiums for some Obamacare customers and lower premiums for less regulated coverage for those who want to try new insurance options. They could cause some insurers to exit some markets in the long term. But the rules governing Obamacare insurance, the subsidies to help middle-income people buy it, the expansion of Medicaid to more poor adults, and Obamacare’s many other provisions touching health and health insurance remain the law. The executive order could result in real changes for some people in the insurance market. But those changes are not the same thing as eliminating the health care law.  The executive order has no force of law itself. It instead asked three federal agencies to consider possible new regulations that could help achieve certain goals. It is not clear what those rules will say. Generally, issuing new regulations takes several months, including a period of public comment. None of the proposed changes to regulation are specifically tied to Obamacare. But they would alter the rules for parts of the insurance system that the Affordable Care Act didn’t touch, as a way of offering more Americans access to those types of insurance. The subsidies Trump eliminated were created as part of the Affordable Care Act, but not clearly appropriated by Congress. That leaves them in a weird legal spot. Insurers are still required to offer discounts to customers who qualify. And they may sue the administration to recoup the funds. But they will lose money in the short term, and in the long term, unless they charge enough in premiums to make up for the losses. That could hurt higher-income customers who pay full price.

"We Will Own This" - Retiring Republican Congressman Bashes Trump's Obamacare Order -- Pennsylvania Congressman Charlie Dent took to CNN to share his views about the president’s controversial decision to cancel federal cost-sharing subsidies to Obamacare insurers, a decision that Dent believes will ultimately hurt the Republicans by forcing them to take ownership of the ‘death spiral’ that now appears inevitable as insurers jack up premiums – or pull out of markets like UnitedHealth did - to compensate now that the lucrative government payoffs that made it possible (and profitable) for insurers to provide coverage for the riskiest patients (aka those with preexisting conditions) have ended. Trump has been threatening to kill the subsidies for months – a fact that hasn’t been lost on insurers, who’ve jacked up premiums preemptively to account for the “uncertainty” surrounding future federal health-care policy. But as Dent sensibly asserts, by killing the payments, Trump is creating an opening for Democrats to sell a narrative where the Republicans spitefully sabotaged Obamacare after failing to repeal it and replace it with “something way better,” as president Trump had repeatedly promised.Leaving Republicans to own Obama’s mess while absolving the Democrats by conclusively ceding the moral high ground. “Barack Obama is a former president. Trump is a president, and he’s a Republican and we control the Congress. We own this system now. We’re going to have to figure out a way to stabilize this situation. Barack Obama is no longer in the equation. So, this is on us.”

Trump just ignited a battle within the Republican Party about whether to save Obamacare - President Donald Trump continued a battle to undermine Obamacare on Thursday, when his administration announced it would cease paying the cost sharing reduction (CSR) payments under the Affordable Care Act. And in doing so, he created another battle that is set to play out among congressional Republicans in coming weeks. The administration's decision will halt payments to insurers that offset the cost of offering low-income Americans plans with cheaper out-of-pocket costs. Analyses say it could lead to higher premiums for some, an increased number of people without coverage, insurer uncertainty, and destabilization of the Obamacare individual insurance markets in the short-term.  But the move also shifts the onus onto Congress, where Republicans are set to battle over whether to appropriate the payments and help stabilize a law they have tried for the better part of a decade to repeal. Alternatively, they could let the law crumble and try to replace it again. "While some lawmakers will use this as an excuse to pursue 'bipartisan market stabilization' measures, Obamacare is a fundamentally flawed law that cannot be saved, repaired or bailed out," said Michael Needham, the CEO of the conservative group Heritage Action. To mitigate any short-term fallout, Congress could pass a bill to appropriate the funds. But that would require a push from influential congressional Republicans.  Some moderate members are calling on Congress to take up a bill to appropriate funding for the payments, while conservatives have come out against the idea.

Not Dead Yet: Obamacare Insurers Are Hanging In There - NYT - Despite President Trump’s best efforts, the Obamacare market hasn’t imploded yet.While Thursday’s decisions to cut off government funding and invite competition from flimsier, cheaper plans will jostle a vulnerable market, many of the major insurance companies say they will remain in the state marketplaces next year.“It’s going to be business as usual,” said Michael F. Neidorff, chief executive of Centene, a major insurer that agreed to sell coverage in areas where competitors had bowed out. “We’ve stepped in and covered bare markets,” he said, adding that if any new bare spots emerged in coming weeks, the company would work with state regulators to try to fill them.But for millions of consumers, and taxpayers, there will be a price to pay. Unless they shop around, consumers who don’t qualify for federal subsidies could face premiums that have been raised by 20 percent or more,  just because of the loss of the federal funding.  And taxpayers will foot the bill for the higher subsidies required with higher prices. The Congressional Budget Office has estimated that eliminating the cost-sharing reductions could increase the federal deficit by $194 billion over a decade.

Trump Brags About Tanking Insurer Stocks With Health Subsidy Cut - Donald Trump boasted about triggering a decline in health insurance stocks with his decision to end federal subsidies to those companies that help low-income Americans afford their medical coverage.  “Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!” the president told his 40.5 million Twitter followers on Saturday. Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall!— Donald J. Trump (@realDonaldTrump) October 14, 2017Shares of insurers still present on Affordable Care Act exchanges slumped on Friday. St. Louis-based Centene Corp. dropped more than 3 percent. Even large health insurers that have mostly or entirely exited the Obamacare exchanges saw an impact, and publicly traded hospital chains fell sharply as well. Hospital operator Tenet Healthcare Corp. tumbled 5 percent. Trump’s tweet was a departure from his regular comments taking credit for strength in the U.S. stock market. “It would be really nice if the Fake News Media would report the virtually unprecedented Stock Market growth since the election,” he tweeted on Wednesday.  Analysts considered cutting fourth-quarter and 2018 earnings estimates for insurers and hospitals. “The effect of the order is likely to be profoundly destabilizing,” Mizuho Securities analyst Sheryl Skolnick wrote in a note to clients.

Despite Trump’s Health-Care Changes, He’s Keeping Obama’s Opioid Strategy - In the last two weeks, President Trump has taken several steps to reverse parts of President Obama's signature health-care law. He weakened the Affordable Care Act's birth control mandate, signed a wide-ranging executive order that, among other things, allows for more unregulated plans, and announced the end of subsidies that help low-income consumers buy insurance. But there's at least one area of health care where the White House is continuing its predecessor's policies: those designed to aid the opioid epidemic. The federal Centers for Medicare and Medicaid Services (CMS) approved a waiver last Tuesday for West Virginia -- one of the states affected most by the opioid epidemic -- that will help the state cover substance abuse treatment for more people.Medicaid, the nation's health insurance program for the poor, hasn’t been allowed to cover substance abuse treatment centers with more than 16 beds since 1965. The provision was part of a greater push away from large mental institutions, many of which were seen as sites of human rights abuses, and toward smaller community-based mental health services. But once most big mental institutions closed, many communities didn't pick up the slack, and the number of psychiatric beds available diminished. The waiver allows the state to pay for Medicaid patients to go to 30-day residential treatment centers -- regardless of how many beds they have.

Reuters: Trump Healthcare Order Could Run Afoul Of Retirement Plan Law -- President Donald Trump’s plan to make it easier for small businesses to band together and buy stripped-down health insurance plans could violate a federal law governing employee benefit plans and will almost certainly be challenged in court, legal experts said. Trump signed an executive order on Thursday aimed at letting small businesses join nationwide associations for the purpose of buying large-group health plans that are not subject to coverage requirements of the Affordable Care Act, commonly known as Obamacare. Industry experts said Trump’s order could ultimately enable such associations to purchase insurance from states with the fewest regulations. That would undermine Obamacare, former Democratic President Barack Obama’s signature healthcare law, which Republicans have failed to repeal. Several healthcare and employment law experts said if Trump’s plan moves forward, states could argue the federal government had overstepped its authority in violation of the U.S. Employee Retirement Income Security Act (ERISA), a law that governs large-group plans. In Thursday’s order, Trump asked the Department of Labor to propose rules that would allow more employers to participate in association health plans. Legal experts said lawsuits might not be brought until such regulations are issued. Dania Palanker, an assistant research professor at Georgetown University’s Center on Health Insurance Reforms, said ERISA granted states the right to regulate association health plans. Attorneys general could argue the federal government had overreached if the Trump administration winds up allowing associations to buy health coverage across borders that only complies with a single state’s regulations. 

Hospital group warns Trump's executive order could weaken insurance markets | TheHill: The largest hospital association warned that an executive order signed by President Trump on Thursday could destabilize insurance markets and make coverage unaffordable for people with pre-existing conditions. "Today’s Executive Order will allow health insurance plans that cover fewer benefits and offer fewer consumer protections," said Tom Nickels, executive vice president of the American Hospital Association, in a statement. "No one can predict future health care needs with complete certainty and such plans could put patients at risk when care is needed most."Trump’s order seeks to expand the ability of small businesses and other groups to band together to buy health insurance through what are known as association health plans. It also lifts limits on short-term health insurance plans. Because both of these types of plans do not have to follow the same ObamaCare rules, such as minimum benefits standards, experts warn that healthier people could join these cheaper plans and leave only sicker people in ObamaCare plans. That could lead to a spike in premiums for ObamaCare plans or to insurers simply dropping out of the market. "In addition, these provisions could destabilize the individual and small group markets, leaving millions of Americans who need comprehensive coverage to manage chronic and other pre-existing conditions, as well as protection against unforeseen illness and injury, without affordable options," Nickels said. "The AHA is committed to ensuring that individuals and small businesses have affordable, comprehensive health care coverage options, and we encourage the Administration to achieve this goal without sacrificing critical consumer protections by stabilizing the individual and small group markets." 

The Incidence of the Obamacare Subsidies --Justin Fishel and Mary Bruce covers Trump’s dismantling of Obamacare:The White House announced Thursday night that the administration will slash Obamacare subsidy payments to insurers. The “cost-sharing reduction payments,” worth an estimated $7 billion this year, are intended to reduce out-of-pocket costs for low-income Americans on Obamacare … House Democratic leader Nancy Pelosi and Senate Democratic leader Chuck Schumer issued a joint calling the action “pointless sabotage.”  “It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America.” Trump’s counter is that the health insurance companies are very profitable because they are reaping the benefits of these subsidies. I would argue that health insurance company profit margins are high in large part because we have not enforced the anti-trust laws and allowed a lot of market power. Brad and Michael Delong made this point last fall: The United States’ Affordable Care Act (ACA) has significantly increased the need for effective antitrust enforcement in health-insurance markets. Despite recent good news on this front, the odds remain stacked against consumers … It is not surprising, then, that in 2015 some of the largest private American health-insurance companies – Anthem, Cigna, Aetna, and Humana – began exploring the possibility of merging. If they could reduce the number of national insurers from five to three, they could then increase their market power and squeeze more profits from consumers. Even five health insurance companies are two few. But suppose we did have real competition in the health insurance market – what would be the effect of subsidies. Let’s consider this primer on the incidence of taxes: The tax incidence depends on the relative price elasticity of supply and demand. When supply is more elastic than demand, buyers bear most of the tax burden. When demand is more elastic than supply, producers bear most of the cost of the tax. Trump is implicitly assuming a very elastic demand for health care or a very inelastic supply of health care. But where is his evidence for these claims? I guess when Kevin Hassett produces his “analysis, we might see a link from Greg Mankiw.

Partisan clash on Obamacare raises specter of government shutdown - Democrats accused President Trump of trying to sabotage the nation’s health-care system through his decision to halt payments to insurers that are meant to shore up the system, while Republicans countered Sunday that Trump is just pushing for a hard bargain. Trump’s decision, announced Friday after months of criticizing the payments as an insurance industry bailout, will throw into doubt the private insurance exchanges that are part of the Affordable Care Act. Democrats vowed to use year-end negotiations on the federal agency budgets as a leverage point to reinstate the payments, promising to pin the political blame on Republicans if premiums skyrocket next year. “This is the equivalent of health-care arson. He is literally setting the entire health-care system on fire just because the president is upset that the United States Congress won’t pass a repeal bill,” Sen. Chris Murphy (D-Conn.) said on “Fox News Sunday.” But Sen. Lindsey O. Graham (R-S.C.), who has played golf twice with Trump in the past week, said the president called Sen. Lamar Alexander (R-Tenn.) on Saturday and is “encouraging him to get a bipartisan deal that would have some flexibility” from the existing law. “I hope that we can get a deal between Senator Alexander and Patty Murray that would allow us to continue the payments, but get reform,” Graham said on CBS’s “Face the Nation,” referring to the chairman and the ranking Democrat on the health committee. The standoff comes as Trump heads to a potentially pivotal meeting Monday with Senate Majority Leader Mitch McConnell (R-Ky.), with whom he has publicly clashed since the Senate’s unsuccessful vote in late July to repeal the ACA. Advisers say the one-on-one talk is meant to get both sides on the same page moving into the critical fall and early winter legislative session as they tackle such as health care, immigration and federal spending, among others. 

Trump’s Attack on Insurer ‘Gravy Train’ Could Actually Help a Lot of Consumers - All year, President Trump had threatened to release a metaphorical bomb into the Obamacare markets — canceling a certain type of payment to health insurers. Everyone was convinced it would destroy the marketplace.Late last Thursday, he carried out his threat, later saying that “the gravy train ended the day I knocked out the insurance companies’ money.”Congress is responding. Senators Lamar Alexander and Patty Murray, the chairman and ranking member of the Health, Education, Labor and Pensions committee, announced on Tuesday that they had reached a deal on legislation that would undo the president’s order and bring back the subsidies.But now it looks as if Obamacare markets won’t face wholesale devastation, regardless of whether that legislation passes. In 2018, at least, insurers may be made whole and consumers protected — even without the subsidies. How could that be? The details are complicated, but the crux is that insurers and state regulators worked together to find a way to funnel more federal money into the Obamacare insurance markets. The insurer-regulator hack will mean that navigating the Obamacare marketplace will be more complicated for consumers (more on that later). And the change will cost taxpayers more money — perhaps $21 billion more in 2018 alone. But, in the end, most customers will be unharmed by the president’s decision, and a substantial fraction will be better off, able to buy plans for about the same price they pay now, yet with lower deductibles.

Senator Murray Thinks She has a Deal to Save the CSR - “Sen. Lamar Alexander (R-TN), chairman of the Senate health committee, said he hopes to release a bill this week, in collaboration with Sen. Patty Murray (D-WA), the senior Democrat on the committee, to fund the cost-sharing reduction payments and give states more leeway on insurance rules.” Not sure why Senator Murray feels the need to go down this avenue when the preceding Executive Order already wandered into greater flexibility for states, states rights, and who decides what. As has been explained by the CBO, Drum, other pundits, and myself; the loss in out-of-pocket subsidies will result in increased premiums which are “still” paid for by the ACA between 138% and 250% FPL. In some cases, Bronze plans can be had for free, Silver plans become cheaper, and Gold plans offering better care and lower deductibles attainable.  Senator Murray is giving away the store if what Senator Alexander says is true. “Alexander said Murray agreed to a deal giving states ‘meaningful’ flexibility on coverage rules. Asked what the stumbling blocks to the deal are, Alexander replied: ‘The definition of meaningful.'” We have already seen what the word meaningful means with regard to the expansion of Medicaid in some states . . . it never happened. I am hoping Senator Murray has second thoughts and decides not to go farther with her thoughts on negotiating with the Republicans as she is off base and we will be better off by not altering what is law already and it is the ACA.  Premiums will go up in 2018 as no one is going to trust Trump regardless of any deal reached with the Republicans.

Bipartisan Deal To Maintain Subsidies For 2 Years Sends Healthcare Stocks To New Record Highs -- It appears that President Trump's action last week has scared lawmakers, as taking the subsidy 'punchbowl' away from healthcare providers has been suddenly met with a bipartisan deal that Republican Senator Alexander says would maintain Obamacare safeguards for two years. Healthcare stocks are soaring back from the recent weakness to new record highs...As The Hill reports, Sens Lamar Alexander (R-Tenn.) said Tuesday that he and Sen. Patty Murray (D-Wash.) have reached a bipartisan deal to stabilize ObamaCare.The deal would extend key Obamacare payments to insurers for two years and give states more flexibility to change Obamacare rules. Healthcare company shareholders are exuberant... GOP Sen. Lamar Alexander of Tennessee tells reporters that the next step will be for him and his negotiating partner — Democrat Patty Murray — to win enough support from colleagues to push it through Congress.Earlier, Alexander said in an interview that he was nearing agreement with Murray to continue federal payments to insurers for two more years. In exchange, Republicans want Congress to give states flexibility to avoid some coverage requirements under President Barack Obama's health care law.Trump halted the insurers' payments last week, but has said he wants a bipartisan deal to continue them temporarily. Trump spoke in the Rose Garden Tuesday at a joint press conference with the Greek prime minister, saying "Obamacare" is "everything but dead."

Senate Deal To Stabilize Obamacare "Dead On Arrival" In The House - Not even a full day after Senators reached a "bipartisan" deal to keep subsidies to health insurers for the next two years, this latest attempt to keep Obamacare alive appears to be dying, because moments after Fox News reported that the Alexander-Murray Bill "will be dead in the House" as many in the GOP "want full repeal and replace", Bloomberg reported that the bipartisan deal has "stalled out" according to Senator Thune, while Senator Hatch said that he opposes the Alexander-Murray fix altogether.  Meanwhile, after keeping pundits in the dark on whether Trump does or does not support the proposed deal, the President on Wednesday officially backed away from the proposed deal one day after signaling his support for the plan. On Tuesday, Trump had indicated support of the agreement during a news conference, saying the White House had been involved in the negotiations and that the agreement would be a “short-term solution” that would “get us over this intermediate hump.” During Tuesday’s news conference, he also made clear that he wanted broader legislation to repeal and replace Obamacare and that he still considered the subsidies a government handout that had enriched insurance companies. However, Trump's support fizzled on Wednesday, when he wrote on Twitter that “I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co’s who have made a fortune w/ O‘Care." According to Reuters, Republican Senator Lamar Alexander, who reached the agreement with Democratic Senator Patty Murray, said Trump had “completely engineered” the proposal. In another setback, Republican House of Representatives Speaker Paul Ryan indicated no interest in the Alexander-Murray agreement. “The speaker does not see anything that changes his view that the Senate should keep its focus on repeal and replace of Obamacare,” Ryan spokesman Doug Andres said.

New Bill to Restore the ACA CSR - Senate Health Committee Chairman Lamar Alexander (R-TN) “Unless they are replaced with something else temporarily, there will be chaos in this country and millions of Americans will be hurt.” Twelve Republicans and 12 Democrats signed on to the bill, which would continue ObamaCare’s insurer subsidies for two years and give states more flexibility to waive ObamaCare rules.Senator Alexander is talking about the impact of Trump canceling the CSR which pays for deducible and co-pays directly to insurance companies for the insured between 138% and 250% FPL. And no, neither the CSR or the Risk Corridor Program bailouts for insurance companies. All of these are lies and misconceptions coming from the mouths of Republicans and the President. Here is what will happen:
– Premiums for benchmark plans sold on the Affordable Care Act exchanges will rise about 20 percent next year and about 25 percent by 2020. The cost to consumers, however, would stay the same or even decline.
– People with lower incomes who buy insurance on the exchanges get a tax credit, so their costs remain stable as a share of their income. When premiums rise, those government subsidies rise as well.
– For people with incomes below 200 percent of the federal poverty level, the out-of-pocket cost of insurance would remain about the same because of the bigger tax credits.
– For those with incomes between 200 percent and 400 percent of the federal poverty level, the cost to buy insurance could actually get cheaper. Some Gold plans may be cheaper than the Silver plans. 85 percent of people who bought Obamacare insurance got a tax credit.
Kaiser Family Foundation Vice president Larry Levitt: “The CBO analysis makes it clear. The ending cost-sharing subsidies would be a perfect example of cutting off your nose to spite your face. Premiums would rise and the government would end up spending more in the end through tax credits that help people pay their premiums.”The CBO report confirms earlier analyses, including this one by Kaiser and this one from the consulting firm Oliver Wyman suggested eliminating the cost-sharing payments could make policies cheaper for some individuals. In the end, the elimination of the CSR may cause a cumulative deficit of $194 billion from 2017 through 2026, CBO and JCT estimate. While it may be chaotic in the beginning as people will not know what to do, premium subsidies will pickup the difference, and the CBO assumes the chaotic conditions will level out over a period of 2-3 years.

The Alexander-Murray Market Stabilization Package: What’s In It And Where’s It Going? - They may have done it. The apocryphal bipartisan deal to “fix” Obamacare is being struck (at least by two important Senators, for now, in part …). Today, Senators Lamar Alexander of Tennessee and Patty Murray of Washington announced they are converging on an agreement on a short-term package to help stabilize the individual insurance market.Even better, the policies included would likely be somewhat successful in achieving their purported purpose. This post will explore each of them in some detail and consider the impact they may have, as well as the probability Congress will send the legislation to President Trump, who has said he would sign it. The post is based on information about the bill now available, and will likely need to be updated once we see the final language. The key component to the deal is stable funding for the cost-sharing reduction (CSR) subsidies that President Trump last week said he would no longer pay. These subsidies lower out-of-pocket costs for individuals enrolled in the Affordable Care Act exchanges with incomes between 100 and 250 percent of the federal poverty level. The legality of the Obama (and then Trump) Administration’s making these payments has been the subject of a legal dispute over whether Congress has actually appropriated the money to fund the requirements of the underlying ACA provisions. Complicating matters further, 19 state attorneys general just filed a lawsuit seeking to compel continued funding of the program. Regardless of the status of the funding, insurers are obligated to furnish eligible enrollees with the discounts. What the President did last week was stop reimbursing plans for the cost of doing that, which equates to higher premiums as insurers then pass through those additional costs to consumers. In fact, the Congressional Budget Office (CBO) said eliminating CSRs increases Federal spending – in the form of increased premium subsidies for those facing these higher premiums – by $194 billion over the next 10 years. It would stand to reason then that appropriating these funds would save the government money, but that remains to be confirmed by CBO.  If the cost of terminating CSRs equates, even fractionally, to savings for restoring them, the Alexander-Murray deal should be self-funded, with perhaps some extra offset room for must-pass legislation such as extending the Children’s Health Insurance Program (CHIP) or financing state reinsurance programs for the individual market.

Hatch Deals Blow to Bipartisan Health Care Bill - Utah Republican Sen. Orrin G. Hatch has dealt an emerging bipartisan health care bill a body blow. President Donald Trump has sent mixed messages on his stance on the legislation from Senate Health, Education, Labor and Pensions Chairman Lamar Alexander of Tennessee and ranking Democrat Patty Murray of Washington, saying he opposed it Wednesday after saying he supported it Tuesday.  But perhaps more importantly, Hatch, who chairs the Senate Finance Committee, also came out on Wednesday in opposition. “I can’t co-sponsor it because I don’t agree with it,” the Utah Republican said. “I think he’s trying to do a good thing, but it’s only temporary.” When asked whether he could advance the bill over Hatch’s opposition, Alexander said he is “going to try to attract everybody’s support.”It would be very difficult for legislation related to overhauling the health insurance system to move through the Senate, let alone reach the president’s desk, without the support of the Finance panel chairman, given its broad jurisdiction over health care. Republicans and Democrats alike think Trump could be convinced to support the bipartisan health care bill. But GOP members previously said opposition from either Hatch or Alexander would prevent any proposal related to the insurance markets from advancing.

Regular Order? Maybe Not For Alexander-Murray Bill - A committee markup of a bipartisan health bill from Sens. Lamar Alexander and Patty Murray could add another potentially fatal complication for the measure that is already under significant pressure. Senators from both parties have for months decried the lack of regular order in the chamber as Republicans tried to jam through legislation to repeal the 2010 health law. Now, after the proposal from the duo that helms the Senate Health, Education, Labor and Pensions Committee solicited enough support on Thursday to pass the chamber if a vote were held, sponsors are unclear on how the bill will advance. “We haven’t made a decision on that yet,” Alexander, a Republican from Tennessee, said when asked whether a markup will be held. Both Republican leaders and Democrats on HELP, however, said the committee process would be necessary.“I think our folks will want to have regular order on that,” Senate Republican Conference Chairman John Thune of South Dakota said.“I think a very fast markup,” Sen. Bob Casey, D-Pa., said. “We’ve already had lots of hearings.” When the 2010 health law was advancing through the Senate, the health panel held a 13-day markup of the legislation. The Senate Finance Committee held an eight-day markup.  Alexander said if the legislation were to go through regular order, it would fall under the jurisdiction of the Finance panel, where support for it remains an open question. “I’m not very enthused about it. It’s more of the same. More big spending, more big government, more lack of a solution,” Sen. Orrin G. Hatch, the committee’s chairman, said on Thursday.When asked if he would be open to holding a markup on the bill, Hatch said “I don’t know.”“We’ll have to take a look at it,” the Utah Republican said.When asked, Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee, could also not definitely say.“The most important thing is to get premiums down,” he said.

 The “Copper” (Catastrophic) Health Insurance Plans in the Alexander-Murray Bill -  Lambert Strether -- The condition of the Alexander-Murray fix for ObamaCare’s markets remains day-to-day (although we seem to be running out of factions who want to take a bite at the apple: first Ryan, then McConnnell, then Cassidy-Graham, then Trump himself, and now Alexander-Murray, the first bipartisan effort, recommended to Trump by Chuck Schumer). Here’s a summary of the bill. In this brief post, I want to look at one face of Alexander-Murray: The “copper” plans. The plans available to people on the ObamaCare exchanges are labeled by metal: Platinum, Gold, Silver, and Bronze. You would infer that Copper plans are the worst of all, and you would be right: The first four plans must offer ObamaCare’s essential benefits. The Copper (or Catastrophic) plans do as well, but with two qualifications. First, a massive deductible:Catastrophic plans will cover all of the essential benefits defined by the ACA, after the out-of-pocket maximum ($6,850 for an individual in 2016) is reached. Catastrophic plans cover up to three primary care visits per year with no cost-sharing, and preventive care with no cost-sharing, but virtually all [other] services will be paid by the insured until the deductible is met.Second, there are no subsidies:Premium subsidies are not available for catastrophic plans (nor are cost-sharing subsidies). Now, Copper plans are available on the ObamaCare exchanges today but with some complex eligibility requirements and means-testing: “[T]hese plans are currently only available to individuals under the age of 30 or those who qualify for an economic hardship waiver.” In 2014, only 2% of ObamaCare “customers” bought them. Alexander-Murray would remove these limits and make them available to everyone. Let’s look at the upsides of Copper plans, and the downsides.

State Attorneys General Ask Court For Injunction Reversing CSR Payment Halt -- On October 18, 2017, the attorneys general of eighteen states and the District of Columbia asked the United States District Court for the Northern District of California for a temporary restraining order and order to show cause why a preliminary injunction should not issue to compel the Trump administration to continue making cost-sharing reduction (CSR) payments until the lawsuit they have filed is resolved. The motion asks the court to make a decision by 4:00 PM tomorow, October 19, as the next cost-sharing reduction payment is due on October 20. The plaintiffs ask for a nationwide injunction as the issue it addresses is nationwide in scope.The motion is supported by a legal memorandum and numerous affidavits. To obtain preliminary relief, a plaintiff “must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” In the Ninth Circuit, where California is located, it is enough to show that serious legal questions are presented if the balance of hardships tips sharply in the plaintiff’s favor.The brief begins by explaining the purpose of the Affordable Care Act’s cost-sharing reductions: making health care affordable to lower-income individuals enrolled in silver marketplace plans by reducing out-of-pocket limits, deductibles, and other cost-sharing. It notes that insurers are required to reduce cost sharing for eligible individuals and that they are doing so to the tune of $7 billion for 2017. The ACA requires the federal government to reimburse insurers for these costs and up until September of 2017—including eight months of the Trump administration—it did so. Only days before the October payment was to be made, and less than three weeks before open enrollment began for 2018, the administration cut off the payments. The states argue that Congress has in fact appropriated funds to cover the cost sharing reduction reimbursement payments.

Can Manipulating the Prices of ObamaCare’s “Silver” Plans Prevent Trump’s CSR Cuts from Having Any Impact? - Lambert Strether  - Spoiler: I don’t think so. CSR stands for Cost Sharing Reduction, and one of the ways Trump has sabotaged — or, depending on the outcomes of the Alexander-Murray bill, threatened to sabotage — ObamaCare is by threatening to cut them. From the White House Press Secretary: Based on guidance from the Department of Justice, the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare. In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments. The United States House of Representatives sued the previous administration in Federal court for making these payments without such an appropriation, and the court agreed that the payments were not lawful.  The effect could be to throw the ObamaCare marketplace into chaos, and hurt poor people. Business Insider:  The payments were introduced by the ACA to help offset the cost to insurers of offering affordable plans to poor Americans. Insurers have repeatedly warned that if the payments were cut off, they would be forced to raise premiums to make up the financial loss. “Raise premiums…” But how? And what happens then? Some states, including California, seem to have managed to dodge the CSR cut bullet by manipulating the prices of ObamaCare’s Silver plan. Timothy Jost, Health Affairs (October 13):  The effect of CSR payment termination, however, will depend heavily on how insurers deal with the change. In several states, including California, insurers have anticipated the termination and have already loaded the lost payments into their on-exchange silver plans. In other states, however, insurers have to date been instructed to assume that the payments will be made, or have been given no instructions whatsoever. In these states, the change is likely to cause considerable confusion. Insurers will have to refile their rates and will likely not be able to do so before open enrollment begins in three weeks. For more on the different responses insurers may have take, see here.

A Compromise on Obamacare Is Still Practically Impossible --  Since August, Senate Republican Lamar Alexander and Democrat Patty Murray, ranking healthcare experts in their parties, had been working on a plan to stabilize the ACA's marketplaces by securing the reliability of CSR payments. That's long seemed like a fairly safe, widely agreeable proposal. But last month's bone-headed last-ditch effort to repeal and replace the ACA derailed it. Negotiations had all but stalled out, it seemed. Then on Tuesday, Alexander and Murray announced that they had a plan. The bill would restore and guarantee CSR payments for two years and provide $100 million for ACA outreach during the open enrollment period (which Democrats want), and in exchange, make it easier for states to develop their own alternative healthcare provision systems (within the framework of the ACA) and allow more people to sign up for catastrophic insurance plans (which Republicans want). It seemed like a solid deal. Republicans wary of being associated with propping up the ACA could sell it as a stopgap, buying time to overhaul the system. Twelve more moderate GOP senators (including Alexander) were, as of Thursday,onboard as cosponsors, and all 48 Democrats seemed likely to support it, meaning it had the 60 votes needed to get out of the upper chamber. But within days, said Miller, "the initial momentum or whatever optimism and enthusiasm there was for this" plan, for "putting this together, has certainly been dented and stalled." A lot of that—surprise, surprise—comes down to Trump. Alexander and others claim that, over the weekend, the president was supportive of their plan,although others in the White House claimed Trump would require much more concessions from Democrats to accept a law restoring CSR payments. Then on Monday Trump declared the ACA, which the Alexander-Murray plan would rescue, "dead." On Tuesday, he openly supported the Murray-Alexander negotiations, then moved away from them. On Wednesday, he expressly disavowed their proposal, a stance the White House officially confirmed,without guaranteeing a veto. Then on Thursday, he was back to tacitly supporting it."Given his latest vacillations and claims unrelated to fact," said Mark Peterson, a UCLA healthcare expert, "it is fair to conclude, as many have long ago, that President Trump has no knowledge of health policy and… what the bipartisan compromise would or would not do, and in general, how health insurance markets in the US work."

No progress on negotiations to fund Children's Health Insurance Program | TheHill: Negotiations on a bipartisan bill to fund the popular Children's Health Insurance Program (CHIP) have made little progress, a top House Republican said Monday. Energy and Commerce Committee Chairman Greg Walden (R-Ore.) said Democrats have not made a counteroffer on paying for an extension of the program. "Despite Ranking Member [Frank Pallone Jr.’s (D-N.J.)] statement calling for renewed bipartisan negotiations nearly two weeks ago, we have yet to receive a single counteroffer from our Democratic colleagues," Walden said in a statement."If Democrats are serious about funding these important programs, I call on them to follow through on their offer for renewed negotiations. There is too much at stake for partisan games and gridlock." The Energy and Commerce Committee passed a bill extending funding for the program earlier this month with no Democratic support. Democrats, however, took issue with offsets that would cut an ObamaCare public health fund and increase Medicare premiums for those with incomes of more than $500,000 a year. Walden agreed last week to reopen negotiations with Democrats on ways to pay for the program but said Monday there hasn't been any progress. He said if the two sides can't come to an agreement, the full House will vote on the bill passed by the committee once it returns from recess next week. Pallone, meanwhile, released a statement last Friday suggesting that Republicans have refused to budge on the offsets. 

As Congress Weighs Debt Forgiveness for Flood Program, Some Want to See it Reformed - The Senate is expected to vote this week on $16 billion in debt forgiveness for the National Flood Insurance Program, continuing the bizarre bipartisan politics that have defined the beleaguered FEMA program. Meanwhile, Congress has less than two months to decide whether to reauthorize the NFIP, renewing calls for an overhaul of the program made especially urgent by the climate change-related increase in catastrophic storms. The House approved the debt forgiveness in a 353-69 vote on Thursday. As The Intercept previously reported, the bill cancels two-thirds of the flood program’s debt while offering Puerto Rico a $5 billion loan from the U.S. Treasury—a baffling move considering the small island is already at least $74 billion in the red to a number of mostly foreign creditors who aren’t about to give up their investments without a fight.The difference? Puerto Rico is effectively a colony of the United States. The National Flood Insurance Program (NFIP) happens to help a lot of millionaires.For that reason, the NFIP has historically been a rare spot of cross-aisle agreement, with loyalties divided more along geographic lines than partisan ones. Because homeowners living in floodplains are required to purchase flood insurance, the politicians who represent coastal constituencies tend to favor keeping rates low in order to keep them happy. Yet the forgiveness—which came partially at the request of the White House—is still something of a surprise. Prior to a few weeks ago, Rep. Maxine Waters, D-Calif., who’s gained a considerable following among progressives for her opposition to President Donald Trump, was the main advocate pushing for her colleagues in Congress to forgive the flood insurance debt in its entirety.

Dickinson, Texas offers Hurricane Harvey relief only to those who won’t boycott Israel --- A Texas city is telling its residents that if they want aid to rebuild from Hurricane Harvey, they have to promise not to boycott Israel -- a deal the American Civil Liberties Union says is unconstitutional. In Dickinson, Texas, located just outside Houston, residents were hit hard by the storm in August and the local government there began accepting applications for grants to rebuild homes and businesses on Oct. 11. Grants were distributed via the Dickinson Harvey Relief Fund, which was set-up by the municipal government via the city's website. In order to qualify, it said, the recipient must agree not to boycott Israel. According to the Dallas Morning News, the application says applicants must not "boycott Israel during the term of this agreement." The geopolitical ideology requirement caught the attention of the ACLU, which said it violates the U.S. Constitution. "The First Amendment protects Americans' right to boycott, and the government cannot condition hurricane relief or any other public benefit on a commitment to refrain from protected political expression," said ACLU of Texas Legal Director Andre Segura. "Dickinson's requirement is an egregious violation of the First Amendment, reminiscent of McCarthy-era loyalty oaths requiring Americans to disavow membership in the Communist party and other forms of 'subversive' activity."

These Volunteer Nurses In Puerto Rico Fear FEMA Is Failing ― Water is rationed. Scabies is spreading. Grocery stores are lined with empty shelves, if they’re open at all. People are fainting as they wait in lines for hours in sweltering heat, because they have to check into a FEMA hub to get small amounts of food and supplies being guarded by armed officers. That’s if they can even make it to FEMA.This is the jarring reality that greeted registered nurses Alicia Schwartz and Misty Richards when they arrived in Puerto Rico. They didn’t know each other before last week, when they flew into San Juan from New York and Oregon, respectively, to volunteer to help with the humanitarian crisis on the island ravaged by Hurricane Maria. Now they spend every night together, camped out in a vacated baseball stadium locker room with other volunteers trying to aid 3.4 million fellow Americans in their moment of need.FEMA and military personnel have been leading relief efforts, but from the looks of it, something isn’t working. It’s been more than three weeks since the hurricane hit, and 36 percent of people still don’t have drinking water, according to a government website updated daily. About 84 percent still don’t have power.And that’s if you think the data are accurate. In a phone interview, Schwartz and Richards laughed as HuffPost read aloud statistics from the government site. They say it’s way worse. “That’s lies,” said Schwartz, 54. “First of all, we don’t even know if the water is drinkable. Where is FEMA collecting this information? This is not what we’re seeing.” Schwartz said she’s met people who haven’t had much access to drinking water for weeks, so they keep filling up containers from rivers or mountain streams. But that water isn’t clean and can cause bacterial diseases, including leptospirosis, which is spread by animal urine. Puerto Rico Gov. Ricardo Rossello said Wednesday that at least 10 people have suspected cases of leptospirosis, and four deaths may be tied to it. “Who tells them that they cannot drink this water?” asked Schwartz. “We had to stop people on the side of the road to Utuado, one of the places where water rushes by, and stop people from getting water there and teach them how to disinfect water.” 

How the Pentagon Spun Hurricane Maria - Late last month, Pentagon communications officials inadvertently included Bloomberg climate reporter Christopher Flavelle on an internal distribution list, in which Defense Department and Federal Emergency Management Agency officials discussed their evolving strategy for presenting the response to Hurricane Maria.  Despite repeatedly alerting officials to the error, Bloomberg continued receiving the emails for five days. Those messages, each of which was marked “unclassified,” offer a glimpse into the federal government’s struggle to convince the public that the response effort was going well. That struggle was compounded by the  commander-in-chief, and eased only when public attention was pulled to a very different disaster.  Below are passages from those messages, tied to the events that federal officials were trying to respond to.

 FEMA is spending billions, and some questionable companies are getting work -  This year’s record hurricane season has led to the biggest spike in government disaster contracts in more than a decade, testing the government’s ability to manage the unpredictable and growing costs of climate change. Since Hurricane Harvey struck Texas on Aug. 25, the Federal Emergency Management Agency has awarded $2.2 billion in contracts, according to data compiled by Bloomberg Government. That’s about twice what the agency typically awards over an entire year. With parts of Florida, Texas, and Puerto Rico in desperate need of help, FEMA is under pressure to put money to work as fast as possible. One way to speed things up is to bypass the usual competitive bidding process. In the fiscal year ended Sept. 30, FEMA awarded $178 million in noncompete contracts, more than twice as much as the year before. The danger in sidestepping competitive bidding is that the government may pay more than it needs to and that companies may not get the necessary scrutiny. And with 85 percent of its staff deployed to cope with the effects of natural disasters around the country, FEMA’s personnel may have a harder time than usual making sure contractors are doing their jobs. “There’s not enough people to go around,” says Sandra Knight, a former deputy associate administrator at FEMA who’s now at Dawson & Associates, a Washington consulting firm. “They’re moving 200 miles an hour.” Federal watchdogs have warned FEMA about situations like this. In 2015 the U.S. Government Accountability Office found the agency still hadn’t fully implemented changes to its contracting process that were legislated by Congress after Hurricane Katrina. It cited FEMA’s “risk of developing gaps in contract oversight during major disasters.”  One risk is that contractors with questionable track records get taxpayer money again. Since Harvey, FEMA has awarded $215 million to a company called Composite Analysis Group Inc. to provide bottled water. According to a federal contractor database, Composite Analysis is also called Lipsey Mountain Spring Water Inc., which got $81 million in 2005 for services that included providing bottled water to areas hit by Hurricane Katrina. Lipsey missed at least 9 of 14 deadlines, failed to document its orders properly, submitted “improper or inaccurate documentation,” and was paid $881,000 in unsupported costs…

A Month Later, U.S. Is Failing With Its Food and Water Crisis in Puerto Rico - It's been a month since supercharged Hurricane Maria delivered a devastating blow to Puerto Rico, and people are still suffering without food, water and electricity. This is America in 2017, and there is only more climate chaos ahead thanks to the tight fist that fossil fuel interests have on climate policy. What will the response be to this new normal—deadly hurricanes, horrific and deadly wildfires , and their equally deadly aftermath? The past few weeks of climate disasters during this historically vicious season have shown that we need to move swiftly off of greenhouse gas-spewing fossil fuels. They have also shown that if we don't prioritize an equitable and just response to these unnatural disasters, more Americans will continue to face climate-fueled humanitarian crises. And the Americans that will be most adversely affected are the vulnerable—children; elders; pregnant women; and low-income communities and communities of color. Puerto Rico is one of the starkest environmental justice stories of our time, and a reminder that our response to disasters must protect everyone going forward. This is our first test of humanitarian response within our borders to mass numbers of people lacking food and water, and in Puerto Rico, where 3.4 million Americans live, the Trump administration has failed miserably. Water is life and Puerto Ricans are on the brink of disaster. Their water system relies on electricity to run the equipment to treat and distribute water , but only 22 percent of the island has power, which is hampering the effort to get the water and sewer systems back up and running. According to FEMA , only 56 percent of wastewater facilities are running (on generator power). Currently, 72 percent of homes have potable water coming out of the taps—after it inexplicably dropped from 72 to 65 percent earlier this week —but in the northern service area, less than half of homes have running water.  The situation is so dire that the U.S. Environmental Protection Agency (EPA) had to issue a warning for desperate people not to consume water from wells at contaminated toxic waste sites . Many are relying on stream water and at risk of contracting diseases like leptospirosis—and residents are already dying from drinking tainted water .

Leaked ICE Guide Offers Unprecedented View of Agency’s Asset Forfeiture Tactics - ICE confirmed to The Intercept that the handbook reflects the agency’s most up-to-date guidance on asset forfeiture. Agents under its instruction are asked to weigh the competing priorities of law enforcement versus financial profit and to “not waste instigative time and resources” on assets it calls “liabilities” — which include properties that are not profitable enough for the federal government to justify seizing. “As a general rule, if total liabilities and costs incurred in seizing a real property or business exceed the value of the property, the property should not be seized,” the document states. The handbook also instructs ICE agents on the various ways laws can be used to justify the seizure of a property, and devotes a significant portion of its pages to the seizure of real estate. The manual instructs agents seeking to seize a property to work with confidential informants, scour tax records, and even obtain an interception warrant to determine whether “a telephone located on the property was used to plan or discuss criminal activity” in order to justify seizing the property. The handbook acknowledges that civil forfeiture can be used to take property from a person even when there’s not enough evidence for a criminal indictment. There “may be third party interest that would prevail in a criminal case, but would not survive in a civil proceeding, making the civil proceeding essential to forfeiture,” the handbook states, referencing a property owner not officially implicated in a crime. “Those situations generally occur when a property owner is not convicted of a crime but is also not an innocent owner. Under criminal forfeiture, that property owner would be entitled to the return of the property. Under civil forfeiture, however, the owner would lose his or her interest to the Government.” Noting that ICE is not alone among federal agencies in relying on asset forfeiture,

Federal Judge Blocks Third Trump Administration Travel Ban -- In the latest court challenge to the Trump administration’s push to prevent potentially dangerous individuals from entering the US, a district court judge has blocked the Trump administration's third travel ban, which it had introduced late last month following the expiration of a temporary ban that had been hobbled by court challenges. The decision from Hawaii-based Judge Derrick K. Watson – a recurring Trump antagonist who also challenged the last two bans - in Hawaii is sure to be appealed. But for now, at least, it means that the administration cannot restrict the entry of travelers from six of the eight countries that officials said were either unable or unwilling to provide information the US wanted to vet their citizens, according to the Washington Post. The Trump administration unveiled the updated ban late last month. The updated ban – which, like its predecessor, was purportedly designed to avoid a court challenge –abandoned wholesale prohibitions in favor of severe restrictions on travelers from an expanded group of eight countries. The open-ended ban targeted people from Iran, Libya, Syria, Yemen, Somalia, Chad and North Korea, as well as certain government officials from Venezuela. It was slated to take effect tomorrow, according to Reuters.

Feud: Elena and Neil: Why rumors of a Gorsuch–Kagan clash at the Supreme Court are such a bombshell. - Following his nomination to the Supreme Court, Neil Gorsuch was packaged by his wealthy benefactors as the judicial equivalent of a carrot cake: mild and wholesome with the occasional hint of spice. Now that the justice has been safely installed on the court for life, he has revealed himself to be more akin to melted sorbet: sickly sweet and insubstantial with a tangy finish that induces slight nausea. Gorsuch’s abrupt pivot to arrogance has been on full display in his bumptious opinions and questions from the bench. But it also appears to be infecting his interactions with justices behind the scenes. Whispers emerging from the court indicate Gorsuch is more likely to alienate than influence even his conservative colleagues. The latest sign of trouble comes from NPR’s Nina Totenberg, who dropped in on the indispensable Supreme Court podcast First Mondays to dish some gossip about the newest justice. Totenberg, a renowned court reporter who is friendly with several justices, noted that Gorsuch “ticks off some members of the court—and I don’t think it’s just the liberals.” Without exposing her sources—“you talk to former law clerks, you talk to friends, you talk to some of the justices”—Totenberg then dropped a bombshell: My surmise, from what I’m hearing, is that Justice [Elena] Kagan really has taken [Gorsuch] on in conference. And that it’s a pretty tough battle and it’s going to get tougher. And she is about as tough as they come, and I am not sure he’s as tough—or dare I say it, maybe not as smart. I always thought he was very smart, but he has a tin ear somehow, and he doesn’t seem to bring anything new to the conversation.  Conference is famously sacrosanct: It’s where the justices gather to cast their votes in the cases of the week, with each explaining his or her reasoning in order of seniority. Nobody else is allowed to attend. If rumors leak about a justice’s behavior in conference—and they basically never do—it is almost certainly a justice who leaked them.  The fact that we know about the “battle” in conference between Gorsuch and Kagan suggests that someone on the court wants us to know. The substance of the leak is also startling since conference is not intended to foster the kind of arguments that Totenberg described. Sixty years ago, some justices did engage in ferocious debate during conference. But Chief Justice John Roberts, like William Rehnquist before him, prides himself on presiding over civil orderly discussions. By all accounts, Kagan has adhered to this tradition throughout her seven years on the bench. Gorsuch, it seems, has disrupted it. Is he needling Kagan to the point that she explodes? Or is he expounding his opinion so obnoxiously or condescendingly that she feels compelled to speak out?

U.S. Census ‘Urgently’ Needs Another $3.3 Billion, Wilbur Ross Says -- The 2020 U.S. Census will require $15.6 billion -- $3.3 billion more than estimated in 2015 -- after a government review found that technological upgrades would be tougher to implement and save less money than previously thought, Commerce Secretary Wilbur Ross told lawmakers on Thursday. The Census Bureau, housed within the Commerce Department, hopes the additional funding will bring the project back on track after years of missed deadlines, incomplete projects and underfunding, Ross said. The new budget would include $1.2 billion for contingencies. “There are still many challenges ahead, and these additional resources I have described are urgently needed,” Ross said in his testimony to the House Oversight Committee. “An efficient 2020 Census that provides a full, fair and accurate count has been one of my highest priorities since being confirmed in February.” The decennial count, enshrined in the U.S. Constitution, determines how many members of Congress each state will have while providing a detailed look at the nation’s demographics. Committee members, especially Republicans, expressed concerns about the ability for the agency to meet its new budget and goals. The 2010 Census failed to deliver on a promised digital overhaul in record collection, resulting in some data collected via pen and paper. Ross said the logistical challenges of organizing the Census has made it “one of the most challenging aspects of the entire Commerce portfolio,” citing the decline in voluntary responses and a deep skepticism of government. The Census Bureau also manages other data collection efforts, including the American Community Survey, which estimates population and demographic characteristics between every Census. The agency also conducts surveys for economic data such as employment. 

A thought for Sunday: the Rule of Gerontocracy --The US looks like government of, by, and for senior citizens.President Donald Trump just had his 72nd birthday. He assumed office at age 71, the oldest person ever to do so.In Congress, Senate Majority Leader Mitch McConnell is 75 years old.  His Democratic counterpart, Charles Schumer, is a relatively spry 66. The median age of US Senators is 63. A full 30 Senators are age 70 or older. Sixteen of them are over 75. Nine are over 80!  The oldest, Diane Feinstein of California, is 84 years old and just announced that she intends to run for re-election. Should she win, by the end of her term, she will be 91 years old -- if she survives. The average life expectancy for an 85 year old woman is 6.9 years. In other words, she will have nearly a 50% chance of dying in office before she completes her term.In the House of Representatives, Speaker Ryan is the baby of the group at age 47.  Democratic Minority Leader Nancy Pelosi is 77. The average House member is 57 years old, the oldest average ever. Over 30% of the Members are age 65 or older. Over 15% are over 70. Twelve Members are over 80!The median age of Justices of the Supreme Court is 67. Two Justices are over 80.  One is 79. In the 19th Century, the average Justice served about 10 years. Now they sit on average close to 25 years.In short, the majority of the leadership of all three branches of the US government are old enough to collect Social Security and Medicare. Forget Boomers, most of the US leadership belongs to the Silent Generation, and formed their basic political opinions in the 1950s during the days of Ike and Senator Joseph McCarthy, and when court-ordered racial integration was just beginning.  And it shows.

Trump Subpoenaed for Documents Related to Sexual-Assault Allegations - Last month, lawyers representing former Apprentice contestant Summer Zervos, one of the women who has accused President Trump of sexual misconduct, served the Trump campaign with a subpoena asking it to preserve any documents that it had pertaining to her and any other women who have made similar allegations against Trump.  Buzzfeed News reported the filing on Sunday, noting that it is related to a defamation suit that Zervos filed against Trump in January after he responded to her and others’ assault allegations by denying the charges and calling the women liars. In a press conference last October, Zervos claimed that Trump had groped and kissed her at the Beverly Hills Hotel in 2007 after she had gone to meet with him about the possibility of taking a job with the Trump Organization.Per Buzzfeed:[Zervos and her lawyers] also asked for “all documents” concerning other women who have accused Trump of groping them, including Jessica Leeds, Mindy McGillivray, Rachel Crooks, Natasha Stoynoff, Temple Taggart, Kristin Anderson, Cathy Heller, Jill Harth, and Jessica Drake. The subpoena seeks “all documents concerning any accusations that were made during Donald J. Trump’s election campaign for president, that he subjected any woman to unwanted sexual touching and/or sexually inappropriate behavior.” … The subpoena did not make its way into the court file until last month, when Zervos’ attorneys, including the high-profile lawyer Gloria Allred, filed it as part of motion disputing a contention from Trump’s legal team that her subpoena was too broad. Neither Trump’s attorney nor the White House responded to Buzzfeed’s request for comment regarding the subpoena, but Trump has until October 31 to file a response to the motion.

Into the Cold and Dark -  Kunstler - It amuses me that the nation is so caught up in the sexual mischief of a single Hollywood producer when the nation as a whole is getting fucked sideways and upside down by its own political caretakers. Behind all the smoke, mirrors, Trump bluster, Schumer fog, and media mystification about the vaudeville act known as The Budget and The Tax Cut, both political parties are fighting for their lives and the Deep State knows that it is being thrown overboard to drown in red ink. There’s really no way out of the financial conundrum that dogs the republic and something’s got to give. Many of us have been waiting for these tensions to express themselves by blowing up the artificially levitated stock markets. For about a year, absolutely nothing has thwarted their supernatural ascent, including the threat of World War Three, leading some observers to believe that they have been rigged to perfection. Well, the algo-bots might be pretty fine-tuned, and the central bank inputs of fresh “liquidity” pretty much assured, but for all that, these markets are still human artifacts and Murphy’s Law still lurks out there in the gloaming with its cohorts, the diminishing returns of technology (a.k.a. “Blowback”), and the demon of unintended consequences. Many, including yours truly, have expected the distortions and perversions on the money side of life to express themselves in money itself: the dollar. So far, it has only wobbled down about ten percent. This is due perhaps to the calibrated disinformation known as “forward guidance” issued by this country’s central bank, the Federal Reserve, which has been threatening — pretty idly so far — to raise interest rates and shrink down its vault of hoarded securities — a lot of it janky paper left over from the misadventures of 2007-2009. I guess the lesson is that when you have a pervasively false and corrupt financial system, it is always subject to a little additional accounting fraud — until it’s not. And the next thing you know, you’re sitting in the rubble of what used to be your civilization. The ever more immiserated schnooks who make up the former middle-class know that their lives are crumbling, and may feel that they’re subject to the utterly overwhelming forces of a cruel destiny generated by a leviathan state that hates and despises them. And of course that is exactly why they turned to the Golden Golem of Greatness for salvation. Alas, Mr. Trump has not constructed a coherent strategy for defeating the colossus of fakery that drives the nation ever-deeper toward the cold and dark. He has a talent for distraction and disruption, though, and so far that gave cover to a whole lot of other people in power who have been able to stand around with their hands in their pockets doing nothing about the sinking state of the nation.

Firm Behind "Trump Dossier" Refuses To Comply With Congressional Subpoena -- The three co-founders of Fusion GPS, the opposition research firm responsible for overseeing the creation of the infamous “Trump dossier”, will refuse to comply with a subpoena ordered by House Intelligence Committee Chairman Devin Nunes,according to a letter from their attorneys originally obtained by Business Insider. But experts say the argument their lawyers are using to ask that they be excused relies on shaky legal grounds, and is unlikely to hold. Attorneys from Cunningham, Levy & Muse said in a letter that, if called to testify, their clients planned to invoke their first amendment rights to exempt them from answering questions. The move - which has all the hallmarks of a stalling tactic - is the latest attempt by the firm’s founders, who reportedly were aware that not all of the allegations contained in the dossier were credible before turning it over to the FBI, to forestall delivering public testimony. Glenn Simpson, a former WSJ investigative reporter and one of the firm’s three founders, met privately with the Senate Judiciary Committee for ten hours over the summer. Afterwards, a group of senators, including Democrat Richard Blumenthal, pushed for Simpson’s testimony to be made public, and the committee is reportedly still mulling whether to release it.

Executives of Firm Tied to Trump Dossier Take the Fifth at Committee Meeting -- Two executives of a firm that helped produce an opposition-research dossier that makes salacious claims about President Donald Trump’s ties to Russia refused to answer questions Wednesday in a private meeting with the House Intelligence Committee.  Fusion GPS partners Peter Fritsch and Thomas Catan invoked their Fifth Amendment rights against self-incrimination, said their lawyer, Joshua Levy. He said they would cooperate with "serious" investigations and also claimed that a "Trump cabal has carried out a campaign to demonize our client for having been tied to the Trump dossier."  The Wednesday appearance by Fritsch and Catan before committee staff and a single member, Republican Tom Rooney of Florida, was compelled, said Levy, even though he had informed the panel in writing they would be invoking their Fifth Amendment rights. He said they were required to appear anyway, which he called an "indignity" and an "abuse of power." Committee Chairman Devin Nunes of California didn’t attend the interview. He had stepped back from running the panel’s probe into Russian meddling in the U.S. election amid controversy, though he kept his job as committee chairman and remains involved in some issues related to the investigation.  The subpoenas he signed sought information from Fusion GPS officials on the creation of the dossier, written mostly by former British spy Christopher Steele. The 35-page document included unverified allegations about Trump, including contacts between Russian officials and his staff during the presidential campaign, and Moscow’s possession of compromising information about the president. Trump has denied the allegations.

Did John McCain Provide The Infamous 'Trump Dossier' To BuzzFeed? - After nearly a year of cogitating, no one in the media, usually a fairly leaky institution, has been able to figure out who exactly who provided the infamous "Trump Dossier" to BuzzFeed which was published on January 10, 2017 and promptly debunked within approximately 35 seconds. As the Daily Caller points out today, less than a handful of people had access to the dossier before it made its way to BuzzFeed: John McCain, David Kramer (a former State Department official and an associate of McCain), then FBI Director James Comey andFusion GPS (the creator of the document).  Fusion GPS has since admitted under oath that they did not share the document with BuzzFeed which basically just leaves John McCain (and/or his associate) or James Comey.Asked about the dossier recently, an irritable, and perhaps defensive, McCain lashed out at a Daily Caller reporter (seemingly a new trend for McCain of late) saying only "I don’t know why you’re digging this up now."In addition to McCain and Steele, opposition research firm Fusion GPS had the dossier, as did David J. Kramer, a former State Department official and an associate of McCdoain’s.One person who was provided a copy of the salacious document, written by former British spy Christopher Steele, is Arizona Sen. John McCain. But McCain, who has already acknowledged providing an early version of the dossier to former FBI Director James Comey, denied this week that he also gave a version to BuzzFeed, which published it on Jan. 10.“I gave it to no one except for the director of the FBI. I don’t know why you’re digging this up now,” McCain said during a testy exchange with The Daily Caller on Wednesday. McCain was asked whether he was BuzzFeed’s source after the Republican’s office declined to answer direct questions on the matter.

Jared Kushner Is Reportedly 'Freaked Out' About the Russia Investigation - Donald Trump’s son-in-law and top White House advisor Jared Kushner has been “freaked out” about the investigations into a Donald Trump’s campaign and possible collusion with the Russian government, and has been concerned about former FBI director James Comey “from day one,” a Trump advisor told Vanity Fair’s Gabriel Sherman.   According to Sherman, prior to Trump’s May 9 decision to fire Comey (a move Trump himself has said relieved “great pressure” on his administration), Kushner was concerned about the FBI’s investigation into the Trump campaign. “He’s all over us,” Kushner told a White House official, Sherman reports.  News of Kushner’s extensive concerns over Comey come after former Trump chief of staff Reince Priebus reportedly met with special counsel Robert Mueller, who was appointed by deputy attorney general Rod Rosenstein to lead the investigation into Russian meddling in the 2016 presidential election and possible collusion with the Trump campaign shortly after Trump fired Comey.According to a source who spoke with Sherman, Preibus “was champing at the bit to testify.” Priebus’ lawyer William Burck told Politico Priebus was “happy to answer all of their questions.” As Sherman notes, Priebus was privy to the goings-on at Trump’s golf club in Bedminster, New Jersey when the president decided to fire Comey. Subsequent reports indicate Kushner played an active role in the president’s decision, which is likely the crux of any investigation possible obstruction of justice by the president—a lead the special counsel’s team is likely pursuing. Kushner, who recently obtained lawyer Charles Harder (Harder represented Hulk Hogan in his suit against Gawker and until recently served as disgraced Hollywood producer Harvey Weinstein’s legal counsel), is also under fire for using a private email address to conduct government business.

Senate Judiciary opens probe into Obama-era Russian nuclear bribery case | TheHill: The Senate Judiciary Committee has launched a probe into a Russian nuclear bribery case, demanding several federal agencies disclose whether they knew the FBI had uncovered the corruption before the Obama administration in 2010 approved a controversial uranium deal with Moscow.Aides said the committee had sent requests for information to 10 federal agencies involved in the Russian uranium approvals. The committee is discussing other bipartisan requests to make in the coming days, and Grassley also is expected to seek access to potential witnesses soon, escalating from the information requests he made a few years back, according to people familiar with the investigation. The senator also specifically conveyed in the latest letters he no longer accepts the Obama administration's assurances from 2015 that there was no basis to block the Uranium One deal. . "The sale of Uranium One resulted in a Russian government takeover of a significant portion of U.S. uranium mining capacity. In light of that fact, very serious questions remain about the basis for the finding that this transaction did not threaten to impair U.S. national security." President Obama's multi-agency Committee on Foreign Investment in the United States (CFIUS) gave approval to Russia's Rosatom to buy a Canadian mining company called Uranium One that controlled 20 percent of America's uranium deposits. The committee's members at the time included former Attorney General Eric Holder and former Secretary of State Hillary Clinton, whose husband collected large speech fees and millions in charitable donations from Russia and other entities interested in the outcome of the decision.

FBI uncovered Russian bribery plot before Obama administration approved controversial nuclear deal with Moscow | TheHill: Before the Obama administration approved a controversial deal in 2010 giving Moscow control of a large swath of Americanuranium, the FBI had gathered substantial evidence that Russian nuclear industry officials were engaged in bribery, kickbacks, extortion and money laundering designed to grow Vladimir Putin’s atomic energy business inside the United States, according to government documents and interviews. Federal agents used a confidential U.S. witness working inside the Russian nuclear industry to gather extensive financial records, make secret recordings and intercept emails as early as 2009 that showed Moscow had compromised an American uranium trucking firm with bribes and kickbacks in violation of the Foreign Corrupt Practices Act, FBI and court documents show. They also obtained an eyewitness account — backed by documents — indicating Russian nuclear officials had routed millions of dollars to the U.S. designed to benefit former President Bill Clinton's charitable foundation during the time Secretary of State Hillary Clinton served on a government body that provided a favorable decision to Moscow, sources told The Hill. The racketeering scheme was conducted “with the consent of higher level officials” in Russia who “shared the proceeds” from the kickbacks, one agent declared in an affidavit years later.Rather than bring immediate charges in 2010, however, the Department of Justice (DOJ) continued investigating the matter for nearly four more years, essentially leaving the American public and Congress in the dark about Russian nuclear corruption on U.S. soil during a period when the Obama administration made two major decisions benefiting Putin’s commercial nuclear ambitions.

Trump: Russian Uranium Deal "Is The Biggest Story That Fake Media Doesn't Want To Follow" - As we reported yesterday, as the media continues to lose their collective minds over $100,000 worth of Facebook ads allegedly purchased by Russians during the 2016 election, the Senate Judiciary Committee has finally decided they're going to take a look into a shady Russian deal - first  profiled here last summer - that handed Putin 20% of America's uranium reserves, was approved by the Obama administration during an ongoing FBI investigation into charges of bribery, extortion and money laundering by the Russian buyer and netted the Clintons millions of dollars in donations and 'speaking fees." Recall that on Wednesday it was reported that the Senate Judiciary Committee launched a full-scale probe into a Russian nuclear bribery case, demanding several federal agencies disclose whether they knew the FBI had uncovered the corruption before the Obama administration in 2010 approved a controversial uranium deal with Moscow. Fast forward to this week when thanks to newly released affidavits from a case that landed one of the Russian co-conspirators, Vadim Mikerin, in jail, we learned on Tuesday that not only was the Obama administration aware the Russians' illegal acts in the U.S. but it may have also been fully aware that "Russian nuclear officials had routed millions of dollars to the U.S. designed to benefit former President Bill Clinton’s charitable foundation during the time Secretary of State Hillary Clinton served on a government body that provided a favorable decision to Moscow." It gets better: in an unexpected twist, the FBI's investigation into this particular Russian plot began in 2009 under none other than Robert Mueller, now the special counsel in charge of the Trump case... and ended in late 2015 under the controversial, former FBI Director James Comey who was relieved of his duties by President Trump. "Surprisingly" when the DOJ finally arrested Mikerin in 2014, following 5 years of investigations in a massive international bribery and money-laundering scheme, rather than publicly celebrate, they seemingly swept it under the rug.  In fact, there was no public release concerning the case at all until a full year later when the DOJ announced a plea deal with Mikerin right before labor day.

FBI informant blocked from telling Congress about Russia nuclear corruption case, lawyer says | TheHill: An American businessman who worked for years undercover as an FBI confidential witness was blocked by the Obama Justice Department from telling Congress about conversations and transactions he witnessed related to the Russian nuclear industry's efforts to win favor with Bill and Hillary Clinton and influence Obama administration decisions, his lawyer tells The Hill. Attorney Victoria Toensing, a former Reagan Justice Department official and former chief counsel of the Senate Intelligence Committee, said Tuesday she is working with members of Congress to see if they can get the Trump Justice Department or the FBI to free her client to talk to lawmakers. “All of the information about this corruption has not come out,” she said in an interview Tuesday. “And so my client, the same part of my client that made him go into the FBI in the first place, says, 'This is wrong. What should I do about it?'”Toensing said she also possesses memos that recount how the Justice Department last year threatened her client when he attempted to file a lawsuit that could have drawn attention to the Russian corruption during the 2016 presidential race as well as helped him recover some of the money Russians stole from him through kickbacks during the FBI probe. The undercover client witnessed “a lot of bribery going on around the U.S.” but was asked by the FBI to sign a nondisclosure agreement (NDA) that prevents him from revealing what he knows to Congress, Toensing explained. When he tried to bring some of the allegations to light in the lawsuit last year, “the Obama Justice Department threatened him with loss of freedom. They said they would bring a criminal case against him for violating an NDA,” she added. 

 Judiciary Committee calls on former FBI informant to testify about Uranium One - Senate Judiciary Chairman Charles Grassley asked the attorney of a former FBI informant Wednesday to allow her client to testify before his committee regarding the FBI's investigation regarding kickbacks and bribery by the Russian state controlled nuclear company that was approved to purchase twenty percent of United States uranium supply in 2010, Circa has learned.In a formal letter, Grassley, an Iowa Republican, asked Victoria Toensing, the lawyer representing the former FBI informant, to allow her client, who says he worked as a voluntary informant for the FBI, to be allowed to testify about the "crucial" eyewitness testimony he provided to the FBI regarding members of the Russian subsidiary and other connected players from 2009 until the FBI's prosecution of the defendants in 2014.Toensing's client was an American businessman who says he worked for four years undercover as an FBI confidential witness. Toensing said he was blocked by the Obama Justice Department, under then Attorney General Loretta Lynch, about testifying to Congress about his time as an informant for the FBI. He contends that he has pertinent information that the Russian's were attempting to gain access to former President Bill Clinton and his wife, then Secretary of State Hillary Clinton, to influence the Obama administration's decision on the purchase of Uranium One, Toensing said."Reporting indicates that “the informant’s work was crucial to the government’s ability to crack a multimillion dollar racketeering scheme by Russian nuclear officials on U.S. soil” and that the scheme involved “bribery, kickbacks, money laundering, and extortion," Grassley states in his letter. "Further, the reporting indicates that your client can testify that 'FBI agents made comments to him suggesting political pressure was exerted during the Justice Department probe' and 'that there was specific evidence that could have scuttled approval of the Uranium One deal.' It appears that your client possesses unique information about the Uranium One/Rosatom transaction and how the Justice Department handled the criminal investigation into the Russian criminal conspiracy." Grassley added that "such information is critical to the Committee’s oversight of the Justice Department and its ongoing inquiry into the manner in which CFIUS approved the transaction. Accordingly, the Committee requests to interview your client."

Emails Reveal Bill Clinton Met With Vladimir Putin Just Before Uranium One Deal -- If President Trump or anyone even remotely close to his presidency, including his best friend from 2nd grade that he hadn't seen in 40 years, sought to meet with key Russian nuclear officials, in Moscow, just months before the federal government approved a very controversial deal handing Vladimir Putin 20% of U.S. uranium reserves, despite an ongoing investigation into Russian fraud, bribery, extortion and money laundering, it would be the only story played on a 24 x 7 loop on CNN and MSNBC. Ironically, that is exactly what new emails dug up by The Hill show that Bill Clinton did in June 2010, just months before the Uranium One deal was approved by a committee on which his wife, then Secretary of State Hillary Clinton, sat.  Oh, and did we mention that Bill's Clinton Foundation just happened to collect millions of dollars in bribes donations from Russian sources and Uranium One shareholders shortly after his Moscow meetings? As you will recall, the Committee on Foreign Investment in the United States (CFIUS), approved the Uranium One transaction in October 2010.  According to new emails revealed by The Hill, just months before that approval, Bill Clinton sought permission from the State Department, run by his wife at the time, to meet Arkady Dvorkovich, a top aide to then-Russian President Dmitri Medvedev and one of the highest-ranking government officials to serve on Rosatom’s board of supervisors, the company which was ultimately approved to purchase Uranium One.As he prepared to collect a $500,000 payday in Moscow in 2010, Bill Clinton sought clearance from the State Department to meet with a key board director of the Russian nuclear energy firm Rosatom — which at the time needed the Obama administration’s approval for a controversial uranium deal, government records show. Arkady Dvorkovich, a top aide to then-Russian President Dmitri Medvedev and one of the highest-ranking government officials to serve on Rosatom’s board of supervisors, was listed on a May 14, 2010, email as one of 15 Russians the former president wanted to meet during a late June 2010 trip, the documents show.“In the context of a possible trip to Russia at the end of June, WJC is being asked to see the business/government folks below. Would State have concerns about WJC seeing any of these folks,” Clinton Foundation foreign policy adviser Amitabh Desai wrote the State Department on May 14, 2010, using the former president’s initials and forwarding the list of names to former Secretary of State Hillary Clinton’s team.

CIA director distorts intelligence community’s findings on Russian interference - WaPo - CIA Director Mike Pompeo declared Thursday that U.S. intelligence agencies determined that Russia’s interference in the 2016 American presidential election did not alter the outcome, a statement that distorted spy agency findings.  “The intelligence community’s assessment is that the Russian meddling that took place did not affect the outcome of the election,” Pompeo said at a security conference in Washington. His comment suggested — falsely — that a report released by U.S. intelligence agencies in January had ruled out any impact that could be attributed to a covert Russian interference campaign that involved leaks of tens of thousands of stolen emails, the flooding of social media sites with false claims and the purchase of ads on Facebook. A report compiled by the CIA and other agencies described that Russian operation as unprecedented in its scale and concluded that Moscow’s goals were to undermine public faith in the U.S. democratic process and help elect Donald Trump. But the report reached no conclusions about whether that interference had altered the outcome — an issue that U.S. intelligence officials made clear was considered beyond the scope of their inquiry. “We did not make an assessment of the impact that Russian activities had on the outcome of the 2016 election,” the report said. U.S. spy agencies are “charged with monitoring and assessing the intentions, capabilities, and actions of foreign actors,” the report said, but do “not analyze U.S. political processes or U.S. public opinion.”

Comey Drafted Statement Ending Clinton Email Investigation Months Before Interviewing Her, FBI Confirms In documents it released on Monday, the FBI confirmed that former FBI Director James Comey drafted a statement about the conclusion of the Hillary Clinton email investigation months before interviewing Clinton.The records show that on May 2, 2016, Comey emailed Deputy Director Andrew McCabe, general counsel James Baker and chief of staff and senior counselor James Rybicki. The subject of the email was "midyear exam," and though the email says its contents are unclassified, the body of the email is redacted in the release. On Monday, the bureau also released a response to the May 2 email. Rybicki sent the response, dated May 16, 2016, to several colleagues: Peter Strzok, Jonathan Moffa, Baker, Trisha Anderson and E.W. Priestap. He copied McCabe and David Bowdich, the associate deputy director. In the email, which is marked "unclassified," Rybicki wrote, "Please send me any comments on this statement so we may roll into a master doc for discussion with the Director at a future date. Thanks, Jim." The FBI titled the release "Drafts of Director Comey's July 5, 2016 Statement Regarding Email Server Investigation." That title refers to a press conference Comey held in which he said the bureau had completed its investigation into Clinton's use of a personal email system and that it would not be recommending that the Department of Justice pursue charges, though Clinton had been "careless." The bureau interviewed Clinton on July 2, 2016.

Papers Filed To Disbar James Comey Following "False Testimony To Congress" -- Ty Clevenger, the "crusading lawyer" who has been trying for months to get Hillary and several members of her campaign staff disbarred in every jurisdiction from Little Rock, Arkansas to New York, has now set his sights on a new target: Former FBI Director James Comey.  According to the Washington Times, Clevenger filed a bar grievance in New York this week accusing Comey of lying to Congress and destroying potential evidence in the Clinton email scandal, in a process that could end up costing him his law license.Ty Clevenger filed the grievance in New York, where Mr. Comey was a former U.S. attorney and is licensed to practice law.Mr. Clevenger said Mr. Comey’s testimony to Congress that he did not predetermine the outcome of the FBI’s probe into former Secretary of State Hillary Clinton is belied by revelations this week that he in fact started drafting an exoneration months before even speaking with Mrs. Clinton.“Insofar as Mr. Comey gave materially false testimony to Congress, it appears that he violated Rules 1.0(w), 3.3(a)(1), and 8.4 of the New York Rules of Professional Conduct,” Mr. Clevenger wrote.Clevenger also asked to renew grievances in New York against former Attorney General Loretta Lynch, saying that Comey’s claim that she tried to pressure him to downplay the Clinton probe should subject her to scrutiny.

In attempt to sow fear, Russian trolls paid for self-defense classes for African Americans - Oct. 18, 2017: A group linked to the Russian troll farm behind thousands of fake Facebook ads paid personal trainers in New York, Florida, and other parts of the United States to run self-defense classes for African Americans in an apparent attempt to stoke fear and gather contact details of Americans potentially susceptible to their propaganda. "Be ready to protect your rights... Let them know that black power matters," the group, known as Black Fist, wrote on its website promoting the events. The group appears to have been set up in January 2017, and it ran events before stopping at some point this year, evidence that Russia's attempts to use social media to meddle in American affairs have extended far beyond the 2016 presidential election. The events, which appear to have been designed to suggest a connection to the Black Lives Matter movement, were -- unbeknownst to the trainers who led them -- likely conceived by the Russian government-linked Internet Research Agency. The site lists Facebook and Instagram pages that CNN is told were removed as part of Facebook's investigation into Russian meddling in U.S. politics, a source familiar told CNN. 

House (of Representatives) Negroes Rally Against Russia  - Black Agenda Report  - The Congressional Black Caucus is "the heart and soul of the resistance movement in Congress,” said California Rep. Barbara Lee, speaking at a “State of Black America” panel at Laney College, in Oakland, last week. Lee’s right. She and her Black corporate Democratic colleagues are in the forefront of a kind of “resistance” -- but not resistance to the routine murder of Blacks by police, or the economic race to the bottom led by the Caucus’s patrons on Wall Street, or to gentrification, hyper-militarization and war. Instead, the Black Caucus has been waging a desperate resistance to the incipient grassroots movement that emerged in Ferguson, Missouri, three years ago. This perversion of “resistance” now speaks in anti-Russia tirades, but that’s only the CBC’s latest diversionary tactic, as it scrambles to reclaim its squandered legitimacy.  Like the rest of the Black Misleadership Class, the Caucus feared that a revival of movement politics might unleash forces that could not easily be contained. The Black elite’s job is to keep the lid on Black protest -- the real resistance -- so that the dispersal, disempowerment and demoralization of Black communities can be accomplished with as little disruption as possible. The rebellions in Ferguson and Baltimore threatened the carefully constructed arrangement between corporate power and the Black political class -- a deal forged and mediated largely through the structures of the Democratic Party. The Black political class lives and feeds within the institutional confines of the Democratic Party, which has colonized most of the Black community’s civic groups and churches. For the Black elite, “resistance” means defense of the Democratic Party against all challengers -- including independent political challenges from grassroots Black America, which is decidedly to the left of the Democratic Party. “The Black elite’s job is to keep the lid on Black protest.”

The truth about Congress and financial conflicts - WaPo-- When Public Citizen asked for an investigation in January of possible insider trading by Rep. Chris Collins (R-N.Y.) and then-Rep. Tom Price (R-Ga.), it raised the question of whether the Stop Trading on Congressional Knowledge Act has had any impact on members’ stock-trading activity at all. When the Stock Act was finally approved in 2012 by a reluctant Congress, it was a widely hailed legislative achievement. The legislation applied the law against insider trading for the first time to Congress itself and mandated an online disclosure system of members’ stock trades so that compliance to the law could be monitored. I fully expected that the disclosure system would also reduce stock-trading activity by Congress, especially in industries that members directly oversee, because the conflict of interest would now fall under public scrutiny.  Have recent events proved me wrong?I looked at stock-trading activity of all U.S. senators before and after passage of the Stock Act to answer that question. The results provide good news and bad news, showing that the law has worked but can still be bolstered. The Stock Act has indeed had a dramatic impact on stock-trading activity by senators, reducing both the overall volume of stock trades and the transaction value of those trades. Remarkably, the number of stock transactions three years before and after passage of the Stock Act has fallen by 68 percent. Furthermore, the monetary value of those stock trades has also fallen by 66 percent — an extraordinary achievement. It is reasonable to assume the same trend has occurred in the House of Representatives.  But there is bad news as well. Of the senators who remain active in the stock market, they have a high propensity for trading stocks in businesses they directly oversee from their committees. From these perches, members of Congress often are privy to information that could directly affect the value of stocks, posing a serious conflict of interest when trading in those markets.

 A significant hike of the SIFI threshold is coming, Cohn predicts - — Senate lawmakers will soon introduce a bill that could more than quadruple the current $50 billion threshold to be considered a systemically important bank, a top Trump administration official said Monday.   “There is a shot that we get something done on the $50 billion dollar level this year in a bipartisan way,” National Economic Council Director Gary Cohn told bank executives at the American Bankers Association annual convention in Chicago. “What we arguing about is where we end up.”

Why Have Investigations of Wall Street Disappeared from Corporate Media? --  Pam Martens -- Hurricanes, wildfires, the multiple investigations of Russia’s involvement in the 2016 presidential election and the calamity-du-jour in the Trump White House are gobbling up an outsized share of digital and print news pages at corporate media. What’s gone missing is intrepid, in-depth investigations of Wall Street’s latest scam against the public – even at corporate media outlets purporting to focus on Wall Street.Consider today’s front page of the Wall Street Journal: there’s an article on health care; central banks and stimulus; Iraqi forces and Kurdish fighters; how Blackstone Group is on the prowl for retail investors; and a curious report on long-haul truckers cooking up jambalaya and Thai peanut pork (you can’t make this stuff up). There is nothing about an investigation of a mega Wall Street bank; the dangers these behemoths continue to pose to taxpayers and the U.S. economy; nothing about Wall Street’s return to its jaded ways that led to the epic financial crash of 2008 – despite the fact that all of this is happening and timely and the public has a right to be reading about it in a paper whose beat is ostensibly Wall Street. Rupert Murdoch’s News Corp. bought Dow Jones & Company in late 2007 after a century of ownership by the Bancroft family. The purchase just happened to come at a time when the Federal Reserve had secretly begun to funnel what would end up totaling $16 trillion in cumulative low-cost loans to bail out the Wall Street mega banks and their foreign counterparts. In 2011, the Pew Research Center released a study on how front page coverage had changed since the News Corp. purchase of the Wall Street Journal. Pew found that “coverage has clearly moved away from what had been the paper’s core mission under previous ownership—covering business and corporate America.  What is not down but “up” at the Wall Street Journal is its defense of the Wall Street banking giants’ indefensible practices on its editorial and opinion pages.

OCC-CFPB spat takes interagency discord to new level - Bank regulators, for the most part, avoid the public spats that define other realms of the polarized Washington landscape. They will often disagree on policy, but their differences are hashed out behind closed doors.That is, except if you are acting Comptroller of the Currency Keith Noreika and Consumer Financial Protection Bureau Director Richard Cordray. The dispute between the two agency heads related to use of mandatory arbitration clauses — punctuated by competing op-eds about the CFPB's recent arbitration rule — has become a personal and political fight that observers say is highly unusual between bank regulators.  "It's very rare to see this kind of bare-knuckles politics," . "I cannot recall a similar situation in which you had two regulators going back and forth quite like this."The tug of war pits Noreika, a Trump administration appointee and former private banking attorney seen as more industry-friendly, against an Obama administration holdover — the first head of the post-crisis consumer bureau that is the target of relentless GOP attacks.Both regulators have become polarizing in their own right. Since President Trump took office, many have speculated about the administration's desire to fire Cordray, a former Democratic attorney general who is rumored to want to resign to run for Ohio governor. Noreika, meanwhile, has been caught up in controversy as well. On Tuesday, six Democratic senators asked the Treasury Department's watchdog to investigate his appointment to run the Office of the Comptroller of the Currency as a so-called "special government employee," which allowed him to avoid Senate confirmation but limited his service at the OCC to 130 days. (Joseph Otting's nomination as permanent OCC chief is still pending.)

Senate Democrats Claim a Top Banking Regulator Is Serving in his Position Illegally - Six Senate Democrats have asked the Treasury Department’s inspector general to investigate whether Keith Noreika, head of the Office of the Comptroller of the Currency, is illegally serving in office.  As The Intercept first reported, September 12 represented Noreika’s 130th day in control of the OCC, one of the most critical banking regulators in the federal government. That’s a key number, because Noreika, a former financial industry lawyer thrust into the position overnight, has been serving as a “special government employee,” a designation that exempts him from certain ethics and disclosure rules for members of the executive branch. This enables Noreika to serve as OCC chief without Senate vetting, and then roll back to a white-shoe law firm, evading certain restrictions on whether he can communicate with former colleagues or lobby the agency. Noreika planned to serve temporarily until Joseph Otting, former CEO of OneWest Bank and Trump’s nominee for the OCC, was confirmed. But that hasn’t happened yet; Otting’s nomination has sat on the Senate calendar for over a month. Special government employees are limited to 130 days of service over a 365-day period. The OCC contends that the number only refers to business days, meaning weekends can be taken off and Noreika still has until November to go. But “business days” appears nowhere in the statute.. Watchdog groups have argued that, if Noreika isn’t handing off power every weekend, he’s still on call and in charge of the agency, making any day of his service count.

Fears of commercially owned banks are unfounded: OCC's Noreika -- — Acting Comptroller of the Currency Keith Noreika on Thursday pushed back against concerns that his agency's proposed fintech charter will unduly benefit nonfinancial firms.  Since being appointed, Noreika has expressed an open mind about commercial firms entering the banking system, suggesting that the strict separation of banking and commerce in U.S. policy should be reexamined.

Defying industry, regulators plow ahead with long-term liquidity rule – Federal regulators are moving forward with plans to finalize one of the last significant Obama-era rules governing long-term bank liquidity despite widespread expectations by banks that the proposal was all but dead. The rule, known as the Net Stable Funding Ratio, would mandate that systemically significant banks hold enough debt and liquid assets to keep the firms’ operations afloat for at least a year.  

 We need more than half-measures to right-size regulation – BankThink  - A decade after the start of the 2007-2008 financial crisis, and seven years after the passage of the Dodd-Frank Act, it seems both the legislative and executive branches may be making small steps toward financial regulatory reform. Earlier this month, the Treasury Department released the second in a series of reports on the U.S. financial sector, this one focused on the capital markets. And last week, the House Financial Services Committee passed a suite of bills aimed at reforming many areas of financial regulation.  While passing legislation out of committee is only the first of many steps toward enactment, it is encouraging that several of the House bills passed with either unanimous or bi-partisan support. Although the House notably passed the Financial Choice Act earlier this year, a bill that would serve effectively as a repeal-and-replace template for Dodd-Frank, that bill passed on a strict party-line vote, with only Republicans voting in favor. . But even though this recent regulatory reform activity is a step in the right direction, much more needs to be done. And in terms of the reforms envisioned in the Treasury report and the recent suite of House bills, they’re a mixed bag. To be sure, some proposed reform follow recommendations that many of us have been pushing for a while now. For example, the Treasury report recommends that all companies considering an initial public offering (IPO) be permitted to file confidentially and “test the waters,” that is, sound out potential investment interest before pulling the trigger on a costly IPO. Right now, only companies below a certain size are permitted to do this.  Given the fact that investment in privately-held companies is tightly restricted, if companies eschew the public capital markets, average investors lose out.   But other changes would be half-measures, better than the status quo but still short of the mark.

GAO ruling puts leveraged lending guidance in GOP crosshairs  — Federal regulators’ 2013 guidance on leveraged lending should have been treated as a rule under the Congressional Review Act – and is now eligible for Congress to repeal, the Government Accountability Office said Thursday. In a letter to Sen. Pat Toomey, the GAO ruled against the agencies’ arguments that the guidance was not a formal rulemaking, concluding that the leveraged lending guidelines are a “general statement of policy” and therefore subject to Congressional review.

Vulnerabilities in Equifax's The Work Number raise new security doubts --Recently exposed security vulnerabilities in an Equifax tool used extensively in the mortgage industry are raising new questions about the reliability and veracity of the beleaguered credit bureau's employment verification service.Consumer data stolen in Equifax's massive data breach earlier this year could be used to access employment history and salary data collected by The Work Number, according to a report by cybersecurity journalist Brian Krebs.While access to The Work Number's browser-based portals is protected by various authentication measures, much of the data needed to gain access can be found online, according to Krebs."Successful validation to the system produces two sets of data: An employee's salary and employment history going back at least a decade, and a report listing all of the entities…that have previously requested and viewed this information," Krebs wrote.Many of the vulnerable Work Number web pages were taken down for maintenance after the report was published. Equifax did not respond to NMN's repeated inquiries about The Work Number vulnerabilities or the timing of the website maintenance.

Equifax restoring The Work Number portal with beefed-up security - Equifax continues work to add new security features and restore full access to The Work Number following a report highlighting potential security vulnerabilities in a browser-based portal of its employment verification service.The Work Number employee portal was taken offline for servicing on Oct. 8, according to Equifax spokesperson Wyatt Jefferies."At that time, we also decided to accelerate the implementation of select security enhancements to our platforms which extended the service outage timeframe," he said in an email.That's the same day cybersecurity journalist Brian Krebs published a report claiming consumer data stolen in Equifax's massive data breach earlier this year, along with an employer ID obtained from a public Equifax website, could be used to access employment history and salary data collected by The Work Number."Effective Oct. 16, 2017, access to The Work Number employee portal is being progressively restored and is expected to be complete over the next several days," Jefferies said. Equifax declined to answer questions about whether the timing of the portal maintenance or the decision to add new security features were in response to the Krebs report.

Beyond the breach: Credit reporting accuracy also under fire - The credit bureaus' cybersecurity and breach notification procedures have caught the most public attention following the massive hack at Equifax last month, but lawmakers are also taking an interest in the accuracy of credit reports.  At a Senate Banking Committee hearing Tuesday, the members seized on the lack of incentives for credit bureaus to fix credit reporting errors. "We know the credit bureaus have a long history of consumer complaints and inaccurate reporting that has long term effects on people’s ability to get a job or a house," said Sen. Sherrod Brown, D-Ohio, the panel's top Democrat. "Rather than addressing these problems, the credit bureaus have spent millions acquiring other data collection companies and branching out into new lines of business."During the hearing, Brown broached the idea of an accuracy standard for credit reporting agencies, suggesting that credit bureaus that do not meet such a standard should be prevented from “collecting new personal data or providing other services until they have met accuracy metric in their consumer reporting.”The Equifax breach, which potentially affected over 145 million consumers, has prompted legislative proposals from both Democrats and Republicans to reform the industry. But the hack also seemed to exacerbate longstanding criticism of how private companies handle consumers' financial data. “Credit reporting agencies which provide personal data to others should be held to an accuracy standard because of course when they provide information that is inaccurate ... people are wrongfully denied credit and people are wrongfully denied jobs,” said Marc Rotenberg, president of the Electronic Privacy Information Center, during the hearing.

California extends ban against Wells Fargo due to scandals - Wells Fargo was barred by California's treasurer from being hired for another year because of the bank's fraudulent account scandal, leaving the company largely cut off from underwriting work with one of the nation's biggest municipal-bond issuers.Treasurer John Chiang on Monday said he decided to leave the sanctions in place against the San Francisco-based bank, whose reputation has suffered because of revelations employees opened bogus accounts in customers' names to meet sales quotas. Chiang's decision will prevent his office from hiring Wells Fargo as an underwriter or investment broker. The ban was imposed in September 2016 and was set to lapse after a year. The scandal at Wells Fargo prompted a nationwide backlash, with public officials in New York, Washington and Illinois also moving to sever ties to the bank. Chief Financial Officer John Shrewsberry previously said such measures have cost it "tens of millions of dollars" in revenue, and it has lost ground to other municipal-bond underwriters this year. Chiang said there has been an "alarming drumbeat of new reports of egregious, unethical or illegal actions by the bank over the past year," including allegations that it denied loans to those brought to the country illegally as children and overcharged veterans for mortgages."The opaque manner with which the bank continues to do business and the frequency of new disclosures of wanton greed and lack of institutional control makes this decision so clear that there really was no choice at all," Chiang said in a statement.

 Sloan resists calls for a new CEO at Wells Fargo - Wells Fargo CEO Tim Sloan is defiant in the face of critics who argue that the scandal-plagued bank needs a new leader.  “I don’t think I’m a liability for the company,” Sloan said Wednesday. “The moment that I would ever think that, I would step aside. I’m not going to step aside because I’m an asset for this company. We’re moving the company forward.”

Wells Fargo fires FX trading executives amid report of probe - Wells Fargo fired four foreign-exchange executives amid an investigation into that business both internally and from regulators, The Wall Street Journal reported Friday, citing sources familiar with the matter.Wells Fargo confirmed the departures to the Journal and CNBC. Shares of Wells Fargo remained about 2 percent higher Friday afternoon.  The executive firings and investigation into the investment-banking division would add to Wells Fargo's existing struggle with scandal in its consumer banking business.The bank paid $185 million in penalties after it was revealed last year that employees opened millions of unauthorized consumer deposit and credit card accounts for years in order to meet aggressive sales goals, a practice the bank said it has since ended. In August, the bank said an expanded third-party review identified about 3.5 million such accounts and that Wells Fargo has now paid millions in total customer refunds or payments.The bank appointed a new CEO, Tim Sloan, last October, and announced a reorganization of its board this summer.In late July, news broke that hundreds of thousands of Wells Fargo customers were charged for auto insurance they did not need. This week, the Office of the Comptroller of the Currency sent a confidential preliminary report to Wells Fargo that criticized the bank for the auto insurance sales practices and how it handled the problem, The New York Times reported Friday. The OCC report also said Wells Fargo may need to refund customers more than the $80 million the bank has set aside for payouts, the Times said. A person familiar with the matter told the Journal the same thing.

Small banks were better off in pre-crisis reg regime: Fed’s Bullard - — It's not uncommon these days for regulators to acknowledge that the pendulum of supervision has swung too far, particularly for community banks. But James Bullard, the president of the Federal Reserve Bank of St. Louis, is willing to go even further, suggesting that it was a mistake for smaller institutions to face most of the new requirements of the Dodd-Frank Act, including internally-run stress tests and the Volcker Rule.

‘There’s a sense of unfairness about it’: Fed's Bullard  (podcast) St. Louis Fed President James Bullard explains why community banks feel they were hit with unduly tough regulations after the financial crisis.

 Mapping the blockchain project ecosystem (TechCrunch) Blockchain technology, cryptocurrencies, and token sales are all the rage right now. In the 5+ years I’ve been working in the VC industry, this is by and large the fastest I’ve seen any area of technology take off in terms of new company (or project) formation.It wasn’t too long ago that founders and VCs were mainly focused on centralized exchanges, enterprise or private blockchain solutions, wallets, amongst several other popular blockchain startup ideas that dominated the market from 2012 to somewhere around 2016.However, as I wrote about a few months ago, the rise of Ethereum with its Turing-complete scripting language and the ability for developers to include state in each block, has paved the way for smart contract development. This has led to an influx of teams building decentralized projects seeking to take advantage of the most valuable property of blockchains — the ability to reach a shared truth that everyone agrees on without intermediaries or a centralized authority.There are many exciting developments coming to market both in terms of improving existing blockchain functionality as well as the consumer’s experience. However, given the rapid pace at which projects are coming to market, I’ve found it to be difficult to keep track of each and every project and where each one fits into the ecosystem. Furthermore, it’s easy to miss the forest for the trees without a comprehensive view of what the proverbial forest looks like. As a result, here’s a compiled a list of all of the decentralized blockchain-based projects that I have been following, and was able to dig up through research, along with recommendations from friends in the ecosystem.

Treasury regulatory review will include fintech policy, official says — The Treasury Department will release a report early next year on opportunities and risks posed by fintech as part of administration efforts to reform the financial regulatory structure, a top Treasury official said Wednesday. Craig Phillips, a top adviser to Treasury Secretary Steven Mnuchin, suggested that a goal of the report is to consider how to harmonize fintech policy across multiple regulators.

Another way fintech will redefine banking: No more free services - If you are not paying for something, then you are the product. This concept, which has been floating around for a while, is usually applied to companies like Facebook, Twitter and Google — businesses that are selling you, the users, to advertisers as clickbait. In many countries, consumers bank for free. Yet, like tech, there is no such thing as free banking either. Not really. In cases where a bank waives fees, someone is paying for the service. Right now, it’s the poor who largely pay for banking services — the people who fall into an overdraft or need a quick loan to cover their everyday expenses. In fact, the poorer you are, the more you pay. Take a look at payday loan companies or money transmitters. If you are trying to send $100 from the U.S. to the Philippines, your family will not receive much of that $100 by the time all the fees and currency transfers are applied. This “free” banking model, which is seriously flawed, is about to change — and not for the reasons some expect. Many U.K. bankers will tell you that the free banking model is a broken idea. However, many of these bankers are under the impression that the only way the model will change will be if regulators tell the banks to change. After all, no bank wants to break ranks and say, “Hey, here is a bank account you have to pay for!” This pitch, after all, would not be a very attractive offer when competitors’ offerings are free. So banks assume they will all, as an industry, have to switch to chargeable bank accounts when their regulator says so. But I disagree. Fintech companies are already breaking the free banking model on their own.   As more and more technology firms eat into narrow areas of banking, the banks will be left holding the expensive aspects of deposit accounts; however, the model will no longer be viable.   As a result, fintech companies will force retail banks to end free banking and rethink their whole business model.

Could online lending become the next systemic risk? — When banks resisted expanding credit in the years following the financial crisis and passage of the Dodd-Frank Act, online marketplace lending seized on what seemed like a niche opportunity: targeting the credit markets deserted by banks. But with issuance of marketplace securitizations now exploding — rising 300% cumulatively in the past two years — the idea of online lending as a niche is quickly deteriorating. This continues to prompt challenging questions including whether the industry imposes systemic risk, how it can weather an economic crisis, whether its underwriting model is sustainable and if the days of bank-managed financial intermediation are numbered.

Are fintechs charging minorities more for business loans? -  Minorities are more likely to turn to a financial technology firm when seeking a business loan, but they may pay higher interest rates, according to the preliminary results of a congressional investigation released Monday.  Rep. Emanuel Cleaver, D-Mo., launched an inquiry into the online lending space earlier this year.

Tech aspires to be a meritocracy. But it’s only a ‘mirror-tocracy’ - The tech and startup world is filled with innovators who want to solve really tough problems. Investors are pouring billions of dollars into fintech, health tech, education tech, artificial intelligence, virtual reality and many other verticals to realize these entrepreneurs’ dreams. Yet, we can’t seem to make a dent in addressing the lack of diversity in tech companies and startups. Worse, the sexism and harassment being reported in Silicon Valley have historically only been discussed behind closed doors, until now. In tech, we aspire to meritocracy. But the thing is, we aren’t a meritocracy. We’re still a “mirror-tocracy,” the phenomenon where people like to work with and fund people who look like them.  Women (who represent 57% of the U.S. labor force) fill just over a quarter (26.5%) of tech jobs at the top U.S. tech firms, down from 35% in 1990. Women in tech earn, on average, just 85% of what their male counterparts do. The investor world shows similar patterns. At the top 100 venture capitalist firms, only 7% of managing partners are women. And only 7% of investor money in the U.S. goes to women-led startups. The stats are worse for black women founders. According to digitalundivided, an organization that provides an incubation program for tech startups led by women of color, a mere 0.2% of ventures deals from 2012 to 2014 went to black women founders.

Fintech’s Achilles heel: Reaching low-income consumers - Over the last decade, fintech companies have launched robo-advisers, digitized lending, improved fraud detection and created virtual currencies. In short, fintech firms have helped change our understanding of what is possible in financial services.However, the fintech revolution has largely ignored the financial needs of the bottom third of the U.S. population. For instance, fintech companies have so far failed to successfully create an alternative to credit scores for the 51% of people with subprime scores. Secondly, fintech firms have yet to help move our national savings rate in a positive direction. Thirdly, the amount of money that lower-income households have left over every month after paying their expenses is still declining despite fintech apps’ promise to help people budget. According to data from the Pew Charitable Trusts, the typical low-income household had $1,500 of income left over after expenses in 2004. In 2014, they were $2,300 in the red after expenses. Why is fintech failing to address the needs of such a large swath of the market? One explanation: Consumer spending dictates the preponderance of innovation and investment, and spending by 5% of households with the highest income now directs one-fifth of gross domestic product. The result is a robust ecosystem of advanced offerings catering to a select few high-income earners.

CFPB issues principles on financial data sharing — The Consumer Financial Protection Bureau released non-binding principles Wednesday for third parties that use consumer financial data to help guide the development of innovative but safe fintech solutions. The guidance said consumers should have greater ability to obtain information about their financial data from providers, while providers should collect information in a manner that does not expose consumers to data breaches, among other principles. “These principles express our vision for realizing an innovative market that gives consumers protection and value,” CFPB Director Richard Cordray said in a press release. Yet the agency, which last year launched an inquiry to gather information about data sharing and aggregation practices, was careful to state that the principles were not binding. “The Principles do not themselves establish binding requirements or obligations relevant to the Bureau’s exercise of its rulemaking, supervisory, or enforcement authority,” the guidance said. “In addition, the Principles are not intended as a statement of the Bureau’s future enforcement or supervisory priorities.” The guidance is directed at companies — that include both fintech firms and more traditional lenders like banks — that seek out consumers’ financial information in order to find services or products that they think might be of interest to the consumer.

Amazon’s grocery expansion a threat to CRE, banks fear - Shopping centers anchored by supermarkets were once a coveted lending opportunity at TowneBank. While the Portsmouth, Va., bank hasn’t pulled the plug completely on them, its loan officers are definitely having second thoughts. “Supermarket shopping centers had been an attractive asset class for us for a long time,” said Jeremy Starkey, president of commercial real estate finance at the $8.4 billion-asset TowneBank.“It’s not as attractive as it used to be,” he said.Starkey and TowneBank have plenty of company. Bankers at several other institutions with big commercial real estate book have also decided to think twice about loans on strip centers dominated by a large grocery store. There are too many warning signs on the horizon, from the potential for the sector to be disrupted by Amazon’s purchase of Whole Foods to the expansion of German discount retailers Aldi and Lidl.“My opinion is that this probably represents a structural change in terms of the intensity of online competition for grocery,” said Mike Wilson, chief lending officer at the $4.3 billion-asset Bankers Trust Co. in Des Moines, Iowa. It’s the latest sign of trouble in CRE lending. Regulators have steadily issued warnings to banks that have high concentrations of CRE loans. The broader retail sector has experienced a huge wave of bankruptcies in recent months. And office-building-vacancy rates have spiked in some markets.

RMI Reveals Greatest Banking Threat is Farm Foreclosures - The Rural Mainstreet Index (RMI) released each month by Creighton University is becoming a broken record when describing the farm economy - the overall index remaining below growth neutral. The bright spot in the September RMI is the index saw slight improvements, jumping from 39.6 in September to 45.3 in October. Every state showed a boost in the RMI, except Missouri, where the index slipped to 49.2 from 51.3 The RMI is a survey of ag bankers in a 10-state region. While October’s number showed outlooks are on the rise, it’s the struggling farm economy due to stagnant crop prices acting as a wet blanket on the overall RMI. “As a result of weak farm income and low agriculture commodity prices, approximately 9.5 percent of bank CEOs expect farm loan foreclosures to pose the greatest threat to banking operations over the next five years,” said Ernie Goss, author of the RMI. The survey showed almost one in 10 bankers expect farm foreclosures to be the greatest challenge to banking operations over the next five years. “I don't think the bottom is in in terms of for example foreclosures and delinquencies and bankruptcies,” said Goss. “I think still we've got a bottom there ahead of us.” Surveyed lenders are also keeping a close eye on the Federal Reserve and a possible additional rate hike during the December meeting. “Rural Mainstreet bankers have been generally supportive of Federal Reserve rate hikes,” said Goss. “Approximately 64.3 percent anticipate one more 2017 rate increase.”

Ocwen settles with Alabama, Minnesota regulators - Ocwen Financial Corp. is settling allegations by Alabama and Minnesota that it engaged in improper mortgage activities, bringing the total of states it has settled with to 17."We continue to work cooperatively with the remaining 14 state regulatory agencies and two state attorneys general to reach acceptable resolutions," said John Lovallo, a spokesperson for Ocwen, in an emailed statement.  As in previous settlements with other states, the settlements with Alabama and Minnesota restrict Ocwen's ability to purchase mortgage servicing rights for several months and require the company to switch to a new servicing system, according to an 8-K filing with the Securities and Exchange Commission.  Other states that have settled, withdrawn regulatory actions or allowed them to expire include Georgia, Idaho, Illinois, Maine, Michigan, Mississippi, Montana, Rhode Island, South Carolina, Wisconsin, Indiana, Nevada, Virginia, West Virginia and New Mexico.

What the Ginnie/VA task force will look for in its refi clampdown - Ginnie Mae and the Department of Veterans Affairs recently described in more detail the VA loan refinancing practices they will crack down on to eliminate a long-running churning concern.The two agencies' joint task force is looking at whether any VA refinance provides a data-based "net tangible benefit" for the borrower in terms of cost, and whether costs and benefits were fully disclosed to borrowers, according to a Ginnie Mae press release.The task force also is considering establishing time frames for the recoupment of fees and stronger seasoning requirements for the loans beyond the minimum six-month requirementput in place earlier this year. The VA and Ginnie are looking to put an end to "aggressive and misleading refinancing propositions" as described in a Consumer Financial Protection Bureau report on VA loan complaints late last year. Among the complaints were repeated solicitations for refinancing and misleading advertisements. Examples of misleading ads included one showing a low rate prominently on the front but had on the back fine print specifying that a product was an adjustable-rate mortgage with a charge for discount points.About 14% of more than 12,500 CFPB mortgage complaints from servicemembers, veterans and their dependents centered on VA refis, the CFPB found.

Trump's pick to run FHA has helped lenders fight it - For the past eight years, Brian Montgomery has helped mortgage lenders fight penalties sought by the Federal Housing Administration. Now he’s President Donald Trump’s nominee to lead the agency.Montgomery, who is seeking a second stint as head of the FHA, would play a key role in mortgage-insurance decisions that could mean billions of dollars for clients of The Collingwood Group, the Washington consulting firm that he co-founded and currently serves as vice chairman.The potential for conflicts of interest is putting Montgomery in the awkward position of possibly recusing himself from specific matters involving some of the country’s top mortgage lenders.The FHA, which is part of the Department of Housing and Urban Development, sells insurance that repays lenders if a borrower defaults. The protection allows borrowers to get mortgages with down payments of little as 3.5 percent and credit scores as low as 580 on a scale of 350 to 850, making the program a favorite among first-time home buyers. The agency can also penalize lenders for mistakes in FHA-backed loans that lead to insurance payouts.Collingwood is known in the housing-finance industry as a specialist in helping firms navigate FHA-related penalties and lawsuits. Montgomery’s former clients include Wells Fargo & Co., US Bancorp, Nationstar Mortgage Holdings Inc. and Caliber Home Loans Inc. He is also on the board of Radian Group Inc., a private mortgage insurer that competes with the FHA and could profit along with other rivals if the Trump administration shrinks the agency’s footprint. Montgomery has said he would leave Radian’s board if confirmed by the Senate. The Senate Banking Committee plans to host a confirmation hearing for Montgomery next week.

Fannie, Freddie must be allowed to rebuild capital, say small banks, credit unions — Credit unions and community bankers showed a rare moment of unity on Thursday, jointly calling on the top regulator of Fannie Mae and Freddie Mac to change a policy that forces the government-sponsored enterprises to sweep their profits to the Treasury Department and instead allow them to rebuild capital. “Internal reforms are not enough and that the time has come for Congress to act on comprehensive housing finance reform to create a more healthy and sustainable secondary market. We believe this process begins with allowing the GSEs to rebuild their capital buffers,” said a letter penned by the National Association of Federally-Insured Credit Unions and the Independent Community Bankers of America and sent to Federal Housing Finance Agency Director Mel Watt. The Treasury Department and FHFA struck a deal in 2012 that directed Fannie and Freddie to send their profits to Treasury, gradually allowing their capital to deplete. The GSEs' capital is expected to be exhausted next year. But Watt has begun voicing concern that allowing the GSEs to run out of capital could destabilize the mortgage market even though the enterprises have a $258 billion line of credit with Treasury. Watt has warned that if Congress doesn't act he will either strike a new deal with Treasury or potentially unilaterally alter the arrangement if pressed.

Fannie markets more than $3 billion in distressed loans - Fannie Mae put more than $3 billion in distressed loans up for bid Wednesday. The government-sponsored enterprise is marketing in collaboration with Citigroup Global Markets Inc. a $2.2 billion package of reperforming loans that marks its fifth transaction of this type. Buyers must agree to offer sustainable loss mitigation to any borrower who redefaults within five years following the sale. Bids are due on Nov. 6. Goldman Sachs affiliate MTGLQ last month purchased Fannie's last reperforming loan sale and also has purchased multiple nonperforming loan packages Fannie has sold. Fannie on Wednesday also began marketing in conjunction with Bank of America Merrill Lynch and First Financial Network Inc. more than $1.4 billion of nonperforming loans. The nonperforming loans going up for bid are divided into four larger pools that total $1.29 billion and two smaller pools of loans totaling $129.6 million. The two smaller nonperforming loan pools are Fannie's ninth and 10th community impact pools, which are typically smaller, geographically focused pools designed to appeal to smaller investors such as nonprofits and minority- and women-owned businesses.One community impact pool is larger and geographically diverse, but the other is small and focused on the New York area. Bids on the four larger pools are due Nov. 2 and bids on the two community impact pools are due Nov. 15. Fannie began selling nonperforming loan pools at the direction of its regulator and conservator, the Federal Housing Finance Agency, in 2015; and the agency started marketing reperforming loan pools last year.

Damages from Hurricane Irma mount in Central Florida -  One out of every 150 houses, business and other properties in Orange County suffered damage from Hurricane Irma, with far more than that filing insurance claims, new reports show. Damage from the Sept. 11 disaster totaled $51.67 million in Orange County, according to an assessment released Wednesday by Orange County Property Appraiser Rick Singh. On average, damages averaged $8,286 for each of the 3,001 Orange properties that reported property damage. The estimates are based on confirmed damages reported to the county. The toll, though, could be greater based on state insurance records. Orange County residents and properties owners submitted 61,322 insurance claims related to Irma— second only to Dade County where more than 94,000 insurance claims were filed, the state Office of Insurance Regulation reported. Central Florida claims related to Irma totaled about 126,000 for Orange, Seminole, Osceola and Lake counties. Within the four-county region, Orange took the brunt of the damage followed by Osceola with 24,141 claims, Seminole with 20,521 claims and Lake with 19,981 claims, according to the state. Article continues belowHal Breeding, who lives near St. Cloud, said Farm Bureau Insurance was the only thing that worked for him following the storm. He said Federal Emergency Management Agency was unresponsive to his calls and made him wait hours on the phone before telling him the computers were down. And roofers largely disregarded his requests for a quote. “I called four roofers and not a one showed up for a month,” Breeding said. One roofing company did finally tarp over Breeding’s house to protect it until they could get back in six months to install a new roof for $12,000, he added. 

Regulators waive appraisals in hurricane areas to help rebuilding - — In the wake of three major hurricanes, the federal banking and credit union regulators are waiving normal appraisal requirements so financial institutions can make loans to help with rebuilding and recovery efforts. The waiver will ensure that a shortage of appraisers, which could delay appraisals, will not slow down recovery efforts in areas most affected by Hurricanes Harvey, Irma and Maria.The order — issued by the Federal Reserve Board, Federal Deposit Insurance Corp., National Credit Union Administration and Office of the Comptroller of the Currency — allows banks and credit unions to extend credit for real estate transactions without an appraisal if lenders document the property value to support the loan.  "The exceptions apply to transactions in areas of Florida, Georgia, Puerto Rico, Texas, and the U.S. Virgin Islands and expire three years after the date the president declared each area a major disaster," according to a joint press release by the agencies.  Under the order, appraisals are not required if a property is located in a major disaster area, a binding commitment is in place to fund the transaction within 36 months of when the area was declared a major disaster areas, and "the value of the real properties support the institutions' decisions to enter into the transactions."

Black Knight: "Hurricanes Irma and Harvey Drive Surge in Past-Due Mortgages" -- From Black Knight: Black Knight’s First Look at September 2017 Mortgage Data: Hurricanes Irma and Harvey Drive Surge in Past-Due Mortgages

• Nationally, the number of non-current mortgages (those at least 30 days past-due or in active foreclosure) jumped by 214,000 (+9 percent), driven primarily by fallout from Hurricanes Harvey and Irma
• FEMA-declared hurricane disaster areas accounted for the bulk of the increases; non-current inventory rose by 84,000 (+48 percent) in Irma disaster areas and 52,000 (+67 percent) in those related to Harvey
• Prior to the hurricanes, Texas and Florida ranked 20th and 22nd among states by non-current mortgage rates; after the storms, they now rank 3rd and 5th respectively
• Primarily as a result of hurricane impact, September saw the first annual rise in mortgage delinquencies (borrowers at least 30 days past-due but not yet in active foreclosure) since July 2010
• Monthly foreclosure starts were at their lowest in more than 17 years, with starts down as much as 90 percent in areas covered by post-hurricane foreclosure action moratoria

According to Black Knight's First Look report for September, the percent of loans delinquent increased 11.9% in September compared to August, and increased 3.0% year-over-year.
The percent of loans in the foreclosure process declined 7.2% in September and were down 30.1% over the last year.  Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 4.40% in September, up from 3.93% in August. The percent of loans in the foreclosure process declined in September to 0.70%.  The number of delinquent properties, but not in foreclosure, is up 80,000 properties year-over-year, and the number of properties in the foreclosure process is down 151,000 properties year-over-year.

In Santa Rosa, the scramble begins for replacement housing - Soot and ash are still settling over the Sonoma County, Calif., housing market, but real estate brokers and lenders contend the fiery destruction of a few thousand properties here will make it harder for both buyers and renters to find new homes.The fires that struck the county last week could lead to fewer home sales and higher prices in the months ahead. However, experts generally hedged their predictions by pointing to the unprecedented scale of the disaster.  Most interviewed Monday said they have yet to see much movement in the market one way or the other since the fires hit last week. But Rick Laws, senior vice president in Santa Rosa for Pacific Union International real estate agency, said in the past three days, his agents have been putting together more deals with buyers who have lost homes and are begging, "I need something, anything." Those buyers typically are well off, believe the available inventory will become more scarce and "they're going to do what they need to do to secure housing," said Laws, who prepares The Press Democrat's monthly housing report. The deals he helped oversee generally were for 10% over the sellers' asking prices.The housing market slowed last week after a series of catastrophic fires claimed at least 41 lives across four Northern California counties and 6,700 structures across Sonoma County. Some agents lost homes or had to leave areas under evacuation. Monday, eight days after the disaster began, at least two lending offices remained closed in Santa Rosa because they are still in evacuation zones. Also, lending, insurance and title companies all have set up new safeguards to avoid costly missteps, including the sale of homes that burned to the ground.

Nevada senators seek mortgage help for Las Vegas shooting victims - Sens. Dean Heller and Catherine Cortez Masto of Nevada called on mortgage industry leaders to provide relief and financial assistance to victims of the Oct. 1 mass shooting at the Route 91 Harvest Festival in Las Vegas.  Named the deadliest mass shooting in modern American history, the Las Vegas massacre has left hundreds of families with funeral costs, medical bills and emotional trauma that may hinder their ability to meet financial commitments, according to the senators.  "We write to you today to ask that your organizations do whatever they can to ease the burdens that may be faced by victims, survivors and their families at this difficult time or in the future. Importantly, should the issue arise, we would ask that you not initiate or finalize any legal foreclosure proceedings that would lead to a victim or their family's eviction during their recovery," wrote Heller and Cortez Masto. "If victims and survivors have difficulty with future mortgage or other loan payments, we ask that you would work with those individuals to offer tailored solutions, which could include forbearance plans and loan modifications, to help ensure that their financial wellbeing is taken care of. Finally, we ask that you streamline documentation requests and paperwork burdens for any impacted borrowers and dedicate additional staff to process any requests from victims and their families," they continued.

Mortgage default rates inch up closer to year-ago levels - Mortgage defaults in September were slightly higher than in the previous month and are still lower than a year ago but they are closer to matching levels seen in 2016.The default rate for first mortgages last month was 0.66%, up a basis point from August, but down a basis point from September a year ago, according to Standard & Poor's and Experian.Second-mortgage default rates were three basis points higher on a consecutive-month basis at 0.53% but were 3 basis points lower year-to-year.The composite default rate for mortgage, bank card and auto loan credit was up 2 basis points from a month ago and down 2 basis points from a year ago at 0.88%. The auto loan default rate in September was up 10 basis points from where they were the previous month, and the same as where they stood a year ago at 1.05%.  Card defaults were down 4 basis points from the previous month but up 29 basis points year-over-year at 3.15%.

Quicken Loans to begin closing mortgages with eNotes -  Quicken Loans will begin closing mortgages using electronic promissory notes, marking a critical operational shift for the tech-savvy lender. While the Detroit-based lender is highly regarded as one of the industry's most innovative lenders, much of its consumer-facing tech developments focus on digitizing the upfront application process with online self-service tools and electronic documents. Now, that approach will extend throughout the entire loan process. Quicken Loans will manage the e-notes with technology from eOriginal, a Baltimore-based e-doc and e-vault technology provider. "Quicken Loans has worked diligently to provide clients a completely online mortgage experience from application to closing. The next step in this evolution is to digitally move the note to the industry stakeholders who need it," said Jay Farner, Quicken Loans CEO, in a press release.

MBA: Mortgage Applications Increase in Latest Weekly Survey -- From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey Mortgage applications increased 3.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 13, 2017. This week’s results included an adjustment for the Columbus Day holiday... The Refinance Index increased 3 percent from the previous week. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 9 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) decreased to 4.14 percent from 4.16 percent, with points remaining unchanged at 0.44 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

NAR: "Existing-Home Sales Inch 0.7 Percent Higher in September" ---From the NAR: Existing-Home Sales Inch 0.7 Percent Higher in September After three straight monthly declines, existing-home sales slightly reversed course in September, but ongoing supply shortages and recent hurricanes muted overall activity and caused sales to fall back on an annual basis, according to the National Association of Realtors®.Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 0.7 percent to a seasonally adjusted annual rate of 5.39 million in September from 5.35 million in August. Last month's sales pace is 1.5 percent below a year ago and is the second slowest over the past year (behind August). Total housing inventory at the end of September rose 1.6 percent to 1.90 million existing homes available for sale, but still remains 6.4 percent lower than a year ago (2.03 million) and has fallen year-over-year for 28 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.5 months a year ago. This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in September (5.39 million SAAR) were 0.7% higher than last month, and were 1.5% below the September 2016 rate. The second graph shows nationwide inventory for existing homes.According to the NAR, inventory increased to 1.90 million in September from 1.88 million in August.   Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory. Inventory decreased 6.4% year-over-year in September compared to September 2016.   Months of supply was at 4.2 months in September.  As expected, sales were above the consensus view. For existing home sales, a key number is inventory - and inventory is still low.

Blood In The Streets? Storm-Savaged September Sees Home Sales Surge - Tumbling starts and permits data, and dismal new, pending, and existing home sales in August urged a rebound in September and existing home sales (amid massive storms) somehow managed to surge 0.7% MoM (smashing expectations of a 0.9% tumble). Trend reversal? The 0.7% rise in September was driven by single-family homes rising 1.1% as rental unit sales dropped 1.6%.Median sales price increased 4.2% YoY to $245,100.However, it's not all shits ands giggles... Exisitng home sales dropped 1.5% YoY - the first decline since July 2016... The South did see a 0.9% MoM decline in sales after a 5.7% plunge in August (as The West surged 3.3%) Houston home sales jumped 4%, as we assume speculative buyers swooped on the 'blood in the streets'! “Home sales appear to be holding steady,” Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report. “The hurricane impact appears to be short-lived.” “First-time buyers stepped back a bit,” he said, showing pricing increases that are outpacing income gains remain a constraint.

A Few Comments on September Existing Home Sales -- First, as usual, housing economist Tom Lawler's estimate was much closer to the NAR report than the consensus. So the slight month-to-month increase in reported sales, in September, was no surprise for CR readers.My view is a sales rate of 5.39 million is solid. In fact, I'd consider any existing home sales rate in the 5 to 5.5 million range solid based on the normal historical turnover of the existing stock. As always, it is important to remember that new home sales are more important for jobs and the economy than existing home sales. Since existing sales are existing stock, the only direct contribution to GDP is the broker's commission. There is usually some additional spending with an existing home purchase - new furniture, etc. - but overall the economic impact is small compared to a new home sale.  Inventory is still very low and falling year-over-year (down 6.4% year-over-year in September). Inventory has declined year-over-year for 28 consecutive months.  I started the year expecting inventory would be increasing year-over-year by the end of 2017. That now seems unlikely. However this was the lowest year-over-year decline this year, and inventory could bottom this year.  Inventory is a key metric to watch.  More inventory would probably mean smaller price increases, and less inventory somewhat larger price increases. The following graph shows existing home sales Not Seasonally Adjusted (NSA).Sales NSA in September (465,000, red column) were below sales in  September 2016 (486,000, NSA) and sales in September 2015 (471,000). Sales NSA are now slowing seasonally, and sales NSA will be lower in Q4.

Housing Starts decreased to 1.127 Million Annual Rate in September -- From the Census Bureau: Permits, Starts and Completions Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,127,000. This is 4.7 percent below the revised August estimate of 1,183,000, but is 6.1 percent above the September 2016 rate of 1,062,000. Single-family housing starts in September were at a rate of 829,000; this is 4.6 percent below the revised August figure of 869,000. The September rate for units in buildings with five units or more was 286,000. Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,215,000. This is 4.5 percent below the revised August rate of 1,272,000 and is 4.3 percent below the September 2016 rate of 1,270,000. Single-family authorizations in September were at a rate of 819,000; this is 2.4 percent above the revised August figure of 800,000. Authorizations of units in buildings with five units or more were at a rate of 360,000 in September.
The first graph shows single and multi-family housing starts for the last several years.Multi-family starts (red, 2+ units) decreased in September compared to August.  However Multi-family starts are up slightly year-over-year.Multi-family is volatile month-to-month, but has been mostly moving down recently. Single-family starts (blue) decreased in September, and are up 5.9% year-over-year.  The second graph shows total and single unit starts since 1968.  The second graph shows the huge collapse following the housing bubble, and then - after moving sideways for a couple of years - housing is now recovering (but still historically low),Total housing starts in September were below expectations.  Starts for July and August were revised slightly.   Starts in the south were down year-over-year (hurricane Harvey). 

New Residential Housing Starts Down in Again in September - The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for September new residential housing starts. The latest reading of 1.127M was well below the Investing.com forecast of 1.180M and a decrease from the previous month's upwardly revised 1.183M. Here is the opening of this morning's monthly report: Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,215,000. This is 4.5 percent (±1.6 percent) below the revised August rate of 1,272,000 and is 4.3 percent (±1.7 percent) below the September 2016 rate of 1,270,000. Single-family authorizations in September were at a rate of 819,000; this is 2.4 percent (±1.7 percent) above the revised August figure of 800,000. Authorizations of units in buildings with five units or more were at a rate of 360,000 in September.Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,127,000. This is 4.7 percent (±8.1 percent)* below the revised August estimate of 1,183,000, but is 6.1 percent (±8.8 percent)* above the September 2016 rate of 1,062,000. Single-family housing starts in September were at a rate of 829,000; this is 4.6 percent (±8.5 percent)* below the revised August figure of 869,000. The September rate for units in buildings with five units or more was 286,000. [link to report] Here is the historical series for total privately-owned housing starts, which dates from 1959. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

September housing permits and starts: stall continues, where will future growth come from? -  Let me start with two introductory comments: Fist, one disagrees with Bill McBride at one's peril with regard to housing, but I am unable to share in his continued optimistic outlook. Housing sales are driven by three primary factors: 
1. Housing moves inversely, with a lag, to interest rates.
2. Although sales turn before prices, prices are a causative agent driving the turn in sales.
3. Housing moves in sync with demographics, specifically the number of young first time buyers. 
While the third factor is still a positive, interest rates remain a negative YoY for at least one more month. Even then, it does not appear likely that they will approach, let alone make, new lows. Prices meanwhile continue to outpace wage and household income growth. In other words, for the near future, it appears that both the downpayment and the monthly carrying costs for housing will become more challenging for the first time buyers who ultimately drive the market. I just don't see where the impetus for significant new growth in housing sales is going to come from. Second, last month I cautioned readers to take the good housing permits number with a grain of sailt, since it wasn't confirmed by any other metrics. Yesterday's release of September housing permits and starts indicates that caution was on point. Remember that permits are less volatile than starts, and single family permits are the least volatile of all. Starts are best looked at as a three month moving average. So, first of all, here are total and single family permits: Both declined. Further, neither one has made a new high since the early months of this year. Further, when we do our hurricane workaround, and compare the sum of the other three Census Regions unaffected by the recent hurricanes, we get the same result:

Housing Starts, Permits Collapse In September (Spoiler Alert: It Wasn't Just The Storms) -- Following last month's bounce in permits (later revised lower), September expectations were for a decline of 2.1% (presumably analysts knew of the storms' potential impact when they guessed) but it utterly collapsed - down 4.5%. Worse still Housing Starts were supposed to drop just 0.4% in September but crashed 4.7%. These are 2 to 3 standard deviation misses of expectations... so don't simply blame the storms as analysts were well aware that they occurred when they made their forecasts... Notably, multifamily starts tumbled to 286K, lowest since Sept 2016...  And it was clearly not just the hurricanes - starts dropped in every region except The West:

• Northeast: -9.2%
• Midwest: -20.2%
• South -9.3%
• West: +15.7%

Comments on September Housing Starts - The housing starts report released this morning showed starts were down 0.8% in September compared to August (August was revised up slightly), and starts were up 6.1% year-over-year compared to September 2016.  This was below the consensus forecast, but some of the weakness was in the south - probably due to hurricane Harvey. This first graph shows the month to month comparison between 2016 (blue) and 2017 (red). Starts were up 6.1% in September 2017 compared to September 2016 (an easy comparison), and starts are up only 3.1% year-to-date.  The comparisons in Q4 will be more difficult. Note that single family starts are up 9.1% year-to-date, and the weakness (as expected) has been in multi-family starts. My guess was starts would increase around 3% to 7% in 2017. Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).These graphs use a 12 month rolling total for NSA starts and completions.   The rolling 12 month total for starts (blue line) increased steadily over the last few years - but has turned down recently.  Completions (red line) have lagged behind - but completions have almost caught up to starts (more deliveries).  Completions lag starts by about 12 months. As I've been noting for a couple of years, the growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR).

AIA: Architecture Billings Index "Backslides Slightly" in September -- Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Architecture Billings Index Backslides SlightlyAfter seven months of steady growth in the  demand for design services, the Architecture Billings Index (ABI) paused in September.  As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the September ABI score was 49.1, down from a score of 53.7 in the previous month. This score reflects a slight decrease in design services provided by U.S. architecture firms (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.0, down from a reading of 62.5 the previous month, while the new design contracts index eased somewhat from 54.2 to 52.9. “We’ve seen unexpectedly strong numbers in design activity for most of 2017, so the pause in September should be viewed in that context” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Project inquiries and new design contracts remain healthy, and the continued strength in most sectors and regions indicates stability industry-wide.”
• Regional averages: Northeast (56.9), South (54.0), Midwest (50.4), West (48.8)
• Sector index breakdown: commercial / industrial (54.0), mixed practice (52.2), multi-family residential (51.0), institutional (51.0)

NAHB: Builder Confidence increased to 68 in October -- The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 68 in October, up from 64 in September. Any number above 50 indicates that more builders view sales conditions as good than poor. From NAHB: Builder Confidence Rises Four Points in October Builder confidence in the market for newly-built single-family homes rose four points to a level of 68 in October on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This was the highest reading since May.  “This month’s report shows that home builders are rebounding from the initial shock of the hurricanes,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “However, builders need to be mindful of long-term repercussions from the storms, such as intensified material price increases and labor shortages.”  “It is encouraging to see builder confidence return to the high 60s levels we saw in the spring and summer,” said NAHB Chief Economist Robert Dietz. “With a tight inventory of existing homes and promising growth in household formation, we can expect the new home market continue to strengthen at a modest rate in the months ahead.” ..All three HMI components posted gains in October. The component gauging current sales conditions rose five points to 75 and the index charting sales expectations in the next six months increased five points to 78. Meanwhile, the component measuring buyer traffic ticked up a single point to 48. Looking at the three-month moving averages for regional HMI scores, the South rose two points to 68 and the Northeast rose one point to 50. Both the West and Midwest remained unchanged at 77 and 63, respectively.

Americans' Economic Confidence Turns Negative For First Time Since Election --Last week,we noted that, despite storms, wildfires, quakes, higher gas prices, and failed Washington policies, Americans are - according to The University of Michigan - their most confident since January 2004. Additionally, businesses are cock-a-hoop BUT the real economy is seriously lagging...  This all seems a little odd... and sure enough, we get a survey from Gallup that seems to fit reality a lot more accurately... Americans' confidence in the U.S. economy tilted slightly negative last week for the first time in 2017. Gallup's U.S. Economic Confidence Index was -1 for the week ending Oct. 15, down seven points from the previous week. Though a first for 2017, the index has flirted with negative territory at several points in recent months -- with a score of zero in late June, for example. But even with this week's dip into negative territory, confidence remains higher in 2017 than in any year since Gallup began tracking the index in 2008.

Industrial Production Increased 0.3% in September - From the Fed: Industrial production and Capacity Utilization Industrial production rose 0.3 percent in September. The rates of change for July and August were notably revised; the current estimate for July, a decrease of 0.1 percent, was 0.5 percentage point lower than previously reported, while the estimate for August, a decrease of 0.7 percent, was 0.2 percentage point higher than before. The estimates for manufacturing, mining, and utilities were each revised lower in July. The continued effects of Hurricane Harvey and, to a lesser degree, the effects of Hurricane Irma combined to hold down the growth in total production in September by 1/4 percentage point.[1] For the third quarter as a whole, industrial production fell 1.5 percent at an annual rate; excluding the effects of the hurricanes, the index would have risen at least 1/2 percent. Manufacturing output edged up 0.1 percent in September but fell 2.2 percent at an annual rate in the third quarter. The indexes for mining and utilities in September rose 0.4 percent and 1.5 percent, respectively. At 104.6 percent of its 2012 average, total industrial production in September was 1.6 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.2 percentage point in September to 76.0 percent, a rate that is 3.9 percentage points below its long-run (1972–2016) average.This graph shows Capacity Utilization. This series is up 9.4 percentage points from the record low set in June 2009 (the series starts in 1967). Capacity utilization at 76.0% is 3.9% below the average from 1972 to 2015 and below the pre-recession level of 80.8% in December 2007. Industrial Production The second graph shows industrial production since 1967. Industrial production increased in September to 104.6. This is 20.1% above the recession low, and close to the pre-recession peak. The hurricanes are still impacting this data.

NY Fed: Manufacturing Activity "grew at a robust pace" in October - From the NY Fed: Empire State Manufacturing SurveyBusiness activity grew at a robust pace in New York State, according to firms responding to the October 2017 Empire State Manufacturing Survey. The headline general business conditions index climbed six points to 30.2, its highest level in three years. The new orders index came in at 18.0 and the shipments index rose eleven points to 27.5—readings that pointed to ongoing solid gains in orders and shipments. ...The index for number of employees rose five points to 15.6, suggesting that employment expanded more strongly this month, while the average workweek index registered zero, indicating that the average workweek held steady. ...Indexes assessing the six-month outlook suggested that firms continued to be optimistic about future conditions. The index for future business conditions climbed six points to 44.8, and the index for future new orders also came in at 44.8. Employment was expected to increase modestly.   This was well above the consensus forecast of a reading of 20.0.

 Philly Fed Manufacturing Index: Continued Growth in October - The Philly Fed's Manufacturing Business Outlook Survey is a monthly report for the Third Federal Reserve District, covers eastern Pennsylvania, southern New Jersey, and Delaware. While it focuses exclusively on business in this district, this regional survey gives a generally reliable clue as to the direction of the broader Chicago Fed's National Activity Index.  The latest Manufacturing Index came in at 27.9, up from last month's 23.8 and has been positive for fifteen consecutive months. The 3-month moving average came in at 23.5, up from 20.7 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 46.4, a decrease from the previous month's 55.2. Today's 27.9 headline number came in above the 22.0 forecast at Investing.com. Here is the introduction from the survey released today: Manufacturing firms reported continued growth in regional manufacturing in October. The survey’s current indicators for general activity, new orders, shipments, and employment all remained positive this month. Both of the survey’s current labor market indicators showed notable improvement. The indexes assessing the six-month outlook suggest that firms remained optimistic about future growth. (Full Report) The first chart below gives us a look at this diffusion index since 2000, which shows us how it has behaved in proximity to the two 21st century recessions. The red dots show the indicator itself, which is quite noisy, and the 3-month moving average, which is more useful as an indicator of coincident economic activity. We can see periods of contraction in 2011 and 2012, and a shallower contraction in 2013. 2015 saw a contraction with an improvement in 2016. In the next chart, we see the complete series, which dates from May 1960. For proof of the high volatility of the headline indicator, note that the average absolute monthly change across this data series is 7.7.

Weekly Initial Unemployment Claims decrease to 222,000 - The DOL reported: In the week ending October 14, the advance figure for seasonally adjusted initial claims was 222,000, a decrease of 22,000 from the previous week's revised level. This is the lowest level for initial claims since March 31, 1973 when it was 222,000. The previous week's level was revised up by 1,000 from 243,000 to 244,000. The 4-week moving average was 248,250, a decrease of 9,500 from the previous week's revised average. The previous week's average was revised up by 250 from 257,500 to 257,750.  Claims taking procedures continue to be severely disrupted in Puerto Rico and the Virgin Islands as a result of power outages and infrastructure damage caused by Hurricanes Irma and Maria.  The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.

 BLS: Unemployment Rates Lower in 11 states in September; Tennessee and Idaho at New Series Lows --  Note from the BLS on Puerto Rico (due to ongoing catastrophe):  Due to Hurricanes Irma and Maria, Puerto Rico was not able to conduct normal data collection for either its household or establishment surveys for September. Likewise, the U.S. Virgin Islands was not able to administer its establishment survey for September. National estimates do not include Puerto Rico or the U.S. Virgin Islands. From the BLS: Regional and State Employment and Unemployment Summary Unemployment rates were lower in September in 11 states, higher in 4 states, and stable in 35 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Twenty-two states had jobless rate decreases from a year earlier, 1 state had an increase, and 27 states and the District had little or no change. The national unemployment rate declined by 0.2 percentage point from August to 4.2 percent and was 0.7 point lower than in September 2016… .  North Dakota had the lowest unemployment rate in September, 2.4 percent, closely followed by Colorado and Hawaii, 2.5 percent each. The rates in Idaho (2.8 percent) and Tennessee (3.0 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 7.2 percent.  This graph shows the current unemployment rate for each state (red), and the max during the recession (blue). All states are well below the maximum unemployment rate for the recession.The size of the blue bar indicates the amount of improvement.   The yellow squares are the lowest unemployment rate per state since 1976.Thirteen states have reached new all time lows since the end of the 2007 recession.  These thirteen states are: Alabama, Arkansas, California, Colorado, Idaho, Maine, Mississippi, North Dakota, Oregon, Tennessee, Texas, Washington, and Wisconsin. The states are ranked by the highest current unemployment rate. Alaska, at 7.2%, had the highest state unemployment rate.

For Some Reason, No One Wants Entry-Level Retail Jobs - With more commerce shifting online every year and a “retail apocalypse” at hand shuttering stores and malls, you’d think that there would be plenty of folks clamoring for the few retail jobs that remain. But even the stores that are actually looking to hire employees seem to be having trouble finding them, it turns out. Staffing firms have noticed a national trend that there are more low-level jobs and fewer people interested in taking them. Recruiters told Reuters that entry-level employees are looking for flexibility that isn’t always available in retail. They blame ride-hailing services and on-demand delivery apps for taking entry-level workers, since they offer (or at least advertise) higher starting pay and opportunities for tips and bonuses. “There just aren’t enough people who are looking for work,” the chief economist of job site Glassdoor told Reuters. Walmart, the country’s biggest bricks-and-mortar retailer, says that it’s putting money toward higher pay for current employees rather than hiring seasonal help, but in turn is asking employees to do more.

Mass Firings at Tesla Raise Labor Questions – Why would a corporation setting nearly impossible manufacturing goals suddenly fire hundreds of workers at its one and only automobile plant? Could it be because it wanted to exchange vocally pro-union workers with temps that are cheaper to employ and easier to control?  Those are the questions the labor organizing campaign at Tesla is asking, after the company issued a wave of terminations, allegedly linked to performance issues among its 33,000 employees. Several members of the campaign, known as A Fair Future at Tesla, were among those fired, and they all claim to have had excellent performance records. None have been able to obtain the negative reviews that were supposed to be the rationale for their firing. Tesla announced the firings, which are reportedly still continuing, last week. Though no official number of terminations would be given, estimates range from 400 to 1,200. The company did not give advance notice under the WARN Act because, it insisted, they were performance-based terminations, not layoffs.  The terminations struck many as strange. Tesla wants to ramp up production of the highly anticipated Model 3, a more affordable electric vehicle. CEO Elon Musk set a goal of 20,000 completed cars per month by this December. But in the third quarter of 2017 Tesla finished just 260. Musk has cited “production bottlenecks” for the poor output. But firing workers and retraining replacements seems a hindrance to, not an improvement on, this goal. Also, Tesla fashions itself a high-growth company, and mass terminations aren’t something high-growth companies do. Furthermore, fired employees claim they never had the kind of review that would explain the terminations. “I had great performance reviews. I don’t believe I was fired for performance,” said Daniel Grant, a production associate at the plant for three years. Grant claims he was injured on the job on a Friday, and fired the following Monday. “The company didn’t show me or others our most recent reviews when they fired us.” Only when you understand Tesla’s labor issues does a more plausible explanation emerge. For months, Grant and other Tesla workers have spoken out about low pay, hazardous working conditions and a culture of intimidation at the Fremont plant. They have sought to affiliate with the United Auto Workers to win a voice on the job. Pro-union workers criticized the Model 3 ramp-up in August, saying that Tesla skipped test runs for the assembly line and predicting the company would likely institute forced overtime to keep on track. Both issues could lead to more injuries, the workers claimed. Grant believes that vocalizing these types of concerns about safety cost him his job.

A must listen-to podcast from steel country - Jared Bernstein - I’ve previously endorsed the New York Times podcast “The Daily,” to which I’m happily addicted. I found Wednesday’s episode particularly well done and important. It tells the story of Shannon Mulcahy, a steel worker from an Indiana plant (Rexnord) that recently moved much of its production to Mexico. If you’ve followed the issue of manufacturing job losses, which has of course been going on for decades, nothing in the podcast or article will surprise you. But, along with putting a human face in the story, it underscores many key points in the political economy. (Plus, you can listen to it while you’re exercising!)First, many economists label anyone who isn’t college educated as “unskilled.” Decades ago, when I was a little, baby number cruncher, economist Larry Mishel taught me not to do this. I challenge anyone with half-a-brain to continue to do so after listening to Mulcahy’s story.   Second, anyone who’s running for national office needs to listen to this and figure out what you’re going to say to people like Mulcahy, which is anything but easy. Listen to her talk about Obama, for whom she voted and who she still considers a good president. But she voted for Trump, because he, more than other candidates, communicated an understanding of her plight. You can call her naïve for thinking he’d actually help (she’s since seen the light), but that’s not at all how she comes off to me. Third, the reporter, Farah Stockman, makes a mistake that I’d like to correct. It doesn’t take anything away from her excellent reporting, but it warrants a correction. In a discussion about why white working-class people were more pessimistic than blacks, she suggested it might be because economic trends have been more punishing for the white than the black working class. Not so, at least if we compare real hourly wages of non-college educated white and black men. For whites since 1973, their real wage is down 8 percent; for blacks, it is down 10 percent. And, as you see, black male wages are always below those of whites, even within the same education categories.

The Supreme Court has a chance to restore a critical right to women at work - In 2017, the nation has been publically discussing what many women have known privately for years —there is still a vast amount of sexual harassment and gender discrimination in America’s workplaces. The revelations about Harvey Weinstein are the latest example of predatory sexual conduct against women at work, but the list of business leaders engaging in or condoning a culture of sexual harassment at work is staggering:  even the current U.S. president has admitted to sexual assault, and referred to his own daughter in sexually explicit and derogatory terms.  Women are also paid less than men for the same work. The disparities are even worse for women of color. Relative to white non-Hispanic men, white non-Hispanic women are paid only 76 cents on the dollar, but Hispanic women are paid only 68 cents on the dollar and black women are paid only 67 cents on the dollar, even after controlling for education, years of experience and location. The Supreme Court heard oral arguments on October 2 in Murphy Oil v. NLRB, a case that will have significant consequences for women’s abilities to fight back against discrimination and sexual harassment on the job. In this case, the Court will decide whether workers should have to sign away their rights to take their employers to court, just to obtain, or keep, their jobs. Forced arbitration is a tool employers use to prevent their employees from seeking justice in court when disputes arise in the workplace. Arbitration is a form of private dispute resolution in which the employer and employees submit their dispute to a professional arbitrator (usually a private lawyer), who will hear both sides’ positions and decide who wins. The arbitrator’s decision is legally binding and generally non-appealable in court—meaning, it’s final. And usually, the arbitrator deciding the dispute is chosen by the employer. Since these clauses are buried in the fine print of employment contracts, it’s estimated that at least 60 million workers in America are subject to forced arbitration and may not even be aware of it. Because of a clause in the contract they signed to get a job, workers must accept a process they often don’t understand, where the costs of seeking justice might be far higher, even as their chances of winning or obtaining a just award of damages are reduced dramatically. That’s right—employers and employees have to pay for this service. Arbitration is like a private, for-profit court system, where the employer usually gets to pick the judge.

More Americans Are Getting Their Electricity Cut Off -- More than 900,000 homes went dark in Texas last summer because of unpaid bills, almost triple the number 10 years ago. In California last year, it was 714,000, the most on record. The tally across the country is in the millions, a sign of the economic stress that lingers after the Great Recession.Utilities are disconnecting more households as President Donald Trump moved to end $3.4 billion in federal energy-bill help for the poorest Americans. Congress voted to reinstate the funding, but the administration has yet to release the money.“It’s indicative of an economy that’s still recovering,” said Katrina Metzler, executive director of the National Energy and Utility Affordability Coalition in Washington. “Underemployment is still common, and many families live paycheck to paycheck.” Most customers aren’t denied electricity for long. Utilities commonly work out payment plans or help customers get financial aid within a few days. About 10 percent to 15 percent of people who are disconnected never get reconnected, according to the Utility Reform Network, a San Francisco-based consumer group also known as TURN. While the U.S. jobless rate fell to a 16-year low of 4.2 percent last month — compared with 10 percent in 2009 — many Americans are struggling. Forty-four percent of adults told the Federal Reserve Board of Governors last year that they wouldn’t be able to cover a surprise $400 expense or would have to sell something or borrow to raise the money. The Trump administration’s 2018 fiscal-year budget scrapped the Low Income Home Energy Assistance Program, or LIHEAP, because it’s “no longer a necessity” and subject to fraud. Mick Mulvaney, director of the U.S. Office of Management and Budget, testified to Congress in May that 11,000 dead people were used as applicants to receive the LIHEAP benefit, a statistic cited in a 2010 General Accounting Office report. About 2.9 million households were disconnected for nonpayment last year in the 18 states surveyed by TURN, the San Francisco group.

  Smartphones Are Killing Americans, But Nobody’s Counting --  Over the past two years, after decades of declining deaths on the road, U.S. traffic fatalities surged by 14.4 percent. In 2016 alone, more than 100 people died every day in or near vehicles in America, the first time the country has passed that grim toll in a decade. Regulators, meanwhile, still have no good idea why crash-related deaths are spiking: People are driving longer distances but not tremendously so; total miles were up just 2.2 percent last year. Collectively, we seemed to be speeding and drinking a little more, but not much more than usual. Together, experts say these upticks don’t explain the surge in road deaths.There are however three big clues, and they don’t rest along the highway. One, as you may have guessed, is the substantial increase in smartphone use by U.S. drivers as they drive. From 2014 to 2016, the share of Americans who owned an iPhone, Android phone, or something comparable rose from 75 percent to 81 percent.  The second is the changing way in which Americans use their phones while they drive. These days, we’re pretty much done talking. Texting, Twitter, Facebook, and Instagram are the order of the day—all activities that require far more attention than simply holding a gadget to your ear or responding to a disembodied voice. By 2015, almost 70 percent of Americans were using their phones to share photos and follow news events via social media. In just two additional years, that figure has jumped to 80 percent. Finally, the increase in fatalities has been largely among bicyclists, motorcyclists, and pedestrians—all of whom are easier to miss from the driver’s seat than, say, a 4,000-pound SUV—especially if you’re glancing up from your phone rather than concentrating on the road. Last year, 5,987 pedestrians were killed by cars in the U.S., almost 1,100 more than in 2014—that’s a 22 percent increase in just two years. 

No Forfeiture-Database Backup With Millions on the Line, NYPD Admits — New York City is one power surge away from losing all of the data police have on millions of dollars in unclaimed forfeitures, a city attorney admitted to a flabbergasted judge on Tuesday.“That’s insane,”  Manhattan Supreme Court Judge Arlene Bluth said repeatedly from the bench.This morning’s revelation stems from a request filed in 2014 by the nonprofit group Bronx Defenders under New York’s Freedom of Information Law.In the previous fiscal year, Bronx Defenders noted, the NYPD reported seizing more than $6 million in cash and property. Intermingled with the open forfeitures from past years, this meant that the NYPD a balance sheet of more than $68 million in seized currency in any given month in 2013.Bronx Defenders wants to study department records on the forfeitures, but city attorney Neil Giovanatti has argued that the NYPD lacks the technical capability to extract information from its forfeiture database.Judge Bluth appeared gobsmacked Tuesday to hear about the precarious position of data in the police department’s PETS database, short for Property and Evidence Tracking System.  “Do you want the Daily News to be reporting that you have no copy of the data?” Bluth asked Giovanatti. “That deserves an exposé in the New York Times,” the judge added later.

A Philando Castile Memorial Fund Has Wiped Out All Student Lunch Debt in St. Paul - A memorial fund set up to honor the late Philando Castile has raised enough money to clear a year’s worth of student lunch debt across St. Paul, MN. Castile, whose killing by police officer Jeronimo Yanez sparked nationwide outrage, worked as a nutrition services supervisor at the J.J. Hill Montessori school in St. Paul. The Philando Feeds The Children Fundwas started by Pam Fergus, a local community college professor who was inspired by stories of Castile having helped pay for student’s lunches with his own money. “We just had this little idea that we were going to help do Mr. Phil’s job and make sure you guys have good lunch to eat every day,” Fergus told students, according to a WCCO report. In total, more than 2000 donors helped the fund raise over $72,000—well above the initial $5,000 goal—which was presented to officials at J.J. Hill on Friday by Castile’s mother Valerie. “We as a community have to work together in order for things to work,” Valerie told WCCO. “This would’ve meant everything to him.” Castile was shot and killed by Yanez while driving with his girlfriend and her daughter in the Twin Cities suburb of Falcon Heights. His death sparked waves of protests across St. Paul, which were renewed after Yanez was found not guilty for Castile’s death earlier this summer.

Critics of New Mexico science standards organize protests  — About 30 critics of New Mexico's proposed changes to public school science standards gathered Friday to protest the deletion or omission of references to global warming and evolution.The teach-in style demonstration outside state Public Education Department offices included brief lectures from scientific experts about advances in the understanding of human evolution, geology and climate change — intermixed with criticism of proposed standards that substitute the words "global warming" with "temperature fluctuations." A third grade student spoke on behalf of an after-school program for the study of global warming.The Public Education Department has suggested several additions and deletions to a set of science standards developed by a consortium of states and the National Academy of Sciences. State Education Secretary Christopher Ruszkowski has said the department is open to feedback and the proposed changes are not set in stone.The edited standards have generated opposition from school boards, scientific teaching associations and leading local scientists.Nathan Urban, a physicist at Los Alamos National Laboratory, said the human causes of global warming have been firmly established and that students deserve to understand the underlying science. "Honestly I don't think anybody is going to be quizzing people on climate science on a job" interview," he told the crowd on Friday. "It is important for students to act as informed citizens because climate change will affect everyone and there need to be policy choices."

Facing Public Outcry, New Mexico Restores Evolution and Global Warming to Science Standards - New Mexico’s public education agency announced late Tuesday that it would restore references to evolution, global warming, and the age of the Earth that had been stripped out of the state’s proposed science education standards. The reversal comes after an outcry by teachers, scientists, students, and others—the culmination of which was a day-long public hearing on Monday in which scores of people spoke out against the draft standards. “Similar to the process in other states, our goal in holding a public hearing is to ensure all those who wanted to discuss these proposed standards would be heard,” Christopher Ruszkowski, New Mexico’s secretary of education, said in a Tuesday statement. “We have listened to the thoughtful input received and will incorporate many of the suggestions into the New Mexico Standards.” The whole saga began last month when, as Mother Jones first reported, the state’s Public Education Department unveiled a set of draft standards for science, technology, engineering, and math (STEM) education spanning grades K-12. New Mexico’s proposal largely followed the Next Generation Science Standards, a highly regarded model for teaching STEM that has been adopted by 18 states and the District of Columbia. But the state also made several baffling changes of its own, as we explained: [T]he draft released by New Mexico’s education officials changes the language of a number of NGSS guidelines, downplaying the rise in global temperatures, striking references to human activity as the primary cause of climate change, and cutting one mention of evolution while weakening others. The standards would even remove a reference to the scientifically agreed-upon age of the Earth—nearly 4.6 billion years. (Young Earth creationists use various passages in the Bible to argue that the planet is only a few thousand years old.)

Milton Friedman & Conservatives Are Wrong In Education -- Once upon a time, some conservatives used to call for the abolition of the U.S. Department of Education. Lamentably, conservatives today celebrate when a “free-market advocate” like multimillionaire Betsy DeVos is appointed U.S. Secretary of Education, and they get terribly excited when she speaks at conservative conferences. Meanwhile, even while conservatives continue to pronounce their allegiance to their favorite mantra — “free enterprise, private property, limited government” — they continue to embrace not only public schooling itself but also their favorite public-schooling fix-it program, school vouchers.Over the years, conservatives have developed various labels for their voucher program: a “free-market approach to education,” “free enterprise in education,” or “school choice.” They have chosen those labels to make themselves and their supporters feel good about supporting vouchers.But the labeling has always been false and fraudulent. Vouchers are nothing more than a socialist program, no different in principle from public schooling itself.The term “free enterprise” means a system in which a private enterprise is free of government control or interference. That’s what distinguishes it from a socialist system, which connotes government control and interference with the enterprise.A voucher system entails the government taxing people and then using the money to provide vouchers to people, which they can then redeem at government-approved private schools. Does that sound like a system that is free from government control or interference?In reality, it’s no different in principle from food stamps, farm subsidies, Social Security, or any other welfare-state program. The government is using force to take money from Peter and giving it to Paul. That’s not “free enterprise.” That’s the opposite of free enterprise.

Higher Education's Biggest Scam Is Legacy Admissions Policies - As freshmen flood college campuses across the U.S. this year, Harvard University has trumpeted the fact that its incoming first-year class of 2021 is majority non-white. But it left something out. In recent years, about as many Harvard students have come from the top 1 percent of families by income as the bottom 60 percent, according to a 2017 study. More have come from the top 10 percent by income than the rest of the population. Multi-racial aristocracy is better than all-white aristocracy — but it is still aristocracy. Part of the problem is that Harvard gives admissions preference based on lineage — providing a significant boost based not on merit but whether or not one’s relatives are a member of the Harvard club. In fact, a recent Harvard Crimson survey of the 2021 class found that an astounding 29 percent of students — nearly a third — had a relation (parent, grandparent, sibling, aunt, uncle etc.) who attended Harvard. This is almost double the proportion in the survey (16.3 percent) who said their parents lack a four-year college degree. To put this in context, many more Harvard students have a Harvard relative than are first-generation college students, even though there are 382 times as many American adults age 25 and older without a college degree (143 million) as there are adults in the world with a Harvard degree (375,000). And it’s not just Harvard. A 2010 study of the top 100 national universities, as ranked by U.S. News & World Report, found that about three quarters provide a preference based on who your daddy or mommy is.  Elite universities offer several excuses for legacy preferences. None ultimately hold up.

The Decline of the Midwest’s Public Universities Threatens to Wreck Its Most Vibrant Economies -- Federal funding for basic research—more than half of it conducted on university campuses like this one—has effectively declined since 2008, failing to keep pace with inflation. This is before taking into account Trump administration proposals to slash the National Science Foundation (NSF) and National Institutes of Health (NIH) budgets by billions of dollars more.Trump’s cuts would affect all research universities, but not equally. The problem is more pronounced at public universities than private ones, and especially at public institutions in the Midwest, which have historically conducted some of the nation’s most important research. These schools are desperately needed to diversify economies that rely disproportionately on manufacturing and agriculture and lack the wealthy private institutions that fuel the knowledge industries found in Silicon Valley or along Boston’s 128/I-95 corridor. Yet many flagship Midwestern research universities are being weakened by deep state budget cuts. Threats to pensions (in Illinois) and tenure (in Wisconsin) portend an exodus of faculty and their all-important research funding, and have already resulted in a frenzy of poaching by better-funded and higher-paying private institutions, industry, and international competitors.  While private institutions are better shielded from funding cuts by huge endowments, Midwestern public universities have much thinner buffers. The endowments of the universities of Iowa, Wisconsin, and Illinois and Ohio State, which together enroll nearly 190,000 students, add up to about $11 billion—less than a third of Harvard’s $37.6 billion. Together, Harvard, MIT, and Stanford, which enroll about 50,000 students combined, have more than $73 billion in the bank to help during lean times. They also have robust revenues from high tuitions, wealthy alumni donors, strong credit, and other support to fall back on. Compare that to the public university system in Illinois, which has cut its higher-education budget so deeply that Moody’s downgraded seven universities, including five to junk-bond status.

University of Chicago Graduate Students Vote to Unionize -- University of Chicago graduate students have voted to unionize by an overwhelming margin.1,103 “yes” votes were counted, exceeding the combined 479 counted “no” votes and the 149 votes that were challenged. The two-day election closed Wednesday at 9 p.m. Votes were counted at the NLRB regional headquarters downtown Thursday. The University is one of a dozen schools to host graduate student unionization votes since an NLRB decision August before last reopened the possibility. Several of these universities have continued legal challenges and refused to bargain after successful union votes. The University had filed to block this week’s vote, in part because a new Trump-era majority on the NLRB might again move to block graduate student unionization.The Maroon spoke to graduate students at the polls Tuesday and Wednesday.A pro-unionization graduate student described how she viewed the stakes: “A lot of us are living in almost poverty conditions; we’re really overworked, the school’s not very supportive—it’s been great to have this group of grad students coming together.” The administration argued for months that a union would not be in the best interests of graduate students. An e-mail from Executive Vice Provost David Nirenberg on Sunday cautioned that unionization would introduce a “third party” that could interfere with graduate students’ relationships with the University.

New Federal Data Show a Student Loan Crisis for African American Borrowers - Two weeks ago, the U.S. Department of Education provided the first-ever look at long-term outcomes for student loan borrowers, including results by race and ethnicity.The data show that 12 years after entering college, the typical African American* student who started in the 2003-04 school year and took on debt for their undergraduate education owed more on their federal student loans than they originally borrowed. This holds true even for students who finished a bachelor’s degree at a public institution. One reason they might not be paying down their loans? Nearly half of African American borrowers defaulted, including 75 percent of those who dropped out of for-profit colleges.These results show that the U.S. Department of Education cannot ignore the interaction of race and student loans. Traditionally, the agency has not collected any data on the race of borrowers, except in irregular sample surveys conducted by its quasi-independent statistical arm. Unfortunately, not collecting this information has allowed for the disparate outcomes by race to go unnoticed.Seeing even African American students who earned a bachelor’s degree struggle also reinforces that we cannot pretend the federal student loan program exists in a vacuum. The median African American household has just $1,700 in accumulated wealth. Racial discrimination in hiring has not improved over the past quarter century. Perhaps it’s too much to expect student loans and postsecondary education to solve these structural problems, but sending African American students into an inequitable adulthood with large debts from college can put them even further behind than they already start. These are not problems that will be fixed easily. But the first step is conducting a full analysis of the problem. The Department of Education must start collecting data on the race and ethnicity of its borrowers. It should carefully review outcomes such as completion, repayment, and default by race and ethnicity within institutions to identify colleges with sizable gaps in results. Institutions with particularly awful results for racial and ethnic subgroups—such as default rates of more than 75 percent—should be further reviewed to ensure that they are not engaging in intentional discrimination. This could include recruiting people who they know will struggle to repay just so the institution can pocket students’ federal financial aid dollars or disproportionately directing financial aid to white students.

Student loans take a mental toll on young people - For many recent graduates, student loan debt is literally giving them nightmares.Over the last decade, college-loan balances in the United States have jumped to an all-time high of $1.4 trillion, according to a recent report by Experian. The average outstanding balance is $34,144, up 62 percent over the last 10 years.Those student loan payments have created an "unprecedented financial challenge" for borrowers, according to a new report by Gradifi, a Boston-based start-up that provides a student loan benefit platform for employers.  To that point, 80 percent of working professionals with student loan debt said it is a source of "significant" or "very significant" stress, according to the survey of more than 3,000 Americans conducted online in May. Many millennials said that student loans have impacted their ability to go on vacation, buy a car, pay rent or get necessities like food and clothing. And then there are the long-term consequences: From buying a home to getting married and even having children, an increasing number of young adults are putting off major milestones because of that one large liability.  "People with student loan debt are carrying a serious financial and emotional burden," said Tim DeMello, Gradifi's founder and CEO. "The pressure of making big monthly loan payments is taking its toll in terms of stress, housing affordability and quality of life." "You have some students with $400, $600, $800 or even $1,200 a month in student loan payments," DeMello said.

2 insurers raising premiums in health insurance marketplace (AP) — Two insurers will be charging higher premiums for New Jerseyans who buy coverage in the federal health insurance marketplace created by the Affordable Care Act. Horizon Blue Cross Blue Shield of New Jersey customers will see their rates rise by an average of 24 percent next year, while AmeriHealth of New Jersey policy holders will pay an average of 17 percent more. The state-approved rate increases were made public Tuesday by the Department of Banking and Insurance. Horizon and AmeriHealth are two of three insurers in New Jersey participating in the marketplace for 2018. The other is New York-based Oscar Health, which is returning after a year’s absence.  Along with increasing its rates, AmeriHealth is also expanding its operations and will now serve 13 of the state’s 21 counties.

Health insurance hikes could exceed 50 percent -  daltondailycitizen.com: — Some Georgians will pay even steeper premium hikes for health insurance next year if Congress doesn’t renew cost-sharing reduction payments that President Donald Trump announced last week will soon end. About 42,000 of the nearly half million people enrolled under the Affordable Care Act in Georgia will likely be affected, according to Georgians for a Healthy Future, a patient advocacy group. These are consumers who have purchased health care plans on the state’s federally run marketplace but who don’t qualify for aid. “They’re going to be the people who really feel the brunt of this decision,” said Laura Colbert, the group’s executive director. These individuals will face rate increases that exceed 50 percent, according to proposed rate increases Georgia’s four insurers filed with the state earlier this fall. The highest, proposed by BlueCross BlueShield of Georgia, is 57.5 percent. With the cost-sharing reduction payments, which are made to the insurers, the rate increase would have been 40.6 percent. For Kaiser, the proposed rate increase jumps 26 percentage points without the federal payments. “The premium hikes are even higher because insurers are not receiving those payments now,” said Laura Harker, a health policy analyst with the Georgia Budget and Policy Institute.

Pa. insurance department says Obamacare rates to rise 30.6 percent - Pennsylvania insurers offering Obamacare plans will need to raise premiums an average 30.6 percent in 2018, nearly four times the increase that had been anticipated before President Donald Trump scrapped government subsidies five days ago.The new numbers come from the state Insurance Department, which on Monday released the rate hikes that it had approved after calculating the impact of the president’s move.Earlier this year, the Pennsylvania Insurance Department had projected an average 7.6 percent rate hike for individual health insurance plans purchased through the Affordable Care Act’s government exchange in this state.Acting Commissioner Jessica Altman said she was disappointed by the news. “It is with great regret that I must announce approved rates that are substantially higher than what companies initially requested,” Ms. Altman said in a prepared statement.  “This is not the situation that I hoped we would be in, but due to President Trump’s refusal to make cost-sharing reduction payments for 2018 and Congress’ inaction to appropriate funds, it is the reality that state regulators must face and the reason rate increases will be higher than they should be across the country.”

 Steep Premiums Challenge People Who Buy Health Insurance Without Subsidies -- Millions of people have gained health insurance because of the federal health law. Millions more have seen their existing coverage improved. But one slice of the population, which includes Melquist and Goodrich, is unquestionably worse off. They are healthy people who buy their own coverage but earn too much to qualify for help paying their premiums. And the premium hikes that are being announced as enrollment looms for next year — in some states, increases topping 50 percent — will make their situations more miserable. Exactly how big is this group? According to Mark Farrah Associates, a health care analysis firm, as of 2017, there were 17.6 million people in the individual market, 5.4 million of whom bought policies outside the health exchanges, where premium help is not available. Combine that with the percentage of people who bought insurance on the exchanges but earned too much (more than four times the federal poverty level, or about $48,000 for an individual) to get premium subsidies, and the estimate is 7.5 million, or 43 percent of the total individual market purchasers, according to insurance industry consultant Robert Laszewski.Who are these people? They're early retirees," says Laszewski. "They're people working part time who have substantial outside income. They're people who are self-employed of any age, people who are small employers." Melquist is one of those early retirees. He and his wife are both 59. He worked in the defense industry and retired at the end of 2016. He always planned to retire at age 55 but ended up working longer, in part because he knew health insurance costs were rising. When he did retire and sought to purchase coverage for himself and his wife, he says, "I was shocked to find out how bad it actually was." For a bronze-level plan with a health savings account, Melquist says, "we pay $15,000 a year [in premiums] and the first $6,550 [for health care expenses] for each of us comes out of our pocket. So basically you could be looking at $30,000 out of pocket before anything gets covered."

New Test for Obamacare, Iowa Seeks to Abandon Marketplace - With efforts to repeal the Affordable Care Act dead in Congress for now, a critical test for the law’s future is playing out in one small, conservative-leaning state.  Iowa is anxiously waiting for the Trump administration to rule on a request that is loaded with implications for the law’s survival. If approved by the federal Centers for Medicare and Medicaid Services, it would allow the state to jettison some of Obamacare’s main features next year — its federally run insurance marketplace, its system for providing subsidies, its focus on helping poorer people afford insurance and medical care — and could open the door for other states to do the same.Iowa’s Republican leaders think their plan would save the state’s individual insurance market by making premiums cheaper for everyone. But critics say the lower prices come at the expense of much higher deductibles for many with modest incomes, and that approval of the plan would amount to another way of undermining the law.Iowa calls its request a stopgap plan that would allow the state to opt out of the federal health insurance marketplace, HealthCare.gov, for 2018 and create a state-run system that its insurance commissioner says would lower premiums for the 72,000 Iowans who currently have Obamacare health plans, including 28,000 who earn too much to get subsidies to help with the cost.  But the cheaper premiums would come with a big trade-off: higher out-of-pocket costs. The only option for customers would be a plan with deductibles of $7,350 for a single person and $14,700 for a family. The proposal would also reallocate millions of federal dollars that the health law dedicates to lowering costs for people with modest incomes and use the money for premium assistance to those with higher incomes, no matter how much money they make. The individual insurance market is particularly fragile in Iowa, partly because the state has allowed tens of thousands of people to keep old plans that do not meet the health law’s standards. Aetna and Wellmark Blue Cross & Blue Shield, the state’s most popular insurer, are both withdrawing at the end of the year. The only insurer planning to remain, Medica, is seeking premium increases that average 56 percent, blaming Mr. Trump’s ongoing threats to stop paying subsidies known as cost-sharing reductions that lower many people’s deductibles and other out-of-pocket costs.

 Gallup: Rate of American adults without health insurance rises -- The percentage of American adults without health insurance rose to 12.3 percent in the third quarter, a Gallup survey released Friday indicated. The figure is 0.6 percent higher than it was during the second quarter. The rate of uninsured American adults increased 1.4 percent since the end of 2016, meaning about 3.5 million people are now without health insurance. The uninsured rate: is below the peak of 18 percent in the third quarter of 2013, prior to insurance access through the Affordable Care Act.A Gallup statement suggested that the end of some insurance companies' involvement in health care exchanges, a rise in premiums due to the lack of provider competition and uncertainty surrounding U.S. healthcare law may be contributing to the increase in the rate of uninsured American adults. President Donald Trump canceled cost-sharing payments that subsidize insurance plans for low-income Americans on Oct. 13. He also intervened to deny waivers to certain ACA rules in Iowa and his administration missed a deadline to apply similar waivers in Oklahoma. Iowa faces a 2018 premium rate hike of 56 percent, its two senators said. Oklahoma's health commissioner predicted a premium increase of 30 percent next year. On Wednesday, Trump said he is opposed to a new bipartisan congressional plan to maintain subsidies for ACA healthcare exchanges. The Gallup survey was based on over 45,000 interviews with U.S. adults aged 18 and older from July 1 to Sept. 30, conducted as part of the Gallup-Sharecare Well-Being Index. Respondents were asked if they have health care insurance.

Nursing shortage strains U.S. hospitals  (Reuters) - A shortage of nurses at U.S. hospitals hit West Virginia’s Charleston Area Medical Center at the worst possible time. The non-profit healthcare system is one of the state’s largest employers and sits in the heart of economically depressed coal country. It faces a $40 million deficit this year as it struggles with fewer privately insured patients, cuts in government reimbursement and higher labor costs to attract a shrinking pool of nurses. To keep its operations intact, Charleston Medical is spending this year $12 million on visiting or “travel” nurses, twice as much as three years ago. It had no need for travel nurses a decade ago. “I’ve been a nurse 40 years, and the shortage is the worst I’ve ever seen it,” said Ron Moore, who retired in October from his position as vice president and chief nursing officer for the center. Charleston Area Medical’s incentives include tuition reimbursement for nursing students who commit to work at the hospital for two years. “It’s better to pay a traveler than to shut a bed,” he said. Hospitals nationwide face tough choices when it comes to filling nursing jobs. They are paying billions of dollars collectively to recruit and retain nurses rather than risk patient safety or closing down departments, according to Reuters interviews with more than 20 hospitals, including some of the largest U.S. chains. In addition to higher salaries, retention and signing bonuses, they now offer perks such as student loan repayment, free housing and career mentoring, and rely more on foreign or temporary nurses to fill the gaps. The cost nationwide for travel nurses alone nearly doubled over three years to $4.8 billion in 2017, according to Staffing Industry Analysts, a global advisor on workforce issues. The burden falls disproportionately on hospitals serving rural communities, many of them already straining under heavy debt like the Charleston Area Medical Center. 

People With HIV Should Be Quarantined, Says Georgia Lawmaker and Wife of Tom Price - People with HIV should be quarantined, and the U.S. would be safer if they “died more readily,” according to Betty Price, a Republican state representative and wife of former Health Secretary Tom Price. The Georgia-state lawmaker and former anesthesiologist, who now represents people who live in the northern Atlanta area, was asked in a hearing what the U.S. is “legally able to do” to limit the spread of HIV throughout the state.  “It’s almost frightening, the number of people who are living that are carriers with the potential to spread,” Price said during a Georgia House of Representatives committee meeting on access to health care in the state (around the one-hour mark of the video). “Whereas in the past, they died more readily, and at that point they’re not posing a risk. So we’ve got a huge population posing a risk if they’re not in treatment.”  “I don’t want to say the quarantine word—but I guess I just said it,” Price said to Dr. Pascale Wortley, director of the Georgia Department of Public Health’s HIV epidemiology section, according to STAT News.“Is there an ability, since I would guess that public dollars are expended heavily in prophylaxis and treatment of this condition, so we have a public interest in curtailing the spread. … Are there any methods legally that we could do that would curtail the spread?” In 2014, about 50,000 people were diagnosed with HIV in the state—the second-highest rate of new diagnoses among all states the following year, according to the Centers for Disease Control and Prevention. Price’s “incredibly disturbing” comments were condemned for perpetuating “the stigma that still exists around HIV,” Jeff Graham, executive director of Georgia Equality.

The opioid epidemic: How Congress and drug company lobbyists worked to neutralize the DEA -WaPo - In April 2016, at the height of the deadliest drug epidemic in U.S. history, Congress effectively stripped the Drug Enforcement Administration of its most potent weapon against large drug companies suspected of spilling prescription narcotics onto the nation’s streets. By then, the opioid war had claimed 200,000 lives, more than three times the number of U.S. military deaths in the Vietnam War. Overdose deaths continue to rise. There is no end in sight. A handful of members of Congress, allied with the nation’s major drug distributors, prevailed upon the DEA and the Justice Department to agree to a more industry-friendly law, undermining efforts to stanch the flow of pain pills, according to an investigation by The Washington Post and “60 Minutes.” The DEA had opposed the effort for years. The law was the crowning achievement of a multifaceted campaign by the drug industry to weaken aggressive DEA enforcement efforts against drug distribution companies that were supplying corrupt doctors and pharmacists who peddled narcotics to the black market. The industry worked behind the scenes with lobbyists and key members of Congress, pouring more than a million dollars into their election campaigns. The chief advocate of the law that hobbled the DEA was Rep. Tom Marino, a Pennsylvania Republican who is now President Trump’s nominee to become the nation’s next drug czar. Marino spent years trying to move the law through Congress. It passed after Sen. Orrin G. Hatch Sen. Orrin Hatch (R-Utah)negotiated a final version with the DEA. The new law makes it virtually impossible for the DEA to freeze suspicious narcotic shipments from the companies, according to internal agency and Justice Department documents and an independent assessment by the DEA’s chief administrative law judge in a soon-to-be-published law review article. That powerful tool had allowed the agency to immediately prevent drugs from reaching the street.  

Engulfed in Opioid Deaths, Ohio Turns to Science -- Ohio holds a singular place in America's opioid scourge. In 2014 it suffered more overdose deaths than any other state. Since then such fatalities have only swelled, with 4,050 in 2016—a 32.8 percent increase from the previous year, according to health officials. Fueled by prescription painkillers as well as heroin and fentanyl, the epidemic has overrun city morgues, forced thousands of children into foster care and turned Montgomery County, which encompasses Dayton, into the overdose capital of the U.S.  Last year Ohio poured nearly $1 billion into fighting the crisis through prevention, treatment and law enforcement. But the state keeps surpassing its own grim statistics. Exasperated, local authorities have begun confronting the disaster from another angle—technology. In May the state signed off on Gov. John Kasich's request to invest $20 million in accelerating high-tech scientific measures to address the situation. Universities, hospitals and medical device manufacturers are now vying for grant money with proposals that include implantable therapeutic meshes and systems that deliver electric nerve jolts.

Another outbreak related to the nation’s opioid crisis: hepatitis C — The nation’s opioid epidemic has unleashed a secondary outbreak: the rampant spread of hepatitis C. New cases of the liver disease have nearly tripled nationwide in just a few years, driven largely by the use of needles among drug users in their 20s and 30s, spawning a new generation of hepatitis C patients. Because a treatment that cures the disease costs tens of thousands of dollars, is limited by insurance and Medicaid, and is mostly unavailable to people who are still using illicit drugs, there probably will be financial and public health ramifications for decades to come. Here in West Virginia, which has the nation’s highest rates of overdose deaths and new hepatitis C and hepatitis B infections, public-health officials are attempting to identify as many new hepatitis carriers as possible — and are girding for decades of repercussions. “If we don’t cure a significant number of the people who are injecting, in 20 years from now, the hospitals in this part of the world will be flooded with these people with end-stage liver disease, which has no cure,” said Judith Feinberg, a professor of behavioral medicine and psychiatry at the West Virginia University School of Medicine. “I can see it coming at me like the headlights of a train. Just coming, coming, coming, and I’m thinking, ‘Doesn’t anybody want to jump out of the way?’” The number of new confirmed hepatitis C cases nationwide rose from 853 in 2010 to 2,436 in 2015, according to the Centers for Disease Control — a 15-year high. But tens of thousands more are believed to have contracted the disease without knowing it.   In Massachusetts, officials estimate 300,000 people have the disease — and just half have received a formal diagnosis. Testing for the disease is not widespread, and because it’s possible to not display any symptoms, hepatitis C often goes undetected for decades until manifesting in severe, life-threatening liver disease. “It’s the unidentified that scare me,” said Rahul Gupta, West Virginia’s health commissioner. “What I’m afraid of is that there are people out there not in the medical health care system and they’re spreading the disease.”

 Insurance plays significant role in breast cancer disparities -Differences in insurance account for a substantial proportion of the excess risk of death from breast cancer faced by black women, according to a new study. The study, appearing in Journal of Clinical Oncology, concludes that equalizing access to care could address much of the existing black/white disparity in breast cancer mortality.Breast cancer mortality was higher in white women than in black women until the 1980s, when improvements in early detection and treatment began to create a gap between black and white women. Whites benefited more from these improvements, and since then, the black-white mortality gap has continued to widen. In 2014, the most recent year for which data is available, breast cancer mortality rates were 41% higher in black women than white women.For the new study, investigators from the American Cancer Society, Emory University, and Dana-Farber Cancer Institute examined the contributions of demographics, other medical conditions (comorbidities), insurance, tumor characteristics, and treatment to black-white mortality disparities among more than 550,000 nonelderly women diagnosed with early stage breast cancer. The data come from the National Cancer Database, a national hospital-based cancer registry cosponsored by the Commission on Cancer (CoC) of the American College of Surgeons and the American Cancer Society. Compared with white women, black women were more likely to be uninsured or have Medicaid insurance (22.7% v 8.4%) and were more likely to have tumors that were larger, higher grade, and hormone receptor negative. Hormone receptor negative cancers have fewer treatment options and tend to grow faster than hormone receptor-positive cancers. Among women with hormone receptor-positive tumors, the risk of death in blacks was twice that of whites (100% higher).

Genes for Skin Color Rebut Dated Notions of Race, Researchers Say - For centuries, skin color has held powerful social meaning — a defining characteristic of race, and a starting point for racism.  “If you ask somebody on the street, ‘What are the main differences between races?,’ they’re going to say skin color,” said Sarah A. Tishkoff, a geneticist at the University of Pennsylvania. On Thursday, Dr. Tishkoff and her colleagues showed this to be a profound error. In the journal Science, the researchers published the first large-scale study of the genetics of skin color in Africans.The researchers pinpointed eight genetic variants in four narrow regions of the human genome that strongly influence pigmentation — some making skin darker, and others making it lighter.These genes are shared across the globe, it turns out; one of them, for example, lightens skin in both Europeans and hunter-gatherers in Botswana. The gene variants were present in humanity’s distant ancestors, even before our species evolved in Africa 300,000 years ago. The widespread distribution of these genes and their persistence over millenniums show that the old color lines are essentially meaningless, the scientists said. The research “dispels a biological concept of race,” Dr. Tishkoff said. The eight gene variants that Dr. Tishkoff and her colleagues discovered in Africans turned out to be present in many populations outside the continent. By comparing the DNA of these people, the researchers were able to estimate how long ago the genes appeared.They turned out to be immensely old. A variant for light skin — found in both Europeans and the San hunter-gatherers of Botswana — arose roughly 900,000 years ago, for example. Even before there were Homo sapiens, then, our distant forebears had a mix of genes for light and dark skin. Some populations may have been dark-skinned and others light-skinned; or maybe they were all the same color, produced by a blend of variants.

State Of Emergency Declared As California's Hepatitis A Outbreak Accelerates --A month after San Diego began street-bleaching in an effort to control its spread, Governor Jerry Brown has declared a state of emergency as California's Hepatitis A outbreak has "gone statewide," with dozens dead and hundreds hospitalized. In order to combat the disease, the southern California city of San Diego has literally begun spraying the streets with bleach. An article by NPR said that the Hepatitis A was first identified in the area in early March, according to the county, and declared a public health emergency earlier this month. Nearly 400 people have been infected with the disease. The majority of those sickened by this viral infection outbreak have been homeless people. A letter from San Diego County health officials stated that hepatitis A is being spread through contact with a “fecally contaminated environment” as well as person-to-person transmission. A big part of the problem is an apparent lack of public restrooms in areas where the homeless population congregates.Hepatitis A is a highly contagious viral infection, which can prove fatal. According to the Centers for Disease Control, the virus attacks the liver. Adequate personal hygiene and sanitation can help prevent the spread of the virus.But, as we pointed out earlier this week, the hepatitis A outbreak that started in San Diego is now on the verge of reaching statewide epidemic status, as cases have spread through homeless tent cities all the way north to Sacramento. At least 569 people have been infected and 17 have died of the virus since November in San Diego, Santa Cruz and Los Angeles counties,where local outbreaks have been declared.

57 Dead, Over 680 Infected As Madagascar Plague Outbreak Escalates -- An outbreak of the plague in Madagascar is spreading at an unprecedented rate.  With the ease of spreading the plague, the likelihood that this disease will move to other more densely populated regions of the planet has become a huge concern for many. So far, the plague has claimed 57 lives and infected more than 680 others. These figures are from October 12, however, and the disease is spreading rapidly. An estimated 329 of these cases and 25 of the deaths were in the capital city of Antananarivo. Of the 684 cases reported as of October 12, 474 were the pneumonic plague, 156 bubonic and 1 septicemic plague. A further 54 were unspecified, according to the World Health Organization. Of Madagascar’s 114 districts, 35 have reported cases of plague, including at least 10 cities. Plague is caused by infection with the bacterium Yersinia pestis and is typically spread through the bite of infected fleas, frequently carried by rats. The bacteria will eventually end up causing the often fatal plague. Symptoms can include painful, swollen lymph nodes, called buboes, as well as fever, chills, and coughing. Pneumonic plague is more virulent or damaging and is an advanced form of the disease characterized by a severe lung infection. The infection can be transmitted from person to person via airborne droplets from coughing or sneezing. The incubation period is extremely short too, and an infected person may die within 12 to 24 hours of contracting the bacteria making cures in underdeveloped regions of the globe difficult at best.

Japanese Developing Egg That Fight Cancer -- In their ongoing efforts to make drugs cheaper, Japanese researchers at the National Institute of Advanced Industrial Science and Technology have genetically engineered chickens to lay eggs containing drugs that can fight diseases like hepatitis and cancer. According to Phys.org, the unique drug creation technique uses gene-editing technology to make the cocks produce interferon beta, a protein related to the immune system that is a powerful tool in treating of skin cancer and hepatitis. Those cells were then used to fertilize eggs and create hens, which inherited those genes. A few rounds of cross-breeding later and voila!: chickens were laying eggs with disease-fighting superpowers. As reported by The Japan News, the researchers plan to sell the drug to pharmaceutical companies, so they can perform research on the drug at a reduced cost.

Drinking Water for Millions in Rural America Contaminated With Suspected Carcinogen -- Drinking water supplies for millions of Americans in farm country are contaminated with a suspected cancer -causing chemical from fertilizer, according to a new report by the Environmental Working Group .  The contaminant is nitrate, which gets into drinking water sources when chemical fertilizer or manure runs off poorly protected farm fields. Nitrate contaminates drinking water for more than 15 million people in 49 states, but the highest levels are found in small towns surrounded by row-crop agriculture . Major farm states where the most people are at risk include California, Iowa, Illinois, Wisconsin and Kansas.  Nitrate can be fatal to babies who ingest too much of it, and the U.S. Environmental Protection Agency's ( EPA 's) legal limit for it in drinking water was set 25 years ago to protect infants from so-called blue baby syndrome. But the new report, Trouble in Farm Country , details the previously undocumented adult cancer risk posed by drinking water polluted with nitrate at only half the EPA's legal limit.  Data in the report comes from EWG's Tap Water Database, compiled from test results of almost 50,000 local water utilities in all 50 states. The data show that relatively few U.S. water supplies had nitrate levels in 2015 above the EPA's legal limit of 10 parts per million, or ppm. But more than 1,600 systems serving small towns had levels above 5 ppm, which studies by the National Cancer Institute have found to increase the risk of colon, kidney, ovarian and bladder cancers.

EPA Limits Use of Problematic Herbicide Dicamba—But Is That Enough? -- Dicamba has a tendency to vaporize and drift with the wind , and it if lands on a farm that hasn't planted Monsanto's dicamba-resistant seed, the pesticide will stunt and kill crops in a very distinctive way, with a telltale cupping and curling of leaves, as seen above. Drift from dicamba has affected millions of acres of crops, prompting multiple states to issue temporary bans on the pesticide . Farmers have been taking sides, either pro-dicamba or anti, and at least one farmer has been killed in a dispute over its use.  Following reports that dicamba has drifted into forestland and is harming trees , too, the U.S. Environmental Protection Agency (EPA) took action. According to a statement from the EPA , manufacturers selling dicamba pesticide—that's Monsanto and German agrochemical firm BASF, right now—will have to take new steps to attempt to avoid drift. Dicamba will now be listed as a "restricted-use pesticide." Here's what that means, in the EPA's words: RUPs are not available for purchase or use by the general public. RUPs have the potential to cause unreasonable adverse effects to the environment and injury to applicators or bystanders without added restrictions. The "Restricted Use" classification restricts a product, or its uses, to use by a certified applicator or someone under the certified applicator's direct supervision.  In the case of dicamba, the new label will limit the times when dicamba can be applied (for example, when it's windy), and will restrict application to only those who have undergone special training.  Placement on the RUP list isn't a ban. It's incredibly far from a ban; the second-most popular pesticide in the U.S., atrazine, is on that list. In a statement to Reuters , a Monsanto vice president noted that the restrictions are not only voluntary but were proposed by Monsanto.

With OK From EPA, Use Of Controversial Weedkiller Is Expected To Double - The Environmental Protection Agency announced Friday that it will let farmers keep spraying the weedkilling chemical dicamba on Monsanto's new dicamba-tolerant soybeans and cotton. The decision is a victory for the biotech giant and the farmers who want to use the company's newest weedkilling technology.Farmers across the Midwest and Mid-South have been waiting for the EPA's decision for months ever since it became clear that dicamba was drifting into thousands of fields where it didn't belong and damaging those crops. Some groups have called on the EPA to ban the most troublesome uses of dicamba, following the lead of regulators in Arkansas.The EPA, however, decided that the problems that occurred this past summer can be solved simply by adding a few new restrictions on how dicamba is used. In the future, applying dicamba will require special training; it can't be applied if the wind speed is greater than 10 mph and farmers will be asked to pay more attention to the risk that dicamba spraying may pose to nearby orchards and vegetable fields. Farmers have used dicamba for decades, but this past summer, they got permission to use it in a new way, spraying it over the top of soybean and cotton crops that Monsanto has genetically modified to tolerate the chemical. This meant that more dicamba was sprayed, and it was being applied in the heat of summer, which makes chemicals more likely to turn into a vapor and drift. Scott Partridge, Monsanto's vice president of global strategy, welcomed the EPA's decision. "We're very excited about it," he said. "It directly addresses what we found to be the causes of the off-target movement in 2017, and we think it sets the stage for all growers and applicators to have a positive experience in 2018."

Pest resistance to biotech crops surging - In 2016, farmers worldwide planted more than 240 million acres (98 million hectares) of genetically modified corn, cotton and soybeans that produce insect-killing proteins from the bacterium Bacillus thuringiensis, or Bt. These Bt proteins kill some voracious caterpillar and beetle pests, but are harmless to people and considered environmentally friendly. While organic farmers have used Bt proteins in sprays successfully for more than half a century, some scientists feared that widespread use of Bt proteins in genetically engineered crops would spur rapid evolution of resistance in pests.Researchers at the University of Arizona in Tucson, Arizona have taken stock to address this concern and to discover why pests adapted quickly in some cases but not others. To test predictions about resistance, Bruce Tabashnik and Yves Carriere in the College of Agriculture and Life Sciences analyzed the global data on Bt crop use and pest responses. Their results are published in the current issue of the journal Nature Biotechnology. "When Bt crops were first introduced in 1996, no one knew how quickly the pests would adapt," said Tabashnik, a Regents' Professor and head of the UA Department of Entomology. "Now we have a cumulative total of over 2 billion acres of these crops planted during the past two decades and extensive monitoring data, so we can build a scientific understanding of how fast the pests evolve resistance and why." The researchers analyzed published data for 36 cases representing responses of 15 pest species in 10 countries on every continent except Antarctica. They discovered resistance that substantially reduced the efficacy of the Bt crops in the field in 16 cases as of 2016, compared with only three such cases by 2005. In these 16 cases, pests evolved resistance in an average time of just over five years.

Herbicides, not insecticides biggest threat to bees, beekeeper says -- Insecticides – especially those in the neonicotinoid class – have been getting a bad rap in environmental circles. But researchers at Mississippi State University believe herbicides used to control weeds can spell even bigger trouble for bees.Jeff Harris, bee specialist with the MSU Extension Service and a researcher with the Mississippi Agricultural and Forestry Experiment Station, said herbicides can be a bigger threat because they destroy bee food sources.“When farmers burn down weeds before spring planting, or people spray for goldenrod, asters and spring flowers, or when power companies spray their rights-of-way, they’re killing a lot of potential food sources for bees and wild pollinators,” says Harris, who is based on the MSU campus in Starkville.Harris said the direct effect of these chemicals on bees is so much less of an issue than their loss of food supply.“Disappearing food is on the mind of beekeepers in the state,” he said. “That is even more important to them than losses of bees to insecticides.”   Johnny Thompson, vice president of the Mississippi Beekeeping Association, is a cattle and poultry farmer in Neshoba County who has been in the bee business for the last 10 years.  “Before we got back into bees, I sprayed pastures by the barrel to kill weeds. As a cattle farmer, weeds are a nuisance,” Thompson said. “I’m trying to grow grass for the cows to eat and not weeds, but as a beekeeper, those weeds are not weeds. That’s forage for the bees.”

The Big Itch: - As temperatures rise, mosquitoes will thrive. As a result, the tropical diseases they carry will creep across the South to places like Mississippi and possibly points north. Here’s what entomologists are trying to learn.  The buzzing has already begun in Texas. In Houston, mosquito counts surged in the wake of Hurricane Harvey, as expected. That’s thanks to plentiful pools and pockets of standing water, which can be used as breeding sites, creating what entomologist Don Yee calls a post-disaster “pulse of mosquitoes.” Yee, 46, an entomologist at the University of Southern Mississippi, has been tracking the situation through Entotwitter, the informal group of entomology experts that frequently tweet about their passion, sometimes using the hashtag #bugnerds. A few weeks after Hurricane Irma struck, photos from Hernando County Mosquito Control were retweeted often on Entotwitter. It showed 26,000 dead mosquitoes caught within 16 hours, in a trap that usually nets several hundred bugs during that period. It’s like clockwork, says Jerome Goddard, 60, a medical entomologist at Mississippi State University who helped run the Gulf Coast mosquito-control program after Hurricane Katrina. “About two weeks after a hurricane, mosquito numbers go through the roof,” he says.It’s pretty simple. Most mosquitoes need warmth and standing water. For a short period of time after a tropical system, they have exactly what they need. Now imagine what climate change could do. Imagine if those needs were met continuously. In mosquitoes that bite humans, female mosquitoes need one more thing: blood to help their eggs develop. These mosquitoes are known as “vectors” of disease, because they can carry disease from human to human – if the blood they draw contains a pathogen. (Sometimes, for mosquitoes that bite both birds and humans, the pathogen comes from birds and is spread in humans.) On top of a new, heightened population of mosquitoes, climate change brings an added concern: that new preponderance of mosquitoes could be especially dangerous if pathogens – tropical viruses – are able to move north and firmly establish themselves in Mississippi and all along the Gulf Coast, in the balmy region that stretches from Florida to Texas.

This is very alarming!’: Flying insects vanish from nature preserves --  Not long ago, a lengthy drive on a hot day wouldn't be complete without scraping bug guts off a windshield. But splattered insects have gone the way of the Chevy Nova — you just don't see them on the road like you used to.  “For those of us who look, I think all of us are disturbed and all of us are seeing fewer insects,” said Scott Black, executive director of the Portland, Ore.-based Xerces Society, a nonprofit environmental group that promotes insect conservation. “On warm summer nights you used to see them around streetlights.”A small but growing number of scientific studies suggest that insects are on the wane.“The windscreen phenomenon is probably one of the best illustrative ways to realize we are dealing with a decline in flying insects,” said Caspar Hallmann, an ecologist at Radboud University in the Netherlands. Hallmann is part of a research team that recently waded through 27 years' worth of insects collected in German nature preserves.   Between 1989 and 2016, according to a report published Wednesday in the journal PLOS One, the biomass of flying insects captured in these regions decreased by a seasonal average of 76 percent.  John Losey, an entomologist at Cornell University in New York who was not involved with this study, said he was impressed by the scope of the new research across time, space and habitat range. Insects were collected at 63 locations in Germany, including grasslands, swamps, sand dunes, wastelands, shrub land and along the margins of human settlement. All of the locations were protected areas. “This decline happened in nature reserves, which are meant to preserve biodiversity and ecosystem functioning,” Hallmann said. “This is very alarming!”

Warning of 'ecological Armageddon' after dramatic plunge in insect numbers -- The abundance of flying insects has plunged by three-quarters over the past 25 years, according to a new study that has shocked scientists. Insects are an integral part of life on Earth as both pollinators and prey for other wildlife and it was known that some species such as butterflies were declining. But the newly revealed scale of the losses to all insects has prompted warnings that the world is “on course for ecological Armageddon”, with profound impacts on human society.The new data was gathered in nature reserves across Germany but has implications for all landscapes dominated by agriculture, the researchers said. The cause of the huge decline is as yet unclear, although the destruction of wild areas and widespread use of pesticides are the most likely factors and climate change may play a role. The scientists were able to rule out weather and changes to landscape in the reserves as causes, but data on pesticide levels has not been collected.“The fact that the number of flying insects is decreasing at such a high rate in such a large area is an alarming discovery,” said Hans de Kroon, at Radboud University in the Netherlands and who led the new research.“Insects make up about two-thirds of all life on Earth [but] there has been some kind of horrific decline,” said Prof Dave Goulson of Sussex University, UK, and part of the team behind the new study. “We appear to be making vast tracts of land inhospitable to most forms of life, and are currently on course for ecological Armageddon. If we lose the insects then everything is going to collapse.” The research, published in the journal Plos One, is based on the work of dozens of amateur entomologists across Germany who began using strictly standardised ways of collecting insects in 1989. Special tents called malaise traps were used to capture more than 1,500 samples of all flying insects at 63 different nature reserves.

Cocktail tests on toxic waste called for - Surprisingly low concentrations of toxic chemicals - from fungicides to antidepressants - can change the way some aquatic creatures swim and feed, according to new research. In addition, depending on the cocktail of toxins they can produce unexpected results. The scientists behind the research, from the Universities of Barcelona and Portsmouth, call for the need to consider low dose and mixture toxicity testing in risk assessment of chemicals entering our aquatic environments. The research is published in the journal Environmental Pollution. One of the authors, Professor Alex Ford, of Portsmouth's Institute of Marine Biology, said: "Most of the world's urban waterways receive a cocktail of pollutants from agricultural run-off to human sewage containing sometimes high concentrations of medicines like antidepressants. "Such cocktails may stop short of killing marine species, but we are concerned at what sub-lethal effects certain pollutants maybe having. There can be thousands of different chemicals in our rivers and seas, from agricultural run-off to sewage effluent, and though they stop short of being lethal, these contaminants can damage the health of aquatic ecosystems. "These findings underline the importance of understanding and knowing the impact of complex mixtures of pollutants are having. One of the great conundrums for environmental toxicologists is how can we possibly determine or predict the effects of every combination of chemicals when there are simply thousands released into the environment, many of which have had quite limited toxicity assessment."

Air Pollution Kills 9 Million, Costs $5 Trillion Per Year  --"For decades, pollution and its harmful effects on people's health, the environment, and the planet have been neglected both by Governments and the international development agenda. Yet, pollution is the largest environmental cause of disease and death in the world today, responsible for an estimated 9 million premature deaths."   So begins the executive summary of the landmark Lancet Commission on Pollution and Health , just published. It continues: "The substantial health and economic costs of pollution globally can no longer be ignored."  The introduction to the report is stark : "Pollution is one of the great existential challenges of the Anthropocene epoch ... Pollution is now a substantial problem that endangers the health of billions, degrades the Earth's ecosystems, undermines the economic security of nations, and is responsible for an enormous global burden of disease, disability, and premature death."  Some of the statistics and findings are startling . People are not just dying—they are getting sick and living with years of disability. This has an economic toll. The "welfare losses due to pollution to be more than US$4.6 trillion per year, which is equivalent to 6.2% of global economic output."  If the message was not unambiguous enough: Air pollution "threatens the continuing survival of human societies." The impact on health is immense : Air pollution was responsible in 2015 for 19 percent of all cardiovascular deaths worldwide, 24 percent of ischaemic heart disease deaths, 21 percent of stroke deaths, and 23 percent of lung cancer deaths.  However, the burden is disproportionately on the poor and the world's most vulnerable. More than ninety percent of all pollution-related mortality is seen in low-income and middle-income countries.  Children are also "at high risk of pollution-related disease and even extremely low-dose exposures to pollutants during windows of vulnerability in utero and in early infancy can result in disease, disability, and death in childhood and across their lifespan."  "We fear that with nine million deaths a year, we are pushing the envelope on the amount of pollution the earth can carry," said professor Philip Landrigan at the Icahn School of Medicine at Mount Sinai, who co-led the commission.

Pollution killing more people than war and violence, says report - Environmental pollution is killing more people every year than smoking, hunger or natural disasters, according to a major study released in The Lancet medical journal on Thursday. One in every six of the 9 million premature deaths worldwide in 2015 could be attributed to diseases caused by toxins in air or water, the study says. It says air pollution was the main cause of deaths, responsible for 6.5 million of the fatalities, followed by water pollution, which killed 1.8 million. The estimate of 9 million premature deaths, considered conservative by the authors, is one and a half times higher than the number of people killed by smoking, and three times the death toll from AIDS, turberculosis and malaria combined. It is also 15 times the number of people killed in war or other forms of violence.Ninety-two percent of pollution-related deaths occurred in low- or middle-income developing countries, with India topping the list at 2.5 million, followed by China at 1.8 million.The report also attributed massive costs to pollution-related death, sickness and welfare, estimating the costs at some $4.6 trillion (€3.89 trillion) in annual losses — or about 6.2 percent of the global economy."What people don't realize is that pollution does damage to economies. People who are sick or dead cannot contribute to the economy. They need to looked after," said one of the study's authors, Richard Fuller, who is head of the global pollution watchdog Pure Earth. "There is this myth that finance ministers still live by: that you have to let industry pollute or else you won't develop. It just isn't true," he said.

Quelle Surprise! Pollution Pays! - The authors make a case study of DuPont’s failure to remedy the emissions of a harmful chemical, C8. used in making Teflon, that eventually led to a $670 million settlement earlier this year. The interesting part of the Shapira/Zingales paper is that they argue that for Du Pont to keep polluting was a rational decision, using reasonable discounting assumptions. From their summary of their paper at Harvard Law School’s Corporate Governance and Financial Regulation blog:The key decision point for DuPont came in 1984, when alarming information about the potential consequences of C8 emissions caused the company to call a top-executives meeting. By 1984 DuPont was aware that C8 is toxic, associated with birth defects, does not break down in the environment, and accumulates in human blood over time. Essentially, by 1984 C8 could already be considered a perennial red flag. DuPont’s executives acknowledged that the legal and medical departments would recommend stopping the usage of C8 altogether in light of the new alarming information. Yet, the business side overruled these recommendations and opted to continue C8 emissions (in fact they doubled them). Importantly, DuPont’s decision-makers also opted against investing in abatement options that were on the table, such as building an incineration device that would greatly reduce C8 emissions. Was this a myopic managerial decision? An agency problem? The internal documents allow us to conduct a cost-benefit analysis, showing that even a shareholder-value-maximizing manager would have chosen to pollute. Our calculation shows that even if DuPont managers could have forecasted all future legal liabilities, they would have preferred to pollute as long as they thought that the probability of getting caught was less than 19%. Given the extreme set of unlikely events that led to the payment of heavy legal fines, and given the fact that other C8 users (like 3M) have escaped such heavy legal liability, we conclude that at that time polluting without abating was a reasonable bet by DuPont’s decision makers. Thus, it was value-maximizing for DuPont to pollute, in spite of the fact that—as we show—the costs C8 pollution imposed on society greatly exceeded DuPont’s own estimates of abatement costs.

China bans foreign waste – but what will happen to the world’s recycling? - The dominant position that China holds in global manufacturing means that for many years China has also been the largest global importer of many types of recyclable materials. Last year, Chinese manufacturers imported 7.3m metric tonnes of waste plastics from developed countries including the UK, the EU, the US and Japan. However, in July 2017, China announced big changes in the quality control placed on imported materials, notifying the World Trade Organisation that it will ban imports of 24 categories of recyclables and solid waste by the end of the year. This campaign against yang laji or "foreign garbage" applies to plastic, textiles and mixed paper and will result in China taking a lot less material as it replaces imported materials with recycled material collected in its own domestic market, from its growing middle-class and Western-influenced consumers.The impact of this will be far-reaching. China is the dominant market for recycled plastic. There are concerns that much of the waste that China currently imports, especially the lower grade materials, will have nowhere else to go. This applies equally to other countries including the EU27, where 87% of the recycled plastic collected was exported directly, or indirectly (via Hong Kong), to China. Japan and the US also rely on China to buy their recycled plastic. Last year, the US exported 1.42m tons of scrap plastics, worth an estimated US$495m to China. So what will happen to the plastic these countries collect through household recycling systems once the Chinese refuse to accept it? What are the alternatives? Plastics collected for recycling could go to energy recovery (incineration). They are, after all, a fossil-fuel based material and burn extremely well – so on a positive note, they could generate electricity and improve energy self-sufficiency.  They could also go to landfill (not ideal) – imagine the press headlines. Alternatively, materials could be stored until new markets are found. This also brings problems, however – there have been hundreds of fires at sites where recyclable materials are stored.

Toxic Toys? After Nine Years, a Ban on Harmful Chemicals Becomes Official -- Phthalates are a particularly harmful type of chemical , used, among a range of other ways, to soften plastic in children's toys and products like pacifiers and teething rings. In response to mounting concern about the serious health impacts of phthalates—most notably, interference with hormone production and reproductive development in young children— Congress voted overwhelmingly in 2008 to outlaw the use of a few phthalates in these products and ordered the Consumer Product Safety Commission (CPSC) to assess the use of other types of the chemical in these products. After much delay, the CPSC voted 3–2 Wednesday to ban five additional types of phthalates in kids' toys and childcare products.   "These chemicals in children's toys and childcare articles are a known health risk. In banning them, CPSC is following the advice of its scientific experts and doing precisely what Congress directed the agency to do in a 2008 law it passed overwhelmingly."  The CPSC proposed a ban on the five additional types of phthalates in late 2014 but blew past its January 2015 deadline to finalize the rule. Much of the delay can be attributed to the efforts of phthalate-manufacturing chemical companies like ExxonMobil to sway the agency to reverse its decision. In December 2016, NRDC, along with Breast Cancer Prevention Partners and Environmental Justice Health Alliance , sued to force the agency to make a final decision. The case ended up being settled, and the CPSC agreed to take a final vote on the phthalates rule by Wednesday.

Child safety smartwatches ‘easy’ to hack, watchdog says - Some smartwatches designed for children have security flaws that make them vulnerable to hackers, a watchdog has warned. The Norwegian Consumer Council (NCC) tested watches from brands including Gator and GPS for Kids. It said it discovered that attackers could track, eavesdrop or even communicate with the wearers. The manufacturers involved insist the problems have either already been resolved or are being addressed. UK retailer John Lewis has withdrawn one of the named smartwatch models from sale in response. The smartwatches tested essentially serve as basic smartphones, allowing parents to communicate with their children as well as track their location. Some include an SOS feature that allows the child to instantly call their parents. They typically sell for about £100. The NCC said it was concerned that Gator and GPS for Kids' watches transmitted and stored data without encryption. It said that meant strangers, using basic hacking techniques, could track children as they moved, or make a child appear to be in a completely different location.  

Pushing Toxic Chemicals and Climate Denial: The Dark Money-Funded Independent Women’s Forum - The Independent Women's Forum is a 501(c)(3) nonprofit that has taken money from tobacco and oil companies, partners with Monsanto , defends toxic chemicals in food and consumer products, denies climate science and argues against laws that would curb the power of corporations.  IWF began in 1991 as an effort to defend now Supreme Court Justice (and former Monsanto attorney) Clarence Thomas as he faced sexual harassment charges. The group now says it seeks to "improve the lives of Americans by increasing the number of women who value free markets and personal liberty."  A key message of IWF is to shift the blame for health or environmental problems away from corporations and toward personal responsibility—for example arguing that parents, not food companies , are to blame for America's obesity problem.  According to data collected by Greenpeace USA , IWF has received more than $15 million in funding since 1998, largely from right-wing foundations that promote deregulation and corporate free reign.  IWF's leading contributors, with donations topping $5.3 million, are Donors Trust and Donors Capital Funds, the " dark money ATM of the conservative movement " connected with Charles and David Koch . The funds channel money from anonymous donors, including corporations, to efforts that champion corporate agendas, as a Greenpeace investigation established . IWF has also received $844,115 in combined donations from Koch family foundations. Other top funders include the Sarah Scaife Foundation , the Bradley Foundation , Randolf Foundation (an offshoot of the Richardson Foundation ) and Searle Freedom Trust —all are leading funders of climate-science denial, according to a Drexel University study

Study reveals new threat to the ozone layer -- Thirty years ago, the Montreal Protocol was agreed to phase-out chemicals destroying the ozone layer, the UV-radiation shield in the Earth's stratosphere. The treaty has helped the layer begin the slow process of healing, lessening the impact to human health from increased exposure to damaging solar radiation. But increasing emissions of ozone-destroying substances that are not regulated by the Montreal Protocol are threatening to affect the recovery of the layer, according to the new research. The substances in question were not considered damaging before as they were "generally thought to be too short-lived to reach the stratosphere in large quantities," explains Oram, a research fellow of the UK's National Centre for Atmospheric Science. The new Atmospheric Chemistry and Physics study raises the alarm over fast-increasing emissions of some of these very short-lived chemicals in East Asia, and shows how they can be carried up into the stratosphere and deplete the ozone layer. Emissions of ozone-depleting chemicals in places like China are especially damaging because of cold-air surges in East Asia that can quickly carry industrial pollution into the tropics. "It is here that air is most likely to be uplifted into the stratosphere," says co-author Matt Ashfold, a researcher at the University of Nottingham Malaysia Campus. This means the chemicals can reach the ozone layer before they are degraded and while they can still cause damage.  One of the new threats is dichloromethane, a substance with uses varying from paint stripping to agricultural fumigation and the production of pharmaceuticals. The amount of this substance in the atmosphere decreased in the 1990s and early 2000s, but over the past decade dichloromethane became approximately 60% more abundant. "This was a major surprise to the scientific community and we were keen to discover the cause of this sudden increase," says Oram.

Growing acidification of the Chesapeake Bay threatens crabs, oysters, other life - For ten days across recent summers, researchers aboard the University of Delaware research vessel Hugh R. Sharp collected water samples from the mouth of the Susquehanna River to Solomons Island in a first-of-its-kind investigation. They wanted to know when and where the waters of the Chesapeake Bay were turning most acidic. One finding: As oceans around the world absorb carbon dioxide and acidify, the changes are likely to come faster to the nation’s largest estuary. Scientists have long studied the slow and steady acidification of the open oceans — and its negative effects. Acidifying waters can kill coral, disrupt oyster reproduction, dissolve snail shells like nails in a can of bubbly Coke. But researchers are just beginning to investigate the consequences for the Chesapeake. And they’re finding that acidification could compound the ecological challenges already wracking the bay.  Not all effects are immediately negative on all species. Experiments are showing that blue crabs, marsh grasses and algae could theoretically thrive in the conditions expected to develop over the next century. But the acidification is a threat to other keystone bay species, such as oysters — a key source of food for crabs. Scientists say acidification could dramatically and unpredictably alter the delicate balances that stabilize the bay ecosystem. With so many variables expected to affect bay creatures — including rising acidity, warming waters and continued nutrient pollution — research is complex.

Western Arizona tribes could lease Colorado River water to areas thirsty for development - The clear waters of the Colorado River flow gently through the Headgate Rock diversion dam while boaters and Jet Skiers play upstream in front of the Blue Water Resort and Casino. The dam quietly siphons off almost one fourth of Arizona’s share of Colorado River water and sends it to nearby fields of alfalfa and cotton on the reservation of the Colorado River Indian Tribes.  The 4,500 people of the Mohave, Chemehuevi, Navajo and Hopi tribes who belong to the Colorado River Indian Tribes, or CRIT, are hoping to profit by leasing some of that water to the rest of Arizona for the first time.The plan is filled with complications, legal and logistical.Moving the water from the river to other locations would require costly new infrastructure and cooperation among several water management agencies.But the amount of water is significant enough to help settle water issues across the state, from Tusayan on the rim of the Grand Canyon south to Sierra Vista. And Arizona’s growing population is making the tribes' water more valuable by the day.  The tribes use a 75-year-old canal system that wastes vast quantities of water. But the tribes have been working with Salt River Project on how they might plug some of the leaks in the canals and send the conserved water to Phoenix and beyond. “People don’t realize the amount of water we are talking about,” says Dennis Patch, chairman of the Colorado River Indian Tribes, The tribal water rights are significant because Supreme Court decisions on how to divvy up the river have been based on how many acres can be irrigated with the water. With more than 100,000 acres of farmland along the river, the Colorado River Indian Tribes were allotted 662,000 acre-feet of water for Arizona land and another 57,000 acre-feet for the California portion of the reservation.  The Colorado River Indian Tribes' entitlement is about 24 percent of the 2.8 million acre-feet Arizona is allotted annually from the river, and it is more than double the 300,000 annual acre-feet of the river Nevada is allotted. Arizona is expected to end 2017 with more than 7 million residents and add another 2 million in the next 25 years or so.

Oroville Dam repair costs will top $500 million -- The costs to repair the nation's tallest dam after a nearly catastrophic failure of the spillways will top $500 million, nearly double the original estimate of $275 million, a California Department of Water Resources official said Thursday. The $500 million figure reflects only the work by the main construction contractor, Kiewit Corp., to repair the spillways at the 770-foot Oroville Dam, said Erin Mellon, a spokeswoman for the state water agency. It excludes the costs of other contractors and the emergency response in the immediate aftermath of the spillway failure, which prompted fears of massive flooding. Nearly 200,000 were ordered to evacuate, but disaster was averted.  Construction crews are excavating unstable soil, replacing it with concrete and topping it with slabs of rebar-reinforced concrete that is anchored into the bedrock.The project has required far more excavation and concrete than expected, said Jeff Petersen, a Kiewit vice president who is directing the project. The state has also revised plans to shore up the emergency spillway, doubling the amount of concrete it will require.Barring a major storm or equipment failure, Kiewit's 700 workers and subcontractors are on track to finish pouring concrete on the main spillway by Nov. 1, Petersen said. That will give the surface a month to cure and be ready for use in December.The cost for emergency response during the evacuation and its immediate aftermath is estimated between $140 million and $160 million, Mellon said.

Greenpeace Fells Logger's Suit Over 'Forest Destroyer' Tag -- Montreal-based Resolute Forest Products Inc.’s U.S. lawsuit was dismissed Monday by a San Francisco federal judge, who said the company can revise and refile its claims.   Resolute Forest, which branded the advocacy group a “global fraud” in its complaint, said tissue manufacturer Procter & Gamble Co. was among the companies scared off when Greenpeace spread false information accusing the logger of environmentally unsound forestry practices in Canada’s evergreen Boreal Forest. Resolute Forest accused Greenpeace of defamation and racketeering.The timber company is represented by Kasowitz Benson Torres LLP, a New York-based law firm whose managing partner, Marc Kasowitz, is President Donald Trump’s longtime personal attorney. The same firm sued Greenpeace in August on behalf of Energy Transfer Partners LP, alleging it incited terrorist acts and vandalism and hampered the Dakota Access pipeline operator’s ability to raise money for projects.Michael Bowe, a partner with Kasowitz Benson, said in an email that the firm will amend the complaint to address the deficiencies identified in Monday’s ruling and proceed with the case. U.S. District Judge Jon Tigar said in his ruling that “the word ‘destroy’ is a perennial instrument of hyperbole.” He said Resolute Forest wasn’t specific enough in alleging that Greenpeace acted with a “malicious mindset.”

Groups Slam Zinke's 'Backroom Deals' to Build Road Through Alaskan Wildlife Refuge - Ryan Zinke 's Interior Department is working behind the scenes to build a controversial and long-contested road through the heart of Alaska's Izembek National Wildlife Refuge , documents show. The refuge was established more than 30 years ago to conserve wetlands and habitats for migrating birds, brown bears and salmon and other wildlife. 300,000 of its 315,000 acres has been designated as Wilderness in 1980 under the Alaska National Interest Lands Conservation Act.  The proposed 11-mile road would essentially bisect Izembek to connect the towns of King Cove, population 989, and Cold Bay. Proponents, including Alaska Gov. Bill Walker, say the road is needed for medical emergency evacuations, as King Cove's airport is inaccessible during inclement weather, forcing residents to use boats or helicopters.  But refuge advocates fear the road would disrupt critical wildlife habitat and set a precedent to open wildlife refuges, national monuments, wilderness areas and other public lands to economic development.  The Center for Biological Diversity , the National Wildlife Refuge Association , and other environmental organizations have also warned that the project is about " privatizing public lands for profit from a seafood venture ."  The Obama administration shelved the King Cove road project years ago after then-Interior Secretary Sally Jewell decided after a 2013 visit to the refuge that building a road would "cause irreversible damage not only to the Refuge itself, but to the wildlife that depend on it."  Now, a new report from the Washington Post suggests that the Trump administration is making the issue a top priority and has taken steps to hide discussions from the public.

Brutal Outlook for Healthy Wild Horses and Burros: BLM Calls for Shooting 90,000 - On Thursday, the National Wild Horse and Burro Advisory Board recklessly voted to approve recommendations that call on the Bureau of Land Management to shoot tens of thousands of healthy wild horses and burros. At its meeting in Grand Junction, Colorado, the advisory board recommended that BLM achieve its on-range population goal of 26,715 wild horses and burros while also phasing out the use of long-term holding facilities—both within three years.  If Congress allowed BLM to follow through on the independent board's recommendations, that would mean the government shooting at least 90,000 healthy animals. The advisory board has no power to control policy.  The board also called for allowing international adoptions and sales, which have not been allowed before. During its deliberations, the board repeatedly referenced a proposal made by a private party to have American taxpayers pay to ship upwards of 20,000 wild horses to Russia—where they would serve as prey animals for big cats.  "Killing tens of thousands of wild horses and burros would be a betrayal of millions of taxpayers who want wild horses protected as intended in the 1971 Wild Free-Roaming Horses and Burros Act and who have invested tens of millions of dollars in their care," said Neda DeMayo, president of Return to Freedom Wild Horse Conservation .  "BLM has been tasked by Congress with the responsibility of protecting wild horses. The agency has failed over and over, wasting time on think tanks, challenge concepts and meetings that go nowhere instead of directing resources toward actually managing land, water and habitat on the range and building a robust volunteer effort to help with critical projects benefitting wild horses and other wildlife ."

Shocking Photo of Dehorned Black Rhino Wins Top Award - Africa loses an average of three rhinos a day to the ongoing poaching crisis and the illegal rhino horn trade. In 2016 alone, 1,054 rhinos were reported killed in South Africa, representing a loss in rhinos of approximately six percent. That's close to the birth rate, meaning the population remains perilously close to the tipping point. This year, the Natural History Museum in London awarded photographer Brent Stirton the 2017 Wildlife Photographer of the Year grand title for his grisly image of a black rhino with its two horns hacked off in South Africa's Hluhluwe-Imfolozi Park. "Brent's image highlights the urgent need for humanity to protect our planet and the species we share it with," said Natural History Museum director Sir Michael Dixon. Stirton's photograph, "Memorial to a species," emerged as the winning shot from almost 50,000 competition entries from 92 countries. The photo also won of the "Wildlife Photojournalist Award: Story" category.  "The killers were probably from a local community but working to order," the caption from Stirton's photograph states. "Entering the Hluhluwe Imfolozi Game Reserve at night, they shot the black rhino bull using a silencer. Working fast, they hacked off the two horns and escaped before being discovered by the reserve's patrol. The horns would have been sold to a middleman and smuggled out of South Africa, probably via Mozambique, to China or Vietnam. For the reserve, it was grim news, not least because this is where conservationists bred back from near extinction the subspecies that is now the pre-eminent target for poachers, the southern white rhino. For the photographer, the crime scene was one of more than 30 he visited in the course of covering this tragic story."

India faces burning issue as farmers fuel smog crisis -- Malkit Singh is a typical Punjabi farmer, trying to coax as much as he can out of his 10 acres. Before the onset of the monsoon rains, the 70-year-old plants rice. A week after the October harvest, he plants a winter crop of potatoes or wheat. Yet that quick turnaround comes at a high price to public health. After the rice harvest each year, Mr Singh, like millions of north Indian farmers, sets fire to the crop residues — the fastest and cheapest way to eliminate unwanted straw and prepare for the next sowing. The burning of more than 9m acres of rice crop residues is now recognised as one of the big causes of the hazardous air pollution that enshrouds New Delhi each October and November.   The Indian capital has some of the most noxious air in the world, fouled by a dangerous combination of exhaust from vehicles running on dirty fuel, diesel generators, road dust, burning of waste and crop burning in neighbouring states.   In 2014, the World Health Organization declared the city’s air the worst of any in the world, including Beijing, a distinction it has since lost after the WHO added many smaller cities to its annual ranking.

Death toll rises to 40 as firefighters continue to battle massive California wildfires - LA Times: s the death toll rose to 40, firefighters struggled to get the upper hand against several massive wildfires that have ravaged Northern California for almost a week. The winds that bedeviled firefighters Saturday are expected to die down Sunday, allowing firefighters to go back on the offense after a day of new evacuations. Cooler temperatures are also forecast. So evacuations in Napa city were lifted Sunday. Officials said Sunday they are making good progress on the Tubbs and Atlas fires. which are both more than 50% contained. Firefighters will concentrate their forces on the Nuns fire, which is 30% contained. There was some concern the Tubbs and Nuns fires could merge. It was a different story Saturday, when strong winds kicked up overnight in the central Napa Valley region, causing some fires to spread and triggering evacuations in Sonoma and elsewhere, officials said. Fire officials feared that winds forecast for Saturday would be similar to those that stoked the first flames on Oct. 8 and that have since exploded to more than 15 fires that have scorched 220,000 acres, destroyed an estimated 5,700 structures and caused at least 40 deaths. Despite low humidity and red flag warnings throughout the region, however, the winds appeared to calm down Saturday afternoon, aiding firefighters who have been battling the fire around the clock, officials said. Officials warned that the biggest threat remains the low humidity, with the dry air continuing to transform grass and vegetation into fuel. Northerly winds, similar to Southern California’s Santa Ana winds, are expected to move across the region at about 15 mph overnight with some 25 mph gusts, he said. Temperatures are expected to drop into the mid-40s overnight, with temperatures expected to hover in the mid-80s Sunday. 

California’s Raging Fires Have Turned Into a Public Health Crisis – “It is completely unsafe to be here at this moment,” said Jennifer Franco, a resident of Fairfield, California, on Wednesday afternoon, as massive wildfires ripped through Santa Rosa and Napa a few miles west. But she wasn’t talking about the flames—she was talking about the smoke. Accelerated by high-speed seasonal winds, ash-laden air was blowing eastward, directly into her neighborhood.   “I’ve been having chest pain, and now I’m using a respirator.”   “But a friend of mine who lives nearby has asthma. She was telling me that the smoke is in the house. Her eyes are burning. Her chest hurts. She has difficulty breathing.” The most immediate threat from the 22 devastating wildfires currently roaring through California are the immediate fire zones. At least 21 people have died there; more than 600 people have gone missing; and thousands of buildings have been destroyed. But beyond the fire zones, millions of Californians are facing a secondary, more insidious threat: polluted air, rife with tiny particles small enough to penetrate deep into the circulatory system. Those potentially deadly particles are creating unhealthy air as far as 70 miles away from fire zones, according to Bay Area Air Quality Management District spokesman Tom Flannigan. But people closer to the fire zones are even more at risk, since the air in those regions could also be tinged with toxic heavy metals like arsenic, cadmium, copper and lead, as the smoke picks up chemicals from burned-up plastic, cars, and building materials. “These are unprecedented conditions,” Flannigan said, estimating that four to five million people living in the Bay Area are breathing toxic air outdoors. “We’ve measured some of the highest air pollution ratings in the Bay Area ever recorded.”

Downed PG&E power lines investigated as potential cause for North Bay wildfires - CAL FIRE investigators are looking into fallen PG&E power lines as one of a number of potential causes for the recent wildfires that have ravaged the North Bay this week.The fires, now the deadliest in California history, have burned more than 221,000 acres and destroyed 57,000 structures since they began. Additionally, nearly 272,000 PG&E customers have lost power as a result of the fires, according to PG&E spokesperson David Kligman, although as of Friday morning, 88 percent of those customers have since had their power restored.“Life safety is our absolute focus right now,” Kligman said. “At this time, we are not going to speculate about any causes of these fires, but we will support the reviews by investigators.”Despite the speculative nature of the company’s role in the fires, PG&E has nonetheless seen a nearly $6 billion hit to its stock share values this week, according to Bloomberg News. Previously, the Silicon Valley power giant was also found responsible for the 2015 Butte Fire after a pine tree fell into a PG&E power line. PG&E has been accused of negligent maintenance practices in the past, such as in the wake of a 1994 wildfire in the Sierra foothills. The company reached a $29 million settlement in 1999 after the California Public Utilities Commission accused it of diverting money from its tree-trimming services, necessary by law to keep branches away from power lines.

Photos of California's Destructive Wildfires (36 photos)  Powerful winds drove more than a dozen wildfires across several counties in California on Monday, burning more than 100,000 acres, destroying 1,500 homes, and reportedly killing 11 people. In Sonoma County, the sheriff’s office stated that roughly 150 people have been reported missing due to the fires. The dry conditions are expected to last for at least another week, as Californians still battle one of the most destructive wildfire episodes their state has ever experienced.

15 Shocking Videos Expose The Reality Of Surviving The California Wildfires --The Northern California wildfires are fast-moving, unpredictable, and for some, unsurvivable.  The videos below will show you what it’s really like, trying to survive an ever-changing inferno…and why you shouldn’t wait for the official evacuation order.  A lot of folks have been critical, saying blithely, “They knew there was a fire. They should have evacuated.” It’s important to understand that it doesn’t always work like that with wildfires. Armchair quarterbacking is easy. Fleeing when the car your driving literally catches on fire and the smoke is blinding you is not. First of all, fires move rapidly. You can be in no danger whatsoever and just see a fire on the distant horizon, and then minutes later, it’s at your back door. Secondly, they change courses. Many times, the fire gets a hold of some new fuel – like a home, tall grass, or trees, and the course veers in that direction. Finally, high winds have propelled these fires rapidly and fanned them to new heights. Every fall, California has something called the “Diablo Winds.” These are seasonal gusts that can reach as high as 80 mph and cause extremely high fire danger. When coupled with existing fires, it’s nothing less than the perfect storm. October is often the worst month of the year for wildfires in California. Not only is it the time when the Diablo winds (or Santa Ana winds in Southern California) kick up, but it’s also the driest month. California has a long dry season. It isn’t unusual to go without a single drop of rain from May through the end of October. Because of this, all the lush grass that grows during the spring rainy season is dried, crisp, and tragically perfect fuel. In situations like this, there is often little to no warning before the fire is roaring through your property. The fire may be miles away and heading in the opposite direction one minute, then turn on a dime. Then suddenly, you find yourself directly in the path of an inferno. If you’re lucky, you escape unscathed with your life but lose all your worldly possessions. Many people have not been lucky.

Firefight in Sonoma County reaches second week as flames force thousands to evacuate - An army of firefighters with a larger aerial arsenal at their disposal held their ground and made some gains Saturday on devastating wildfires ravaging Wine Country, but evacuation orders that forced thousands from their homes before dawn and a rising death toll were clear reminders of the peril that still grips the region. Northeast winds that arrived early Saturday whipped up a new fire in the hills outside eastern Santa Rosa, and spread an existing blaze outside Sonoma, prompting another round of nighttime evacuation orders. Thousands of Santa Rosa residents were forced to leave — some for the second time since last Sunday — while others faced their first mandatory orders in Sonoma. Aware winds were on their way, firefighters were posted in potential trouble spots ahead of time as law enforcement officers — their bullhorns and sirens blaring — drove city blocks in Santa Rosa ordering people out of their homes before 3 a.m. They knocked on doors and in some cases returned to homes two or three times, authorities said. Authorities were concerned the fire would advance on Oakmont, the retirement community across the highway from the park, and into the city. The mass evacuation carried out by officers went smoothly, authorities said, allowing firefighters to focus on their job. It was a marked contrast with the helter-skelter operation on the night of the initial firestorm, they said.

California inmates paid $1 an hour to battle wildfires -- As many as 1,900 inmates at a time are directly fighting fires alongside professional firefighters from the California Department of Forestry and Fire Protection and the Los Angeles County Fire Department, CNN reports.Others are “on a rest period from being on a fire line or providing backup to fire protection somewhere,” according to Bill Sessa, a spokesman for the California Department of Corrections and Rehabilitation.Those not fighting fires directly are earning $2 a day. All are drawn from a pool of about 3,800 people who are serving sentences at minimum-security conservation camps across the state. There are 43 such conservation camps facilities throughout the state. Inmates must apply for the program, which offers less formal penal conditions than serving out their sentence traditionally. Each day of good behavior also translates to two days off their sentence, according to Mashable.

Crews push to contain California fires, search for bodies (Reuters) - Crews fought their way across rugged, steep terrain on Tuesday in a push to gain full control of the deadliest wildfires in California history, as search-and-rescue teams picked through an ashy moonscape of destroyed homes looking for victims.  Though a dozen major blazes were still burning across the region, where 5,700 homes and businesses, some of them wineries, have been gutted, fire officials said they were gaining confidence they had finally gained the upper hand against the flames. “There are still some concerns that if the west winds come up or we get some erratic winds they could push our lines, but as of right now we’re looking pretty good,” Steve Crawford, a fire operations chief, told reporters at a briefing in Sonoma County in the heart of California’s celebrated wine country. At the same time, teams of searchers were moving house to house through neighborhoods where little was left standing, picking through ash and rubble to recover the bodies of those who did not make it out in time.  Already 41 people have been confirmed killed in the fires, which erupted last week and were driven by dry, hot winds into Northern California communities, giving residents little or no chance to escape.   Law enforcement officials said 63 people remained missing or unaccounted for in Sonoma and Napa counties.  Most of the over 1,900 people listed in missing-persons reports have turned up safe, including evacuees who failed to alert authorities after fleeing their homes, but authorities still fear they may find more charred bodies as they move into previously inaccessible areas.  Tens of thousands of people remained displaced. Many would return to find nothing left, leaving them to hastily make alternative plans for shelter.

Why older people didn't fare well in Northern California wildfires (NPR) More than 40 people have died in the wildfires in Northern California. That number could rise. More than 50 people are still missing, and investigators have been looking for remains in the ashes. But one thing stands out about those who perished: The vast majority who've been identified were over the age of 65.Certainly luck — or rather bad luck — played a role in some of the fatalities. For example, the fire swept through a mobile home park, Journey's End, which catered to residents 55 and older. And reports say that Armando and Carmen Berriz were trying to drive to safety but got stuck on a tree that had crashed across the road. They took refuge in a swimming pool. He survived. She didn't. But then there were Charles and Sara Rippey. He was 100 and she was 98. According to news reports, they simply didn't have the mobility to escape their home before it crashed around them in flames.  Marianne McBride says that even if an older person could get out of their house, that doesn't necessarily mean they could get away."Twenty-five percent of us will lose our ability to drive in our lifetime," said McBride. "So if that were the case and you didn't have a car to get away, then ... you're stranded." Many people who escaped reported being awakened by the smell of smoke. McBride says some older people who seemed relatively healthy might not have noticed that because many lose their sense of smell as they get older."Anyone with early cognitive issues, sense of smell is one of the first things that goes," said McBride.Other evacuees have said they were awakened by the roar of the wind or the flames. Or by pounding on the door. But nearly two-thirds of adults over age 70 have some degree of hearing loss. McBride says even hearing aids might not have helped in this situation because "we take them off at night, or we turn them off at night. So it's ... quite likely that we wouldn't hear something," she said. And, as the story of LeRoy and Donna Halbur shows, a serious physical challenge can make it all but impossible to outrun the flames.

Insured losses top $1 billion in Northern California fires - LA Times: Deadly wildfires in Northern California have caused over $1 billion in insured losses, according to California’s insurance commissioner. Preliminary loss figures released Thursday by State Insurance Commissioner Dave Jones estimate total insured losses at $1.045 billion.The insurers — eight of California’s largest — also found that there were 4,177 partial residential losses, 5,449 total residential losses, 601 commercial property losses, and over 3,000 auto losses. Jones, who released the findings Thursday afternoon in Los Angeles, noted that it will take months to finalize the total insured losses from the fires. Article continues below“We know this number will climb as more victims go through the claims process, as they secure the safety of their loved ones and themselves and begin to reach out to their insurance agents and insurance companies," Jones said. News of the insured losses come as crews continue to gain control of multiple wildfires. Firefighters from around the state are starting to return home while some evacuees are just now digging through what’s left of their neighborhoods. Most mandatory evacuations throughout the region have been lifted, but about 22,000 people in Sonoma County were still displaced Thursday morning, either because their homes are still at risk or were in a burn zone, said Sonoma County spokesman Scott Alonso. The fires destroyed at least 5,700 structures, including more than 2,800 homes in the city of Santa Rosa alone. Officials called it the deadliest week in California fire history, with at least 42 confirmed fatalities. 

New Fire Danger Threatens to Worsen Most Disastrous Wildfire Season in California History - A record-breaking heat wave will build over Southern California over the weekend and peak on Tuesday, bringing triple-digit temperatures that could set marks for the hottest temperatures ever recorded so late in the year in the Los Angeles area. Accompanying the heat will be the notorious Santa Ana winds, which will bring a multi-day period of critical fire danger, Saturday through Tuesday.  The heat wave and Santa Ana winds will be caused by a large near-record-strength dome of high pressure expected to settle in over the Great Basin, a few hundred miles northeast of Los Angeles. The difference in pressure between this high-pressure system and lower pressure over Southern California will drive gusty northeast winds over Southern California. Since these winds will originate over desert areas, they will be hot and dry. As the air descends from the mountains to the coast, the air will get hotter and drier, due to adiabatic compression—the process whereby the pressure on a parcel of air increases as it descends, decreasing its volume, and thus increasing its temperature as work is done on it. As of 11 am EDT Friday, fire weather conditions are predicted by the NOAA/NWS Storm Prediction Center to be in the “elevated” to “critical” range Saturday through Tuesday across the coastal mountain ranges and foothills north of the Los Angeles Basin (fire weather alert levels come in three levels of severity: “elevated”, “critical”, and “extreme”.) Wind gusts of 35 – 50 mph will be capable of causing rapid spread of any fires that might ignite, though these winds will not be as strong as the ones that created the deadly firestorm in California’s wind country earlier this month. The fire danger increases through Tuesday, as the heat builds, and relative humidities below 10% are expected in many areas. Conditions at night will not help firefighting efforts much, as temperatures will only cool down to the mid-70s, with low humidity and strong winds. By Wednesday, the heat and fire danger will begin to diminish as the Santa Ana winds die down and cooler, more humid air moves in, but temperatures will still be in the mid-90s in the Los Angeles area. Such a long period of extreme heat and Santa Ana winds mean that any fires that do ignite will be difficult to control and will potentially burn a large area.

Record Amazon fires stun scientists; sign of sick, degraded forests -- Figures from the Brazilian government’s INPE (National Institute of Space Research) show that 2017 is shaping up to be the worst year on record for forest fires: 208,278 were detected by 5 October. Alberto Setzer, who runs INPE’s fire monitoring department, told Mongabay that 2017 was now on course to overtake 2004, until now the year with the most fires, when 270,295 were detected. More fires were seen in September of this year (110,736) than in any previous month in the 20 years that INPE has been recording fires.  Two rural districts in Pará state had the highest number of fires in the Amazon biome: 9,786 in São Félix do Xingu and 6,153 in Altamira up to the end of last month. The increase of fires in the whole of Pará has been astonishing: INPE figures show that there were 24,949 just in September, a six-fold increase compared with 3,944 recorded in the same month last year. In fact, 29,316 fires were recorded in all of last year for the Amazonian state. While there is a high level of drought this year, it is clear that something other than dry conditions is driving the record number of wildfires. Setzer told Mongabay that the fires almost everywhere have a common characteristic: they are manmade. INPE, which has a sophisticated system for monitoring fires, has built up an impressive archive of satellite images of the damage done by the fires. This archive shows that the wildfires have increasingly been spreading into protected forests. Over fifty conserved areas have been impacted this year, almost twice the number damaged last year. And the list includes some of Brazil’s iconic nature parks. Araguaia National Park is a highly important protected area on the island of Bananal in southwest Tocantins state. Covering 558,000 hectares (1.4 million acres), it is home to threatened species like the giant otter and jaguar, and stands out as an oasis in the midst of the parched savanna vegetation of the Cerrado that surrounds it. Earlier this month one of Brazil’s leading TV shows, the Fantástico programme on Globo TV, showed powerful images of the national park being devoured in flames. In all, 70 percent of it was destroyed. Out-of-control fires have affected cattle ranches as well. In the region of Carmolândia in the north of Tocantins a fierce fire raced across eight farms, killing over a thousand cattle. Almost everywhere, fire brigades have been too poorly staffed and equipped to control the blazes.

Portugal and Spain wildfires: Dozens dead and injured - BBC News: A wave of wildfires in central and north Portugal which started at the weekend has killed at least 31 people, civil defence authorities say. Dozens of the 145 fires still raging are considered serious, a spokeswoman said. To the north, fires which broke out across the border in Spain's Galicia region claimed at least three lives. Thousands of firefighters are battling the flames, which erupted after a hot dry summer. Conditions were worsened by Hurricane Ophelia, as it approached Europe's western coast, bringing strong winds to fan and spread the flames.More than 50 people have also been injured in Portugal; 15 are reported to be in a serious condition. Local media say several people are still missing there, including a month-old baby. In Spain, two of the victims were found in a burned-out car by the side of the road. A state of emergency has been declared in Portugal north of the Tagus river - about half of the country's land area. More than 6,000 firefighters in 1,800 vehicles were deployed by early Monday morning. As a result of the fires, at least a dozen roads were closed, as well as schools in some places. The Portuguese deaths were in the Coimbra, Guarda, Castelo Branca and Viseu areas. "We went through absolute hell. It was horrible. There was fire everywhere," a resident of Penacova, near Coimbra, was quoted as telling Portuguese RTP radio and TV. 

Deadly Fires Sweep Portugal and Northern Spain - — At least 35 people have been killed and dozens more injured by wildfires in Portugal and northern Spain, as strong winds from a hurricane fanned hundreds of blazes sweeping across densely forested territory.The authorities in Portugal declared a state of emergency in affected areas over the weekend, when about 500 fires were reported in the central and northern regions, and they raised the death toll to 31. About 4,000 firefighters were working to extinguish at least 65 blazes Monday morning.Across the border in Spain, fires reached the outskirts of the port city of Vigo, forcing the temporary closing of a car factory. Television news reports and videos shared on social media showed residents forming human chains to pass water buckets in order to help put out flames. The Spanish authorities said that more than 90 fires were burning in the northern regions of Galicia and Asturias. Prime Minister Mariano Rajoy, who is from Galicia, traveled on Monday to his home region, where the authorities confirmed that at least four people had died. In a post on Twitter, Mr. Rajoy said he gone to the region in the name of the Spanish people to express his condolences for those who died and to offer support for those affected. The fires had spread rapidly since Sunday, in part because of strong winds tied to Hurricane Ophelia in the Atlantic Ocean, Spanish meteorologists said. But investigators are looking at human causes.

How the city at the ground zero of Hurricane Harvey is moving forward 7 weeks later -- It's been seven weeks since Hurricane Harvey roared through this seaside town, crushing buildings, splintering roofs and displacing thousands of people. The long road to normalcy sometimes seems far off. But for James, 65, it's done one shell at a time. "This really hurts," she says as she rummages through her mold-infested store, which lost part of the roof during the storm. "But I don't want to leave. I don't want to give up this corner." Ground zero for Hurricane Harvey, Rockport and neighboring Fulton received some of the worst wind and storm surge damage from the Category 4 storm that made landfall here Aug. 25. But media attention quickly shifted away to the Harvey-induced floods in Houston and later, hurricanes in Florida and Puerto Rico and the California wildfires. "That attention was never here," James says. "It went straight to Houston." The Federal Emergency Management Agency has struggled to keep up with the litany of disasters. FEMA officials pulled workers from other federal agencies, such as Homeland Security and the Army Corps of Engineers, to staff the recovery effort in Aransas County, which includes Rockport, says Rita Egan, a FEMA spokeswoman. So far, nearly 13,000 people have registered for FEMA assistance in Aransas County and the agency has approved $22.4 million in aid, she says. "We are stretched thin, there's no question about that," Egan says.

EPA orders more repairs at Texas toxic site following Harvey (AP) — The Environmental Protection Agency says it has ordered two companies to make more extensive repairs to stabilize the area around a Superfund toxic waste site near Houston following Hurricane Harvey.EPA said Thursday that a survey of the area near the San Jacinto River Waste Pits found erosion of the river bottom up to 12 feet deep adjacent to a fabric and stone cap intended to keep highly contaminated sediments from washing away.EPA Administrator Scott Pruitt has ordered International Paper and a subsidiary of Waste Management Inc. to underwrite a $115 million cleanup at the former mill. Testing conducted after the historic storm showed cancer-causing dioxins were exposed to the river water. The companies are opposed to the expensive cleanup, arguing the current covering is sufficient.

Puerto Ricans Drinking Water From Hazardous Waste Sites - The ranking Democrat on the House Homeland Security Committee called for an investigation into the availability of potable water in Puerto Rico following reports Friday that residents are scrounging for water from hazardous waste sites.  After the U.S. Environmental Protection Agency ( EPA ) confirmed residents were trying to access water from three Superfund sites, and following a CNN story Friday featuring Puerto Ricans taking water from a fourth site, Rep. Bennie Thompson (D-MS) wrote a letter to acting DHS Secretary Elaine Duke asking if she knew about the situation and calling the reports "beyond disturbing."  Food, water, electricity and medical care is still scarce three weeks after Hurricane Maria blew through the island, and more than one-third of residents do not have a safe, available source of drinking water. While 85 percent of the island still remains without electricity, Governor Ricardo Rosselló said Sunday he hopes that power will be almost totally restored by mid-December.  As reported by The Verge :  "The Environmental Protection Agency received reports that people were trying to access water at toxic Superfund sites, according to a news release issued on Wednesday. These sites are at Caguas , San German , and Dorado , an agency spokesperson clarified in an email. The EPA advised people against tampering with or drinking from sealed and locked wells. But without access to safe water, people are forced to make the terrible choice of drinking from a risky source , or nothing at all.  The agency investigated the three sites that were reported, plus two additional ones in Cabo Rojo and Maunabo , an EPA spokesperson said. Although they're scattered across the island, all are groundwater sources contaminated with industrial solvents used for metal degreasing and dry cleaning. Exposure to these solvents can have dangerous health effects , such as harming the liver and increasing cancer risk . But, dehydration is dangerous too."

Puerto Rico Sets Goal of 95% Power Restoration in December - Puerto Rico’s governor set a goal of reestablishing electric service to 30 percent of the island by the end of the month after Hurricane Maria devastated the U.S. territory's infrastructure, with the goal of restoring 95 percent of service by Dec. 15.  More than three weeks after the hurricane hit, only around 14.6 percent of Puerto Rico had electric service restored, according to the government. Generators were being used to power businesses and other structures.   Puerto Rico Gov. Ricardo Rosselló said in a statement Saturday that the goal was issued "so that our people can have clear and established metrics."  At least 44 deaths in Puerto Rico have been directly and indirectly blamed on the hurricane, which made landfall on Sept. 20. As of Saturday 64 percent of water service had been restored to the island, which has a population of around 3.5 million, according to officials. The devastation has been called a humanitarian disaster.   The Trump administration has been criticized for its response to the hurricane. President Donald Trump sparked a furious backlash on Thursday when he tweeted about Puerto Rico’s financial crisis and said that "electric and all infrastructure was disaster before hurricanes."  The president also tweeted that "We cannot keep FEMA, the Military & the First Responders, who have been amazing (under the most difficult circumstances) in P.R. forever!" Some critics accused the president of treating Puerto Ricans, who are American citizens, as second-class.  House Speaker Paul Ryan said during a visit to Puerto Rico Friday "we are all in this with each other for the long haul to make sure that this island survives." Vice President Mike Pence said during a visit last week that "our message here today is the same as President Trump's message earlier this week: We're here for the long haul."

Masked and Armed With Rifles: Military Security Firms Roam Streets of San Juan — It’s the morning of Oct. 7 and a man stops traffic on Antonsanti Street in Santurce, behind the Ciudadela building. He is wearing a helmet, sunglasses, facemask, a vest with ammunition, gloves, plastic straps used for arrests, boots, camouflaged pants with knee pads, a knife and gun. There is a machine gun in his hand. He has no plaque or ID. He works for a private security firm hired by Nicholas Prouty, the owner of the Ciudadela complex. Prouty turned to that service after Hurricane María, he told the Center for Investigative Journalism (CPI in Spanish) last week. “With a substantial reduction in the number of police officers on the streets [due to the government’s reallocation of resources to protect diesel and supply chains0, and most streets lights not functioning, Ciudadela has taken the necessary steps to make its residents and commercial tenants feel safe,” he said, without revealing the name of the security firm. Who do you work for?, the CPI asked the armed man who was at Ciudadela. “We work with the government,” he answered. Which division? “It’s a humanitarian mission, we’re helping Puerto Rico,” he said in broken Spanish. And why the covered face? “Because if I go with my daughter to eat at Burger King tomorrow and somebody identifies me, they could kill me,” he said.

Puerto Ricans put out of work by hurricane can’t even apply for unemployment benefits - President Trump on Thursday said federal relief workers can’t stay in Puerto Rico “forever,” but many Puerto Ricans still can’t get to work themselves — or even apply for unemployment benefits. Three weeks after Hurricane Maria devastated the island, the number of Puerto Ricans who’ve applied for jobless benefits has actually declined sharply instead of surging as expected. How come? A widespread lack of electricity and damaged roads that limit travel. Puerto Ricans unable to work at their jobs either have no means to file their claims or the island’s government is unable to process them. At the end of September, the U.S. government recorded just 328 new applications for unemployment benefits in the U.S. territory. By contrast, initial jobless claims totaled 2,416 in the week before Maria slammed into Puerto Rico. That’s a 96% decline. And claims appear to have fall even further in early October. A U.S. Labor Department official said claims from the island were just starting to flow in and that some applications were being processed on the mainland. So look for jobless claims in Puerto Rico to shoot higher later in October. A spike in Puerto Rico claims, however, is unlikely to cause the U.S. total to soar. Initial claims have actually fallen from a 2 1/2-year high of 298,000 in early September as more people went back to work in Texas and Florida after hurricanes Harvey and Irma. Those storms briefly prevented millions of people from getting to work, although only a fraction of them filed for benefits. The situation in basically bankrupt Puerto Rico, though less populous, is more dire and sure to last a lot longer than that in Texas and Florida. 

More Rain In Puerto Rico Brings Misery To Those With Damaged Roofs : NPR podcast (with transcript) Some other news now from Puerto Rico, which has seen steady rain this week. Rain means more misery for people whose roofs were damaged by Hurricane Maria, and there was already an extreme shortage of tarps that people need to protect their homes. Across the island, people are frustrated by the long wait for tarps, which are usually provided by FEMA and the Army Corps of Engineers. NPR's Adrian Florido has the story.

4 out of 5 Puerto Ricans are still without power — but darkness is far from the island's biggest problem - Nearly a month after Hurricane Maria barreled across Puerto Rico, 85% of the US territory remains without power. The death toll has climbed to 48, though officials expect that number to rise once more accurate counts can be made. Some 117 people are missing. Residents on the ground told Business Insider that in some ways, people are worse off now than they were just days after the storm hit. A lack of electricity underlies many of the island's most pressing problems, but the most dire issue is how to keep people alive. Although 98% of the island's hospitals are reportedly open, very few of them have steady electricity. Patients at hospitals that lack generators are being referred to facilities that do have them, and doctors at those hospitals are struggling to cope with the influx. Emergency health services are paralyzed. Many sick people are trapped in their homes with no one to call and no phone line — cellular or otherwise — to call from. Those with lifelong medical conditions are helpless to get the medications they need..  Maritza Stanchich, a professor of Caribbean studies at the University of Puerto Rico, told Business Insider In some cases, instead of seeing patients at the hospital, health workers are going door to door on what are essentially rescue missions to help people trapped in their homes.  "Yesterday alone, we saw 130 patients, sometimes climbing over fences to reach patients unable to move who are essentially trapped in their homes and are being kept alive and fed by neighbors," said a hospital worker who declined to give her name since she was not authorized to speak publicly.  Supplies of life-saving medications like oxygen and insulin are running out. Some of them have spoiled. In other cases, there simply isn't enough to go around. Lisandra Figueroa told the New York Times that her father passed away a few days ago at age 58 after going a week without the oxygen he needed to breathe.  “A lot of people died, and are still dying. You can’t get sick now," she said.

Raw sewage contaminating waters in Puerto Rico after Maria - ABC News: Raw sewage is pouring into the rivers and reservoirs of Puerto Rico in the aftermath of Hurricane Maria. People without running water bathe and wash their clothes in contaminated streams, and some islanders have been drinking water from condemned wells. Nearly a month after the hurricane made landfall, Puerto Rico is only beginning to come to grips with a massive environmental emergency that has no clear end in sight. "I think this will be the most challenging environmental response after a hurricane that our country has ever seen," said Judith Enck, who served as administrator of the U.S. Environmental Protection Agency region that includes Puerto Rico under President Barack Obama. With hundreds of thousands of people still without running water, and 20 of the island's 51 sewage treatment plants out of service, there are growing concerns about contamination and disease. "People in the U.S. can't comprehend the scale and scope of what's needed," said Drew Koslow, an ecologist with the nonprofit Ridge to Reefs who recently spent a week in Puerto Rico working with a portable water purification system. EPA officials said that of last week they still had not been unable to inspect five of the island's 18 Superfund sites — highly contaminated toxic sites targeted for cleanup because of risks to human health and the environment — including the former U.S. Navy bombing range on the island of Vieques.

Workers are dangling from helicopters to fix Puerto Rico's power lines - Power workers with no fear of heights are being hoisted up by helicopter in the mountains of Puerto Rico to repair the island's devastated transmission lines.About 300 are in Puerto Rico already and 700 more are on the way, contracted by a fairly new company based in Montana, of all places.Montana may be 3,000 miles from Puerto Rico and far from tropical, but Andrew Techmanski, the CEO of Whitefish Energy, says his workers and contractors have the skills needed to get the island back on line. They're used to working in rough, mountainous terrain, dangling from a helicopter and clambering high up on transmission towers to get power lines up.

Puerto Rico still stumbles in the dark a month after Maria - One man climbs 24 flights of stairs several times a day alongside dormant elevators. Street vendors hawk plastic washboards for $20. And families outstretch their hands as crews in helicopters drop supplies in communities that remain isolated. This is life one month after Hurricane Maria slammed into the U.S. territory on Sept. 20 as a Category 4 storm that killed at least 48 people, destroyed tens of thousands of homes and left tens of thousands of people without a job. It was the strongest hurricane to hit Puerto Rico in nearly a century, with winds just shy of Category 5 force. "I've never seen anything like this," Maria caused as much as an estimated $85 billion in damage across an island already mired in an 11-year recession. That has complicated and delayed efforts to restructure a portion of a $74 billion public debt load that officials say is unpayable. And it has thrust Puerto Rico's territorial status into the international spotlight, reviving a sharp debate about its political future as the island attempts to recover from flooding, landslides and power and water outages. Maria has also put Puerto Rico into the U.S. political spotlight with President Donald Trump on Thursday giving himself a "10" for his response to the devastation wrought by the hurricane. Asked when the 3.4 million U.S. citizens living there could expect power to be fully restored, Trump said it will take "a while."  Roughly 80 percent of power customers remain in the dark, and another 30 percent are without water. Schools remain closed. Stoplights are not operating. And while nearly 90 percent of supermarkets have reopened, many have bare rows of shelves empty of goods ranging from water to bananas to canned tuna. "We're not eating well,"  "It's a lot of white rice and fried eggs." Less than half of Puerto Rico's cellphone towers are operating, and only 64 percent of bank branches have reopened, some of them with dead outdoor ATMs whose empty screens prompt a roll of eyes from people seeking to withdraw money. A brown haze has settled over parts of the island as more and more generators are turned on to light hospitals, homes and even the power company itself. In turn, the number of asthma cases and thefts has increased. Newly precious generators have been stolen from places including a nursing home, an airport cargo terminal and a hospital.Nearly 5,000 people remain in shelters, with many using rainwater to shower. "Life has changed dramatically,"  "I've had no work. Everything is paralyzed."

‘Survival Mode’ Defines Puerto Rico One Month After Maria -- Only tenuous, provisional measures seem to be preventing a much greater humanitarian crisis in Puerto Rico. A government task force has restored electricity to many hospitals and healthcare facilities, but others are sustained by diesel generators that occasionally fail. (APR Energy Chairman John Campion, whose company rents the units for natural disasters, said in an interview that such generators typically have a life span of 500 hours, and the crisis has already lasted longer than that.) About 83 percent of residents and businesses -- not just in the rural mountains, but across the island -- are still without electricity.  As of Friday, one-in-three residents lacked running water, and only about half of cellular towers were operational. Meanwhile, the official death toll, currently at 49, keeps creeping higher, with 76 islanders still reported missing. Many blame an insufficiently robust federal response, while authorities note the myriad logistical challenges that make the high-poverty island distinct from storm-battered states such as Florida or Texas.Certainly, there have been improvements. In the days after the storm, the entire island appeared engulfed in pandemonium; the airport operated at a fraction of its normal capacity with leaky ceilings, no air conditioning or escalators; frantic islanders formed half-mile long lines for gas and diesel; and mayhem ensued on roads and highways, even in the capital, as people tried to dodge fallen trees and street lights. This week, by contrast, the airport was back in operation, with a blast of cool air greeting new arrivals at the end of the jet bridge and slot machines in the terminals blinking and jingling. The roads around the capital have been largely cleared, as have many major highways. But the reality remained very different in the mountains of central Puerto Rico. “Everyone is in survival mode," "There’s no work, no earnings. People are buying what they need for the day."

Hurricane Ravaged Dominica: "It's All Gone" And Fighting For Survival -- In just the blink of an eye, island life on Dominica was turned upside down.  Like Puerto Rico, Dominica was violently ravaged by Hurricane Maria, and residents are still fighting for survival.The wooden frames and scattered, water-damaged belongings are all that remains of some homes of on Dominica, which was ravaged by Hurricane Maria last month.Without warning, the storm rapidly accelerated from a Category 3 to a Category 5, and residents said they could do little to prepare. “There was lightning, there was heavy rain…[it was like] the hurricane was in the house,” said Dominica’s Prime Minister Roosevelt Skerrit according to ABC News.  “We have lost everything that money can buy, and that is a fact.”  Puerto Rico was not the only island in Hurricane Maria’s path, and almost a month later,both islands still look like post-apocalyptic zones. But the island with the highest death toll per capita was Dominica; a close-knit, mostly Christian nation that was left at the mercy of a hurricane that shared a name with the mother of Christ: Maria. To date, 26 people are confirmed dead, 31 are still missing, and more than 50,000 people are displaced on the island that has a total population of roughly 74,000. When  ABC’s Nightline visited Dominica six days after the storm, the only way to reach its interior was with the United States military. Upon arrival, many who had the option to evacuate the island were already in the process of doing so, including 1,300 students at Ross University Medical School, an American college based in Dominica.  No one on the island has access to running, drinkable water, and with sewage systems destroyed, residents are contending with fears of diarrhea, dehydration, and dysentery. Much of the island still remains without power. For the vast majority of Dominicans, the choice to leave their home country isn’t financially available. More than 85 percent of houses have been damaged, and of those, more than a quarter simply do not exist anymore, leaving many of the residents homeless.

Ophelia became a major hurricane where no storm had before -- The system formerly known as Hurricane Ophelia is moving into Ireland on Monday, bringing "status red" weather throughout the day to the island. The Irish National Meteorological Service, Met Éireann, has warned that, "Violent and destructive gusts of 120 to 150km/h are forecast countrywide, and in excess of these values in some very exposed and hilly areas. There is a danger to life and property."Ophelia transitioned from a hurricane to an extra-tropical system on Sunday, but that only marginally diminished its threat to Ireland and the United Kingdom on Monday, before it likely dissipates near Norway on Tuesday. The primary threat from the system was high winds, with heavy rains.Forecasters marveled at the intensification of Ophelia on Saturday, as it reached Category 3 status on the Saffir-Simpson scale and became a major hurricane. For a storm in the Atlantic basin, this is the farthest east that a major hurricane has been recorded during the satellite era of observations. Additionally, it was the farthest north, at 35.9 degrees north, that an Atlantic major hurricane has existed this late in the year since 1939.It's not every day WPC has a conference call with the @metoffice & @MetEireann for #Ophelia! Visit @NHC_Atlantic for official track/info! pic.twitter.com/bEG2bNr3It— NWS WPC (@NWSWPC) October 14, 2017"Ophelia is breaking new ground for a major hurricane," National Hurricane Center scientist Eric Blake wrote on Twitter. "Typically those waters much too cool for anything this strong." He also added, "I really can’t believe I’m seeing a major just south of the Azores." Seas near w  here Ophelia intensified Saturday were 1-2 degrees Celsius above normal.

 Tropical Storm Ophelia Really Did Break the Weather Forecast Grid -- An already unusual hurricane season just got a lot weirder as Tropical Storm Ophelia set her sights on … Ireland and the British Isles. Unaccustomed to such weather, these decidedly not-tropical northern nations are buttoning up, for the first time in recent memory, in the face of the impending storm. Schools are closed, the power is out, and police report at least three people have already been killed in Ireland.Adding to the sensation that we’re witnessing a glitch in the matrix, the storm has also brought along a literal glitch in the storm tracker maps issued by the National Weather Service. This hurricane, it seems, exists too far outside of the traditional tropical storm boundaries to be automatically mapped. As environmental activist and writer Bill McKibben pointed out on Sunday morning, a forecast of Ophelia’s wind speed probabilities abruptly ended at a latitude of 60 degrees north:Apparently when they programmed the software they were not imagining tropical storms north of 60 deg latitude pic.twitter.com/y6zu7MLsCK— Bill McKibben (@billmckibben) October 15, 2017 Michael Brennan, a hurricane specialist with the National Oceanic and Atmospheric Administration, says the graphical glitch shouldn’t worry anyone, but at the same time, he can’t yet explain Ophelia’s strange trajectory. The strange maps are a simple, if somewhat stupefying, result of an old grid: “When you set up a grid, you define boundaries of that grid,” he said. “Whenever that grid was created, it was decided it would cut off at 60 degrees north and just west of 0 degrees longitude.”

Hurricane Ophelia strikes Ireland, bringing 119-mile-per-hour winds, coastal flooding, and even wildfire smoke --The post-tropical incarnation of Hurricane Ophelia slammed Ireland and the northern parts of the U.K., including Scotland, on Monday with damaging wind gusts, towering waves, coastal flooding, and a bizarre phenomenon related to wildfires burning in Portugal and Spain.  As a hurricane, Ophelia set records for being the strongest storm ever observed so far to the north and east in the Atlantic Ocean. On Friday and Saturday, the storm brushed past the Azores as a Category 3 storm. Then, it underwent a rapid transition into an extratropical low pressure system, feeding off the differences in air masses and upper level energy from the jet stream, rather than heat and moisture drawn from the warm waters of the Atlantic.  The storm prompted Met Eireann, Ireland's weather service, to issue a rare, nationwide red weather warning for strong winds on Monday.  As of midday Monday, eastern time, there were media reports of at least 2 storm-related deaths. The storm, referred to by Met Eireann as Ex-Hurricane Ophelia, or "Storm Ophelia," produced a 10 minute average wind speed of 57 miles per hour, with a gust to 84 miles per hour at Roches Point. However, much higher gusts have also been recorded elsewhere:

• 119 mph at Fastnet Rock (at a height of 200 feet)
• 97 mph at Roches Point
• 84 mph at Sherkin Island (before the weather station lost power)
• 78 mph at Cork Airport (before a loss of power)
• 76 mph at Shannon Airport

According to the Washington Post's Capital Weather Gang blog, if the 119 mph wind gust is verified, it would break the record for Ireland's strongest wind gust on record, which was 113 mph, set in 1961 during the remnants of Hurricane Debbie.   The strongest winds likely affected the Trump International Golf Course in Doonbeg, Ireland. The storm has caused power outages, blown the roofs off buildings, and pulled in smoke from deadly wildfires in Spain and Portugal, along with dust from the Sahara Desert, all the way to the North Sea.  In England, on the eastern side of the storm, southerly winds brought so much smoke and dust that the sun glowed an ominous red , prompting numerous posts on social media.

 Hurricane Ophelia damage: Ireland could be without power and water for more than a WEEK - HURRICANE Ophelia may leave up to 450,000 homes across Ireland without power, and utilities bosses clearing the damage are warning residents could be without electricity for more than a week.The fearsome storm claimed the lives of three people as gusts up to 118mph swept across Ireland yesterday, before moving on to batter Scotland and parts of north east England today.And the widespread power cuts have also impacted pumping and sewerage services, with 360,000 people in Ireland faced with no running water until power is restored.Irish electricity firm ESB said yesterday its network in “every part of the country” had been effected by Ophelia’s hurricane-force winds.And Derek Hynes, of ESB, warned a smaller repair effort following a less-severe storm in 2014 took took more than a week to restore power completely across the grid.Speaking yesterday, he said: “Storm Darwin in February 2014 resulted in a loss of supply to 280,000 customers, the restoration effort during storm Darwin took up to eight days across the country to restore supply to everybody.“It is our position at the minute we expect approximately 450,000 homes and businesses to be without electricity by darkness this evening.”The majority of problems for Irish Water are in counties Cork, Kerry, Wexford, Waterford, Galway, Leitrim, Westmeath and Cavan. A spokeswoman for Irish Water told radio station RTE this morning some treatment centres were operating using generators as a quick fix solution. She said three treatment centres were completely without power, and tankers were being drafted in to supply clean water to areas most in need.The spokeswoman added Irish Water would hand deliver warnings to residents to boil water before drinking it if necessary.  And she said there was the possibility of burst pipes across the network which would not be discovered until the full damage from Hurricane Ophelia has been assessed.

October 2017 ENSO update: Still watching for La Niña -- The October ENSO forecast says La Niña conditions are favored during the fall and winter 2017-18, but at press time the ocean-atmosphere system didn’t quite meet the criteria for a La Niña Advisory. Specifically, while the atmosphere is generally consistent with La Niña, the sea surface temperature in the Niño3.4 region has been volatile, recently edging up close to average following several weeks near or below the La Niña threshold (0.5°C colder than average). Is the overall pattern truly La Niña, with some short-term fluctuations temporarily obscuring the pattern? Or has the atmosphere-ocean system really not settled down into a consistent pattern at all? The difference between these two scenarios is subtle, and the ENSO forecast team is maintaining the La Niña Watch as we wait for a clearer picture. The forecast is for that picture to become clearer soon, with La Niña conditions 55-65% likely during this fall and winter. The average wind and cloud pattern over the equatorial Pacific during September looked a fair bit like what we’d expect during La Niña, including stronger near-surface east-to-west winds and upper-level west-to-east winds over the western tropical Pacific. The pattern of greater-than-average clouds and rain over Indonesia and less over the central Pacific is also typical during La Niña. The Southern Oscillation Index and Equatorial Southern Oscillation Index were both weakly positive during September, another indicator of a stronger-than-average Walker Circulation.

U.S. Winter Outlook: NOAA forecasters predict cooler, wetter North and warmer, drier South - Forecasters at NOAA’s Climate Prediction Center released the U.S. Winter Outlook today, with La Nina potentially emerging for the second year in a row as the biggest wildcard in how this year’s winter will shape up. La Nina has a 55- to 65-percent chance of developing before winter sets in.  NOAA produces seasonal outlooks to help communities prepare for what's likely to come in the next few months and minimize weather's impacts on lives and livelihoods. Empowering people with actionable forecasts and winter weather tips is key to NOAA’s effort to build aWeather-Ready Nation. “If La Nina conditions develop, we predict it will be weak and potentially short-lived, but it could still shape the character of the upcoming winter,” said Mike Halpert, deputy director of NOAA’s Climate Prediction Center. “Typical La Nina patterns during winter include above average precipitation and colder than average temperatures along the Northern Tier of the U.S. and below normal precipitation and drier conditions across the South.”Other factors that influence winter weather include the Arctic Oscillation, which influences the number of arctic air masses that penetrate into the South and is difficult to predict more than one to two weeks in advance, and the Madden-Julian Oscillation, which can affect the number of heavy rain events along the West Coast. The 2017 U.S. Winter Outlook (December through February):

• Wetter-than-average conditions are favored across most of the northern United States, extending from the northern Rockies, to the eastern Great Lakes, the Ohio Valley, in Hawaii and in western and northern Alaska.
• Drier-than-normal conditions are most likely across the entire southern U.S.
• Warmer-than-normal conditions are most likely across the southern two-thirds of the continental U.S., along the East Coast, across Hawaii and in western and northern Alaska.
• Below-average temperatures are favored along the Northern Tier of the country from Minnesota to the Pacific Northwest and in southeastern Alaska.
• The rest of the country falls into the equal chance category, which means they have an equal chance for above-, near-, or below-normal temperatures and/or precipitation because there is not a strong enough climate signal in these areas to shift the odds.

 Trump’s Would-Be Weather Czar Tried to Shut Down Free Forecasts -- Donald Trump is poised to hand over control of the National Oceanic and Atmospheric Administration—the government organization that focuses on weather and climate research—to a known opponent of the agency. Barry Myers, the C.E.O. of for-profit weather forecasting service AccuWeather, has supported measures that would limit how much information the National Weather Service can publicly release, so private companies like his can use N.W.S. data to sell their own products to consumers.  “He actively lobbied to privatize the National Weather Service.”   Myers is a businessman and a lawyer who supported a 2005 bill introduced by then Senator Rick Santorum to curtail competition between the National Weather Service and private providers.   “I fear that he’ll do irreparable harm to an agency whose primary mission is to save lives,” Daniel Sobien, the president of the National Weather Service Employees Organization, told Politico. “There seems to be a huge conflict of interest considering his business background and belief system.” If confirmed, Myers would be far from the only Trump appointee to lead an agency that he has previously sworn to destroy. Betsy DeVos, who heads up the Education Department, is a proponent of defunding public schools who has argued that “we don’t fire teachers enough.” Former Texas governor Rick Perry, the secretary of energy, once campaigned to eliminate the $30 billion agency he now runs. Still, nowhere is Trump’s anti-government agenda more obvious than in those agencies that involve climate and the environment. Scott Pruitt, now the head of the E.P.A., has sued the agency 14 times and is a self-described “leading advocate against the EPA’s activist agenda.” Most recently, Trump has signaled his desire to appoint Kathleen Hartnett White, a climate-change denier who has referred to global warming as a “dogma,” clean energy as “parasitic,” and carbon dioxide as “harmless”, to lead the Council on Environmental Quality.

Green groups criticize Trump pick for White House environmental policy post (Reuters) - Green groups on Friday slammed U.S. President Donald Trump for choosing a nominee for White House environmental panel who wrote in an opinion article last year that carbon dioxide is not a pollutant. The White House said on Thursday that Trump had nominated Kathleen Hartnett White, who served as Texas’s top environmental regulator under the state’s former governor, U.S. Energy Secretary Rick Perry, to the White House Council on Environmental Quality. The council sets the administration’s environmental policy goals. White, now a senior fellow at the Texas Public Policy Institute, has questioned the notion that burning fossil fuels is causing harmful increases in global temperatures. In an opinion article in the Austin American-Statesman newspaper on June 20, 2016, she said natural gas had been “falsely maligned” and should be known as the “gas of life.” Environmental Working Group President Ken Cook said on Friday that assertion indicated that White would facilitate “the rampant looting of environmental and public health protection policies,” according to a news release. The Environmental Working Group describes itself as “a non-profit, non-partisan organization dedicated to protecting human health and the environment.” The Sierra Club environmental group called White “a fossil fuel industry apologist” in a news release on Friday.

Dem senator puts holds on two EPA nominees -  Sen. Tammy Duckworth (D-Ill.) has placed a hold on two of President Trump's Environmental Protection Agency (EPA) nominees. Duckworth's office said she has holds on the nominations of Bill Wehrum to lead the EPA’s Office of Air and Radiation and Michael Dourson to head the Office of Chemical Safety and Pollution Prevention. In a statement, Duckworth cited the pair’s history working on behalf of industries they would regulate if the Senate confirms them to their positions at the EPA. She said Dourson’s career as a chemical industry representative compromises his ability to oversee the industry. And she called out Wehrum for his “record of opposing the Renewable Fuel Standard,” the federal mandate on biofuel blending requirements. “In the ten months that Donald Trump has been president, his administration has launched unprecedented attacks on the Renewable Fuel Standard — attacks that fly in the face of promises Trump made as a candidate to our nation’s farmers that he would champion the [Renewable Fuel Standard] program if elected,” Duckworth said in a statement. “Any senator who supports the [Renewable Fuel Standard] program, our farmers, and our commitment to the environment and energy dependence must oppose his nomination.” 

Dem senator slams Trump EPA nominee for starting work before confirmation | TheHill: Sen. Kirsten Gillibrand (D-N.Y.) slammed the Trump administration for what she called a "terrible nomination" for a top position in the Environmental Protection Agency (EPA), saying the pick, who already works for the agency, may have large conflicts of interest. Gillibrand said in a statement Wednesday that she was "stunned" when she learned that Michael Dourson, President Trump's nominee to head the EPA's Office of Chemical Safety and Pollution Protection, was already serving as an unpaid adviser to EPA Administrator Scott Pruitt. “The fact that he has already begun advising the EPA administrator shows contempt for the committee’s role in his nomination process and more importantly a profound disrespect to the families who are terrified about what toxic chemicals are going to do to their children’s health," Gillibrand said, calling for the EPA to cut ties with Dourson until the Senate could vote on him. Gillibrand, who serves on the Senate Environment and Public Works Committee that will vote on Dourson, cited his past work in the chemicals industry at the Toxicology Excellence for Risk Assessment group. Dourson's opponents say the group's research reached beneficial conclusions on chemicals that were out step with other scientists. “There is no way around it. Michael Dourson has spent his career helping chemical companies cover up deadly chemical contamination. His record of greenwashing the actions of chemical companies and placing their profits over the health and well-being of children is appalling," the environmentally conscious senator said. 

NASA Pinpoints Cause of Earth’s Recent Record Carbon Dioxide Spike - A new NASA study provides space-based evidence that Earth’s tropical regions were the cause of the largest annual increases in atmospheric carbon dioxide concentration seen in at least 2,000 years.Scientists suspected the 2015-16 El Nino -- one of the largest on record -- was responsible, but exactly how has been a subject of ongoing research. Analyzing the first 28 months of data from NASA’s Orbiting Carbon Observatory-2 (OCO-2) satellite, researchers conclude impacts of El Nino-related heat and drought occurring in tropical regions of South America, Africa and Indonesia were responsible for the record spike in global carbon dioxide. The findings are published in the journal Science Friday as part of a collection of five research papers based on OCO-2 data.“These three tropical regions released 2.5 gigatons more carbon into the atmosphere than they did in 2011,” said Junjie Liu of NASA’s Jet Propulsion Laboratory (JPL) in Pasadena, California, who is lead author of the study. “Our analysis shows this extra carbon dioxide explains the difference in atmospheric carbon dioxide growth rates between 2011 and the peak years of 2015-16. OCO-2 data allowed us to quantify how the net exchange of carbon between land and atmosphere in individual regions is affected during El Nino years.” A gigaton is a billion tons. In 2015 and 2016, OCO-2 recorded atmospheric carbon dioxide increases that were 50 percent larger than the average increase seen in recent years preceding these observations. These measurements are consistent with those made by the National Oceanic and Atmospheric Administration (NOAA). That increase was about 3 parts per million of carbon dioxide per year -- or 6.3 gigatons of carbon. In recent years, the average annual increase has been closer to 2 parts per million of carbon dioxide per year -- or 4 gigatons of carbon. These record increases occurred even though emissions from human activities in 2015-16 are estimated to have remained roughly the same as they were prior to the El Nino, which is a cyclical warming pattern of ocean circulation in the central and eastern tropical Pacific Ocean that can affect weather worldwide.

The U.S. solar industry's new growth region: Trump country (Reuters) - President Donald Trump’s administration has vowed to revive the coal industry, challenged climate-change science and blasted renewable energy as expensive and dependent on government subsidies. And yet the solar power industry is booming across Trump country, fueled by falling development costs and those same subsidies, which many Republicans in Congress continue to support. Data provided to Reuters by GTM Research, a clean energy market information firm, shows that eight of the 10 fastest-growing U.S. solar markets between the second quarters of 2016 and 2017 were Western, Midwestern or Southern states that voted for Trump, with Alabama and Mississippi topping the list. And solar firms are ramping up investments in these regions, signaling their faith that key renewable energy incentives will remain in place for years to come. The industry’s sunny outlook illustrates the complexity of green power politics in Washington and casts doubt on whether the administration can boost the coal and nuclear sectors while subsidies continue to the fuel growth of competing wind and solar. Solar expansion in the middle of the country is offsetting its slowing growth in the maturing California and Northeast markets. That marks a big shift for an industry that has historically relied on politically liberal coastal states where renewable energy development is mandated to combat air pollution and climate change. With falling development costs, solar firms now see strong prospects in conservative states with no such mandates. “Climate change has never come up in any discussion about why we would do a project,” said Matt Beasley, chief marketing officer for Silicon Ranch Corp, a solar developer based in Nashville, Tennessee. “It is always about the economics.” 

Bipartisan group of former FERC commissioners rejects energy secretary's bid to help coal plants - Energy Secretary Rick Perry’s bid to change regulations to help coal and nuclear power plants has run into unusually blunt opposition from a group of former regulators from both parties.Eight former members of the Federal Energy Regulatory Commission  — including five former chairmen — have filed a letter with the commission opposing Perry’s proposal that would give coal and nuclear plants credit for resilience so that they would have a better chance of beating solar, wind and natural gas competitors.The former commissioners said that Perry was seeking to reverse a quarter century of FERC reforms that have created a marketplace for electric power generators and that many of the coal plants he is aiming to help have no advantage when it comes to reliability.“His focus is clearly coal and there are a lot of dirty coal plants that are not competitive in today’s energy markets,” Elizabeth Moler, a former FERC chairwoman, former deputy energy secretary and former Exelon executive, said in an interview. “To me he’s effectively proposing to subsidize them and put a tax on consumers in doing so. It’s a tax in different clothing. It’s going to cost customers more money to run dirty old coal plants.”In early October, Perry made his proposal to FERC and asked for a decision within 60 days. He proposed that credit be given to power plants with 90-day fuel supplies on site so that they could operate during an emergency including extreme weather or a natural or man-made disaster. FERC is an independent agency, however, and some current members have indicated that the commission would make its own decision. Even one of President Trump’s nominees has stressed FERC’s independence. Robert F. Powelson, who was confirmed in August, said in a speech at the National Press Club on Oct. 16 that “the moment we put our thumbs on the scale is the moment we bastardize the process.”  In an earlier speech on Oct. 4, Powelson said “we will not destroy the marketplace.”

Former FERC heads: DOE NOPR would 'fundamentally distort' power markets  - When the Department of Energy published its Notice of Proposed Rulemaking to provide cost recovery for plants with a 90-day fuel supply onsite, former FERC Chair Jon Wellinghoff immediately told Utility Dive the proposal would "blow the market up" if enacted as written. Now he and four other past chairs are putting that sentiment into official comments, writing to sitting regulators that the NOPR would be "a significant step backward" from FERC's "long and bipartisan evolution to transparent, open, competitive wholesale markets." Independent grid operators have done "a superb job" at ensuring grid reliability while lowering costs to customers served by wholesale power markets, the former regulators wrote. But the introduction of subsidies for such a significant portion of the generation fleet would "fundamentally distort" their functioning. "The subsidized resources would inevitably drive out the unsubsidized resources, and the subsidies would inevitably raise prices to customers," they wrote. "Investor confidence would evaporate and markets would tend to collapse. This loss of faith in markets would thereby undermine reliability." Those comments echo concerns of independent analysts and state energy regulators in the weeks after the NOPR. “There would not be competitive resources on the market if the rule's text is to be taken seriously,” said Montana Public Service Commission Vice Chair Travis Kavulla. Instead of finalizing the NOPR as written, the former FERC chairs urge the sitting regulators to "use the opportunity" created by its discussion to "identify attributes of the current competitive market system that need to be improved." From there, FERC should "crisply define" those attributes and "either modify the current published proposal or initiate regional proceedings to examine resilience issues and consider the need for market rule changes." In particular, the former regulators pushed FERC to identify "outcome-based" resilience services. All organized markets procure Black Start resources, for instance, either through cost-of-service tariffs or competitive processes, as in ERCOT. And RTOs also have reliability must-run (RMR) contracts that ensure specific resources do not retire and are instead "available for a specified length of time to provide a base level of energy production."

Fuel security and power generation in the United States  - "The resiliency of the nation's electric grid is threatened by the premature retirements of power plants that can withstand major fuel supply disruptions caused by natural or man-made disasters," the U.S. Department of Energy warned last week.  Fuel security is the crux of the argument made by U.S. Energy Secretary Rick Perry in proposing a new grid resiliency pricing rule to save coal-fired and nuclear power plants from closure. The electric reliability risks have been extensively studied for a decade by state and federal regulators. Some of the problems identified were fairly easy to resolve, such as differences in the operating and planning schedules of the gas pipeline operators and grid controllers.  The issue that has exercised regulators most, however, is the possibility of a widespread shortage of natural gas during the winter heating season that might leave generators unable to secure enough fuel.The fear is that growing interdependency might leave regulators with a choice between keeping the lights on and keeping homes warm during the darkest and coldest days of winter.Gas-fired generators must compete with other customers, including local gas distribution companies, for gas and transportation capacity on the pipeline networks.Gas-fired generators' need for gas peaks in summer, when there is plenty of gas and capacity available, but there is also a smaller peak in winter, when generators must compete with strong demand from customers who need gas for heating. Reliability experts have expressed concerns about whether gas-fired generators would be able to secure enough fuel during a particularly cold period, when both electricity and gas systems would be stretched simultaneously. The Polar Vortex, which brought freezing temperatures across the entire eastern United States in January 2014, has become a particular focus of concern. "During the polar vortex, the cold weather also increased demand for natural gas, which resulted in a significant amount of gas-fired generation being unavailable," NERC wrote in a post-event study. Many generators failed to start or were unable to operate at full capacity, leading to intense pressure on electricity supplies, although almost no firm load was disconnected.  Many units failed because of frozen equipment but at least some were unavailable due to fuel supply problems and the problem was especially pronounced for gas-fired units.Gas-fired generators accounted for 55 percent of forced outages during the vortex, even though they represented only 40 percent of capacity in the impacted areas. By contrast, coal-fired units accounted for 26 percent of outages and 31 percent of capacity, while nuclear generators suffered 3 percent of the outages but provided 12 percent of capacity.

Mapped: How the US generates electricity - (interactive infographic) The US electricity system is often described as the world’s largest machine. It is also incredibly diverse, reflecting the policy preferences, needs and available natural resources of each state.Carbon Brief has plotted the nation’s power stations in an interactive map (above) to show how and where the US generates electricity.A few key messages can be gleaned from the map and associated data interactives below:

• The US electricity system has been changing rapidly over the past decade.
• This reflects not only federal policy, but also technologies, geographies, markets and state mandates.
• The average US coal plant is 40 years old and runs half the time. Some 15% are at least 50 years old, against an average retirement age of 52.
• Planned new power plants are almost exclusively gas, wind or solar.

Supplying electricity to a nation’s homes, business and industry is an almost uniquely challenging enterprise. For now, electrical energy is either expensive or inconvenient to store, meaning supply and demand must be balanced in real time. It is also easier to generate power close to home than to transport it over long distances.The way electricity is generated fundamentally depends on the fuels and technologies available. The march of progress means this mix is changing – but natural resources and geographies are fixed. Moreover, US states have broad powers to influence the electricity systems within their borders.Putting the US electricity system on a map offers visual confirmation of how important these factors are. Why is solar so prevalent in North Carolina, for example? Or coal in West Virginia? You can use Carbon Brief’s interactive map, above, to view all the power plants in the US and their relative electricity generating capacities, which are proportional to the size of the bubbles. The dynamic chart in the sidebar summarises the makeup of the capacity mix. (See the notes, below, for full details on how the map was made.)

 Trump Tells EPA to Halt Ethanol Quota Changes - President Donald Trump intervened personally with the Environmental Protection Agency amid pressure from Republicans in the politically important state of Iowa who worried the agency was poised to weaken biofuel quotas, three people familiar with the discussions said. Trump directed EPA Administrator Scott Pruitt to back off any changes that would dilute a federal mandate for biofuel use, the people said.  A top EPA official said Trump’s urging was unnecessary because Pruitt wasn’t planning on weakening the mandate. Nevertheless, the agency was told by the White House to drop two changes that were under consideration: a possible reduction in biodiesel requirements and a proposal to allow exported renewable fuel to count toward domestic quotas, said the people, who asked not to be identified because they were not authorized to speak publicly about the move.  The issue is politically treacherous for the president because it pits his allies in the oil industry against Midwest voters who helped elect him, including Iowans who hold first-in-the-nation presidential caucuses. While campaigning in Iowa last year, Trump pledged to protect ethanol and the biofuel mandate. Trump called Iowa Governor Kim Reynolds Wednesday to reassure her of his commitment to the program. "It was a really good, productive conversation," she said in an interview. Pruitt has also been working behind the scenes to soothe Midwestern politicians and biofuel backers alarmed by the possible changes the EPA was considering, the top agency official said. Reynolds is one of a phalanx of Midwest politicians who have lobbied the administration by highlighting the president’s promises to support ethanol and signaling that any move to weaken annual quotas would be seen as a betrayal.  "They are feeling the pressure, and that’s why we need to keep it up, we can’t let down," Reynolds said during a press conference with biofuel backers in Pella, Iowa.

Curbing car emissions has made palladium the most precious of metals - Forget gold and platinum, because the shiny metal catching the eye of traders is palladium. The price of palladium surpassed $1,000 per troy ounce for the first time in 16 years in trading today.As countries vow to slow, and eventually stop, the sale of gasoline- and diesel-burning cars, palladium is benefiting from the same surge in investor interest that has pushed up the price of metals used to make lithium-ion batteries in electric cars, such as cobalt and lithium.Palladium is used in catalytic convertors that convert the harmful gases in car exhaust into less toxic substances. So before electric cars sweep across the world’s roads, the metal is in high demand as car manufacturers look for other ways to cut the emissions from their fleets. The price of palladium, which is mostly mined in South Africa and Russia, has surged almost 50% this year as investors bet that the market is heading for a shortage in supply. Speculative bets on palladium’s rise have almost tripled in the past six months, according to the Financial Times (paywall). Last month, the price per ounce of palladium rose above platinum for the first time in 16 years. This might encourage the manufacturers of catalytic convertors to find ways to switch to using platinum in catalytic converters, which is likely to remain cheaper in the near future.

7 Years & Counting - Trump's Looming EV Time-Bomb -- In just seven years’ time – unless Trump does something before his four years are up – the average fuel efficiency of the average car will have to almost double. From 35.5 MPG (now) to 54.5 MPG by 2025. So reads the fuel economy fatwa issued by Trump’s predecessor. No matter how much it costs, no matter what it takes. To put this in perspective, as of 2018, there is only one car available that is capable of meeting the 2025 “goal” – as these forced-on-us things are styled: It is the Toyota Prius Prime plug-in hybrid. Nothing else comes close. Well, except electric cars. These average infinity – as far as gas consumption goes. Which is very helpful insofar as the averages. The federal fuel economy fatwa is formally the Corporate Average Fuel Economy (CAFE) standard, which is an arbitrary number pulled out of a hat by federal regulatory ayatollahs, who have somehow become the arbiters of how much fuel the cars we buy ought to use. Those cars which use more gas than the arbitrarily decreed figure are subject to punitive “gas guzzler” fines meant specifically to discourage their manufacture as well as their purchase, by making them artificially more expensive to manufacture and more expensive to buy. In case you wondered, this is why larger vehicles and vehicles with larger engines are becoming both scarce and exotically priced. If you’re young – 30 or less – you probably will not remember but there was a time when most Americans, including working-class Americans, routinely drove large cars with large engines. Bought them brand-new. Smaller cars with smaller engines were also available, but people bought them because that’s what they wanted – not because they were forced to by government fatwas that put larger and larger-engined cars out of their reach, as today. It is also why suburbanites routinely drive SUVs today. “SUVs” are a made-up class of vehicle that did not exist prior to the CAFE fatwa. The class was made-up by the car industry as a way to get around the fatwa – which (at the time) granted a partial exemption to what were then just trucks, which were considered work vehicles. But if you enclosed the truck’s bed and added seats – you could carry people. Voila!

 World petrol demand 'likely to peak by 2030 as electric car sales rise' -World petrol demand will peak within 13 years thanks to the impact of electric cars and more efficient engines, energy experts have predicted. UK-based Wood Mackenzie said it expected the take-up of electric vehicles to cut gasoline demand significantly, particularly beyond 2025 as the battery-powered cars go mainstream. Combined with car manufacturers forced by regulations to produce models that run further on the same amount of oil, a new report by the analysts suggests global gasoline demand is likely to peak by 2030. The UK and France have recently said they will phase out sales of new petrol and diesel cars by 2040. China, the world’s biggest car market, is mulling a similar move, which would have a significant impact on oil demand.Of the 96m barrels of oil consumed globally each day, 60m are used for transport, which Wood Mackenzie predicts will stall by 2030. Alan Gelder, a senior analyst at Wood Mackenzie, said the ripples of gasoline’s plateau would be felt much earlier, as oil companies put off investment in refineries and the number of petrol stations is reduced. For countries that rely strongly on tax income from fuel duty, such as the £28bn the tax brings in for the UK each year, falling gasoline demand will pose a challenge for governments, he said.  In the short term, regulatory changes to fuel efficiency standards imposed by Barack Obama in the US, and by the EU and China, will be the biggest curb on gasoline demand. Battery-powered cars are expected to have a bigger impact later.“Post-2025, that’s where electric car sales take off. The further you go into the future, the more it’s electric cars,” said Gelder, who foresees plug-in models taking 10% of global new car sales by 2030. If cities began banning cars with a combustion engine, that would rapidly accelerate the switch to electric vehicles, he added. While gasoline will peak first, the analysts expect total oil demand to plateau about 2035, as growth is hit by climate change policies and developing world economies maturing.

VW fails to secure long-term cobalt supply for electric vehicles -  An attempt by one of the world’s biggest carmakers to secure long-term supplies of cobalt for its push into electric vehicles has been shunned by leading producers of the metal. Volkswagen issued a tender last month seeking a minimum of five years of supply at a fixed price, according to people familiar with the process, but struggled to find any takers.The carmaker put off miners by suggesting a price that was well below current market prices, which have jumped by more than 80 per cent this year, the people said.  “They’re being arrogant because they’re automotive and they’re used to doing it,” one trader said. “They completely misjudged the contents of the tender. There’s no point negotiating — it’s not even a discussion point.”   The pushback is a sign of the difficulties carmakers face securing long-term supplies of battery raw materials as they gear up to produce electric vehicles for the mass market.

Australia shuns clean energy target in policy overhaul (Reuters) - Australia’s government on Tuesday rejected calls to set a clean energy target, instead scrapping aid for renewable projects and adopting a fuel-neutral energy policy that it said could keep the country’s lights on and cut power prices. Prime Minister Malcolm Turnbull won support from his Conservative party for a plan to end subsidies for renewable energy after 2020, while requiring energy retailers to guarantee an energy mix that would bring both reliable power and lower carbon emissions. Turnbull set out to overhaul energy policy a year ago to end a decade of political strife over carbon targets - amid rising power prices for domestic consumers - and stabilize the nation’s grid after a huge storm blacked out the country’s most wind power-dependent state. “These guarantees will ensure there is a place for all power sources in the nation’s future energy mix - solar, wind, coal, gas, batteries, pumped hydro,” Turnbull said, announcing the plan in a video posted on social media. “Our plan has no subsidies, no certificates and no tax.” Turnbull had faced a revolt from right-wing members of his party, led by former prime minister Tony Abbott, who do not believe climate change is a threat, and back coal while opposing subsidies for renewable energy. 

Australian battery storage proponents despondent about future - Some in the fledgling tech-metals mining and processing industry are dismayed that the Federal Government's new energy policy does not appear to support renewable energy storage such as batteries. Australian Vanadium chief executive Vincent Algar said the National Energy Guarantee (NEG) unfairly pitted the batteries and renewable energy storage sector against fossil fuel electricity producers such as oil and gas."With coal and gas considered a dispatchable energy source under the NEG, what incentive will there be to source dispatchable energy from a battery?" he said.Dispatchable power can be turned on and off and used immediately as needed. The NEG will mandate that energy retailers need to buy a certain amount of energy from dispatchable sources, which include coal, gas, and pumped hydroelectricity storage.

Britain tries price cap for gas and electricity customers: Kemp -  (Reuters) - Britain's government has published draft legislation which would cap gas and electricity prices for most residential customers until the end of 2020, the most startling intervention since privatisation three decades ago.The caps come after a review by the Competition and Markets Authority (CMA), which concluded in 2016 that retail gas and electricity markets were not working well for customers.Residential energy prices have become a sensitive political issue after gas and electricity prices rose much faster than inflation (and incomes) since 2004.Real electricity prices rose by 75 percent between 2004 and 2014, while real gas prices rose by 125 percent over the same period ("Energy market investigation", CMA, 2016).Six large energy firms dominate the supply of gas and electricity and supply almost 90 percent of domestic customers.And a complicated system of tariffs has left residential customers paying wildly different amounts for essentially the same gas and electric supply.The combination of rising prices, concentrated supply, and extensive price discrimination has created widespread concerns about profiteering and unfairness.The CMA investigation and now the proposals for a price cap are intended to address some of those concerns in the short term, while hoping that structural reforms produce more competition in the longer term.

The electricity required for a single bitcoin trade could power a house for a whole month - — Bitcoin transactions use so much energy that the electricity used for a single trade could power a home for almost a whole month, according to a paper from Dutch bank ING. Bitcoin trades use a lot of electricity as a means to make verifying trades expensive, therefore making fraudulent transactions costly and deterring those who would seek to misuse the currency. "By making sure that verifying transactions is a costly business, the integrity of the network can be preserved as long as benevolent nodes control a majority of computing power," wrote ING senior economist Teunis Brosens. "Together, they will dominate the verification (mining) process. To make the verification (mining) costly, the verification algorithm requires a lot of processing power and thus electricity." Comparing the amount of energy used for a bitcoin transaction to running his home in the Netherlands, Brosens says: "This number needs some context. 200kWh is enough to run over 200 washing cycles. In fact, it's enough to run my entire home over four weeks, which consumes about 45 kWh per week costing €39 of electricity (at current Dutch consumer prices)." Not only does Bitcoin use a vast amount of electricity to complete transactions, it uses an almost exponentially larger amount than more traditional forms of electronic payment.  "Bitcoin's energy costs stand in stark contrast to payment systems that have the luxury of working with trusted counterparties. E.g. Visa takes about 0.01kWh (10Wh) per transaction which is 20000 times less energy," Brosens notes, pointing to the chart below:

U.S. coal production fell in first half of 2017 after increasing in late 2016 - U.S. coal production averaged 192 million short tons (MMst) per quarter in the first half of 2017, a slight decrease from the second half of 2016 but still above levels reached in the first half of 2016. The recent decline in production was a result of weaker demand for steam coal, about half of which is mined in Wyoming and Montana. Production of metallurgical coal, which is used in steel manufacturing and makes up about 8% of total U.S. coal production, increased for the third consecutive quarter.  Demand for steam coal, which in the first half of 2017 made up more than 90% of U.S. coal production, is driven by coal-fired electricity generation. In recent years, coal has lost part of its electricity generation share to other fuels, but it still accounted for 30% of the U.S. electricity generation mix in the first half of 2017 compared with natural gas and renewables (including hydro) at 31% and 20%, respectively.  The largest reductions in demand for steam coal in the second quarter of 2017 occurred in Illinois, Kansas, and Minnesota, which together accounted for nearly half of the total U.S. decline in steam coal consumption. The overall decline in coal demand resulted in a reduction of 11.7 MMst in total steam coal production in the second quarter of 2017, 8.1 MMst of which was coal mined from the Powder River Basin in Wyoming and Montana.  In contrast, average quarterly metallurgical coal production increased from 14.1 MMst in the second half of 2016 to 16.8 MMst in the first half of 2017, driven by higher worldwide demand, particularly from China, Japan, and India. U.S. metallurgical coal exports to Asia increased as China, Japan, and India looked to offset disruptions to their supply of Australian coal caused by Cyclone Debbie in April 2017. In addition, China’s demand for metallurgical coal increased as its steel production reached record levels in June, according to the National Bureau of Statistics of China.

Texas utility to close two major coal-fired power plants | TheHill: A Texas utility plans to shut down two large coal-fired power plants in the state. Luminant announced Friday that it would shutter its two-unit Sandow Power Plant near Austin and two-unit Big Brown Power Plant between Dallas and Houston in early 2018. The two power plants have a generating capacity of 2,300 megawatts. The company had previously announced its plan to take a third coal-fired facility offline, meaning 2.1 million Texas homes will no longer be powered by coal, the Dallas Morning News reports. In a statement, the company said the plants are “economically challenged,” because of low wholesale power prices, the expansion of renewable electricity and the low cost of natural gas.  “This announcement is a difficult one to make,” said Curt Morgan, the president and CEO of Luminant parent company Vistra Energy.“It is never easy to announce an action that has a significant impact on our people. Though the long-term economic viability of these plants has been in question for some time, our year-long analysis indicates this announcement is now necessary," he said.   The announcement comes days after Trump administration started the process of repealing the Obama-era Clean Power Plan, a climate rule for power plants. Officials, from President Trump to Environmental Protection Agency Administrator Scott Pruitt, have vowed to end the “war on coal,” a moniker used by opponents to describe Obama’s aggressive climate change agenda.

Texas' planned coal retirements could depress ERCOT reserve margin - Cheap natural gas and the rise of wind power is changing the Texas power market, and could mean the Lone Star State will need reliability must-run contracts to ensure sufficient capacity. An analysis will be completed before ERCOT's next board meeting in December.But as coal plants are forced offline, wind generation is stepping in to fill the gap, says research at the University of Texas.Some 4,000 MW of wind capacity is expected to come online by 2018, according to Joshua Rhodes, research fellow at the University of Texas Austin’s Energy Institute.  And while the coal and wind have very different capacity factors, he added that "it’s conceivable that energy generation from wind could possibly overtake coal in the near future."Earlier this month, Luminant revealed plans to shutter its Sandow and Big Brown power plants in early 2018, due to low wholesale power prices and difficulty competing with cheap gas-fired and renewable power. The company also plans to retire its coal-fired Monticello power plant in Titus County, Texas, in January.According to Rhodes, Texas will have almost 24 GW of wind capacity next year, compared with 20.3 GW of coal capacity. The coal retirements come despite efforts by the Trump administration to stem the decline. U.S. Environmental Protection Agency head Scott Pruitt is working to rescind the Obama administration's Clean Power Plan, which sought to cut emissions from power plants. Energy Secretary Rick Perry is also pushing for cost recovery for baseload generation in wholesale markets — though it would not impact the Electric Reliability Council of Texas markets, which are exempt from federal regulation.

This Huge Rail Company Is Spewing Coal Dust All Over a Low-Income Community --Each day, Norfolk Southern, a large transportation company, ships coal nearly 2,000 miles across Virginia to Lambert’s Point—a low-income and predominantly black community on the Elizabeth River in the city of Norfolk. When the coal arrives at Lambert’s Point, a coal exporting facility, it’s dumped into shiploaders before being sent off to different parts of the world.  In one year the facility can handle up to 48 millions tons of coal in its 200,000 coal cars.The company boasts that it has created 44 jobs in the state in 2016 and has donated $22 million to various charities over the last five years. But for residents in the surrounding neighborhoods, these contributions are less important than  the coal dust that comes off the rail cars and has coated their community for as long as anyone can remember.  When coal is being transported, hazardous particles of dust routinely fly off the rail cars into the surrounding communities. The Sierra Club reports that those who are exposed are vulnerable to increased rates of childhood bronchitis, asthma, pneumonia, emphysema, heart disease, and reduced lung capacity. They also note that coal cars release 90,000 pounds of coal dust into nearby Virginia towns and cities every year. The Norfolk Southern coal terminal on the Elizabeth River began operations in 1885 and never had a permit regulating coal emissions because it predated the Clean Air Act of 1970. In 1992, the Virginia Department of Air Pollution Control granted the company its first air pollution permit—but regulations only involved new construction, not the uncovered rail cars transporting coal from other parts of Virginia to the coast.

EPA Says Higher Radiation Levels Pose ‘No Harmful Health Effect’ -- In the event of a dirty bomb or a nuclear meltdown, emergency responders can safely tolerate radiation levels equivalent to thousands of chest X-rays, the Environmental Protection Agency said in new guidelines that ease off on established safety levels.  The EPA’s determination sets a level ten times the drinking water standard for radiation recommended under President Barack Obama. It could lead to the administration of President Donald Trump weakening radiation safety levels, watchdog groups critical of the move say.  "It’s really a huge amount of radiation they are saying is safe," said Daniel Hirsch, the retired director of the University of California, Santa Cruz’s program on environmental and nuclear policy. "The position taken could readily unravel all radiation protection rules."  The change was included as part of EPA "guidance" on messaging and communications in the event of a nuclear power plant meltdown or dirty bomb attack. The FAQ document, dated September 2017, is part of a broader planning document for nuclear emergencies, and does not carry the weight of federal standards or law.  "According to radiation safety experts, radiation exposures of 5-10 rem (5,000-10,000 mrem or 50-100 mSv) usually result in no harmful health effects, because radiation below these levels is a minor contributor to our overall cancer risk," EPA said in the document. That level is equivalent to as many as 5,000 chest X-rays or seven to 14 chest CT scans, according to a comparison with Food and Drug Administration data. A 2007 version of the same document stated that no level of radiation is safe, concluding: "The current body of scientific knowledge tells us this."

Florida rejects some recovery for proposed new FPL nuclear reactors  (Reuters) - Utility regulators in Florida on Tuesday rejected Florida Power & Light’s (FPL) request to recover costs incurred after 2016 for two new nuclear reactors at the utility’s Turkey Point power plant. The Florida Public Service Commission (PSC) said in a statement that there was insufficient evidence to decide on FPL’s request to recover costs because the utility did not file a feasibility analysis for the new reactors in 2017 as required under Florida’s nuclear cost recovery rules. FPL, a unit of Florida energy company NextEra Energy Inc, said it was still pursuing licenses to build the new reactors from the U.S. Nuclear Regulatory Commission (NRC). “We are on track to receive final approval from the NRC in the coming months, and we intend to complete the licensing process such that the option of new nuclear power is available for our customers for many years into the future,” Bianca Cruz, a spokeswoman at FPL said in an email. She said the earliest the new units could enter service is 2031-2032 at an estimated cost between $14.96 billion and $21.87 billion for the 2,200-megawatt project. One megawatt can power about 1,000 U.S. homes. FPL, however, has not made a final decision to build the new reactors. There are two reactors operating at the Turkey Point plant, which is about 35 miles (56 kilometers) south of Miami.

Nuclear industry scrambles to avoid Euratom cliff edge - Britain’s nuclear industry is scrambling to understand the full consequences of leaving Europe’s nuclear regulation group Euratom amid growing fears that Britain may be heading towards a Brexit cliff edge. The withdrawal from Euratom, as part of the Brexit process, threatens to leave British firms without a framework through which to navigate the tightly regulated trade of nuclear materials. UK ministers presented a Nuclear Safeguards Bill to Parliament this week which sets up a domestic nuclear safeguards regime. Industry insiders told The Daily Telegraph that they are monitoring the Government’s efforts to replicate the Euratom standards in an attempt to maintain access to the global nuclear market, but the slow progress means urgent contingency plans are likely to be required. The risk of a 2019 cliff edge could paralyse work building the new Hinkley Point C new nuclear project and leave nuclear fuel suppliers without stocks. "We are facing disruption to absolutely everything," Tom Greatrex, chief executive of the Nuclear Industries Association, told Sky News. "Fifteen months to two years sounds like a lot of time. It's not. The clock is ticking and it has been since the referendum and we've made very little progress so far." Nuclear giant Westinghouse, which runs the Springfields nuclear fuel plant in Cumbria, is working closely with the Government, regulators and its customers to ensure it can still import raw materials and export fuel even after leaving Euratom. The Springfields facility is the first plant in the world to produce fuel for a commercial nuclear power station and has supplied products and services to customers in 11 countries since 1946. Without a replacement deal the facility, which employs a workforce of 1,200, would be unable to import the uranium needed to make enriched nuclear fuel or be able to export to customers. 

New Ohio bill reintroduces nuclear subsidy program as DOE pushes cost recovery NOPR - Illinois and New York have both adopted nuclear subsidy programs, and Connecticut has attempted to institute a nuclear subsidy. Ohio’s previousattempts at its version of a nuclear subsidy stalled, but a new version of the bill aims to make the subsidies more palatable by reducing the costs to ratepayers. HB 381 would set the cost for residential customers at $2.50 and the lesser of $3,500 a month or 5% of the total bill for commercial and industrial customers. Under the previous bill, all customers would have been hit by a 5% monthly rate increase. The new bill also shortens the term of the subsidy to 12 years from 16 years. The new bill is sponsored by Rep. Anthony DeVitis (R) and co-sponsored by Rep. Ron Young (R). “Passage of [HB] 381 would increase the likelihood of keeping the plants operational throughout the life of the program,” FirstEnergy spokeswoman Jennifer Young told The News-Herald.  The Ohio bill comes as the Trump administration is trying to find a way to turn the tide for coal and nuclear generation. In September, Energy Secretary Rick Perry proposed the Federal Energy Regulatory Commission (FERC) begin a rulemaking on cost recovery for baseload generation. And earlier this month, the Environmental Protection Agency began the process for repealing the Obama administration’s Clean Power Plan.

Fossil Fuel Misinformation Helps Quash Community Effort to Ban Fracking in Youngstown, Ohio - DeSmog (blog) - For the first time since 2013, a group of activists in Youngstown, Ohio, has been told it cannot place an anti-fracking initiative on local ballots, due in part to a misinformation campaign from the fossil fuel industry. Soon after the Community Bill of Rights Committee gathered enough signatures for both initiatives to head to vote, the oil and gas industry launched a unique media campaign against not only the initiatives but the local ballot initiative process itself. The talking point: Local ballot measures cost taxpayers too much money and should be avoided. Earlier this year the pro-fossil fuel outreach website Energy In Depth filed a freedom of information request from the City of Youngstown for costs associated with the local ballot initiative process. (In 2011 DeSmog exposed Energy In Depth, which billed itself as the product of small, independent oil and gas producers, as being funded by some of the biggest fossil fuel companies on the planet, including BP, Shell, Chevron, and XTO Energy/ExxonMobil.) Energy In Depth reported that the city had spent $185,000 on the previous six anti-fracking ballot measures. However, a DeSmog analysis of the same records shows that this figure is misleading and inaccurate. The $185,000 figure represents the total cost of six primary and general elections between 2013 and 2016, which included much more than just the anti-fracking initiatives. According to the fiscal officer of the Mahoning County Board of Elections, which bills the City of Youngstown for election costs, there were five other charter amendments, 15 liquor options, and one county health board question that contributed to the city’s election invoice. Additionally, the figure touted by Energy In Depth includes paying poll workers in half of those elections, a regular cost incurred whether or not ballot measures were up for vote. Despite this inaccuracy, Energy In Depth’s talking point and the $185,000 figure were quickly picked up by local outlets, fossil fuel–friendly publications and business journals. The U.S. Chamber of Commerce even compared the $185,000 to the amount of money that was spent managing the months-long anti-Dakota Access camps at Standing Rock (roughly $38 million) in a post called “The High Cost of Fracking Protesters.”

Pipelines Fuel Concern for Waterways in Coal Country -   - Bordering western Pennsylvania, the landscape of eastern Ohio is changing, literally. Stretches of hillsides are being cleared of trees, to make way for well pads and pipelines. The oil and gas industry is starting to take a front seat in what’s traditionally been rural coal country. As in Pennsylvania, some people are excited about the new industry. But others are concerned that there’s not enough regulation in place to protect waterways, and other aspects of the environment, from potential harm.  The region, around where Ohio, Pennsylvania and West Virginia meet, is called the Appalachian Coal Basin, and it’s considered to one of the largest coal fields in the country. By the late 1970s, Murray Energy’s coal mines had left the water quality in Captina Creek so bad that large sections of it were declared dead. Local citizens mounted an effort to clean up the stream and, with help from the coal companies, removed the gob piles from its banks. Today, Captina is considered one the cleanest streams that feeds into the Ohio. People swim and fish in it. Abbey Hayward, Captina Creek Watershed Coordinator at the Belmont County Soil and Water Conservation District, keeps an eye on the rare Eastern Hellbender salamander that lives here. . “They need clearer water because they breathe through their skin.” Hayward soon noticed drilling rigs on the hillsides, a sign of energy companies fracking for natural gas. Even though no one in her office, nor the Captina Creek Watershed Action Plan, had mentioned fracking, she started to understand how quickly the industry was moving in to Belmont County.

Prospects For Ethane Production And Transportation From The Marcellus/Utica -- Available ethane in the Marcellus/Utica is expected to increase 70% by 2022 to 800 Mb/d, from about 470 Mb/d this year. That should be good news for the slew of ethane-only steam crackers coming online in that time frame, primarily along the Gulf Coast. But unfortunately, there is limited ethane pipeline takeaway capacity out of the region and today more than half of the potential ethane supply is being rejected into the natural gas pipeline stream. Without additional takeaway capacity, that rejected volume is expected to grow and few additional ethane barrels will make their way to the Gulf Coast. The question is, will transportation economics support additional pipeline development to where the demand is growing the most? Today, we will explore how the changing ethane market is likely to impact the Marcellus/Utica producing region. This is Part 4 of a series in which we look forward based on RBN’s most recent forecasts of ethane supply and demand. In Part 1, we began with a discussion of how the ratio of Mont Belvieu ethane prices to the Henry Hub natural gas price on a per-Btu basis influences the decision of whether to extract ethane or reject it and send it into the natural gas stream. As we noted, that’s one of the most important market factors for understanding how the current ethane market transformation will unfold. The higher the ratio of ethane to natural gas prices/Btu, the greater the volume of ethane that is recovered as a liquid feedstock for the petrochemical industry. This year, that ratio has shifted to 1.4:1, up from 1:1 last year. As a result, ethane production is up about 90 Mb/d in 2017 year-to-date from the 2016 average.

At chapel where nuns protest a pipeline, 23 arrested, including several in their 70s and 80s -   Months ago, when the nuns and the activists built a chapel in the proposed path of a Pennsylvania pipeline, they said that if the bulldozers came to tear up the nuns’ land and put a pipe beneath it, they might stand in the way of the construction equipment to block it with their bodies and their prayers.That day arrived on Monday.  In a dramatic showdown in a cornfield, owned by Catholic sisters of the Adorers of the Blood of Christ, 23 people stood holding hands and singing hymns until they were arrested and charged with defiant trespassing.“I feel really frustrated with our courts and our government,” Barbara Vanhorn, a local resident who came to the nuns’ cornfield to join the protest, said to NPR. The oldest of the 23 people arrested at 86, Vanhorn said she worries that the natural gas pipeline, which will carry the products of fracking in Pennsylvania’s Marcellus Shale formation, will damage the environment. “They’re giving in to these big, paying, lying companies that are trying to destroy not only our country but the world.”According to the local Fox News station, 11 of the protesters who were arrested are in their 60s, 70s and 80s. NBC News reported that one protester, who suffered an apparent panic attack after his hands were zip-tied behind his back for more than an hour, was taken to a hospital. Most of the people arrested were local residents; one traveled from Massachusetts and another from West Virginia to join the protest. Mark Clutterbuck, who leads the group Lancaster Against Pipelines, said that almost 100 people participated in the demonstration. The nuns, most of whom are in their 80s and 90s, did not protest but did hold a prayer vigil in support.

As gas drilling returns, industry and colleges need to talk - No college or training program in Pennsylvania, West Virginia and Ohio makes speaking skills a major component of its programs for students headed into the natural gas industry.Yet half of drilling companies in that region want their employees to be good speakers.  The same goes for time management and writing skills, which between 6 percent and 7 percent of all colleges emphasize in their natural gas-related curriculum. Nearly half of drillers see those skills as important when making hiring decisions. The findings were part of a Rand Corp. study released in Pittsburgh on Tuesday spotlighting a lingering disconnect between the region's schools and employers in the gas industry that swept suddenly into southwestern Pennsylvania about a decade ago to tap into the Marcellus Shale formation.More broadly, it shows the challenge of getting industry and educators to work together on building a regional labor force.  “Few [oil and gas] employers provide deep or continual instructional or curricular support to colleges,” according to the report produced by three Rand researchers with funding from the National Science Foundation. “Both colleges and employers point to each other’s unwillingness and lack of time as key barriers to partnering.” It’s perhaps no surprise that the "skills gap" — a buzzword in workforce development spanning industries like construction, manufacturing, utilities, auto body shops and aeronautics — is an issue in oil and gas.

Secretive Billionaire Wants to Expand Fossil Fuel Empire in the US - The Real News Network – (interview & transcript) James Ratcliffe, the billionaire owner of the chemical giant Ineos Corporation, is pushing for a dangerous pipeline through Pennsylvania, while the company quietly works to start fracking operations in Scotland and the UK, says Food & Water Watch's Patrick Woodall  Patrick Woodall is Research Director and Senior Policy Advocate for Food & Water Watch. Patrick has been a public policy analyst, researcher and advocate on economic justice issues in Washington for more than two decades, including extensive work on mergers and consolidation throughout the food system.

Protesters arrested as pipeline construction begins on natural gas pipeline in Lancaster County   - Protesters surrounded a giant piece of digging machinery and about 25 were arrested as they tried to block the start of construction of a natural gas pipeline near Columbia in Lancaster County.  Within minutes of the last hand-cuffed protester being led away, work on the Atlantic Sunrise pipeline began on the tract of cornfield about a mile south of Route 30.The arrests took place on farmland owned by the Adorers of the Blood of Christ, a religious order of nuns who are suing the federal agency that approved the project, and Williams Partners LP, the Oklahoma firm that's building the pipeline to transfer natural gas from Pennsylvania's Marcellus Shale region.Although the suit is still alive, a federal judge on Friday ruled that construction can begin. On Monday, a crowd of protesters had gathered before 7 a.m. The pipeline, organizers said, violates "our religious rights, community rights, property rights, and rights to clean air and water." The protesters included people of all ages -- retirees, parents of young children and even a few teens who otherwise would have been in school. It took hours until construction equipment was in position and ready to go. Throughout the morning, Mark Clatterbuck, one of the leaders of the protest, urged the group to refrain from hostile words and actions. But, framing it as a "moral" dispute between profit-seeking outside interests and local people trying to protect the safety and beauty of their community, he said it would be a good time for those willing to be arrested for the cause to make their stand. The point, he said, was to call attention to the dispute.

Transforming the garden state into the pipeline state - The Pinelands National Reserve is the first national reserve in the United States and spans 1.1 million acres (around 445,000 hectares) across seven counties. It's one of the few truly wild places left on the US East Coast, the largest open space between Richmond, Virginia and Boston, Massachusetts - a wholly unique UNESCO biosphere, and an ecological jewel that 43 endangered species call home. So, of course, New Jersey's controversial Republican governor, Chris Christie, wants to run a pipeline through it.Last month, it was announced that the Pinelands Commission - the federally supported body that oversees public policy and development projects in the reserve - has approved a new 30-mile natural gas pipeline to run from Chesterfield Township to Manchester Township, right through the protected wilderness of the Pinelands.There has been significant community pushback against New Jersey Natural Gas' so-called "Southern Reliability Line", as well as against the South Jersey Gas Cape Atlantic Reliability Project, another pipeline that Christie approved earlier this year that will span 22 miles and also cut directly through the Pinelands.  Outside of New Jersey, there's been little media coverage of the pipeline controversies, or of Christie's determination to invest in fossil fuel. His folly may damage the Pines' fragile ecosystem for what many critics say is an ultimately unnecessary infrastructure project that goes against the stated mission of the Pinelands Comprehensive Management Plan, as set down by the federal Pinelands Protection Act of 1979: to protect the land and its people, and ensure that any approved projects hold a demonstrable benefit to those who call the Pines home.

Federal regulators approve two major East Coast pipelines - Federal regulators on Friday approved two major natural gas pipelines for construction on the East Coast, a move heralded by business leaders and condemned by environmentalists. The Federal Energy Regulatory Commission granted approvals for the Mountain Valley and Atlantic Coast pipelines, according to The Associated Press. One of the three commissioners dissented.  The Mountain Valley Pipeline, which is slated to cost $3.5 billion, would span 300 miles from the northern portion of West Virginia all the way to Danville, Va. The Atlantic Coast Pipeline, which will amount to $5 billion, will stretch 600 miles from north-central West Virginia, through Virginia, and through eastern North Carolina. Business advocates say the pipelines will lower energy costs and jumpstart economic development, however opponents argue the pipelines will interfere with property rights and have a negative impact on the environment. “Given the environmental impacts and possible superior alternatives, approving these two pipeline projects on this record is not a decision I can support,” said commissioner Cheryl LaFleur, an Obama-era appointee who dissented on Friday, according to the AP. The decision is the latest victory for pipeline advocates. It comes days after a federal judge ruled that the Dakota Access pipeline could continue its operation during a federal review of the project’s environmental impact.

Major East Coast Pipelines Approved by FERC Despite Strong Opposition - Federal regulators approved plans for two controversial new natural gas pipelines along the East Coast Friday. In a divided 2-1 vote, the Federal Energy Regulatory Commission gave the green light to the Atlantic Coast and Mountain Valley pipeline projects, which would carry shale gas through Virginia, West Virginia and North Carolina. Commissioner Cheryl LaFleur, the only dissenting vote, expressed concerns in her written dissent on the redundancy of the collective 900 miles of pipeline, the potential environmental impacts and the relatively small accounted demand for the Mountain Valley project. Both pipelines have been met with severe local opposition, and some activists expect backlash and increased fights against the projects following FERC's decision. As reported by the Charlotte Business Journal : "Greg Buppert, a senior attorney for the Southern Environmental Law Center , called the FERC order a long-anticipated 'rubber stamp' and said his organization intends to challenge the decision. 'The utilities involved in the construction of the Atlantic Coast Pipeline claim utility customers will save money, when in fact this pipeline will drive up ratepayers' bills—and cause harm to national forests and to rivers and streams while threatening to commit our states to fossil fuels for decades to come," he says.'" "This poorly-planned pipeline will hurt the local economy, pollute central Virginia's clean drinking water supply and scar the Appalachian National Scenic Trail," Ron Tipton, president and CEO of the Appalachian Trail Conservancy said in a statement.  "Central Virginia does not need another pipeline to fulfill America's energy needs, particularly one that violates local environmental laws and is strongly opposed by local elected officials and citizen groups."

Politicians react to FERC pipeline certifications - U.S. Sen. Tim Kaine used the phrase “very suspicious circumstances” Monday to describe how a federal agency announced it had approved two deeply controversial natural gas pipelines that will burrow through different regions of Virginia. Kaine, a Democrat who was in Roanoke on Monday, observed that notices from the Federal Energy Regulatory Commission about the commission’s endorsement of the Mountain Valley Pipeline and Atlantic Coast Pipeline were distributed after 7 p.m. Friday — timing clearly intended, he said, to inhibit news coverage going into the weekend. “When somebody puts something out at 7 o’clock Friday night, they’re trying to hide it,” Kaine said. “That means they’re ashamed of their decision. Why would they be ashamed of it?”He said the orders granting certificates of “public convenience and necessity” to the multi-billion dollar projects were issued when there were only three commissioners on FERC’s five-person panel. “Clearly, they were trying to rush it without a full complement on the team,” Kaine said, adding that he believes decisions of this magnitude ought to require the participation of all five commissioners. The senator noted too that a vigorous and “stinging” dissent by Commissioner Cheryl LaFleur was significant, partly because such dissents rarely occur on the commission, he said. LaFleur, a Democrat who has been a commissioner since 2010, wrote, “I cannot conclude that either of these projects as proposed is in the public interest.” The two commissioners who voted to approve the pipelines are both Republicans appointed by President Donald Trump who recently joined the commission. 

Rover Pipeline Spills Water Containing Gasoline Into Michigan Wetlands - Michigan's Department of Environmental Quality (MDEQ) issued a violation notice to Energy Transfer Partners after its Rover pipeline project spilled water containing gasoline into wetlands near Pinckney. The violation notice was issued after the department's Water Resources Division (WRD) staff received a complaint on Wednesday regarding a petroleum odor coming from water discharged from the pipeline project near the northern crossing of Dexter-Townhall Road in Washtenaw County. Upon inspecting the site, WRD staff noted a petroleum odor and observed a sheen in the dewatering enclosure. Staff from the Remediation and Redevelopment Division inspected the site on Thursday and also noted the presence of a petroleum odor and determined a nearby former gas station was the likely source. "Due to the observed odors and the close proximity to a former gas station, the source of the petroleum is likely to be contaminated groundwater from a release at the former gas station," the violation notice states. "The contaminated groundwater is being captured through the dewatering process, which is being employed for the pipeline installation and is being discharged to the wetland. Regardless of the potential source, the presence of odor and sheen indicates a discharge of petroleum-contaminated water from the dewatering activities being conducted on site." Because of the petroleum contamination, the company must apply for a special permit and treat the water prior to discharging it, MDEQ said. Additionally, the water withdrawal system should be registered with the DEQ prior to operating because it has the capacity to pump more than 100,000 gallons a day.  "Finally, Rover's dewatering activities may be exacerbating the spread of contaminated groundwater," the notice states.

DEQ finds Rover Pipeline spilling water containing gasoline into wetlands - The Michigan Department of Environmental Quality issued a violation notice on Friday, Oct. 13, to Rover Pipeline for discharging water containing petroleum into wetlands near Pinckney.Rover Pipeline LLC - which is building a 713-mile gas pipeline that ends in Livingston County - has until Wednesday, Oct. 18, to submit a response stating how the company intends to resolve multiple issues identified by the DEQ.  Rover Pipeline's media relations department did not respond to a request for comment on the situation Friday. The DEQ began investigating the water runoff - near the northern crossing of Dexter-Townhall Road - in response to complaints made by area residents who discovered a dewatering enclosure related to the pipeline project was spilling water into the wetlands near the Portage River and Silver Lake. Residents first observed the leak on Tuesday, Oct. 10, according to the Michigan Residents Against the ET Rover Pipeline citizen group. On Wednesday, residents noticed the water had the smell of gasoline and alerted the DEQ. A representative from the DEQ visited the site Wednesday evening, and then Rebecca Taylor, from the DEQ's Remediation and Redevelopment Division, returned to the site on Thursday to test the water, according to Taylor's field notes.   Taylor smelled gasoline in the water, and she determined the source was a nearby former gas station on Cedar Drive, according to the DEQ's violation notice and Taylor's records.   "The contaminated groundwater is being captured through the dewatering process, which is being employed for the pipeline installation and is being discharged to the wetland,"  Due to the petroleum contamination, the company needs to apply for a special permit and to treat the water prior to discharging it, according to the DEQ violation notice.

"My House Shook": Oil Rig Explosion Near New Orleans Leaves 7 Injured, 1 Missing -- An oil rig in Lake Pontchartrain, La. exploded Sunday night, leaving seven people injured – five of them critically – with one person still missing, NBC News reported. Reports of fire and smoke being seen from Lake Pontchartrain first came in around 8:20 ET Sunday night, according to Jefferson Parish spokesman Antwan Harris. The explosion took place about a mile-and-a-half from the shore of the lake, which is located north of New Orleans. Flames could be seen from the area and the air smelled of burning rubber. The cause of the explosion remained unknown early Monday, and authorities said it was too soon to tell whether any oil had spilled. Ben Zahn, the mayor of nearby Kenner, said no homes were threatened. First responders from St. Charles Parish, Jefferson Parish, Kenner, the US Coast Guard, East Jefferson General Hospital EMS and Louisiana Wildlife and Fisheries responded to the explosion. "Several people have been rescued from the active fire on the rig," Harris said."Authorities on the scene report that cleaning chemicals ignited on the surface of the oil rig platform," the City of Kenner Government posted on its Facebook page Sunday evening. Five of the injured were taken to University Medical Center with "blast type injuries and burns" and are in critical condition. The other two are in stable condition at East Jefferson General Hospital. Search and rescue efforts were continuing as of Monday morning, ABC reported.

Nearly 400,000 Gallons of Oil Spews Into Gulf of Mexico, Could Be Largest Spill Since Deepwater Horizon - Last week , a pipe owned by offshore oil and gas operator LLOG Exploration Company, LLC spilled up to 393,000 gallons of oil into the Gulf of Mexico, reminding many observers of the Deepwater Horizon explosion seven years ago that spewed approximately 210 million gallons of crude into familiar territory. Now, a report from Bloomberg suggests that the LLOG spill could be the largest in the U.S. since the 2010 BP blowout, according to data from the U.S. Bureau of Safety and Environmental Enforcement (BSEE). While at a much smaller scale than the nation's worst accidental oil spill , the Delta House floating production facility, located about 40 miles southeast of Venice, Louisiana, released between 7,950 to 9,350 barrels starting from Wednesday to Thursday due to a fractured pipeline. The flow has been contained and cleanup is underway, according to LLOG officials. No shoreline impacts have been reported and there are no reports of personnel injuries, BSEE noted . On Monday, BSEE Gulf of Mexico Region Director Lars Herbst initiated a five-member panel of inspectors, engineers and accident investigators into the oil release.  "BSEE places great emphasis on making certain all oil and gas operations on America's Outer Continental Shelf are safe," Herbst said . "This panel investigation is a critical step in ensuring BSEE determines the cause, or causes, of the incident and develops recommendations to prevent similar events from occurring in the future."

Oil pipeline break in Gulf of Mexico under federal investigation  - The federal Bureau of Safety and Environmental Enforcement has convened a panel of inspectors, engineers and accident investigators to review a break in an underwater pipe that resulted in the release of up to 9,350 barrels of oil into the Gulf of Mexico about 40 miles southeast of Venice on Thursday (Oct. 12).LLOG Exploration Offshore reported the ruptured pipe to the Coast Guard on Friday and was eventually able to shut off the flow of oil. The company estimated that between 7,950 barrels and 9,350 barrels of oil -- or between 333,900 and 392,700 gallons -- were released 4,463 feet below the surface. The pipe led from a deepwater well at Mississippi Canyon 209 to the company's Delta House platform nearby."BSEE places great emphasis on making certain all oil and gas operations on America's Outer Continental Shelf are safe," Lars Herbst, director of the BSEE Gulf of Mexico region, said in a news release. "This panel investigation is a critical step in ensuring BSEE determines the cause, or causes, of the incident and develops recommendations to prevent similar events from occurring in the future." At the end of the five-member panel's investigation, it will release a report containing findings, recommendations, and identifying any potential violations that should be considered by the BSEE enforcement staff, the news release said. BSEE inspectors traveled to the platform Friday to begin an initial inspection.

Oil Spill Off Louisiana Coast 2X Bigger Than Original Estimate - LLOG Exploration Company, LLC drastically underestimated the amount of oil its fractured pipeline spilled into the Gulf of Mexico last week . The oil and gas operator first estimated that it spewed about 340,000 gallons of oil. Now, according to a Coast Guard announcement, the company is now reporting a discharge of 672,000 gallons—about two times the initial estimate. A report from Bloomberg earlier this week suggested that LLOG's original discharge estimate was already the largest in the U.S. since the 2010 BP disaster which spilled about 210 million gallons of crude into familiar territory. The flow has since been contained and cleanup is underway, according to LLOG officials. No shoreline impacts have been reported and there are no reports of personnel injuries. The Coast Guard said that since the pipeline is 5,000 feet underwater, the oil is likely to be "broken down into small particles and disperse(d) into deep-water currents prior to reaching the surface." "Multiple daily flights" over the area, along with underwater inspections, have not detected any recoverable oil, the Coast Guard added, but noted that skimming vessels from Clean Gulf Associates and the Marine Spill Response Corporation "remain on standby."  On Monday, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) Gulf of Mexico Region Director Lars Herbst initiated a five-member panel of inspectors, engineers and accident investigators into the oil release.  "BSEE places great emphasis on making certain all oil and gas operations on America's Outer Continental Shelf are safe," Herbst said . "This panel investigation is a critical step in ensuring BSEE determines the cause, or causes, of the incident and develops recommendations to prevent similar events from occurring in the future."

Boom in American liquefied natural gas is shaking up the energy world  — A shale gas drilling boom over the last decade has propelled the United States from energy importer to exporter, taking the country a giant leap toward the goal of energy independence declared by presidents for half a century. Now the upheaval of the domestic energy sector is going global. A swell of gas in liquefied form shipped from Texas and Louisiana is descending on global markets, producing a broader glut and lower energy prices. The United States was supposed to be a big L.N.G. importer, not a world class exporter. The frenzy of drilling in shale gas fields across the country changed that over the last decade, creating a glut far larger than domestic demand could possibly consume. Companies that spent billions of dollars to build import platforms suddenly had useless facilities until they spent billions more to convert them for export.The switch will remake the global gas market for decades to come. Energy experts are predicting that the transformation will weaken Russia’s dominance over European power markets, help clean the air in cities across China and India by replacing the burning of coal and eventually provide cheaper and cleaner fuel to African villages.The full dimensions of the wave over the next four or five years, including its impact on the environment and climate change, are hard to predict, in part because they will depend on the policies adopted by many governments. But as several American multibillion-dollar export terminals come on line, few doubt that the influence of more gas, as the cleanest burning fossil fuel, will be consequential for powerful and poor countries alike. Experts point to Mexico as an example of how transformative gas can be in a matter of only a few years. As the American shale boom accelerated, producing more gas than its northern neighbor could consume, Mexico decided to import as much cheap gas as possible. Mexico replaced its dirtier burning coal and petroleum products, and now more than a quarter of the country’s electricity is powered by American gas. Four additional cross-border pipelines are to be completed over the next two years, and many more are in the planning phase. The gas imports have improved air quality, helped Mexico reach goals to reduce its carbon footprint to meet Paris climate agreement targets and freed capital to invest in more exploration and production of oil, which is more valuable on world markets.

Next wave of US LNG export facilities could face credit risk: S&P - Cheap, abundant US supplies of natural gas combined with forecasts of growing global LNG demand early next decade are not enough to ease the uncertainty facing the next wave of LNG export projects, S&P Global Ratings said Tuesday, citing high construction costs and the challenges in securing long-term supply contracts. The ratings agency is part of the same company that owns S&P Global Platts. The main fear is that as developers along the US Gulf of Mexico and the Atlantic and Pacific coasts seek creative ways to finance liquefaction units, they will be open to shorter agreements with smaller quantities and more flexible terms, raising concerns about their ability to repay debt as contracts come up for renewal more often, S&P Global Ratings noted in a report. There are more than a dozen LNG export projects currently being proposed to US regulators, though across the industry almost no final investment decisions have been announced over the last 18 months and some developers have delayed their decisions into 2018 or beyond. Few firm supply purchase agreements have been announced for the projects that have yet to commit to moving forward. "The repayment of project finance debt is from cash flow generated by long-term LNG offtake agreements with investment-grade companies; however, for a variety of reasons, these contracts are increasingly difficult to procure," it said. "The credit quality of new facilities could suffer if project finance structures are used but backed by shorter-term agreements (which introduce re-contracting risk) and/or merchant sales (and associated market risk) or include revenue counterparties that we rate below investment grade." Cheniere Energy's Sabine Pass terminal in Louisiana is the only US facility currently exporting LNG produced from shale gas. The four liquefaction units that it is currently operating there were financed with 20-year take-or-pay contracts with credit-worthy buyers, setting a standard for the industry. Dominion Energy's Cove Point export terminal in Maryland, which is expected to start shipping LNG later this year, has similar deals in place, as do the several other projects that are currently being built, including facilities in Freeport, Texas, and Corpus Christi, Texas.

US LNG exporters face fierce competition in an oversupplied market – Platts Commodity Pulse video - The US is looking to become the third-largest LNG exporter by 2019, and more than a dozen projects are fighting for a way to fit into a growing global market. But buyers don't feel pressure to sign long-term deals, which can be difficult for financing construction. Maya Weber, associate editor with Platts Inside FERC, and Rachel Adams-Heard, natural gas reporter with S&P Global Market Intelligence, have a conversation about the future of US LNG exports: Where is the demand, which projects will make it to completion and how will policy potentially affect the outcome? For an even more detailed analysis of the topic, read their recent post on The Barrel blog: To deal with global supply glut, US LNG export developers thinking outside the box

Haynesville's NatGas Rig Count, Proppant Intensity Surging | 2017-10-17 - The Haynesville Shale redux continues, with the natural rig count sharply higher from a year ago and proppant intensity surpassing any other onshore play in the United States, according to analysts.As of last week the Haynesville was capturing a 24% share or so of all U.S. gas rigs. The play, which straddles East Texas and North Louisiana, at the end of last week had 42 gas rigs running along with two for oil, versus a year ago when 25 gas rigs and two oil rigs were in operation. By comparison, the Marcellus, with 27% of the total gas rig share, was running 45 rigs last week; the Utica Shale had 30.Evercore ISI analyst James West, who issues a monthly analysis of U.S. drilling permit activity, noted in his latest tally that Haynesville permitting during 3Q2017 had increased by 6.6% from 2Q2017. Year-to-date through September Louisiana permitting -- where the core of Haynesville activity is underway -- had risen 21%.The pace of activity, “faster than that in the Marcellus/Utica, has surprised many observers,” said Sanford Bernstein analysts Jean Ann Salisbury and Bob Brackett. They decided to do a deep dive on what’s going on across the region to see if the play is doing as well as some are reporting.“This is an especially key question now, as we are on the cusp of pipeline buildout from the Marcellus/Utica, which will result in more competitive gas entering the market,” said the Bernstein duo. Assessing the latest wells, they found that most of the gas rig growth is attributable to private equity (PE) companies that have bought into the basin over the past few years, notably Covey Park Energy LLC, Indigo Minerals LLC and Vine Resources. However, the average Haynesville well also has improved significantly. Bernstein research determined that the average breakeven in the Haynesville was found to be about $2.40/Mcf half-cycle, and $3.00/Mcf full-cycle, or about 5 cents/Mcf better than a year ago, and “competitive with fully loaded Marcellus/Utica wells.”

Fracking Is Back in the Haynesville Shale - American shale drilling has returned to Haynesville Shale, boosting a building boom along the Gulf Coast. When gas prices plunged over a decade ago, Haynesville fracking fizzled out. Now as companies with positions in the area find it efficient to drill again, Haynesville is back in business. Gas production from the Haynesville has risen more than 20% so far this year, to more than 7 billion cubic feet a day from less than 6 billion in January, according to the U.S. Energy Department. The number of rigs active in northern Louisiana parishes and the Texas portion of the field has more than tripled in the past year to 44, according to oil field services company Baker Hughes Inc Apparently, the payouts on these wells are very attractive to companies. Private companies backed by private equity firms have spent billions buying property in the area from Roya Dutch Shell PLC and Exxon Mobil Corp."If you have Haynesville acreage, it's a good time to drill," said Clay Lightfoot, an analyst with energy consulting firm Wood Mackenzie.Regional producers can now also export their liquefied natural gas. Cheniere Energy Inc . LNG +0.46% 's Sabine Pass LNG plant, a major exporting facility that opened in Louisiana last year, is sending cargoes of liquefied natural gas to Asia, Europe and South America. A dozen other LNG projects are under construction or are permitted and planned in Texas, Louisiana, Mississippi and Maryland. That's a potential drawback for industrial users in the area, such as petrochemical plants, of which there are almost 80 under construction along the Gulf Coast. They fear the price of gas--their main feedstock--could rise as America ships more to foreign buyers.

NYMEX Nov gas settles at $2.873/MMBtu, up 1.9 cents, after late rally -- After spending most of Thursday trading below Wednesday's mark, the NYMEX November gas contract experienced a late surge to settle at $2.873/MMBtu, up 1.9 cents day on day. The rally followed the release of the US Energy Information Administration's gas storage report for the week ended October 13. It showed a build of just 51 Bcf, bringing stocks to about 3.646 Tcf, 4.7 Bcf below the 3.825 Tcf last year and short of the five-year average of 3.681 Tcf. The November contract had been trading between $2.842/MMBtu and $2.884/MMBtu and lingered at the $2.854/MMBtu level when the EIA data was released. "The market is obviously not worried about things," "There hasn't been much demand and there's not much weather, either. This market is comfortable where it is." A year ago, the build for the corresponding week was 77 Bcf, 26 Bcf above Thursday's injection. "This is the definition of a shoulder month," Cooper said. "We haven't had much for demand and stocks should be getting bigger, but we haven't seen the build." According to the US National Weather Service, temperatures in the Southwest are expected to be bearish through the end of the month, with temperatures higher than normal, while the Northeast is likely to experience pleasant weather. For November, the weather forecast calls for much of the nation to see average temperatures. Demand areas in the Northeast are predicted to be slightly warmer and, in the Southwest, Southern California is expected to see warmer-than-normal weather, with Arizona and New Mexico seeing even higher temperatures.

COLUMN-U.S. natural gas prices under pressure even as stocks tighten: Kemp (Reuters) - U.S. natural gas stocks continue to tighten, but most traders appear unconcerned, with futures prices for gas delivered this winter close to the lowest levels since the start of the year.Working gas stocks in underground storage were 35 billion cubic feet (bcf) below the five-year average at 3,646 bcf on Oct. 13, according to data from the U.S. Energy Information Administration (http://tmsnrt.rs/2xUs41q).Working stocks have tightened significantly since the middle of March, when they stood almost 400 bcf above the average and the market appeared heavily oversupplied.But since the injection season started at the beginning of April, stocks have risen by less than average in 19 out of 28 weeks, increasing by a total of 1,594 bcf compared with an average of 1,891 bcf.The result is that the surplus has been steadily worked off and the market has now moved into a small deficit compared with the five-year average.In fact, comparisons with the five-year average may understate the degree of tightening, because of the rapid growth in LNG exports and the increasing number of combined-cycle gas-fired power plants.Combined-cycle gas turbines (CCGTs) are replacing coal-fired power plants as the primary source of baseload power on the grid.The combined capacity of CCGTs connected to the grid has grown by almost 8 percent over the last three years.CCGTs are designed to run most of the time, providing baseload or intermediate load, and consume large quantities of fuel.With so many additional CCGTs now in operation, there is potential for much more power burn this winter than five years ago.Given higher exports and more CCGTs, the need for seasonal gas stocks should be higher, other things being equal.Yet few traders seem perturbed by the continued tightening of gas stocks compared with the five-year average.Futures prices for gas delivered at Henry Hub in December 2017 are trading at just $3.08 per million British thermal units, down from $3.69 in early May. The calendar spread between futures prices for December 2017 and March 2018 has moved into contango, indicating the market is well supplied.

U.S. crude oil production expected to increase through end of 2017, setting up record 2018 - EIA forecasts that U.S crude oil production will average 9.4 million barrels per day (b/d) in the second half of 2017, 340,000 b/d more than in the first half of 2017. Production in 2018 is expected to average 9.9 million b/d, surpassing the previous high of 9.6 million b/d set in 1970, based on projections in EIA’s Short-Term Energy Outlook (STEO). The STEO projects that most of the crude oil production growth in the second half of 2017 will be in the Permian region, which extends across western Texas and southeastern New Mexico and has become one of the more active drilling regions in the United States. Production in the Permian continues to increase, in part, as a result of West Texas Intermediate (WTI) crude oil average monthly prices that have remained higher than $45 per barrel since the second half of 2016. In the STEO, EIA publishes crude oil production projections for Alaska, the Federal Gulf of Mexico, and the aggregated Lower 48 states. However, each month in the STEO, EIA models oil production for certain states and regions within the Lower 48 states. STEO’s projected U.S. production changes for the second half of 2017 are discussed in more geographic detail in the latest This Week in Petroleum, which includes information on production in the Permian, Niobrara, Anadarko, Bakken, Eagle Ford, Alaska, California, and the Gulf of Mexico. The STEO forecast is based on recent trends in drilling and production and on anticipated future changes, driven largely by the WTI crude oil price. EIA evaluates past production trends on a well-by-well basis for all production documented since 2014 and uses that history to estimate future well performance and production decline rates at the state and regional levels.

EIA: Permian basin to drive fourth-quarter U.S crude production increase - In its Short-Term Energy Outlook (STEO) update released this week, EIA forecasts that U.S crude oil production will average 9.4 million barrels per day (b/d) in the second half of 2017, 340,000 b/d more than in the first half of 2017. EIA’s close monitoring of current rig activity in several producing regions shows continued production growth from tight-oil formations, such as shale in the Permian region, driving overall production increases (Figure 1). The STEO projects that the most significant production growth in the second half of 2017 will be in the Permian region. Permian production is forecast to grow to 2.6 million b/d in the second half of 2017, a 260,000 b/d increase from the first half of 2017. Production in the Permian continues to increase, in part as a result of West Texas Intermediate (WTI) crude oil average monthly prices that have remained higher than $45 per barrel (b) since the second half of 2016. Extending across western Texas and southeastern New Mexico, the Permian region has developed into one of the more active drilling regions in the United States because its large geographic size and favorable geology contain many prolific tight formations such as the Wolfcamp, Spraberry, and Bonespring. Increases in proppant intensity, lateral lengths, and changes to slick-water completions are also among the factors that have allowed the Permian to remain one of the most economic regions for oil production despite the low-oil-price environment. WTI spot prices averaged $50/b in the first half of 2017, spurring deployment of more rigs to the Permian, which rose steadily from 276 rigs in January to 380 rigs in September. The STEO projects that the Permian region rig count will continue to grow from an average of 341 rigs in 2017 to 371 rigs in 2018, and the WTI price is forecast to average $49/b for the second half of 2017 and $51/b in 2018. The STEO forecasts Niobrara and Anadarko production to grow by 75,000 b/d and 42,000 b/d, respectively, averaging 500,000 b/d and 460,000 b/d, respectively, for the second half of 2017. This growth makes these two regions the second- and third-largest contributors to the STEO’s projected growth between the first and second half of 2017. Production in the Niobrara and Anadarko regions has grown continuously since January 2017 in response to increasing rig activity and a monthly WTI price range from $45/b to $53/b during the year.

  Crude oil shuttle pipelines in the Permian's Delaware and Midland basins, part 4. - Permian producers and shippers want to be able to transport their crude oil to whichever destination will give them the best netbacks. But that’s a moving target, so what they really need is destination optionality — something they can only get if the gathering systems and shuttle pipelines that move oil from the lease tie into multiple takeaway pipelines with different end-points like Houston, Corpus Christi and Cushing. Midstream companies are clamoring to meet that need by expanding existing shuttle pipelines and building new ones. Today, we continue our review of intra-Permian shuttle pipelines. With Permian crude oil production expected to continue rising under just about any foreseeable price scenario, there’s a big push on to expand regional pipeline networks’ capacity to move more crude oil out of the play and — just as important — to give producers and shippers as many destination options as possible. As we said in Part 1, until a few years ago, most of the oil produced in the Permian flowed north to the crude storage and distribution hub in Cushing, OK. By 2011-12, though, rising crude production in the Bakken, western Canada and the Permian itself — combined with too little pipeline capacity from Cushing to the Gulf Coast — caused a supply glut at Cushing. That, in turn, caused heavy discounting for Cushing benchmark West Texas Intermediate (WTI) versus Louisiana Light Sweet (LLS) at the Gulf Coast, and spurred development of new takeaway capacity from the Permian to Houston and other coastal destinations.

Expanding Storage Supports Booming Exports --U.S. crude exports continue to takeoff — increasing during the week ended September 29, to a new record just under 2 MMb/d, according to the Energy Information Administration (EIA), with 1.3 MMb/d in the first week of October followed by 1.8 MMb/d in EIA’s Wednesday report. The crude exodus is primarily occurring from port terminals along the Gulf Coast and is expected to continue as expanding Permian basin shale production is shipped directly to marine docks by pipeline. Recent and planned expansions to crude storage are largely linked to demand for new capacity at marine docks staging cargoes for export. In today’s blog, Morningstar’s Sandy Fielden details the rapid growth of commercial crude storage capacity at Gulf Coast terminals since 2011. We’ve covered growing terminal and storage capacity on the Gulf Coast extensively since the start of the shale boom. By 2014, pipelines were built out to reach the Gulf Coast from Cushing in the Midwest and the Eagle Ford and Permian basins in Texas, bringing significant new flows to the Houston region (see “Texas Bound and Flyin’”). All the new crude showing up in the Houston region needed new storage capacity to stage its redistribution to local refineries and plants further east in Louisiana. We detailed the growth of Houston storage in a 2015 blog series (see “Stairway to Houston”) and an accompanying Drill Down Report. More recently, we covered expanding storage capacity in Texas City (see “Easy Like Texas City”) and storage at the Louisiana Offshore Oil Port, as well as the potential for crude exports from that port (see “Livin’ on the Edge”).

Judge allows 'necessity' defense by climate activists in oil pipeline protest -- A judge in Minnesota has cleared the way for an unusual and potentially groundbreaking defense, allowing climate activists to use the "necessity" of confronting the climate crisis as justification for temporarily shutting down two crude oil pipelines last year.Robert Tiffany, a district court judge in Clearwater County, Minnesota, ruled on Oct. 11 that three activists who were arrested and charged with felonies last year can argue that they violated the law in order to protect citizens from the impacts of global warming and that they had no legal alternative.  "It is extremely unusual for a court to allow presentation of the necessity defense by environmental protesters," said Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia University. "It will be fascinating to see how this trial goes and how much evidence the court allows."The ruling is only the third time a judge in the United States has allowed for such a defense in a climate case. The first case, in Massachusetts in 2014, did not go to trial after the prosecutor dropped the charges. A judge allowed the necessity defense in a Washington State case in 2016 but then instructed jurors they could not acquit on necessity. "Only a few courts have allowed presentation of the climate necessity defense, and until Friday, no judge in a jury trial in the United States had recognized the defense in writing," the Climate Defense Project, a legal nonprofit that provided pre-trial briefing and is part of the defendants' legal team, said in a statement.In the Minnesota case, Emily Johnston, Annette Klapstein and Benjamin Joldersma are charged with felonies over the shutdown of two pipelines there on Oct. 11, 2016. A fourth defendant, Steven Liptay, who filmed the pipeline shutdowns, is charged with two gross misdemeanors. Enbridge Inc., the Canadian company that owns and operates the two pipelines, said at the time of the shutdowns that the actions were "reckless and dangerous" and that the company would "support the prosecution of all those involved," according to news reports.

More than 400 gather to offer views on replacing Enbridge pipeline in northern Minnesota — Conflicting priorities clashed during two meetings Tuesday, Oct. 17, to gather public input for Enbridge Energy's proposed Line 3 oil pipeline replacement project. More than 400 people attended as community members testified in front of administrative law judge Ann O'Reilly, who will compile the comments and make a recommendation to the Minnesota Public Utilities Commission about the project moving forward. Bill Grant, deputy commissioner for the Minnesota Department of Commerce, said the comments made at previous public meetings largely fell into two categories. "I would say on the proponent's side we've heard a lot of people talk about how much of a reliance we continue to have on oil, and how important it is to the state's economy that it continue to flow. We've heard a lot about the jobs that would be created by the project, the need for jobs in this area," Grant said. "On the opponent's' side, we've heard a lot about the concerns about an oil spill and what that would mean to the pristine waters of northern Minnesota." The Department of Commerce recently came out against the replacement project and said at Tuesday's meetings that it did not feel that Enbridge demonstrated a need. The current Line 3, built in the 1960s, runs from Alberta, Canada, through northern Minnesota to Superior, Wis. Enbridge hopes to decommission the aging line and build a new one; many environmental groups and community activists oppose the plan. Enbridge's preferred route would take the new pipeline through ceded treaty territories and wild rice beds important to local bands of the Minnesota Chippewa Tribe. Before Enbridge can build a new Line 3 and decommission the old one, the Minnesota Public Utilities Commission must issue a certificate of need and the necessary permits. The commission must consider the final environmental impact statement compiled by the Department of Commerce and released in August. 

Oil and gas producers face more stringent air-quality rules on Front Range - Oil and gas operators in the Front Range would have to retrofit equipment and conduct more frequent inspections to detect leaks if state regulators on Friday approve proposed rules aimed at helping alleviate smog concerns.More than 100 people showed up Thursday for a public hearing on the new rules before the Colorado Air Quality Control Commission. Nearly all of those speaking, some of whom were mothers carrying infants, urged the commission to grant final approval on Friday and consider putting in place even tighter regulations on the industry.The rules were drafted for oil and gas operations along the Front Range and are meant to address concerns that federal regulators have raised about air quality in the counties of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson, Larimer and Weld. The U.S. Environmental Protection Agency has said the region is out of compliance with federal standards for ozone pollution and has given the state until July 2018 to meet those standards.Many of those who spoke during Thursday’s public hearing drove up from western Colorado counties and urged the commission to expand the rules to ensure they apply to oil and gas drillers on the Western Slope too.State regulators currently plan to address the Western Slope concerns separately over the next two years. But Karen Sjoberg, a resident of Mesa County speaking on behalf of environmental advocacy group Citizens for Clean Air, urged the commission to immediately ensure the rules for Front Range energy companies apply to the entire state. “As we look to the future in Mesa County, there are advanced plans for 108 oil wells and increased natural gas drilling throughout the valley,” Sjoberg said. “Currently, there are over 1,000 active oil and gas operations in Mesa County alone, and over 18,500 across the Western Slope.”

Judge to hear arguments on tribe's pipeline contingency plan | Star Tribune: A federal judge in Washington, D.C., will accept arguments over the next month on whether the developer of the Dakota Access pipeline must stage equipment near an American Indian reservation in southern North Dakota to respond to any oil spill under the Missouri River. The idea is part of a fallback plan proposed by the Standing Rock Sioux tribe in August in case U.S. District Judge James Boasberg eventually decided to allow the four-state pipeline to continue operating while federal officials do more study on the $3.8 billion project's impact on the tribe. Boasberg ruled on Oct. 11 that oil could keep flowing from western North Dakota through South Dakota and Iowa to a distribution point in Illinois, as it has been since June 1. President Donald Trump earlier this year pushed through the pipeline's completion. On Wednesday, Boasberg conferred with attorneys on both sides of an ongoing tribal lawsuit against the pipeline and set a timeline for arguments on Standing Rock's proposal. It includes increased public reporting of pipeline issues such as repairs, and implementation of an emergency spill response plan — including equipment staging — at the crossing beneath the Missouri River's Lake Oahe reservoir. The tribe gets its water from the reservoir and fears harm from any spill. Standing Rock is the leader of four Sioux tribes hoping to convince Boasberg to shut down the line, which Texas-based developer Energy Transfer Partners maintains is safe. Boasberg won't make a decision until the Army Corps of Engineers, which permitted the project, completes more study that he ordered in June on the pipeline's impact on Standing Rock. The additional review isn't likely to be completed until next spring, according to the Corps.

Oil, coal train fines in Spokane go to voters with legal path unclear -- Initiative opponents say Bakken oil, which is extracted through a process known as hydraulic fracturing or “fracking,” is no more volatile than conventional crudes.  To support their position, they regularly cite 2014 congressional testimony from Timothy Butters, who served as deputy director of the Pipeline and Hazardous Materials Safety Administration. Butters’ testimony included the line, “Bakken crude oil’s gas content, flash point, boiling point and vapor pressure are not outside the norm for light domestic crude oils.”  That line was taken almost verbatim from a 2014 report prepared by Butters’ organization after a random sampling of oil samples taken from the Bakken shale called “Operation Safe Delivery.” But the report goes on to say Bakken crude “has a higher gas content, higher vapor pressure, lower flash point and boiling point and thus a higher degree of volatility than most other crudes in the U.S., which correlates to increased ignitability and flammability.”   The report compared the Bakken oil to the more traditional “heavy crude” that is produced elsewhere in the United States. Trade groups have focused on the finding that Bakken oil shares a similar chemical makeup to other types of domestic light crude, rather than its comparison to the “heavy” version of the commodity that the Pipeline and Hazardous Materials Safety Administration report indicates is less volatile. Environmentalist groups have pointed to the report as proof that Bakken crude is more volatile.Legal certainty is a trait shared by those on both sides of the debate over whether Spokane should impose fines on coal and oil trains rumbling through downtown.  The citizens group behind Proposition 2, which would fine the trains, argues that federal inaction has opened a window allowing the city to demand covered coal trains and the removal of combustible gases from rail-carried oil they say could cause a fiery explosion downtown.

Backers of oil terminal pour money into Washington port race   — Developers of a proposed oil-by-rail terminal that would be the largest in the nation have poured big money into a port commissioner race in Washington state that may shape the project’s future. Backers of the Vancouver Energy project have given $370,000 in cash to support Kris Greene, who has expressed support for the terminal proposed at the Port of Vancouver, according to filings with the Washington Public Disclosure Commission. That represents the bulk of the cash he has raised in the Vancouver port commissioner’s race. His opponent Don Orange is against the proposed $210 million terminal that would handle about 360,000 barrels of crude oil a day. Orange said he would work to end the project’s lease at the port. The terminal has been the subject of heated debate in the Northwest. Project developers see it as an opportunity to link domestic crude oil from the Midwest to a West Coast port and bring jobs and money to the region. Critics say it poses too great a risk to people and the environment, and the dangers extend well beyond the facility to include communities along rail lines. Tesoro Corp. and Savage Cos., operating as Vancouver Energy, have a 10-year lease at the deep-water port about 100 river miles (160.93 river kilometers) from the Pacific Ocean. The proposed terminal would receive an average of four 1½-mile long crude oil trains a day. Oil would be stored on site then loaded onto tankers and ships bound for West Coast refineries. Vancouver Energy said it supports Greene as the candidate with the right experience to lead the port. 

Crude oil and petroleum product exports reach record levels in the first half of 2017 -- Crude oil exports in the first half of 2017 increased by more than 300,000 barrels per day (b/d) from the first half of 2016, reaching a record high of 0.9 million b/d. Petroleum product exports also grew over the same period with propane and distillate exports reaching record highs of 0.9 million b/d and 1.3 million b/d, respectively. Following the removal of restrictions on exporting U.S. crude oil in December 2015, total volumes of crude oil exports and the number of destinations for those exports both increased. The United States exported crude oil to 26 countries in the first half of 2017 compared with 17 countries in the first half of 2016. Canada remained the largest recipient of U.S. crude oil exports at 248,000 b/d in the first half of 2017 but imported an average of 46,000 b/d fewer than in the first half of 2016. China increased its crude oil imports from the United States by 154,000 b/d and became the second-largest importer of U.S. crude oil, averaging 163,000 b/d in the first half of the year. Distillate exports in the first half of 2017 were 14% higher than in the first half of 2016, with exports to South and Central America accounting for most of this growth. The share of distillate exports to Central and South America increased slightly to 56%, while the share of distillate exports to Western Europe fell to 19%. Mexico remained the largest single destination for U.S. distillate, averaging 17% of total exports (223,000 b/d), followed by Brazil and the Netherlands.In the first half of 2017, despite consistently strong domestic demand, U.S. exports of total motor gasoline averaged a record high of 756,000 b/d, a 3% increase from the first half of 2016. High levels of domestic production of gasoline contributed to this record-high export level. Mexico was the destination of more than half (53%) of total U.S. gasoline exports in the first half of 2017. Recent market reforms in Mexico, which allow entities other than state-owned Pemex to import petroleum products, may have contributed to the recent growth in Mexico’s gasoline imports from the United States. Although Mexico produces large amounts of crude oil, Mexico’s refinery output of products such as gasoline has been declining since 2015. In the first half of 2017, Mexico experienced unexpected refinery outages that reduced production of gasoline and distillates even further, and U.S. exports of gasoline to Mexico increased by 27,000 b/d compared with the first half of 2016.

 WORLD’S LARGEST OIL COMPANIES: Deep Trouble As Profits Vaporize While Debts Skyrocket -- The world's largest oil companies are in serious trouble as their balance sheets deteriorate from higher costs, falling profits and skyrocketing debt.  The glory days of the highly profitable global oil companies have come to an end.  All that remains now is a mere shadow of the once mighty oil industry that will be forced to continue cannibalizing itself to produce the last bit of valuable oil. I realize my extremely unfavorable opinion of the world's oil industry runs counter to many mainstream energy analysts, however, their belief that business, as usual, will continue for decades, is entirely unfounded.  Why?  Because, they do not understand the ramifications of the Falling EROI - Energy Returned On Invested, and its impact on the global economy.  For example, Chevron was able to make considerable profits in 1997 when the oil price was $19 a barrel.  However, the company suffered a loss in 2016 when the price was more than double at $44 last year.  And, it's even worse than that if we compare the company's profit to total revenues.  Chevron enjoyed a $3.2 billion net income profit on revenues of $42 billion in 1997 versus a $497 million loss on total sales of $114 billion in 2016.  Even though Chevron's revenues nearly tripled in twenty years, its profit was decimated by the falling EROI. Unfortunately, energy analysts, who are clueless to the amount of destruction taking place in the U.S. and global oil industry by the falling EROI, continue to mislead a public that is totally unprepared for what is coming.  To provide a more realistic view of the disintegrating energy industry, I will provide data from seven of the largest oil companies in the world.

Schlumberger shows growth in stagnating market - Schlumberger reported a $545 million profit in the third quarter with growing revenues of more than $7.9 billion as the world's biggest oilfield services company continues to outpace the stagnating industry. Schlumberger Chairman and CEO Paal Kibsgaard credited nearly all of the growth to the expanding North American shale market, even though the U.S. oil boom slowed significantly in the third quarter. "We continued to gain market share in both hydraulic fracturing and drilling services despite the decelerating rig count growth," Kibsgaard said. "We also saw strong sequential activity growth in Russia, the North Sea and Asia, while our activity in the rest of the world was largely flat compared with the second quarter." Schlumberger's revenues grew 13 percent versus the third quarter last year and 6 percent sequentially from the second quarter of 2017. Schlumberger posted a net loss last quarter because of one-time charges, but its profits still jumped 19 percent when discounting those isolated costs. Kibsgaard said he's cynical though toward the nation's offshore sector. "In the U.S. Gulf of Mexico, activity continued to weaken in the third quarter, and the outlook remains bleak for this region based on current customer plans," he said.To continue its onshore U.S. growth, Schlumberger is finalizing its OneStim joint venture with Weatherford International for hydraulic fracturing services that stimulate shale oil and gas wells. They're combining Schlumberger's large fracking fleet and Weatherford technologies used to stimulate multiple horizontal zones within shale wells. Schlumberger owns 70 percent of the JV. 

Trump approves oil pipeline expansion across Canadian border | TheHill: The Trump administration on Monday approved a proposed expansion of an oil sands pipeline that crosses the Canadian border. Enbridge Energy’s Line 67, also known as the Alberta Clipper, now has State Department approval to nearly double its capacity at the crossing near Neche, N.D., to about 890,000 barrels per day. Line 67 serves a similar purpose to the highly controversial Keystone XL pipeline, and after the expansion, it would carry slightly more oil than Keystone. Environmentalists opposed to Line 67 have sought to tie it to Keystone.It carries oil sands petroleum — which is very energy-intensive to refine — from Alberta’s booming oil country to the United States’ pipeline system for refining. The Line 67 expansion uses new and upgraded pump stations with the same 36-inch pipelines, which nonetheless required new approval from State. 

Senate votes down effort to block drilling in Alaska refuge | TheHill: The Senate on Thursday defeated a Democratic attempt to block oil drilling in the Arctic National Wildlife Refuge. A group of Democrats, led by Sen. Maria CantwellMaria Elaine CantwellUse tax reform to strengthen what’s working: The low-income housing tax credit Senate energy bill is misguided gift to Trump’s dirty fossil fuel agenda Help states solve their housing problems with the Affordable Housing Credit Improvement Act MORE (Wash.), offered an amendment to the Senate’s budget resolution looking to prevent potential drilling in the Alaska refuge as a way to raise revenue for the federal government. Most Democrats and environmentalists consider the refuge in northern Alaska to be too environmentally sensitive to allow oil drilling there, a position pushed by Cantwell and others as debate on the budget moved forward this week. “The notion that we, tonight, after 60-plus years, would give up what is a biologically important area, a critical habitat for polar bears, a breeding ground for caribou, migratory birds and over 200 species — for what? For oil we don’t need?” Cantwell said during floor debate late Thursday. But Republicans said they wouldn’t take the possibility of drilling off the table as the GOP looks to raise revenue and boost the American energy sector. “Those who would support this amendment will deny us the opportunity to do something constructive in this country, when it comes to our opportunities to produce energy, to produce wealth,” Sen. Lisa Murkowski (R-Alaska) said.

GOP-Controlled Senate Paves Way for Oil Drilling in Alaska's Arctic National Wildlife Refuge - The Senate Republicans' narrow passage of the 2018 budget plan on Thursday opened the door for oil and gas drilling in the Arctic National Wildlife Reserve ( ANWR ). But Democratic lawmakers and environmental groups criticized the GOP for sneaking the " backdoor drilling provision " through the budget process. Past proposals to drill in the refuge have consistently failed. The budget was passed through a legislative tool known as reconciliation which only requires a simple majority, rather than 60 votes. The budget was approved 51-49, with Kentucky Republican Sen. Rand Paul joining Democrats in opposition, paving the way for President Trump 's tax overhaul proposal. Drilling ANWR would raise revenue for Trump's tax plan that cuts taxes for the rich. ANWR, the largest protected wilderness in the U.S., consists of more than 19 million acres of pristine landscapes and is home to 37 species of land mammals, eight marine mammals, 42 fish species and more than 200 migratory bird species. "The budget passed by the Senate today sets in motion a sellout of some of our most iconic public lands and waters to the highest bidder, in order to fund tax breaks for billionaires," said Earthjustice president Trip Van Noppen.  "Drilling in the Arctic Refuge is not a budget issue, and should not be part of the budget reconciliation process," Van Noppen added. "This is a blatant attempt to use the budget reconciliation process to pass a divisive and controversial proposal that would lead us in the wrong direction on climate."

Senate votes to raise revenue by drilling in the Arctic National Wildlife Refuge - The Senate rejected an amendment Thursday that sought to block a key panel from raising revenue through drilling in Alaska’s Arctic National Wildlife Refuge, a move that could make it easier for future oil and gas drilling to take place there. Sen. Maria Cantwell (Wash.), the top Democrat on the Energy and Natural Resources Committee, offered a budget amendment that would have removed instructions to the panel to raise an additional $1 billion through federal leasing. It failed 48 to 52 on a largely party-line vote, with only Sen. Susan Collins (R-Maine) and Joe Manchin (W.Va.) breaking ranks. Collins voted in favor of Cantwell’s amendment, while Manchin opposed it. The vote, which came before the Senate approved Republicans’ proposed budget, represented a victory for the GOP and a defeat for environmentalists. The Trump administration is quietly moving to spur energy exploration in the refuge for the first time in more than 30 years by considering whether to allow seismic testing there, but only Congress can determine whether oil and gas drilling can take place within its 19.6 million acres. Sen. Lisa Murkowski (R-Alaska), who chairs the Energy and Natural Resources Committee, told her colleagues that they should view the budget instructions “as an opportunity to do something constructive for the country.” “It’s about jobs, and job creation. It’s about wealth and wealth creation,” she said, adding that drilling in the refuge is “not the only option” for how her panel could find $1 billion in new revenue. “But I will tell you it is the best option, and it’s on the table.” Opponents of the plan say that such operations could imperil the refuge’s wildlife, which include polar bears as well as caribou and migrating waterfowl. David Yarnold, CEO of the National Audubon Society, said in a recent interview that based on recent lease sales, the federal government would likely get only $9 million in revenue if it auctioned off the right to drill on the refuge’s coastal plain. “It’s just bad math,” Yarnold said, adding that when lawmakers predict this activity could raise $1 billion, “there’s no reason to believe that that’s going to happen.” 

ConocoPhillips Alaska plans largest exploration season in 15 years --  ConocoPhillips Alaska is planning its most ambitious exploration program in years, and the effort could provide more details about a newly promising North Slope play.The company plans to drill five exploration wells in early 2018.Three wells will help the company further analyze its large Willow prospect in the National Petroleum Reserve-Alaska, said Joe Marushack, president of ConocoPhillips Alaska, on Thursday night. That prospect could produce 100,000 barrels of oil daily, the company has said.Two other wells will be drilled near the Colville River, not far from where Armstrong Oil and Gas has heralded a large discovery it says could produce 120,000 barrels daily.Marushack said the plans, if completed, will represent the most exploration wells drilled per year by the company in 15 years.Marushack unveiled the proposal as keynote speaker at the annual meeting of the Alaska Support Industry Alliance, at a downtown Anchorage hotel.  Alaska, mired in a recession brought on by low oil prices, had the nation's highest unemployment rate in August. The plans generated applause from the large crowd. Marushack did not provide an estimated cost for the drilling program.The company plans to use three exploration rigs to conduct the drilling. Each rig typically provides 100 direct jobs, and hundreds of indirect jobs ranging from equipment operators to ice-road construction, said Natalie Lowman, a company spokeswoman, on Friday. In 2002, ConocoPhillips drilled seven exploration wells in Alaska, Lowman said. The winter drilling season generally extends from January through April.

Oil company proposes Arctic drilling from artificial island (AP) — America within a few years could be extracting oil from federal waters in the Arctic Ocean, but it won’t be from a remote drilling platform. Federal regulators are taking comments on a draft environmental statement for the Liberty Project, a proposal by a subsidiary of Houston-based Hilcorp to create an artificial gravel island that would hold production wells, a processing facility and the start of an undersea pipeline carrying oil to shore and connections to the trans-Alaska pipeline. The drilling would be the first in federal Arctic waters since Royal Dutch Shell, amid protest both in the United States and abroad, in 2015 sent down an exploratory well in the Chukchi Sea off Alaska’s northwest coast. Supporters like its chances. A final decision is in the hands of Interior Secretary Ryan Zinke. President Barak Obama in December signed an executive order designating the bulk of U.S. Arctic Ocean waters indefinitely off-limits to future oil and gas leasing. But President Donald in April signed another order aimed at reversing the policy. Zinke said Trump’s actions would put the country on track for energy independence. Opponents say Arctic offshore oil should stay in the ground, where it won’t add greenhouse gases that contribute to global warming and the melting of sea ice, the habitat of polar bears and walruses. They say spills are inevitable and cannot be cleaned up in icy Arctic water. Opponents also question Hilcorp’s safety record. State authorities this year fined the company $200,000 for violations at another production site. Hilcorp also waited several months to address an undersea pipeline leaking millions of cubic feet of processed natural gas in Alaska’s Cook Inlet because of danger to divers, Lois Epstein, Arctic program director for The Wilderness Society, said at an Anchorage hearing. “This ongoing gas release into Cook Inlet, visible from the air, was a national embarrassment for Alaska,” she said. The gas leaked from a pipeline supplying fuel to Hilcorp production platforms. The company confirmed the leak in February and lowered pressure in the line but waited until April to make repairs because of the threat to divers from floating ice. The Alaska Department of Environmental Conservation to date has found no evidence the leak harmed birds, fish or marine mammals. 

Video Shows Oil Company's Plans to Drill Arctic From Artificial Island  - The Liberty Project has posted a video about its proposal to build the nation's first oil production platform in federal waters in the Arctic .  The video was quietly uploaded two months ago and shows Hilcorp Alaska's plan to build an artificial gravel island and undersea pipeline for its offshore drilling project in the Beaufort Sea. Frankly speaking, the five-minute clip—with its all-American voiceover and electric guitar riffs—is something you'd expect from a pickup truck commercial.  According to the Associated Press (AP), the man-made island—located 5.6 miles off shore—would consist of a 24-acre base on the ocean floor that's about the size of 18 football fields. It will have sloped sides that lead to a work surface of 9 acres, or about seven football fields, allowing room for 16 wells, including five to eight conventional production wells. Hilcorp estimates it could extract up to 70,000 barrels per day for a total recovery of 80 million to 150 million barrels over 15 to 20 years. Hilcorp insists that it is committed to safety and its technology is sound, but environmental groups have warned about the company's record in Alaska, including its months-long gas leak in its underwater pipelines in Cook Inlet in the Spring.  Previous Arctic project studies have also warned that offshore drilling in those remote, treacherous waters carries a 75 percent chance of a major oil spill , noted the Center for Biological Diversity .  But proponents of the project have pointed out that Liberty would be the 19th artificial drilling island in Alaska, including four that are already pumping oil from state waters.  Federal regulators are currently taking public input on the Liberty project. The comment period ends on Nov. 18. The AP reports that the final decision lies with Interior Secretary Ryan Zinke .

Prudhoe Bay spill in April leads to wider review, suspension of 14 wells - BP has shut in 14 wells at the Prudhoe Bay field to prevent a replay of the oil and gas release on April 14 that the company now believes was caused by a "mechanical failure" after permafrost, melted from hot production fluids, caused the ground to sink and put extra pressure on the well. Five of those wells had been producing oil at the time of the spill but are currently not doing so because their operations were suspended, said Dawn Patience, a BP spokeswoman. The leak in April occurred when the wellhead and valve assembly of one of Prudhoe Bay's original wells suddenly jacked up 3 feet and struck the roof of a well house, causing damage to equipment that led to the uncontrolled release of oil and gas. Additional details about the incident and BP's plans to address the problem emerged in a June 27 report from BP to the Alaska Oil and Gas Conservation Commission. The agency said in a statement that it agrees with BP's conclusion and plan. Another nine wells are also being reviewed. A key element of the plan is a risk assessment of the potential for similar problems at the 14 "highest risk" wells with similar designs that have already been shut in. The oil-and-gas release did not harm people or wildlife or damage tundra. The escaping gas caused a plume of crude oil to spray into a containment area of the gravel drilling pad, affecting less than 1½ acres, state regulators said.The leaking was stopped April 17, three days after the incident began. Boots and Coots, a Halliburton-owned well-control company based in Texas, killed the well by pumping a solution of methanol and saltwater into it.

Unregulated Energy Industry Dams At Risk, Oil and Gas Commission Finds -- At least seven of 51 large dams built by the province’s shale gas industry in northeastern B.C. were not safe and required “enforcement orders” to comply with the law.  Almost six months after an independent report raised serious questions about the legality and safety of earth dams built to hold water for the fracking industry, the province’s energy regulator now reports it is taking action. The Oil and Gas Commission recently issued a bulletin saying it had inspected 51 dams northwest of Fort St. John last May and found “some issues” at seven different structures. These issues included water spilling over their top, erosion at the base and potential failure representing a hazard to the environment, First Nations and energy workers, according to the orders issued by the commission.The commission ordered Progress Energy to reduce water volumes by 50 per cent at five dams containing between 4.4 million and 26 million gallons of water.  The commission says it has identified 51 water storage sites holding more than 2.2 million gallons that qualify as regulated dams under B.C.’s Dam Safety Regulation. The dams are operated by 10 oil and gas companies.The industry funded energy regulator also ordered ConocoPhillips to empty all the water from two dams deemed unsafe and insecure.   Both ConocoPhillips enforcement orders noted “that allowing the structure to fill with water above the native grade elevation creates a potential for failure of the dam and a large release of material downslope.” Inspectors also found a variety of problems at five dams built by Malaysian-owned Progress Energy, including erosion, slumping and water overflowing the top of the dam.  In one case water levels came to within 50 centimetres of the top of the dam during a recent storm, “creating risk of overtopping.” In addition, “the existing closed-culvert spillway on the structure is insufficient to provide adequate outflow in the event of a large inflow from a storm rainfall event,” inspectors found.  In July the commission ordered Progress Energy to reduce water volumes in the structure because if it was more than half full there was “potential for structure failure.”

Cancelled $36B LNG project was 'wake-up call' to industry, says energy exec - Calgary - CBC News: Plentiful cheap natural gas is no guarantee that a Canadian LNG export industry will develop, says an executive with Progress Energy Canada, a division of Malaysia's state-owned Petronas, which cancelled its $36-billion Pacific NorthWest LNG project in July. The decision was difficult to make but "headwinds were too great" for the partnership to green light the West Coast megaproject, said Dennis Lawrence, vice-president of production for Progress, during a panel discussion at the Calgary Energy Roundtable on Wednesday.Lawrence said delays meant the project missed its opportunity to enter the global LNG market when it had a good chance to thrive. "We think it may be a bit of a wake-up call to us as an industry, to governments, to regulators within Canada that time is actually of utmost importance on these projects, that delays and long regulatory timelines can ultimately have an impact on whether projects go ahead or not," he said. Lawrence said the consortium's research showed that its northeastern B.C. Montney gas wells would be competitive with natural gas produced in the northeastern U.S. and it is now focused on developing access to those North American markets. Divergent opinions expressed at the conference reflect the uncertain status of Canada's LNG industry, with nearly two dozen projects proposed and only one — the relatively tiny Woodfibre LNG — approved for construction by its owners. Andy Calitz, CEO of the $40-billion LNG Canada project led by Royal Dutch Shell PLC, said he believes Canada's low-cost gas and relatively closer location to Asia makes it competitive with other countries vying to sell liquefied natural gas around the world. But he conceded the higher cost to build liquefaction facilities and pipelines in British Columbia will affect an investment decision expected next year. 

Indigenous rights 'serious obstacle' to Kinder Morgan pipeline, report says -- The controversial expansion of a pipeline that would carry tar sands crude from Alberta to British Columbia’s coast will be doomed by the rising power of Indigenous land rights.That’s the message that Kanahus Manuel, an Indigenous activist from the Secwepemc Nation in central BC, plans to deliver to banks financing the project as she travels through Europe this week.She’ll have in hand a report being released today by the Indigenous Network on Economies and Trade, which argues that Texas-based Kinder Morgan has misled financial backers about the risks of expanding its TransMountain pipeline, almost half of which runs across “unceded” Secwepemc territory.The project, whose cost has ballooned from $5.4 to $7.4bn, would nearly triple capacity on an existing pipeline to ship 890,000 barrels a day to Asian markets, locking in expanded production of one of the world’s most carbon-intensive oils.The report details “significant legal, financial and reputation risks” that amount to “serious obstacles” it says have been downplayed by Kinder Morgan in its dealings with Canadian and international banks.The key risks, identified by economists and lawyers based on the pipeline’s history, Canadian legal precedents, and financial documents, include Kinder Morgan’s plans to build on lands whose ownership is hotly contested. The pipeline crosses 518km of Secwepemc territory over which the First Nations assert Aboriginal title, a type of land rights that the supreme court of Canada has recognized were never ceded or relinquished through treaties.

Oil Spills Pose Dire Threats to Marine Life --  Research led by the Raincoast Conservation Foundation confirms the threat to marine mammals in BC waters from a seven-fold increase in tanker traffic is considerable.  After examining potential impacts of a 15,000-cubic-meter oil spill in BC waters on 21 marine mammals, researchers concluded most individuals would be at risk and a few local populations wouldn't survive. Baleen whales, for example, are highly susceptible to ingesting oil because they breathe through blowholes, filter and eat food from the ocean surface and rely on invertebrate prey. Oil residue can stick to the baleen, restricting the amount of food they consume.  Resident and transient killer whales, sea otters and Steller sea lions were most likely to see a drop in population levels from an oil spill. Killer whales are especially vulnerable because of their small populations, low reproductive rates, dietary specialization, long lives and complex social structure. The 76 southern resident killer whales off the BC coast, Canada's most endangered marine mammal, are particularly threatened by oil spills , as well as ship strikes and underwater noise that hinders their ability to feed and communicate.  If Trans Mountain's Kinder Morgan pipeline expansion proceeds and an oil spill occurs, the study estimates it would affect between 22 and 80 percent of these whales' critical Salish Sea habitat. They already face severe chinook salmon prey shortages and other challenges. In court, opponents argued that adding pipeline and tanker impacts to the mix could lead to their extinction.  Following the 1989 Exxon Valdez disaster in Prince William Sound, a unique pod of north coast orcas vanished forever. Nine of the 22 whales died and remaining pod members didn't produce any living offspring. All marine mammals are vulnerable to oil spills because they surface to breathe. If that happens in a spill, oil can adhere to their bodies, and they can inhale toxic vapors and ingest oil. Marine mammals exposed to oil spills may suffer damaged airways, congested lungs, stomach ulcerations, eye and skin lesions, weight loss and stunted growth. When whales and dolphins surface to breathe, oil can restrict their blowholes and airways. When seals and otters try to clean oil matted on their coats, they ingest it. They also lose heat because spilled oil ruins their natural insulation, so they can die of hypothermia.

Weak Alberta Gas Prices To Hurt Producer, Provincial Revenues  (Reuters) - Western Canadian natural gas prices have been stuck at historically weak levels since summer due to prolonged pipeline maintenance, which will hurt producers' quarterly profits and royalties paid to the cash-strapped province of Alberta. In the Alberta market, known as AECO, spot natural gas prices for immediate delivery have turned negative eight times in the last three months, most recently on Oct. 9, meaning producers got nothing for gas sold on those days. Throughout the third quarter of 2017 AECO spot prices fluctuated wildly, averaging around C$1.36 a gigajoule, down from C$2.05 a gigajoule or roughly a third on the whole of 2016, also a weak year. One reason is hefty maintenance and expansion work on TransCanada Corp's NOVA Gas Transmission Ltd (NGTL) pipeline system that has resulted in more severe capacity outages than market players expected and hindered gas flow across western Canada. "In August, September and October we have seen these wild swings and the price has gone ridiculously low. It's literally unprecedented," said GMP FirstEnergy analyst Martin King, who has tracked Canadian gas prices since 1993. Encana Corp and Kelt Exploration Ltd have shut in some natural gas production because of the maintenance work and weak prices. BMO Capital Markets this week downgraded their trading recommendations on Tourmaline Oil Corp, Peyto Exploration and Development, Advantage Oil & Gas Ltd and Paramount Resources Ltd to "market perform" from "outperform" because of exposure to AECO prices. Weak prices will also affect the royalties gas producers pay to the province of Alberta, which are based on AECO spot prices and contributed C$520 million to the province's coffers last fiscal year, about 1.2 percent of revenues. The Alberta government last updated its 2017-18 natural gas price forecast in August to C$2.60 a gigajoule, down 30 cents from its original budget estimate. A weaker gas price this year could deepen Alberta's expected C$10.5 billion deficit. 

Canada's oil sands survive, but can't thrive in a $50 oil world (Reuters) - Canada’s oil sands producers are stuck in a rut. The nation’s oil firms are retrenching, with large producers planning little or no further expansion and some smaller projects struggling even to cover their operating costs. As the era of large new projects comes to a close, many mid-sized producers - those with fewer assets and producing less than 100,000 barrels of oil a day in the oil sands - have shelved expansion plans, unable to earn back the high start-up costs with crude at around $50 per barrel. Larger Canadian producers, meanwhile, focus on projects that in the past were associated with smaller names. The last three years have seen dozens of new projects mothballed and expansions put on hold, meaning millions of barrels of crude from the world’s third-largest reserves may never be extracted. Where industry groups in 2014 expected Canada’s oil sands output to more than double to nearly 5 million barrels per day (bpd) by 2030, that forecast has been knocked down to 3.7 million bpd. This follows a spell of consolidation that has seen foreign majors sell off more than $23 billion in Canadian assets in a year and turn to U.S. shale patches such as the Permian basin in Texas, which produce returns more quickly and where proximity to refiners means the barrels fetch a better price. “We cannot compete with that huge sucking noise to the south that is called the Permian. Investment dollars are spiraling away down there,” Derek Evans, chief executive of small oil sands producer Pengrowth Energy told Reuters in an interview. Permian production rose 21 percent in 12 months through July compared to a 9 percent increase in Alberta’s oil sands, according to Canadian and US government data.

Russia Goes All In On Arctic Oil Development -- Neither sanctions nor persistently low oil prices are hindering Russia’s ambitions or plans to develop oil resources in its sections of the Arctic.In April, state-controlled oil giant Rosneft started drilling the northernmost well on the Russian Arctic shelf in the Khatangsky license area in the Laptev Sea. In June, Rosneft struck first oil in the Eastern Arctic in this license.Earlier this month, the oil firm said that recoverable reserves at the field exceed 80 million tons of oil, which is equal to around 586.4 million barrels. Geological data point to reserves at the field at 298 million tons of oil, or some 2.184 billion barrels, and the oil is high quality - light and low-sulfur, according to Rosneft.  The Russian oil giant - whose CEO Igor Sechin is a close ally of Vladimir Putin - continues to drill at the field to study its geology, search for more oil, and define future drilling strategies at the license, Rosneft says.Rosneft and Gazprom’s oil unit Gazprom Neft are the only two companies allowed to drill in the Arctic offshore under Russia’s legislation.Gazprom Neft operates the only oil-producing platform in Russia’s Arctic currently. ThePrirazlomnoye oil field in the Pechora Sea started pumping oil back in late 2013. The field is estimated to hold 70 million tons of oil, or 513 million barrels, with annual production averaging 5.5 million tons (40.3 million barrels) at full capacity.  Rosneft also plans to resume drilling in the Barents Sea next year and in the Kara Sea within two years, thus committing itself to conduct drilling works across the entire Russian section of the Arctic. Rosneft holds 28 licenses in the Russian Arctic shelf that are estimated to have combined reserves of 34 billion tons of oil equivalent, or 249.22 billion barrels. Since 2012, Rosneft has invested $1.74 billion (100 billion rubles) in Arctic exploration, and will invest in 2017-2021 another $4.354 billion (250 billion rubles). Russia, for its part, has stated that Arctic oil and Arctic development are priorities in its policies, and is supporting development with financing in a kind of political message that sanctions won’t deter its Arctic oil ambitions.

$800 Million Gas Pipeline Proposed As Argentina Preps For Shale Boom | Rigzone -- Gas transporter TGS, controlled by Pampa Energía, has proposed an $800 million pipeline and gas treatment plant in Argentina's Vaca Muerta shale fields, a company source said, aiming to address a key barrier to increasing production.The project, subject to approval by the government of Neuquen province, could be built in a year and a half and would transport gas produced by companies including state-run YPF SA, Tecpetrol, Dow Argentina and Exxon Mobil Corp, the source said. Argentina's President Mauricio Macri has made attracting investment to ramp up natural gas production a priority of his government, which is trying to end reliance on costly energy imports. But expanded output is limited by current pipeline capacity in the remote, Belgium-sized fields."Producers always say that a new pipeline will be needed for the next shale and tight gas drilling phase in Vaca Muerta," said the TGS source, who was not authorized to speak to press."This pipeline we are willing to do in a year and a half. We have the technical capacity to do it," the source said, adding that it would have an initial 4 million cubic meters capacity that could be expanded to 35 million cubic meters.Pipelines in Vaca Muerta are currently moving 60 million cubic meters (2,119 cubic feet) of natural gas per day and have capacity for 75 million, oil companies say.Predicting output will quickly rise beyond that as the government subsidizes gas production, state-run YPF, Argentina's top producer, has a contingency plan for two years to hire trucks to ship out gas, a YPF spokesman said.So far this year, Exxon Mobil, BP Unit Pan American Energy, Wintershall, Total,and Statoil have announced investments in Vaca Muerta."In the short term we are not going to have more capacity to move this gas, and planning for infrastructure to increase transport capacity needs to start now," said Gustavo Albrecht, General Director of Wintershall Energía, in a recent conference.Rival gas transporter TGN, controlled by Tecpetrol - part of conglomerate Techint - is also interested in building a pipeline or partnering with TGS, an industry source with knowledge of the company said. 

 Venezuela's deteriorating oil quality riles major refiners (Reuters) - Venezuela’s state-run oil firm, PDVSA, is increasingly delivering poor quality crude oil to major refiners in the United States, India and China, causing repeated complaints, canceled orders and demands for discounts, according to internal PDVSA documents and interviews with a dozen oil executives, workers, traders and inspectors.The disputes involve cargoes soiled with high levels of water, salt or metals that can cause problems for refineries, according to the sources and internal PDVSA trade documents seen by Reuters.The quality issues stem from shortages of chemicals and equipment to properly treat and store the oil, resulting in shutdowns and slowdowns at PDVSA production facilities, along with hurried transporting to avoid late deliveries, the sources said.U.S. refiner Phillips 66 canceled at least eight crude cargoes because of poor oil quality in the first half of the year and demanded discounts on other deliveries, according to the PDVSA documents and employees from both firms. The canceled shipments - amounting to 4.4 million barrels of oil - had a market value of nearly $200 million. Another key buyer of Venezuelan crude - India’s Reliance Industries Ltd, operator of the world’s largest refinery - has repeatedly complained about oil quality, a PDVSA employee told Reuters. State-run firm China National Petroleum Corp (CNPC) also complained earlier this year about excessive water levels in oil cargoes, a former PDVSA employee said.The deterioration of PDVSA crude is the latest symptom of the firm’s ill-maintained production infrastructure, and it threatens to accelerate an already severe cash crisis at a time when Venezuela is hoarding dollars to pay some $3.4 billion to bondholders in the next few weeks. PDVSA’s financial woes radiate through the country’s recession-racked economy, which depends on oil for more than 90 percent of its export revenue. Venezuela’s Oil Ministry and PDVSA did not respond to requests for comment.

 UK Oil And Gas Costs To Rise 100% If Brexit Fails - The UK’s embattled oil industry might have to tackle a twofold increase in trade costs if its separation from the European Union takes place under a no-deal scenario, an industry group has warned.The warning comes just as the region’s oil and gas companies start to boost investments in the UK’s continental shelf, thanks to generous government incentives.The UK government is attempting to negotiate a trade deal with the European Union, but optimism is fading as talks struggle to get off the ground. As Bloomberg noted earlier this week, after the end of yet another round of disappointing discussions, no government in Europe is willing to make concessions to London, as they have enough to deal with at home with populism on the rise and public opinion unlikely to hail any concessions to the British separatists.EU leaders chose to begin trade deal negotiations with London in December, despite the latter’s insistence the talks begin this week. If the talks end unfavorably for the UK, Oil & Gas U.K. warned this week, the investment rush currently underway in the UK’s section of the North Sea would slow down to a trickle as the cost of labor and equipment jumps. This, the group said, will inevitably happen if the UK reverts to World Trade Organization rules in the absence of a trade agreement with the EU.Earlier this year, Oil & Gas U.K. conducted a study of the potential effects of an unfavorable Brexit scenario on the oil and gas industry and found that it could see its cost of trade swell from the current $791 million (600 million pounds) to $1.45 billion (1.1 billion pounds). This is the cost on $97 billion (73 billion pounds) worth of annual trade in goods and services related to the oil industry. For Oil & Gas U.K., this would be the worst-case scenario. While, theoretically, costs equaling one-tenth of turnover isn’t insurmountable for an industry, UK oil and gas is working in one of the highest-cost oil basins in the world. Operators there also face hundreds of millions in decommissioning costs and field depletion. On the other hand, a recent Wood Mackenzie report found that the UK North Sea section has become the second hottest spot for deal making, after U.S. shale. Some oil majors have reduced their presence there, selling assets to independents who are eager to make the most of what oil remains in the North Sea, which isn’t an insubstantial amount. Others, namely French Total, have expanded their footprint through acquisitions.

OPEC's Output Curbs Squeeze World's Biggest Oil Refining Complex | Rigzone: -- Being sophisticated in the age of OPEC output curbs can prove a disadvantage, as the operator of the world’s biggest oil-refining complex is discovering.Reliance Industries Ltd.’s 1.24 million barrel-a-day facility in western India features highly advanced units designed to process the globe’s heaviest types of crude, which have historically been cheaper than lighter varieties because they are more difficult to break down into fuels. Now, a drive by the Organization of Petroleum Exporting Countries to stabilize the oil market is squeezing supplies of such grades and making them relatively costlier.The result: Billionaire Mukesh Ambani’s company posted quarterly profit that lagged behind estimates for the first time in more than two years. Reliance earned $12 for every barrel of crude it turned into fuel in the second quarter ended Sept. 30, compared with a prediction by CLSA India Pvt. for as much as $12.80 a barrel.Shares of the company were down 0.7 percent on Monday at 12:28 p.m. in Mumbai, compared with a 0.3 percent gain in the broader S&P BSE Sensex Index.Refining margins fell below expectations as OPEC’s curbs led to the lower availability of cheaper grades of crude, according to Srikanth Venkatachari, Reliance’s joint chief financial officer. “There is nothing which suggests that suddenly supply of heavy crude has eased, so this condition will persist.”

Crude or condensate? The dilemma over Nigeria's oil-cut exemption (Reuters) - When OPEC agreed to exempt Nigeria from its oil production-restraint deal last year, it knew the country faced a huge challenge in recouping output lost due to militant unrest.As tensions subside and the country pumps closer to normal levels, another dilemma looms for the producer group as it continues efforts to eradicate a price-sapping oil glut - how to count Nigeria’s crude output without mixing in condensates. The answer could determine when – and indeed if ever – Nigeria has to cut or curtail oil production, its key source of foreign currency. While Nigeria promised to cap at 1.8 million barrels per day (bpd) once production “stabilizes”, that limit exempts all of the West African nation’s condensates. And no one seems to agree on how much of that ultra-light oil it pumps. “Previously, due to the whole issue of militancy, quotas were not an issue,” said Gail Anderson, research director at consultancy Wood Mackenzie. But now, “if you start thinking about OPEC cuts, then the definition of crude and condensate becomes quite important”. Nigeria, along with OPEC peer Libya, was exempt from cuts due to militancy in its Delta region that slashed output from 2.2 million bpd to as low as 1.2 million bpd last year. The attacks have abated, with no major incidents since January. Nigeria’s output has also rebounded, and secondary sources such as consultancies and price-reporting agencies quoted by OPEC said it edged above 1.8 million bpd in August and September - reinstating the country as Africa’s largest oil exporter. But Nigeria has said some of that total included condensates, an ultra-light oil that is not counted as part of its promise to cap. Oil minister Emmanuel Ibe Kachikwu told Reuters in July that condensates contributed 450,000 bpd to Nigeria’s production that month. The figure exceeds external estimates for condensate production ranging from 200,000 to 250,000 bpd and suggests Nigeria’s own condensate definition could keep it out of any cap. 

Newest outpost for U.S. crude exports: India  (Reuters) - India is set to emerge as a key market for American crude exports in coming months, as refineries in that country are ramping up “test” purchases of U.S. grades to diversify their imports. U.S. exports recently set a weekly record with nearly 2 million barrels of crude a day sent overseas. But shipments to India have been rare, with just a few deliveries since the U.S. lifted its ban on crude exports in late 2015. Indian refineries are starting to increase purchases as the country seeks to secure more supply from outside the Middle East. Refiners are testing both U.S. sweet and sour crudes in their facilities, a common practice when importing crude from new sources. “A lot of these (Indian refiners) want to see what it’s like if they run it,” said one Houston-based oil broker. “They want to get a taste of U.S. crude.” Those refiners are taking advantage of a wide spread between U.S. oil and other global benchmarks, which has created an attractive discount on American crude grades. Foreign refiners, including those in India, have bid up those physical grades against the U.S. crude benchmark to multi-year highs, traders and brokers said. That includes onshore grades from the Permian Basin in West Texas WTC-WTM and the Eagle Ford further east, as well as offshore U.S. Gulf grades including Mars Sour WTC-MRS and Southern Green Canyon WTC-SGC. In June, Indian Prime Minister Narendra Modi and U.S. President Donald Trump met and discussed energy exports to India. Since then the Modi administration has been encouraging more crude imports by waiving some shipping requirements. 

Asia oil buyers turn to U.S. in hunt for cheap supply (Reuters) - Asia is set to ramp up crude oil imports from the United States in late 2017 and early next year, with buyers searching out cheap supplies after hurricanes hit U.S. demand for the commodity at a time of rising production in the country. As many as 11 tankers, partly or fully laden with U.S. crude, are due to arrive in Asia in November, with another 12 to load oil in the United States later in October and November before sailing for Asia, according to shipping sources and data on Thomson Reuters Eikon. U.S. West Texas Intermediate crude benchmark stands at its largest discount in years against the Atlantic Basin’s Brent, with local appetite curbed as U.S. refineries are still pushing to get back on track in the wake of hurricanes such as Harvey. “Between November and January, there is a very big volume of U.S. crude heading to Asia,” said a Chinese trader who has bought 4 million barrels of medium-sour U.S. oil to arrive in December. He declined to be identified as he was not authorised to speak with media. The price-spread between the two crudes had already pushed U.S. crude exports to a record 1.98 million barrels per day by late September, according to the Energy Information Administration in the United States. Exports in the next two to three weeks could hit 2.2 million bpd, Marco Dunand, chief executive of trading house Mercuria, said last week. That has also been driven as some Asian governments look to diversify supply sources and reduce trade surpluses with the world’s top economy. India joined China, Japan and South Korea when it imported its first U.S. crude in October. And high premiums for Middle Eastern grades of crude are also stoking Asian appetite for U.S. supplies. “U.S. medium sour grades can replace most Middle East grades and the light sweets may replace some African crude,”

       Interview: Saudi Aramco in talks with India on refinery projects - oil minister Saudi Aramco is in discussions with India about the possibility of participating in a number of refining projects operated by state-owned Indian oil companies, the first of which could start up in around 2020-21, Indian oil minister Dharmendra Pradhan told S&P Global Platts Tuesday.  The two projects include plans by the state-owned IOC, HPCL and BPCL to build a 60 million mt/year (over 1 million b/d) refinery in Maharashtra, along with another with a capacity of 9 million mt/year developed by HPCL in Rajasthan, Pradhan said in an interview during a visit to Tokyo."There are some projects [under discussion]," Pradhan said. "Saudi Aramco feels comfortable with the Indian government companies so there will be a joint venture model between Aramco and some of [them]." Saudi Aramco said in early October that India was a priority destination for investment and that it was keen to play a bigger role as a crude and LPG supplier to feed an anticipated rise in demand. Saudi Arabia is India's second-largest supplier of crude oil after Iraq, accounting for about 19% of its imports. It also accounts for 29% of India's LPG imports.
During fiscal 2016-17 (April-March), India imported about 39.5 million mt of crude oil from Saudi Arabia, according to the oil ministry.

Major Energy Importer Bets $10 Billion On Natural Gas -- Much of the attention in energy markets has been focused on OPEC and oil prices lately. But news this week suggests that a different energy commodity is quietly becoming the hottest story going worldwide.That’s natural gas. With the world’s top importing nation — Japan — saying this week it’s about to embark on a major spending spree in the sector.Japanese press reported over the weekend that government agencies are about to launch a major funding program for international natgas projects — specifically aimed at the liquefied natural gas (LNG) sector. With the government planning to make a full $10 billion available for investment.Those dollars will reportedly come from Japan Bank for International Cooperation and Nippon Export and Investment Insurance. With targets being LNG receiving terminals as well as associated power plant facilities. Here’s the most intriguing part: Japanese papers said the program will be aimed entirely at LNG projects in Asia. With the stated goal to “build markets in Asia for U.S. LNG”. At first glance, it seems odd the Japanese government would be spending its own money to help America gain LNG market share. But there may be a more-selfish reason here: namely, to facilitate increased shipments of U.S. LNG into the Asian sphere, making it easier and cheaper for Japanese buyers to grab a piece of the growing supply.  It will be interesting to see how specific deals are structured in regards to this funding. But it’s likely that Japanese backers will look to take direct stakes in facilities they support — in order to have direct control of LNG flows around Asia.

China places bet on yuan-denominated crude oil futures | Asia Times: Oil traders are carefully watching to see which country will follow Venezuela’s decision to export crude oil denominated in renminbi instead of US dollars. Venezuela, the 11th largest oil producer in the world, announced on September 15 it would sell oil and gas in yuan to avoid the “tyranny of the dollar,” according to a plan announced by President Nicolas Maduro. The US promptly responded by announcing sanctions that would bar certain financial dealings with Venezuela.Carl Weinberg, chief economist and managing director at High Frequency Economics, said Wednesday that China will “compel” Saudi Arabia to trade oil in yuan. He said if this happens, the rest of the oil market will follow suit and abandon the US dollar as the world’s reserve currency. China wields significant power on the world oil market. In the first half of 2017, China passed the United States as the largest importer of crude oil – 8.5 million barrels a day on average versus 8.1 million barrels a day imported by the US, according to government data from both countries. In the first eight months of 2017, China imported 281.1 Metric Tonne Oil Equivalents, or 2 billion Barrels Oil Equivalent. At an average price of US$49.36 per barrel, China spent $99.11 billion for the eight months on oil imports, or about $148 billion per year. The Chinese government’s plan to promote the use of renminbi in global commodity markets has been outlined in recent speeches by Chinese officials and oil producers. China will promote the use of renminbi in the global commodity markets, Xinhua Finance Agency reported, citing Pan Hongsheng, the deputy secretary general of the People’s Bank of China’s monetary policy committee. The country will push forward the formation of pricing systems for yuan-denominated commodity products and encourage local commercial banks to launch innovative financial services to support these developments, Pan said in a speech during the first World Petroleum Business Conference in Hangzhou in Zhejiang province on September 18. It will also encourage the launch of derivatives and currency tools to help investors trade yuan-denominated commodity products, he said. 

China's bold gas plan may threaten winter power supplies (Reuters) - China has ordered state oil companies to speed up the construction of pipelines to move natural gas to homes and factories, underscoring worries that the country’s insufficient infrastructure could cause power outages during the peak winter demand period. This winter, millions of homes across the colder northern regions of the world’s second-largest economy will be heated for the first time by gas rather than coal, as part of Beijing’s effort to boost clean fuel use. But with just a month before newly installed radiators get switched on, the National Development & Reform Commission (NDRC) warned on Thursday that supply and demand conditions could be “serious” this winter. The alert shows Beijing is trying to head off supply disruptions during the peak demand period from November until March. Residential users with their radiators will have supply priority over industrial users, increasing the possibility of power losses during gas shortages. “We are all quite concerned with supply shortages this winter ... as we may not have the infrastructure capacity to catch up with the demand growth,” said Li Wei, a vice president of Kunlun Energy, which operates liquefied natural gas (LNG) terminals and gas production plants. Wood Mackenzie estimates the heating needs alone will add 10 billion cubic meters (bcm) to China’s gas demand, the equivalent of Vietnam’s annual consumption. The country is expected to use about 230 bcm this year.Small industrial users like hospitals have also had to switch to gas this winter. China will either need to ramp up imports, offering a boon for major exporters like Russia, or big industrial consumers may get interrupted, warned Kerry Anne Shanks, head of Asia gas and LNG research at consultants Wood Mackenzie. 

Exclusive: China offers to buy 5 percent of Saudi Aramco directly - sources (Reuters) - China is offering to buy up to 5 percent of Saudi Aramco directly, sources said, a move that could give Saudi Arabia the flexibility to consider various options for its plan to float the world’s biggest oil producer on the stock market. Chinese state-owned oil companies PetroChina (0857.HK) and Sinopec (0386.HK) have written to Saudi Aramco in recent weeks to express an interest in a direct deal, industry sources told Reuters. The companies are part of a state-run consortium including China’s sovereign wealth fund, the sources say. Saudi Arabia’s Crown Prince Mohammed bin Salman said last year the kingdom was considering listing about 5 percent of Aramco in 2018 in a deal that could raise $100 billion, if the company is valued at about $2 trillion as hoped. “The Chinese want to secure oil supplies,” one of the industry sources said. “They are willing to take the whole 5 percent, or even more, alone.” PetroChina and Sinopec declined to comment. The initial public offering (IPO) of Saudi Aramco is the centerpiece of an economic reform plan to diversify the Saudi economy beyond oil and it would also provide a welcome boost to the kingdom’s budget which has been hit by low oil prices. But the IPO plan has created public misgivings that Riyadh is relinquishing its crown jewels to foreigners cheaply at a time of low oil prices. Some Aramco employees would like the whole idea to be shelved, sources say. Internal disagreements between what some advisers recommend and what the crown prince wants have delayed several key decisions about the IPO, industry sources said. The sources also point to disagreements between senior government officials, with some pushing only to list Aramco locally or to delay the IPO beyond 2018 when they hope oil prices will have stabilized at $55 to $60 a barrel.

Russia's Gazprom Neft eyes cooperation with Saudi Aramco in hard-to-recover oil | Euronews: Russia’s Gazprom Neft will jointly work with the world’s largest oil producer Saudi Aramco in hard-to-recover oil production and on a technology known as hydraulic fracturing, Gazprom Neft’s head Alexander Dyukov said on Wednesday. Earlier this month, both companies have signed an agreement on technological cooperation during a state visit to Russia by Saudi King Salman. Dyukov also told reporters that Gazprom Neft expects its borrowings to rise to between 200 billion roubles and 210 billion roubles (£2.6 billion – £2.7 billion) next year without possible new funds for Messoyakha greenfield.

Chinese EV Boom Could Crash Oil Prices - The rapid adoption of electric vehicles could cause oil prices to fall to $10 per barrel in less than a decade, according to the CEO of Longview Economics. EVs are gaining traction, and although they still only make up a small fraction of the auto market, more and more analysts are starting to buy into the notion that EVs will quickly gain a foothold over the next decade or so, with massive ramifications for the oil market. There has been a sea change of sorts in just the past year or two, with EVs going from a niche idea even in long-term forecasts, to one that many believe will increasingly take market share from the traditional internal combustion engine. There are many reasons for this – policy and market forces are reinforcing each other to bring the EV revolution closer and closer. The falling cost of batteries have made EVs much more competitive, and EVs could become cheaper than gasoline or diesel-powered vehicles between 2025 and 2029, according to Bloomberg New Energy Finance (BNEF). BNEF predicts that EVs will capture than half of all new auto sales by 2040. But government policies could accelerate this trend. The UK and France have announced a phase out of the internal combustion engine, banning their sales by 2040. China and India have also announced tentative steps in that direction, which, if finalized, would totally change the game.  And China could go a long way by itself in accelerating this transition. As the world’s largest auto market, China’s EV policy, which is still being formulated, could supercharge the race for EVs. The massive investments planned for EVs, combine with restrictions on dirtier forms of transportation, all done within a top-down economy, could spark rapid change. “They can order charging stations set up all over China, dictate driving and licence plate restrictions in major cities,” a western auto executive told the FT, drawing a clear contrast with what can be done in western economies.

NYMEX November gas continues rally, settles up 1.1 cents at $3/MMBtu -- The NYMEX November natural gas futures contract continued to rally Friday off the heels of Thursday's 10-cent climb. The contact settled at $3/MMBtu, up 1.1 cents.The rally has put the front-month contract at the $3/MMBtu level for the first time since September 29. Production near record levels and forecasts of a mild winter had helped drive prices down over recent weeks. But Platts Analytics' Bentek Energy data showed US dry gas production has dipped recently, averaging 72.1 Bcf/d over the past six days. The most recent six- to 10-day outlook from the National Weather Service calls for a high likelihood of warmer-than-average weather across the eastern half of the US, with the eight- to 14-day outlook projecting similar results.Warmer-than-average weather stretching through the end of October could cut into heating demand, allowing gas in storage to build at an above-average pace. The US Energy Information Administration estimated Thursday an 87-Bcf build for the week ended October 6, which equaled the 87-Bcf five-year average for the week. National stocks sit an estimated 0.2% deficit to the five-year average, according to EIA data.

Investors hit peak bullishness on oil (Reuters) - The wave of investor bullishness towards oil that started back in July and August may have peaked at the end of September, according to the latest position records published by regulators and exchanges.Hedge funds and other money managers cut their net long position in the five major futures and options contracts linked to petroleum by a total of 32 million barrels in the week to Oct. 10.Hedge funds cut their net long position in every one of the major benchmarks including Brent (-16 million barrels), WTI (-7 million barrels), U.S. gasoline (-4 million) and U.S. heating oil (-5 million).Fund managers had accumulated a record number of long positions in the petroleum complex by the end of September and the net position in many individual contracts was at or close to record levels.But fund managers have now cut their net long position in petroleum for two weeks in a row and oil prices have generally drifted lower since the end of last month (http://tmsnrt.rs/2xKikXS).Adding to the downward pressure on prices, portfolio managers also cut their net long position in European gasoil by almost 1.6 million tonnes last week from the record of 18 million tonnes set the week before.Investor positioning in petroleum markets had become stretched by the end of September, as many traders and analysts noted at the time.Since the start of 2015, lopsided positioning by hedge funds and other money managers has been a good indicator of an approaching reversal in prices.So the concentration of long positions and absence of shorts posed an increasing risk of a price correction in the event the rally stalled and fund managers attempted to realise some of their profits.Some investors are already anticipating a renewed down-cycle in prices with short positions in NYMEX WTI increasing by more than 17 million barrels since Sept. 26. Positioning and fundamentals now point in opposite directions which will create some short-term tension in oil prices.

Oil jumps 1 percent; fighting shuts output in Iraq's Kirkuk (Reuters) - Oil prices jumped 1 percent on Monday as Iraqi forces entered the oil-rich city of Kirkuk, taking territory from Kurdish fighters and briefly cutting some crude output from OPEC’s second-largest producer. “We’re seeing increased geopolitical tension in the Middle East providing support in the market today, namely in Iraqi Kurdistan, and some uncertainty around Iran,” said Anthony Headrick, energy market analyst at CHS Hedging LLC in Inver Grove Heights, Minnesota. Iraq’s Kurdistan briefly shut down some 350,000 barrels per day (bpd) of production from major fields Bai Hassan and Avana due to security concerns. Iraq launched the operation on Sunday as the crisis between Baghdad and the Kurdish Regional Government (KRG) escalated. The KRG voted for independence in a Sept. 25 referendum. Brent crude futures LCOc1 were up 62 cents or 1 percent at $57.79 per barrel at 11:02 a.m. U.S. West Texas Intermediate (WTI) crude was up 36 cents or 0.7 percent at $51.81 per barrel. The government said its troops had taken control of Iraq’s North Oil Co, and the fields quickly resumed production. The KRG government said oil continued to flow through the export pipeline, and it would take no steps to stop it. Still, the action unsettled the market. Some 600,000 bpd of oil is produced in the region, and Turkey has threatened to shut a KRG-operated pipeline that goes to the Turkish port of Ceyhan at Baghdad’s request.

Global Oil Prices Soar as Kirkuk Conflict Flares Up - The development of the conflict in the Iraqi city of Kirkuk, where Iraq's military units clashed with Kurdish Peshmerga detachments, has already affected the global economy.In the afternoon on Monday the price of December futures for the North Sea oil mixture Brent rose by 1.75 percent, to $58.17 per barrel, whereas the price of November futures for WTI rose by 1.46 percent to $52.2 per barrel.This comes amid tensions between Baghdad and Kirkuk, which have further escalated following Iraqi Kurdistan's independence referendum. Although Kirkuk is not a part of Iraqi Kurdistan it took part in the referendum.  “Oil Brent is now quoted at 1.4% higher than at the close of Friday's trading in Moscow, with the main rise happening this morning. Market participants are reacting to the escalation of the conflict between the Iraqi Kurdistan authorities and the central government of Iraq. …The dynamics of oil markets … were influenced by emerging over the weekend of reports that Saudi Arabia may postpone holding an IPO of company Aramco,” a report by an analyst of Sberbank KIB read.The Iraqi troops have been conducting an operation in the region and have reported capturing the Kirkuk airport from the Kurdish Army in the oil-rich region, which aims to gain independence like Iraqi Kurdistan. The Iraqi federal police managed to capture the Kirkuk administration building without any fight, a source told Sputnik.

Oil prices rise toward six-month high as new Iraq conflict threatens output -- Oil prices closed in on the highest level in six months as a conflict in Iraq spilled over into one of the nation's key crude-producing hubs. Iraqi forces on Sunday launched a campaign to retake control of the area surrounding Kirkuk, an ethnically diverse area controlled by the semiautonomous Iraqi Kurdistan region. Government troops took control of the North Oil Company, a military base and airport, Reuters and Dow Jones reported, marking the escalation of an intensifying dispute following a Kurdish independence referendum last month. U.S. West Texas Intermediate crude prices hit a session high of $52.37 a barrel on Monday, the strongest level since Sept. 28 and about 50 cents shy of posting a six-month high. They eased back and were last up 41 cents at $51.86. Brent crude oil peaked at $58.47 on Monday, about $1 below a more than two-year high struck last month. The international benchmark also pared gains to trade 68 cents higher at $57.85."The international market really took off higher on the news," said John Kilduff, founding partner at energy hedge fund Again Capital. The fallout depends on whether or not fighting actually occurs, he said.Clashes appeared to be limited, according to initial news reports. Still, the standoff was not in the cards as recently as a week ago, Kilduff said. The contracts hit their peaks after Reuters reported Iraqi Kurdistan temporarily shut down 350,000 barrels a day of production at the Bai Hasan and Avana oil fields due to security concerns. An Iraqi oil ministry official told Reuters operations in Kirkuk are "proceeding normally."

Oil Fundamentals Overturn Geopolitical Risk - Oil posted gains on Monday and Tuesday on news that the Iraqi military seized control of Kirkuk, raising fears of supply outages.  Iraqi forces unexpectedly seized control of the key oil fields around the city of Kirkuk, which had been under Kurdish control for more than three years. The move sparked concerns over civil war, and comes three weeks after the Kurdish referendum favoring independence. There were early reports that an estimated 350,000 bpd of oil production was temporarily sidelined after Iraqi government forces took control of the oil fields, and there are conflicting reports on whether the outage remains. Kurdistan has said it would not impede oil exports. The problem is that the oil flows through Kurdish pipelines as a separate pipeline system under Baghdad’s control is damaged. Oil jumped on Monday on fears of outages, although those fears will probably dissipate if exports are restored.  There won’t be any immediate effect on the oil market from the decertification of the Iran nuclear deal by the Trump administration, but if tensions rise in the coming months, it would likely occur at a time when the oil market is tightening anyway, leading to upward pressure on prices, according to FBR Capital Markets.  The decertification of the Iran nuclear deal and the military offensive by the Iraqi government has thrust the prospect of geopolitical risk back into the oil market, according to Goldman Sachs. Still, it isn’t like it used to be – years ago, oil would immediately jump by a few dollars per barrel when news would break about heightened tension. The return of geopolitical risk will be more muted due to a well-supplied market.  While peak oil demand might prove elusive, demand will expand at negligible levels beginning in the 2020s, according to Wood Mackenzie. The consultancy sees demand still rising to 2035, but at very slow rates. While WoodMac does not see peak oil demand overall on the horizon, it does see a peak for gasoline. Consumption in the transportation sector is expected to dip due to the penetration of EVs, but the petrochemical industry will offset the decline. Natural gas will take on greater significance as a fuel used in trucking, shipping, electricity and petrochemicals.

Oil holds ground, settles near 3-week high - Oil settled little changed on Tuesday, but fighting in Iraq and tensions between the U.S. and Iran kept prices at their highest level in nearly three weeks. “Geopolitical risk supported the initial move higher, but we’ve pushed to price levels that are clearly attractive to U.S. shale producers,” Robbie Fraser, commodity analyst at Schneider Electric, told MarketWatch. November West Texas Intermediate crude tacked on a penny to settle at $51.88 a barrel on the New York Mercantile Exchange after tapping a high of $52.25. It settled at its highest level since Sept. 27 for a second session in a row. Brent crude for December rose 6 cents, or 0.1%, to $57.88 a barrel—also its highest since late September.“WTI prices have found some breathing room above the $50 [a barrel level] and the market is increasingly concerned that those levels will trigger rising rig counts and stronger production growth further down the line,” said Fraser. “So long as the market has faith in a U.S. production response, we should keep seeing this secondary move to sell any price rally.”A monthly report from the Energy Information Administration released Monday showed expectations for a rise of 81,000 barrels a day to 6.12 million barrels a day in shale-oil production from seven key U.S. shale regions in November. Elsewhere, Iraqi forces clashed Monday with fighters from Iraq’s semiautonomous Kurdish region in the oil-rich province of Kirkuk, in a continuing standoff over Kurdish independence. The violence followed a referendum late September in which the Kurds voted overwhelmingly in favor of independence, in defiance of the central government in Baghdad and other regional powers.

WTI Shrugs Despite Huge Crude Draw -- A v-shaped recovery in WTI/RBOB today (amid a dollar reversal at the EU close and chatter about a big crude draw) led prices higher into the API print (but after last week's 100% incorrect API vs DOE reversal, who knows what it means). And the rumors were true - a huge crude draw (biggest in 2 months) and the first build at Cushing in 8 weeks. However WTI prices didn't move much as product builds weighed on RBOB prices.  API:

• Crude -7.13mm (-3.2mm exp) - bigget draw in 2 months
• Cushing -151k - first draw in 2 months
• Gasoline +1.951mm (+1.05mm exp)
• Distillates +1.644mm - biggest in 3 months

After last week's 100% wrong API data (API crude build, gas draw; DOE crude draw, gas build), who knows what will happen.

Crude Oil Prices Menace Six-Month High, EIA Inventory Data on Tap --Crude oil prices sank after Sky News reported that Kurdish Peshmerga militia reached agreement to return to Iraq’s 2003 borders. Conflict between local fighters and government forces in the Kirkuk province shut down two oil fields, stoking supply disruption fears.  The swiftly selloff evaporated as markets looked ahead to API inventory flow data however, and it did not disappoint. The report showed US stockpiles shed 7.13 million barrels last week, outpacing the 3.85 million outflow expected to be on display in EIA statistics due today.If official figures hew closer to the private-sector estimate, oil prices may enjoy a further boost. JODI numbers on global output and export trends are also due. Commentary from China’s Communist Party Congress as well as the Oil & Money conference are also worth monitoring for relevant tidbits. Goldprices continued to fall against a backdrop of rebuilding Fed rate hike speculation. The US central bank’s Beige Book survey of regional economic conditions is now in focus.

OPEC oil output cuts 'working' but need to run to end-2018: Total CEO – The current OPEC/non-OPEC output cut deal is starting to bring the global oil market back towards balance, but the agreement will likely need to run until at least the end of next year to fully draw down the overhang of oil stocks, Total CEO Patrick Pouyanne said Wednesday. "The OPEC/Non-OPEC deal is working well...I think the market is slowly rebalancing, the inventories are going down," Pouyanne told the Oil & Money conference in London.Pouyanne said, however, he would reiterate comments he made in January when the OPEC cuts began, that it would take at least two years for the cut deal to fully rebalance the oil market and reduce the overhang of global oil stocks."If you have three or four years of oversupply, it takes time to rebalance the market," he said. Noting comments made during the recent visit by Saudi Arabia's King Salman to Moscow to meet Russian President Vladimir Putin, Pouyanne said he was "convinced" the two major oil producers were now pursuing a target of bringing oil prices to $60/b. During the historic meeting earlier this month, King Salman and Putin discussed extending the deal to keep the OPEC/non-OPEC coalition's market rebalancing efforts on track. "The meeting...I think cemented the agreement between two of the three main producing countries of the world," Pouyanne said. "I'm convinced that both of them are targeting a price of about $60/b."According to the IEA's latest monthly oil market report, OECD oil stocks continued falling against the five-year average in August, to reach 170 million barrels above the five-year average, although the total remained above the 3 billion mark, at 3.015 billion barrels.Global oil stocks are likely to have fallen in Q3 for just the second time since oil prices started collapsing in 2014, the IEA added, noting that stocks are likely to fall by 300,000 b/d on average this year.With current oil prices of around $56/b, Pouyanne said he also saw a new "wave of investment" by US shale producers as drilling efficiencies had lowered break-even costs. Looking further ahead, however, he repeated concerns voiced over the past 18 months that a the sharp drop in upstream spending by oil majors after the 2014 price slump could create a supply shortage in the next decade.

The world’s largest oil trader sees Brent plunging to $45 in 2018 - Brent oil prices could tumble more than 20% by 2018, as U.S. output surges and adds renewed pressure on an oil market that is already battling with a persistent oversupply, according to Ian Taylor, chief executive officer at Vitol Group, the world’s largest oil trader. Speaking at the Oil & Money conference in London on Wednesday, Taylor warned that there’s currently a consensus in the industry that prices will go higher, but that such an unanimity “can be dangerous.”“We are all expecting a little bit of tightening to come through because we all see demand growing next year at a pretty good rate, we all expect OPEC to hold together and we expect probably the capital discipline to [remain in place],” he said. “So it’s guaranteed we are all going to be wrong. And I think there’s a chance oil could fall closer to $40 than $50, because I think there’s still one more big surge coming from U.S., which will knock prices down,” he said, pointing to $45 per barrel as his 2018 forecast. Brent prices traded around $58 on Wednesday, so Taylor’s prediction would indicate a 22% slump from current levels.  U.S. shale output has been singled out as one of key reasons oil prices came crashing down in the summer of 2014 and still haven’t recovered to their former glory. Both crude oil and Brent are still around 50% lower than their 2013-2014 peaks. In response to the price plunge, the Organization of the Petroleum Exporting Countries and a group of non-cartel members have agreed to cut production until March 2018 in an effort to reduce the global supply glut.  However, the U.S. isn’t part of the accord and has been able to grow market share as other global players have frozen or scaled back their output. U.S. oil production is expected to rise for an 11th straight month in November, by around 82,000 barrels a day to 6.12 million barrels a day, the U.S. Energy Information Administration said this Monday.

OPEC reportedly favors 9-month extension to output cut deal in bid to boost oil prices -- OPEC members are reportedly forming a consensus around extending their production cutting deal with other crude exporters by nine months, a move that would help to put a floor under oil prices.That would prolong the agreement among OPEC, Russia and other oil-producing nations to keep 1.8 million barrels a day off the market through the whole of next year. The exporters reached the deal last December and have already extended the agreement once through March of 2018.Sources told Reuters that OPEC may not agree to the extension at its next policy meeting in November. Instead, they may wait until early next year to make a final decision.Oil prices strengthened following the report. International benchmark Brent crude futures were up 38 cents, or 0.7 percent, $58.26 per barrel by 10 a.m. EDT. U.S. crude for November delivery was up 31 cents, or 0.6 percent, at $52.19. OPEC may put off the decision at its Nov. 30 meeting if demand for crude oil and petroleum products remains strong, a source told Reuters. OPEC and the International Energy Agency have recently reported that demand has improved, though the IEA raised concerns about future consumption growth in its latest report.Three of the sources confirmed to Reuters that OPEC is leaning towards a nine-month extension, while a fourth said prolonging the deal by six to nine months would do the job of sopping up excess oil sitting in stockpiles.OPEC is trying to drive down global crude stockpiles to the five-year average. The producer group reported last week that inventories among the OECD, a group of mostly wealthy nations, stood at just under 3 billion barrels in August, about 171 million barrels above the five-year average. Two OPEC sources told Reuters that the group is not likely to deepen the cuts beyond 1.8 million barrels a day.

Oil Algos Shocked As US Crude Production Crashes Most In Over 5 Years ---Following API's huge 7.1mm barrel crude draw overnight, WTI prices are slightly higher (driven more by OPEC jawboning) as last week's API errors are still on traders' minds, but DOE confirmed a big crude draw but notable builds in gasoline and distillates surprised. However, the biggest headline is likely the 11%-plus collapse in US crude production... DOE:

• Crude -5.73mm (-3.2mm exp) 
• Cushing +202k
• Gasoline +908k (+1.05mm exp)
• Distillates +528k (-1.5mm exp)

Traders clearly did not trust the API data (after last week's flip-flop) but DOE confirmed a big draw and notable builds in both gasoline and distillates... As a reminder - Supplies remain bloated at about 21% above the five year average despite rising exports. Following the previous week's drop in production, this week saw a 12% collapse in US Lower 48 output - presumably affected by Hurricane Nate!! The biggest drop since Hurricane Isaac in Aug 2012

Crude futures rise slightly as US product builds limit upside --Crude futures inched higher Wednesday after Energy Information Administration data showed a larger-than-anticipated decline in crude stocks, but surprise builds in product stocks tempered the rise. NYMEX November crude rose 16 cents to settle at $52.04/b. ICE December Brent settled 27 cents higher at $58.15/b. US crude stocks fell 5.731 million barrels to 456.485 million barrels last week. Analysts surveyed Monday by S&P Global Platts expected a draw of 3.9 million barrels. It was the fourth straight decline, but traders looked elsewhere for market direction, and seemed to find aspects of the EIA report bearish enough to cause prices to weaken Wednesday morning. Other factors behind the price reaction were drops in product demand and refinery utilization, said Ryan McKay, commodity strategist at TD Securities. "It seems like we're starting off fall maintenance," he said. Every region saw its utilization rate decline, pulling the total rate 4.7 percentage points lower to 84.5% of capacity. The extent of last week's pullback was unexpected, with analysts looking for a more modest drop of 0.7 percentage points. NYMEX November crude touched a low of $51.69/b Wednesday. ICE December Brent traded as low as $57.74/b at one point. Two factors helping pull crude stocks lower were crude exports, which rebounded 528,000 b/d to 1.798 million b/d, and less crude output. EIA estimates put production at 8.406 million b/d last week, the lowest amount since May 2014. Tropical Storm Nate, which strengthened into a hurricane in the Gulf of Mexico before landing on the Gulf Coast, forced offshore operators to evacuate personnel and shut-in production last week. Despite a decline in refinery utilization, inventories of gasoline and distillates both increased last week. Gasoline stocks rose 908,000 barrels to 222.334 million barrels the week ending October 13, EIA data showed. Analysts were looking for a decline of 340,000 barrels.

Oil ekes out 3-week high as U.S. crude supplies drop, but product stocks rise - Oil futures ended with a minor gain Wednesday, barely notching a three-week high, supported by a fourth straight weekly decline in U.S. crude supplies and escalating tensions in the Middle East.But pressure from unexpected increases in petroleum-product supplies kept prices in a tight trading range. November West Texas Intermediate crude added 16 cents, or 0.3%, to settle at $52.04 a barrel on the New York Mercantile Exchange. Prices pulled back from the $52.23 level hit before the supply data, but still logged their highest finish since Sept. 27.On ICE Futures Europe, Brent crude for December rose 27 cents, or 0.5%, to $58.15 a barrel—for its highest settlement since late September. The U.S. Energy Information Administration Wednesday showed that domestic crude supplies fell by 5.7 million barrels for the week ended Oct. 13. That was higher than the forecast for a drop of 3.9 million barrels by analysts surveyed by S&P Global Platts, but below the 7.1 million-barrel decline reported by the American Petroleum Institute late Tuesday. “Lower offshore domestic production due to Hurricane Nate, strong exports and subdued imports have been offset by refinery runs dropping by a whopping 820,000 [barrels a day],” said Matt Smith, director of commodity research at ClipperData. He said the market was actually “positioned for a larger draw” and that’s why it pared gains. Unexpectedly, gasoline stockpiles were up 900,000 barrels for the week, while distillate stockpiles rose by 500,000 barrels, according to the EIA. The S&P Global Platts survey forecast drops of 340,000 barrels for gasoline and 2 million barrels for distillates. “The size of the crude-supply draw underwhelmed expectations due to refinery maintenance” leading to drop in refinery runs, said Troy Vincent, oil analyst at ClipperData. That “helped offset the 1 [million barrels-per-day] supply shortfall as a result of the hurricane,” which passed through the Gulf earlier this month.

'Oil ends lower after 4-session climb sends prices to highest levels in weeks - Oil futures ended lower Thursday, pulling back after four-consecutive sessions of gains lifted prices to their highest levels in weeks. Tensions in Iraq and uncertainty surrounding Iran’s nuclear deal have raised the risk to global crude supplies as expectations for stronger oil demand boosted prospects for a more balanced market. “Although there are heightened geopolitical tensions between the United States and Iran over the Joint Comprehensive Plan of Action (JCPOA) and ongoing conflicts in Iraq, optimism over global demand for oil increasing in 2017, have supported oil markets,” said Lukman Otunuga, research analyst at FXTM. “The question is, for how long?” November West Texas Intermediate crude lost 75 cents, or 1.4%, to settle at $51.29 a barrel on the New York Mercantile Exchange. December Brent crude fell 92 cents, or 1.6%, to $57.23 a barrel on ICE Futures Europe. Both contracts settled Wednesday at their highest since late September, according to FactSet data. “Much attention should be directed to how OPEC deals with rising production from Nigeria and Libya,” said Otunuga. “With increased output from these two suppliers potentially disrupting the efforts made by the rest of the group to tackle the oversupply woes, OPEC may request that they also cut production.” He said that from a technical standpoint, WTI crude is at risk of depreciating further,” if prices fall below $51, which may “encourage: a further decline back towards the $50 level.

OilPrice Intelligence Report: Has Oil Become Range Bound Again? - Oil seems to have found a relative bottom after the declines over the past few weeks, with WTI firming up at the $50-per-barrel level. Tension in the Middle East, combined with growing confidence in the likelihood of an OPEC extension, has very few analysts seeing a lot of downside risk. “The oil market is tightening gradually,” Tamas Varga, analyst at brokerage PVM Oil Associates, told Reuters. “OPEC is expected to roll over output restrictions for another nine months, supplies are at risk in the Middle East and U.S. inventories are falling.” Still, prices showed some weakness on Thursday and Friday, and benchmark prices are set to post a loss on the week. Without some major bullish or bearish catalysts, prices could bounce around for the next few trading sessions.   Geopolitics are back at the forefront of market concern after years of irrelevance. Citi said that five key oil producers – all OPEC members – should be on everyone’s mind. “The ‘Fragile Five’ petrostates - Iran, Iraq, Libya, Nigeria and Venezuela - continue to see supply disruption potential, with northern Iraq crude exports at risk due to an escalation of tensions between the (Kurdistan Regional Government), Baghdad and Turkey, while the United States has decertified the 2015 Iran nuclear deal,” Citi concluded.   The so-called “shale band” continues to cap oil prices at the $60-per-barrel ceiling, according to oil analysts. Any move above that threshold is widely seen as a likely catalyst for more shale production. This is why even the serious tension in the Middle East can seem to push Brent above $60. “The market is frightened by the shale oil band,” Olivier Jakob at PetroMatrix, who helped coin the term “shale band,” told the FT. “But it’s not just traders — we’ve seen indications from OPEC and Russian oil companies that even they think going above $60 a barrel right now would be too much and would bring on more oil from shale. They don’t want it.”

Baker Hughes: US rig count falls 15 units to 913 - Oil & Gas Journal: The US rig count during the week ended Oct. 20 declined for the ninth time in 12 weeks. Baker Hughes’ tally of active rigs fell 15 units this week to 913. US oil-directed rigs dropped for the eighth time in 10 weeks, shedding 7 units to 736. Gas-directed rigs lost 8 units to 177. There continued to be no unclassified rigs drilling this week. Land-based rigs were down 15 from a week ago, reaching 892. Unchanged from a week ago, there was 1 rig drilling in inland waters and 20 units drilling offshore in the Gulf of Mexico. Texas led the major oil- and gas-producing states with an 8-unit decline to 436. Wyoming and Alaska were both down 2 units to respective counts of 21 and 4. New Mexico and Utah were both down 1 rig each, reaching 68 and 11, respectively. There were 10 states unchanged this week, namely Oklahoma, 124; Louisiana, 65; North Dakota, 51; Colorado, 34; Pennsylvania, 32; Ohio, 29; West Virginia, 15; California, 14; Kansas, 1; and Arkansas, 0.

US Oil Rig Count Drops by 7, Total Rigs Down by 15 - In the week ended October 20, 2017, the number of rigs drilling for oil in the United States totaled 736, seven fewer compared with the prior week and up by 293 compared with a total of 443 a year ago. Including 177 other rigs drilling for natural gas, there are a total of 913 working rigs in the country, down by 15 week over week and up by 360 year over year. The data come from the latest Baker Hughes North American Rotary Rig Count released on Friday. West Texas Intermediate (WTI) crude oil for November delivery settled at $51.29 a barrel on Thursday and traded up about 0.3% Friday afternoon at $51.43 shortly before regular trading closed. The natural gas rig count decreased by eight to a total of 177 this week. The count for natural gas rigs is now 69 higher year over year. Natural gas for November delivery traded up about 1.2% at around $2.90 per million BTUs before the count was released and rose to $2.93 afterward. The Federal Reserve Bank of Dallas noted this week that the futures curve from Brent crude went into backwardation (a commodity market condition where current spot prices are higher than futures prices) in late September. Backwardation is a signal that near-term demand is outpacing supply, giving market participants an incentive to sell now rather than to store and hold supplies for the future. The Dallas Fed said that strong OPEC compliance with the cartel’s production cuts, additional signals that the global market is rebalancing and higher-than-expected global demand have pushed near-term prices higher. The following graph from the Dallas Fed’s report shows the price curves for Brent crude as of June 29, August 30, and September 25.Among the states, Texas had eight fewer rigs this week, while Alaska and Wyoming lost two each and New Mexico and Utah each lost one rig. No state added a rig this week. In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 378, down by six compared with the previous week’s count. The Eagle Ford Basin in south Texas has 65 rigs in operation, two more week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 51 working rigs, unchanged for the week. 

Oil Trades Above $51 as Heightened Risk Appetite Props Up Prices - Oil rebounded as a risk-on appetite is seen coming back into financial markets. West Texas Intermediate futures closed 0.4 percent higher in New York as U.S. equities rallied. In the U.S., oil rigs slid for a third week, according to Baker Hughes data. Meanwhile, supply from Kurdistan remains uncertain. WTI’s 50-day moving average rose above the 200-day one, a bullish signal know as a golden cross. “The stock market is hitting new highs. The risk-on appetite is coming back,” Michael Loewen, a commodities strategist at Scotiabank in Toronto, said by telephone. “The general rhetoric has been OPEC is going to be extending their cuts. We’ve been seeing good demand in the U.S. At the end of the day, the market is shaping up a lot more firmly than most were anticipating.” The U.S. oil rig count fell by seven to 736 rigs this week, as Schlumberger Ltd. and Baker Hughes, the world’s two biggest oilfield service companies, say North America’s growth engine is slowing. OPEC is seen willing to extend its deal to reduce output, with the Russian President Vladimir Putin saying if OPEC and allies did agree to an extension, it should run through at least the end of next year. West Texas Intermediate crude for November delivery, which expires Friday, rose 18 cents to settle at $51.47 a barrel on the New York Mercantile Exchange. Total volume was about 23 percent below the 100-day average. The more-actively traded December contract added 33 cents to end the session at $51.84. Brent for December settlement climbed 52 cents to settle at $57.75 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $5.91 to December WTI. 

OPEC seeks to institutionalize partnership with non-OPEC: Barkindo -- OPEC aims to discuss making permanent its coalition with 10 and possibly more non-OPEC producers to manage oil market balances at its November 30 meeting, the organization's secretary general, Mohammed Barkindo, said Thursday. "This platform of 24 countries, now hopefully growing, should be institutionalized," Barkindo told reporters at the Oil and Money conference in London. "We should have a permanent framework to sustain this platform." Barkindo said the proposal to formalize cooperation with non-OPEC countries should "give comfort" to some currently non-participating countries, an apparent reference to efforts to get more countries to join the cuts. OPEC late last year agreed with 10 non-OPEC countries, led by Russia, to cut a combined 1.8 million b/d in supplies to support the market's rebalancing. Asked about projections by the IEA of oversupply in the first quarter of 2018 and how that would play into discussions about renewing supply cuts which expire at the end of March, Barkindo cast doubt on the projections. "For us the projections for 2018 remain robust. We are looking at growth of about 1.4 million b/d" for the year. "With this strong demand growth and all the challenges that the non-OPEC supply is facing, I have my doubt on the projections of the IEA for 2018. You have had the various headwinds that the shale producers...are facing," he said. "It is expected normally for companies to put on a brave face, especially companies that are financed by private equity, to paint a very robust picture. We know that private equity is not patient capital." Barkindo said he would not pre-empt the OPEC's next meeting, particularly while Saudi oil minister Khalid Al-Falih and Russian energy minister Alexander Novak consult with the countries involved.

OPEC Looks To Permanently Expand The Cartel -- At its November 30 meeting, OPEC will seek to discuss making its current partnership with non-OPEC producers permanent, OPEC’s Secretary General Mohammad Barkindo told reporters at the Oil & Money conference in London on Thursday. “This platform of 24 countries, now hopefully growing, should be institutionalized,” Barkindo said, as quoted by Platts. “We should have a permanent framework to sustain this platform,” OPEC’s secretary general added. “We are working with the Russian and Saudis on how we can structure this platform to sustain it.” Referring to the U.S. shale producers, Barkindo reiterated his view that American producers should have a “shared responsibility”, and said that some of them are “playing the proverbial ostrich.” In an unconventional plea to U.S. shale drillers last week, Barkindo urged North American producers to share the responsibility for drawing down the global oil overhang.

Trump Disavows Iran Deal: What's at Stake for Oil Markets -  Iran, already struggling to attract investors to its energy industry, may find things tougher still as U.S. President Donald Trump refuses to certify the nuclear deal that eased sanctions on OPEC’s third-largest crude producer.In a speech Friday, Trump stopped short of abandoning the nuclear agreement but said he would impose new sanctions on Iran, particularly its Revolutionary Guard Corps, a branch of the armed forces that owns many businesses including in the oil industry. The move won’t immediately curb the flow of some 2.3 million barrels of daily Iranian crude exports -- more than three times the amount of oil the U.S. has sold abroad over the past year.For energy producers, however, the administration’s more confrontational approach does raise the risk of doing business in the Middle Eastern nation. Companies such as Total SA, which in July became the first major Western energy company to sign a production deal with Iran since the 2015 accord, may face new hurdles in contributing to the country’s estimated $100 billion need for oil and natural gas investment.Trump has potentially weakened, but for the moment left largely intact the accord that world powers reached with the Persian Gulf nation two years ago. The White House has argued that Iran’s actions, including missile tests and support for groups like Hezbollah, violate the spirit of the deal. “It is time for the entire world to join us in demanding that Iran’s government end its pursuit of death and destruction,” Trump said in a statement issued by the White House. The Persian Gulf nation says its complying with the pact, which was intended to prevent it from developing nuclear weapons. Foreign Minister Javad Zarif said before Friday’s announcement that the U.S. has “failed to implement its side of the bargain.” The immediate effect on Iran’s crude sales may be limited. Under the last round of sanctions, the U.S. relied on the willingness of Asian customers to buy less Iranian oil, while the European Union imposed a full embargo. Unless other parties to the deal are willing to renegotiate or scrap it -- which so far they have shown little desire to do -- the U.S. under Trump is likely to be isolated this time if it targets oil sales. 

Trump’s Iran Decision Haunts Big Oil - United States President Donald Trump’s decision to “decertify” the Iran nuclear deal probably won’t have an immediate impact on oil prices, but the decision could plant the seeds of problems further down the road. That is because nothing happens right away—Trump kicked the decision to Congress. But he still significantly increases confrontation with Tehran, and is somewhat backing himself into a corner if Congress does nothing, or if Iran doesn’t offer concessions regarding its missile program—two scenarios that seem more likely than not. With little chance of making headway, Trump may leave himself with few options beyond escalation. Geopolitical risk has had very little influence on oil prices in the last three years due to the enormous glut of supply. But by 2018, the market will be much closer to balance, with inventories falling back to average levels. With tighter conditions, geopolitical risk will have greater salience. The timing of that lines up with a potential deterioration in relations between the U.S. and Iran. "The president has made it very clear that he wants to escalate the pressure on Iran. So sometime middle of next year you could see the deal start to deteriorate and then you could have meaningful impact on oil supplies right when the market is tightening," Benjamin Salisbury, energy policy analyst at FBR Capital Markets, told CNBC. It’s unclear if the U.S. will reimpose sanctions, but if it does, the impact will be uncertain. Most likely, they’ll be substantially less effective than the sanctions coordinated by the international community prior to 2016. That’s because the U.S. will probably go it alone. Shortly after President Trump announced that he was decertifying the nuclear deal, the leaders of France, Germany and the UK issued a joint statement supporting the continuation of the agreement. Iran also said that it will continue to abide by the agreement. “This creates a giant wedge—it’s Iran and the rest of the world on one side and the U.S. on the other,” John Glaser, director of foreign policy studies at the Cato Institute in Washington, told Bloomberg.

Saudi Arabia welcomes ‘firm’ US strategy on Iran | Arab News Saudi Arabia has welcomed Donald Trump’s “firm” strategy on Iranafter the US president declined to certify Tehran’s compliance with the nuclear deal, according to the Kingdom’s state news agency. Trump on Friday warned he might ultimately terminate the deal, as he announced a new Iran strategy that includes additional measures to ensure the “rogue regime” in Tehran does not destabilize the region or acquire nuclear weapons. The nuclear deal — known as the Joint Comprehensive Plan of Action (JCPOA), which Iran signed with six nations including the US — limits Iran’s nuclear enrichment activities in return for sanctions relief. Trump announced the major shift in US policy in a speech in which he detailed a more confrontational approach to Iran over its nuclear and ballistic missile programs and alleged support for extremist groups in the Middle East, Reuters reported. “I am directing my administration to work closely with Congress and our allies to address the (nuclear) deal’s many serious flaws so that the Iranian regime can never threaten the world with nuclear weapons,” Trump said. Saudi Arabia praised Trump’s “vision” and commitment to work with US allies in the region in order to face “common challenges, particularly Iran’s aggressive policies and actions,” according to the Saudi Press Agency. A statement stressed that Saudi Arabia had previously supported the nuclear agreement between Iran and the “5 + 1” powers, in the belief that it is necessary to limit the proliferation of weapons of mass destruction. But it added that Iran had “exploited” the economic benefits of eased sanctions and continued to “destabilize the region.”     The Saudi statement pointed to Iran’s ballistic missile development program and alleged support of terrorism in the region, including its backing of Hezbollah and Houthi militias in Yemen.

Trump hostility set to deepen Iran power struggles  (Reuters) - Iranians quickly closed ranks against a hawkish new U.S. approach to Tehran, but Iran’s powerful hardliners are set to exploit the latest dispute with Washington to weaken domestic rivals who are open to the West, analysts and insiders say. President Donald Trump’s warning on Friday that he might ultimately terminate a landmark 2015 nuclear deal sets the stage for an eventual resurgence of political infighting within Iran’s complex power structures, officials said. If the accord signed by Iran and six major powers does start to fall apart, anyone who strongly promoted it, such as pragmatist President Hassan Rouhani, could face a career-damaging backlash. That could leave Iran’s security hardliners unchallenged at home, enabling greater Iranian assertiveness abroad that could worsen tensions in the Middle East, analysts say. For the moment, solidarity within the Islamic Republic’s faction-ridden political elite is the priority. “What matters now is unity against the foreign enemy,” a senior official told Reuters on condition of anonymity, like other figures contacted within Iran because of the sensitivity of the matter. “Our national interest is a priority for all Iranian officials.” But Rouhani and pragmatists and reformist allies who promoted the deal, which lifted sanctions in return for Tehran rolling back technologies with nuclear bomb-making potential, may become increasingly politically vulnerable at home.

Analysis: Business as usual for Iran oil exports as market eyes US sanctions threat -- The oil and shipping markets remain in limbo as the world awaits action from US Congress on sanctions targeting Iran, in the wake of President Donald Trump last week declaring Tehran noncompliant with the nuclear deal. With the deal, called the Joint Comprehensive Plan of Action, still in place for now, Iran continues to sell and ship oil internationally. Traders, brokers and shipowners say any reimposition of sanctions targeting Iran's oil sector might take months, if not a few years, to be fully implemented, as this would require consensus among US policymakers as well as the skeptical international community, which has urged the US not to jeopardize the JCPOA. Even so, they are already eying potential consequences if the US snaps back sanctions or imposes other measures that prompt Iran to withdraw from the agreement.  “There could be many marine insurers unwilling to cover any Iran-related vessels so we just might see buyers asking for less [term] barrels" going forward, said a crude trader at a Chinese company, who spoke on condition of anonymity. S&P Global Platts trade flow software cFlow shows that Iran's crude and condensates exports are expected to average 2.256 million b/d in October. That would be a significant fall from 2.52 million b/d in September, though much of this is due to unscheduled maintenance at the South Pars condensate field and increased internal consumption.

Saudi Arabia’s Footprints in Southeast Asia - When King Salman bin Abdulaziz Al-Saud of Saudi Arabia embarked on a month-long trip to Asia in February this year, Western media outlets led with incredulous stories about the monarch’s large entourage and their mountain of luggage. Traditionally obsessed with the desert kingdom’s human rights record and the state-sponsored brand of Islam, those same outlets took delight in touting the trip as a sign of Saudi economic weakness. However, they missed out on a far more important development – in venturing eastward, Saudi Arabia seeks to secure its leadership of the Islamic world. In doing so, its engagement with Southeast Asia is likely to have significant short-term ramifications for the region’s politics and, in the long run, deepen the cultural divide while raising difficult questions about ASEAN’s unity and security. Besides the economic powerhouses of China and Japan, the King chose to visit only Muslim-majority countries in Southeast Asia – Brunei, Malaysia, and Indonesia. It might have been easier to corral investments from other Southeast Asian markets like Thailand or Singapore; that the King chose to skip those destinations illuminates the fact that this trip was organized with more than just economic motivations in mind. Saudi Arabia has long seen itself as the leader of the Islamic world, but since the ascendance of a theocratic Iranian government in 1979, that position has consistently been challenged. With the Obama administration’s conclusion of the Joint Comprehensive Plan of Action with Iran and the P5+1 countries, the threat of a resurgent Iran has been looming large in the Saudi psyche. The King’s February trip was undoubtedly a means of cementing the desert kingdom’s leadership status before Iran is fully reintegrated into the world order. While Southeast Asian Muslims are predominantly Sunni and thus unlikely to come under Iranian influence, making a big show of its leadership and influence across the world will go some way in securing Saudi Arabia’s stature.

Can Trump Drive A Wedge Between Saudi-Russian Alliance? --Together, Russia and Saudi Arabia produce a fourth of the world’s oil. The laws of competitive international commodity trading have pit the two petrostates on opposite poles of the U.S.-Russia geopolitical rivalry. But a new era of American oil exports and ailing national budgets is pulling Moscow and Riyadh together in trying financial times. President Barack Obama’s administration maintained a cold distance from Saudi Arabia in its final years. As the United States and its European allies began a war against the Islamic State in 2014, Saudi Arabia focused its military might on Yemen—a country on the Arabian Peninsula facing the brutal consequences of an extended Arab Spring. Iranian arms and funding reached the pockets of the Shiite Houthi rebels, who hoped to build a new regime in Yemen, to the chagrin of Wahabbi Saudi Arabia.   President Donald Trump’s White House has extended an olive branch towards Riyadh as the new State Department lays out its foreign policy agenda. But this new diplomatic program runs contrary to the KSA’s economic goals. American oil exports, reinstated back in December 2015, counter the effects of OPEC’s landmark agreement to lower bloc-wide output by 1.2 million barrels per day in an effort to alleviate an international supply glut.  As a major oil exporter, Russia was invited to participate in the agreement when it was being discussed back in 2016. American exports were still limited to specific destinations back then, and U.S.-based companies had only just begun to secure supply contracts in Asian and European markets. Any threat to the success of the deal from the other side of the Atlantic seemed far-fetched just a year ago.  But the tables have turned. Washington doesn’t rely on oil profits to run its nation. Moscow and Riyadh do—and heavily so. A boost in active rigs in the Permian basin, as well as other areas in the north of the country, has put shale oil and gas in the center of Russo-American geopolitics. As Moscow approves an extension of its 300,000-bpd output drop commitment with OPEC, the U.S. department of energy eyes new markets for American fossil fuels. Energy Secretary Rick Perry made his rounds to Japan in May to open the world’s largest liquified natural gas (LNG) consumer’s doors to U.S.-drilled supplies. The carbon-light fuel is considered a gateway energy source for developed countries as grid systems shift to renewable and alternative power options. This new landscape puts Saudi Arabian interests in line with those of Russia. Both mega producers need to contain the growth of the outbound American fossil fuel industry, but the Iran issue remains a key point of contention between Riyadh and Moscow. . New Crown Prince Mohammad bin Salman’s assertive stance locks the country in an irreconcilable rivalry with Iran. In contrast, Moscow stood by Iran through the latter’s experience as an international global pariah.

First Footage Emerges Of Armed Clashes Between Kurdish And Pro-Baghdad Forces Near Kirkuk -- After last month's controversial Kurdistan referendum in northern Iraq, both Baghdad and the Kurdistan Regional Government (KRG) in Erbil vowed to do everything possible to avoid direct military confrontation, even as the Iraq central government took aggressive steps to isolate Kurdistan after the pro-independence "yes" vote. But as many predicted, clashes are now underway near the disputed and oil-richKirkuk province between Kurdish Peshmerga fighters and Shia milita forces (PMU, Popular Mobilization Units) backing the central Iraqi government. Last night fighting erupted in Khurmatu - a city which lies in a disputed area claimed by Kurdistan just south ofKirkuk. Kurdistan media is claiming that amidst the fighting 70 Kurdish families were expelled from their homes by pro-Baghdad Shiite militias.  Kirkuk has long been a potential flash point as it lies on the "border" of the northern Iraqi Kurdistan region and as it produces 10% of Iraq's total oil. Things especially intensified after last month's vote when Baghdad demanded all oil and military facilities be handed over to the central government, after which Kurdish forces rallied to fortify their positions within Kirkuk city, which they see as fundamentally Kurdish in identity, though the population includes Kurds, Arabs, Turkmens, Assyrian Christians, Sunnis and Shiites. This week the Iraqi government began staging forces outside the contested city, while also allying with Iran along Iraq's eastern border to impose a full land and air blockade on all territory claimed by the KRG.

Casualties Reported After Iraqi Troops Enter Oil Rich Kurdish City Of Kirkuk; Oil Spikes -- In a major escalation involving the disputed Iraqi Kurdish region, which last month declared independence following a referendum which was not recognized by any of its neighbors - or Baghdad - Iraqi state media reported that federal troops have entered territories occupied by the nation’s Kurds with the FT adding that Iraqi federal forces moved to enter the city of Kirkuk early on Monday morning. The Iraqi advance comes three years after Kurdish militias seized the areas outside their autonomous region as a pretext to defend against an advance by the Islamic State extremist group. Al-Iraqiya TV said the military, anti-terrorist units and federal police have taken control of "vast areas" around the oil-rich city of Kirkuk which has long been one of the country’s deepest faultlines, claimed by both Erbil and Baghdad. While the TV report said the Iraqis advanced without firing a shot and "without opposition from Kurdish Peshmerga", unconfirmed social media reports suggest that at least one peshmerga has been killed in the fighting: First casualty in Kurdish, Baghdad/militia fighting around Kirkuk.https://t.co/GWx5LYzy1E  Separate twitter reports showed fighting in the south region of Kirkuk where Iraqi forces are said to have made their move:  Yet another explosion in Duz Xurmatu right now.pic.twitter.com/H5KnoDeKQA  Additionally, the FT writes that Najmaddin Kareem, Kirkuk’s governor, was shown on pro-Kurdish channel Rudaw urging the people of the city to take up arms in its defence. Assuring further bloodshed appears inevitable, Hemin Hawrami, a senior adviser to Masoud Barzani, KRG president, told the Financial Times that the peshmerga forces would defend the city. “We have orders, if they come close, all Peshmerga forces will respond very strongly,” Hawrami said. He added that the KRG president had held talks on Sunday with Muhammad Fuad Masum, the Iraqi president, that aimed to resolve the stand-off, saying that it sought “peace and dialogue”. “It seems that Iraqi government and PMF (Popular Mobilisation Forces) made their decision to launch the offensive without even waiting for President Masum to go back to Baghdad tomorrow to take our proposals for talks,”Mr Hawrami said.

Iraqi forces launch operation for Kurdish-held oil fields, military base — Clashes broke out early Monday in northern Iraq as Iraqi forces moved to recapture Kurdish-held oil fields and a military base near the city of Kirkuk, setting the stage for a battle between two U.S. allies. After a three-day standoff, Iraqi forces advanced into the contested province with the goal of returning to positions they held before 2014, when they fled in the face of an Islamic State push. The positions have since been taken over by Kurdish troops. The conflict between Kurdi­stan and the Iraqi government over land and oil is decades old, but a Kurdish referendum for independence last month inflamed the tensions. The Iraqi government, as well as the United States, Turkey and Iran all opposed the vote. The flare-up presents an awkward dilemma for the United States, which has trained and equipped the advancing Iraqi troops, which include elite counterterrorism forces, and the Kurdish peshmerga on the other side. But the Iraqi side is also backed up by Shiite militia forces close to Iran, at a time when the Trump administration has been vocal about curbing Iranian influence in the region, having sanctioned Iran’s Islamic Revolutionary Guard Corps last week. Iraqi forces said they were under instructions to avoid violence, but Kirkuk residents said that gunfire and explosions could be heard in the city in the early hours of the morning. Kurdish media reported that thousands of Kurdish volunteer fighters had rushed to take up arms. Kurdish forces took full control of the ethnically and religiously mixed city of Kirkuk after the Iraqi military fled from large swaths of northern Iraq in 2014 in the face of an Islamic State push. It also seized oil fields formerly run by Baghdad that pump hundreds of thousands of barrels of oil per day. Now Iraq wants that ground back.

Iraqi forces seize Kirkuk governor’s office in push against Kurds - (AFP) - Iraqi forces seized the Kirkuk governor's office, key military sites and an oil field as they swept across the disputed province following soaring tensions with Kurds over an independence referendum. The rapid advance, involving troops, tanks and armoured vehicles, aims to recapture oil and military targets that Kurdish forces took over during the fightback against the Islamic State group (IS). Iraqi forces thrust into Kirkuk city, capital of the oil-rich province, and took control of the governor's office, which had been left deserted, the federal police chief said. Thousands of residents fled Kurdish districts, heading in buses and cars towards the autonomous Kurdistan region of northern Iraq. "We're leaving because we're scared there will be clashes" in the ethnically mixed city of 850,000 people, said 51-year-old Chounem Qader. Meanwhile crowds on the streets of Kirkuk's southern outskirts welcomed Iraqi forces as they entered the city, where they were seen raising Iraqi flags in the place of Kurdish ones.

Iraqi forces seize oil city Kirkuk from Kurds in bold advance (Reuters) - Iraqi government forces captured the major Kurdish-held oil city of Kirkuk on Monday, responding to a Kurdish referendum on independence with a bold lightning strike that transforms the balance of power in the country. A convoy of armored vehicles from Iraq’s elite U.S.-trained Counter-Terrorism Force seized Kirkuk’s provincial government headquarters on Monday afternoon, less than a day after the operation began, a Reuters reporter in Kirkuk said. Neither side gave a casualty toll for the operation. But an aid organization working in Kirkuk said several Peshmerga and members of the Iraqi forces had been killed in an overnight clash south of Kirkuk - the only serious fighting reported. As Iraqi forces advanced, Kurdish operators briefly shut some 350,000 barrels per day of oil output at two large Kirkuk fields, citing security concerns, oil ministry sources on both sides said. But production resumed shortly thereafter following an Iraqi threat to seize fields under Kurdish management if they did not do so, according to the sources. It was not immediately clear whether or when the Iraqi government would seek to retake control of all Kirkuk oilfields, a vital source of revenue for the autonomous Kurdistan Regional Government (KRG). The short suspension in production helped push up world oil prices as the shutdown represented more than half of total Kurdish output.[O/R] A dozen Iraqi armored vehicles arrived at the provincial government headquarters in Kirkuk and took up positions nearby, alongside local police. They pulled down the Kurdish flag and left the Iraqi flag flying. Thousands of Kurdish civilians fled the city of 1 million people for fear of reprisals.

After Lightning Offensive, Kirkuk Is Now Fully Under Iraqi Military Control --- Iraq's military has effectively gained control of major assets and government buildings in Kirkuk city, and is now set to fully pacify it after overnight clashes at a moment when oil prices rose toward a six month high as the conflict now threatens output. Iraq’s elite U.S.-trained Counter-Terrorism Force has taken over the provincial government headquarters in the center of Kirkuk after operations to seize the city from Kurdish forces began overnight - the contested city is now reportedly under the control of Iraqi national forces. Some of the first footage Western audiences woke up to Monday morning were of (ironically enough) US supplied equipment - including tanks, being used to bulldoze images of Iraqi Kurdistan President Masoud Barzani. Iraqi forces have further pulled down Kurdish flags flying over government buildings throughout the city, while leaving the Iraqi flag flying. The Iraqi advance on the oil-rich and ethnically diverse previously Kurdish-held city was lightning fast and largely without a major fight - aided by the fact that some Kurdish Peshmerga fighters fled their posts as national militias advanced, which is a reflection of Iraqi Kurdistan's own political divide: one faction within the PUK Peshmerga (Patriotic Union of Kurdistan) is relatively pro-Baghdad, making the Iraqi advance easy in sections of the city held by the group. And though Kurdish media frequently highlighted footage of armed civilians taking to the streets Sunday and Monday, the city's 1 million plus Turkmen population as well as the up to 20% Arab and Assyrian population generally fears and rejects Kurdish dominance over the region.

US military rushes to defuse looming crisis in Kirkuk after Iraqi army advances -- US military commanders are scrambling to stop a conflict escalating between two forces they arm and train, after the Iraqi army seized the contested, oil-rich city of Kirkuk, from Kurdish peshmerga.  The Pentagon sought to play down the scale of clashes between the two sides, after forces loyal to the central government in Baghdad rapidly took over nearly all the city on Monday, and Kurdish forces abandoned their positions, retreating to nearby oilfields. Video footage showed streams of Kurdish refugees leaving Kirkuk in cars.  Baghdad’s move came three weeks after a referendum on Kurdish independence included the ethnically diverse oil city – a contentious move that Baghdad viewed as an effective annexation  The peshmerga withdrawal delivered decisive military and political gains to Baghdad and a devastating blow to the Kurdish region’s de facto president, Massoud Barzani, who had staked much of his legacy on the referendum and aimed to use it as a stepping stone to consolidate Kurdish autonomy.  Col Robert Manning, a Pentagon spokesman, described the takeover, as “coordinated movements, not attacks” and said an exchange of fire that is reported to have resulted in several casualties was “an isolated incident”.  “We have not seen levels of violences suggested in some of the media reports,” Manning said, urging both parties to focus on the “common threat” of the Islamic State. “This is certainly not helpful and again we encourage both sides to not fight each other.”  He added that US commanders in the region were active in trying to mediate between the two sides in the city. “Coalition leaders at all levels are engaging with their counterparts in the Iraq security forces to encourage dialogue and de-escalation,” Manning said.  Speaking at the White House, Donald Trump said: “We don’t like the fact that they are clashing, but we’re not taking sides.”

Iraq Conquers Kirkuk - The central Iraqi government based in Baghdad has conquered oil-rich and ethnically-mixed Kirkuk from its recent Kurdish rulers, who hoped to continue ruling it as part of their recently declared independent state of (Iraqi) Kurdistan, clearly consisting of three provinces, but which they also wanted to include the fourth one of Kirkuk province. This now appears not to be going to happen. Juan Cole has made an excellent discussion of this, noting 7 reasons why this is not about Iran as many commentators in the US claim. I shall not repeat most of his arguments here but suggest people look at the link. I shall note the crucial point that what looked like it was going to be a major military conflict over Kirkuk thankfully turned out not to be is that the Kurdish Pesh Merga, who were ruling Kirkuk, actually are tied to the main opposition party in Kurdistan, the Patriotic Union Party (PUK) led by the Talabani family,whose old patriarch, once a president of all of Iraq, has just died. The Pesh Merga has simply withdrawn peacefully from Kirkuk, handing a major embarrassment to Massoud Barzani, the current president of newly independent (maybe) Kurdistan, who leads the center right Democratic Party of Kurdistan (DPK). This suggests that while the opposition nominally supported Barzani’s independence referendum, they lack enthusiasm, and Barzani may end up in trouble as things are not going well with this. As I noted in a previous post, Barzani is in a tight position because he canceled an election in 2015, and Kurdistan’s economy has been weak due to low oil prices.

Iraq's NOC vows to maintain Kirkuk oil flows after ousting Kurds - Iraq's state-run North Oil Company vowed to maintain continuity in production and exports of Iraq's northern crude flows Monday after an advance by federal forces ousted Kurdish troops controlling parts of the key disputed oil region. The Iraqi army captured the headquarters of state-owned North Oil Co. from Kurdish Peshmerga forces early Monday and all NOC's producing assets in the Kirkuk oil producing area, local sources said. Federal forces regained control of Kirkuk field's southern Baba Dome as well as the Avana Dome and the nearby Bai Hassan field, Farid al-Jadir, the director general of the NOC, told S&P Global Platts. Of Kurdistan's roughly 600,000 b/d average production from fields under its control, nearly half was produced from the Avana Dome and Bai Hassan fields, which the KRG annexed during the 2014 security vacuum after the Islamic State militant group invaded northern Iraq. Oil production from the giant Kirkuk field, which straddles the semi-autonomous Kurdistan region, was pumping at normal levels late Monday but export flows to Turkey's port of Ceyhan were "temporarily decreased," an official close to Iraq's northern oil exports said. He attributed the fall in export flows to the return of control to the Iraqi government and not a sign that oil fields are going to be shut in.

 Iraqi Kurd Army Agrees To Return To 2003 Border, Oil Slides -- In a dramatic de-escalation of recent hostilities in Iraqi Kurdistan, where in a blitz campaign the Iraqi army was able to recapture Kirkuk , effectively regaining control of the oil-rich region, the Kurdish Peshmerga forces, i.e. the army of the autonomous region of Iraqi Kurdistan told Sky News Arabia that it has agreed to return to the 2003 Iraq border, which if confirmed would be a major concession to Iraq which has been pushing for just this conclusion for the past month.The opportunistic Kurdistan Regional Government increased its territory by at least 40% during the war with Islamic State, bringing many of these disputed areas under its control after the Iraqi army withdrew in the face of advancing ISIS militants. However, as Iraqi forces and pro-govt militias have already regained control of many of these areas, including Kirkuk, over the past 48 hours, the Iraqi Kurdistan region had no other choice. According to the Kurdish news service Rudaw, the pre-2003 borders "exclude disputed areas such as Kirkuk, Khanaqin, Tuz Khurmatu, Makhmour, and Zumar from the Kurdistan Region." Incidentally, at the start of September, Rudaw reported that Baghdad wants the Kurdistan Region to withdraw from disputed areas and return to pre-2003 borders between the autonomous region and Iraq, said Kurdistan President Masoud Barzani. At the time Barzani vowed that the Peshmerga will not retreat from any areas that were taken "with the blood of fallen soldiers." It took one month for him to change his tune.

Russia’s Rosneft to take control of Kurdish oil pipeline - Russian energy major Rosneft has agreed to take control of the main oil pipeline in Iraq’s Kurdistan, further boosting its role as the main international investor in the semi-autonomous region. The move is an apparent part of a broader strategy by President Vladimir Putin to ratchet up Moscow’s political and economic influence in the Middle East.  Rosneft’s investment comes amid a crisis in Kurdistan’s relations with the central government in Baghdad since the region held an independence referendum last month, which angered neighbors Iran and Turkey. The United States called the referendum a provocation but Moscow has effectively supported the vote, saying it understood Kurdish aspirations for independence. Rosneft said it would own 60 percent of the pipeline, with current operator KAR Group retaining 40 percent. Sources familiar with the deal said Rosneft’s investment in the project was expected to total about $1.8 billion. That comes on top of $1.2 billion that the Russian firm, which has struggled to raise Western loans due to U.S. sanctions, lent Kurdistan earlier this year to help fill holes in its budget. Rosneft also agreed to invest another $400 million in five exploration blocks.   Sechin called on Baghdad and Erbil to settle their differences.  But with Rosneft effectively becoming a controlling stakeholder in Kurdish oil infrastructure, the move should help shield Erbil from pressure from Baghdad and its neighbors.

US-Backed Syrian Kurds Transfer Key Gas Field To Russians After Secret Talks -- In a move that surprised many observers of the ongoing war for Deir Ezzor province, the US-backed Syrian Democratic Forces (SDF) handed over one of Syria's largest gas fields to Russian forces on Thursday, possibly as the result of unprecedented direct talks between high ranking Russian officials and Kurdish leaders in Qamishli in northeastern Syria. Conoco gas plant (also locally called Al-Tabiya, which is the plant's main feeder field) lies on the eastern side of the Euphrates outside of Deir Ezzor city - which was recently liberated from ISIS as the Syrian Army and Russian forces approached from the west of the Euphrates. The Conoco field had been held by ISIS since 2014, and was taken by the SDF on September 23rd as the mainly Kurdish force advanced from the east. The now fast crumbling Islamic State relied on much of its financing through its prior consolidation over many oil and gas sites in the resource rich Deir Ezzor province. The gas field, which had the largest capacity of any in Syria prior to the conflict, is capable of producing 450 million cubic feet (13 million cubic meters) of natural gas per day. It is named for the American company which first discovered gas reserves and built a processing plant at the location, however, ConocoPhillips turned the facility over to the state-run Syrian Gas Company in 2005 and has no current association with it.Beirut-based al-Masdar News broke the story based on Syrian military sources:The information, disseminated by Syrian military reports, claims that an agreement has been brokered between Russia and the US-backed Syrian Democratic Forces whereby the Syrian government will be allowed to assume control over the gas field.If true, then the scope of any backdoor agreements reached between Moscow and Washington regarding the transfer of energy assets held by Kurdish-led militias back to the rightful ownership of the Damascus government may yet encompass wider dimensions (i.e. future transfers) – although there is absolutely no evidence to suggest this is in fact the case. Nonetheless, the unexpected transfer of the Conoco Gas Field by the SDF to the Syrian government does now raise questions as to whether or not the hitherto competition between the Syrian Arab Army and Kurdish-led militias to seize control of the much larger Al-Omar Oil Field from ISIS further south is still on.

Israeli Fighter Jets Launch Air Strike On Syrian Air Defense Battery Near Damascus -- After years of undermining the regime of Syrian leader Bashar al Assad, an effort that has seen Israel countenance ISIS training camps near its borders and launch recurringmissile strikes on Syrian territory and its army bases while threatening to bomb Assad's palace, the simmering conflict between the two nations broke out into the open once again overnight. The Israeli Defense Forces confirmed that Israeli Air Force fighters conducted a missile strike against a Syrian base after a missile was fired at Israeli jets on a routine aerial reconnaissance mission in Lebanese airspace, Russia's news agency Sputnik reports. No people were in injured, and the Israeli jets returned safely, but not before attacking an anti-aircraft battery east of the Syrian capital of Damascus. As usual, The IDF blamed the Syrian government for the incident, however, presenting no proof to support the claim. Damascus has yet to comment on the situation.

Somalia: At least 230 dead in Mogadishu blast - BBC News: A massive bomb attack in a busy area of the Somali capital Mogadishu on Saturday is now known to have killed at least 230 people, police say. Hundreds more were wounded when a lorry packed with explosives detonated near the entrance of a hotel. It is the deadliest terror attack in Somalia since the Islamist al-Shabab group launched its insurgency in 2007. It is not clear who staged the bombing, but Mogadishu is a target for al-Shabab militants battling the government. President Mohamed Abdullahi "Farmajo" Mohamed has declared three days of mourning for the victims of the blast. Local media reported families gathering in the area on Sunday morning, looking for missing loved ones amid the ruins of one of the largest bombs ever to strike the city. Police official Ibrahim Mohamed told AFP news agency the death toll is likely to rise. "There are more than 300 wounded, some of them seriously," he said. Officials also confirmed that two people were killed in a second bomb attack in the Madina district of the city.A BBC Somali reporter at the scene of the main blast said the Safari Hotel had collapsed, with people trapped under the rubble. An eyewitness, local resident Muhidin Ali, told news agency AFP it was "the biggest blast I have ever witnessed, it destroyed the whole area". Meanwhile, the director of the Madina Hospital, Mohamed Yusuf Hassan, said he was shocked by the scale of the attack. "Seventy-two wounded people were admitted to the hospital and 25 of them are in very serious condition. Others lost their hands and legs at the scene. "What happened yesterday was incredible, I have never seen such a thing before, and countless people lost their lives. Corpses were burned beyond recognition."

 North Korea not ready to meet with South Korea in Russia: agencies (Reuters) - Politicians from North and South Korea will not hold direct talks in Russia on Monday about Pyongyang’s nuclear and missile program despite attending the same event and being urged to do so by Moscow, Russian news agencies said on Sunday. Valentina Matviyenko, speaker of Russia’s upper house of parliament, is due to discuss the missile crisis in separate talks with a deputy head of North Korea’s legislature and the head of South Korea’s parliament on the sidelines of a congress of parliamentarians in St Petersburg on Monday. Moscow has called on the two countries to use the opportunity to have their own direct talks to try to narrow their differences. But the RIA news agency on Sunday cited Piotr Tolstoi, the deputy speaker of the Russian lower house of parliament, and an unnamed member of North Korea’s delegation as saying there would not be any direct talks. The unnamed North Korean delegate was quoted as saying that U.S. pressure on Pyongyang and U.S. and South Korean military exercises meant preconditions for such talks had not been met. Konstantin Kosachyov, head of the upper house of parliament’s foreign affairs committee, said Moscow would try again on Monday to encourage the two delegations to hold face-to-face talks despite the lack of progress. Russian news agencies quoted him as saying that the North Korean delegation had so far declined to hold such talks, while the South Korean delegation had said it was ready for such a meeting. “We will definitely not try to coerce or talk somebody into anything,” the Interfax news agency cited Kosachyov as saying. “(But) it will be pity, both on the human and political level, if another opportunity to de-escalate tensions in relations between North Korea and South Korea is missed.”

North Korea Warns "Nuclear War Could Break Out At Any Moment" Less than a day after South Korean and US naval forces kicked off their latest round of joint military drills, which are slated to run until the end of the week, North Korea’s deputy UN ambassador claimed during a fiery speech at the UN General Assembly that the Korean peninsula “has reached the touch-and-go point and a nuclear war may break out any moment,” the Associated Press reported.Complaining to the UN General Assembly’s disarmament committee, Kim In Ryong argued that North Korea is the only country in the world that has been subjected to “such an extreme and direct nuclear threat” from the United States since the 1970s, adding that the isolated North has the right to posses nuclear weapons in self-defense.This latest warning arrives as the US and South Korea are bracing for another North Korean missile test. For weeks now, South Korean intelligence has suspected that its isolated neighbor could use the beginning of China’s National Party Congress, which begins on Thursday, as an opportunity for what would be a bold act of defiance, angering both the US and the North’s primary benefactor and only major ally, China. The North has also been threatening to unveil a new ICBM that intelligence services believe might be capable of striking the west coast.  During his speech, Kim accused the US and South Korea of conducting military exercises involving “nuclear assets” and also mentioned a top-secret plan to stage a “secret operation aimed at the removal of our supreme leadership” developed by US and South Korean intelligence. The plan was exposed after North Korean hackers stole a large cache of military documents from the South. Boasting about the country’s nuclear capabilities, Kim bragged that the North Korea had completed its “state nuclear force and thus became the full-fledged nuclear power which possesses the delivery means of various ranges, including the atomic bomb, H-bomb and intercontinental ballistic rockets.”

How Can North Korea Possibly Build Nukes? Because They Have 15,000 CNC Machines -  Constructing a nuclear missile requires access to precision manufacturing techniques. Isolated North Korea, saddled as it is with poverty, starvation and maniacal leadership, is not known as a manufacturing powerhouse. But as it turns out, they started building their own CNC machines in the early '90s, according to Reuters. The working theory is that they got their hands on some Russian machines, reverse-engineered them and started building their own. The article doesn't say what kind of CNC machines, but they're reportedly being used to build everything from missile parts to aluminum tubes that "could be used for nuclear centrifuges."The article also reports that, despite trade sanctions, North Korea has managed to smuggle additional Chinese- and Swiss-made CNC machines into the country. I find the story interesting because it mirrors something going on here in the 'States: The ongoing debate about 3D-printed firearms. In both instances, you have one group of people that want to be able to create their own weapons, and another group of people that don't want them to. I'm referring to Defense Distributed, a Texas-based outfit whose mission is to enable folks to produce their own firearm parts using digital fabrication. They've got quite the following; when they publicly shared the 3D print files for printing their single-shot "Liberator" handgun, the files were downloaded 100,000 times in two days. In any case, we're now seeing the true power of digital fabrication technology, perhaps not in a way that its creators intended. 

China Backs Egypt’s UNESCO Leadership Bid While the US Withdraws Completely -- On October 12, the United States announced its plan to formally withdraw from UNESCO — the United Nations cultural, scientific, and educational organization — by the end of 2018. Also on October 12, China told Egypt that it will withdraw its candidate for the UNESCO director-general position and endorse Egypt’s candidate. The move has won Egypt’s gratitude and appreciation.  In a statement, the U.S. Department of State said it has notified UNESCO of the U.S. decision to withdraw and to seek to establish a permanent observer mission, so as to save money and to protest against “continuing anti-Israel bias at UNESCO.” Despite the withdrawal, the U.S. still hopes to remain engaged with UNESCO as a non-member observer state “in order to contribute U.S. views, perspectives and expertise on some of the important issues undertaken by the organization.”“This decision was not taken lightly,” the statement added.  The U.S. ceased funding UNESCO in 2011 after the organization voted to accept Palestine as a full member (107 countries voted in favor, 14 against). U.S. law prohibits funding of any UN body which accepts Palestine as a full member. Nonetheless, the U.S. maintained an official mission to the Paris-based body.  While the world’s attention was centered around the U.S. withdrawal, China made an unexpected move at this “critical juncture” as well: ahead of the fourth round of voting, China announced it would withdraw its candidate UNESCO director-general and throw its support behind Egypt’s candidate, Moushira Khattab. On Twitter, Egyptian Foreign Ministry Spokesperson Ahmed Abu Zeid announced the Chinese decision and referred to China as a “long-standing and true friend” of Egypt. The Chinese foreign ministry has kept silent on the issue domestically so far.

CPEC Shows China Is Serious About Investing in Pakistan --  U.S. aid to Pakistan has averaged $1-2 billion annually since 2002, spent mainly on reimbursing the military for support in the tribal areas along the Afghan border, securing Pakistan's nuclear arsenal, drug interdiction and disaster relief. A lively debate rages in Pakistan about whether such a small amount of targeted aid is worth accepting.  By contrast, China is four years into joint planning and construction of the China-Pakistan Economic Corridor, or CPEC, a $62 billion, 15-year joint infrastructure and economic development package of nearly 60 road, rail, port, power generation, communications and industrial zone projects that stretch 1,500 miles from Kashgar in southwest China to the Pakistani port of Gwadar on the Arabian Sea. As many as 15,000 Chinese engineers, planners and laborers will have been deployed laying fiberoptic cable from the Chinese border south to Rawalpindi; paving a new Karachi-Lahore highway; upgrading track and roadbed on the 1,200-mile ML-1 Karachi-Peshawar rail line; building a new Gwadar airport; and adding 16,000 megawatts of coal, hydro, solar and wind power from 13 new plants. CPEC is scheduled for completion in 2030, with major projects operational by 2023. Progress has been steady but slow, with 19 projects, valued at $18.5 billion, completed or underway.Both countries will gain. China will get sea access for its landlocked, economically depressed western provinces; a shorter, secure route for its Gulf fuel imports; and fueling and staging capability for Chinese naval vessels. Both countries will obtain expanded access to each other's markets. Pakistan gets a nationwide infrastructure modernization that will add an estimated 700,000 jobs and 2.5 percentage points to GDP and that is widely seen as a lifeline after two decades of economic stagnation.

Xi warns party to tackle challenges as China moves into new ‘modern socialist’ era | South China Morning Post: Chinese President Xi Jinping mapped out a confident vision of China’s rise as a global power by 2050, opening a twice-a-decade party gathering on Wednesday by reaffirming the Communist Party’s continued control and pledging the start of a “new era”. In one of his most important political addresses since taking power five years ago and underscoring his own pivotal role since then, Xi declared China had entered a new phase to create a “modern socialist country”, a declaration analysts saw as a prelude to the omnipresent party-state under his governing philosophy. “Right now both China and the world are in the midst of profound and complex changes,” he told more than 2,300 delegates at the Great Hall of the People in Beijing. “China is still in an important period of strategic opportunity for development. The prospects are bright, but the challenges are severe.” In an all-encompassing, 3½-hour speech that will set the tone for the country’s development over the next decade, Xi urged the party to tackle these severe challenges, from widespread corruption and imbalances in the economy to mounting social unrest and a long list of other social and environmental woes. Despite criticism of his tightening grip on power and narrowing space for civil society, Xi signalled his confidence that relatively high economic growth combined with deepening reforms and better income distribution, a continuing crackdown on corruption and the shaping of its political system on its own terms would engender the party’s legitimacy. Xi appeared to be more ambitious than his predecessors, as he unveiled a two-stage plan to transform China into a “great modern socialist country” by mid-century. Under the plan, China will realise a moderately prosperous society by 2020 and socialist modernisation by 2035. China would become a modern socialist power that was “prosperous, strong, democratic, culturally advanced, harmonious and beautiful” by 2050. 

Xi Jinping's Speech: "Housing Is For Living Rather Than Speculation" -- Xi Jinping delivered a three and a half-hour speech at the opening of China’s 19^th Party Congress, the once in five years mega-Communist Party gathering (previewed here), to herald a ‘new era’ of power, consolidating his position as perhaps the most influential Chinese leader in decades. While he did lay out  guidelines to develop China in this ‘new era’, bottom line: Heavy in superlatives, light on specifics. It was the year's most carefully politically-staged global event, best understood by the related trivia gleaned from party officials. The drafting process involves 4,700 individuals, 59 organisations, reports from 25 think tanks, nine research committees and 6 discussion forums, hosted by Xi, to hear suggestions. Xi walked into the Great Hall of the people to marching band music with delegates clapping in time. When highlighted the role of Marxism in 21^st century China, he was greeted by lots of applause from delegates.

China consumer loans surge nearly 30 percent as debt worries resurface : (Reuters) - China’s outstanding household consumer loans surged nearly 30 percent by end September from a year earlier, data showed on Friday, a day after its central bank governor issued a strong warning about the risks of rapidly rising debt. A central bank report also showed a sharp jump of nearly 23 percent in property loans in the same period, suggesting authorities will be in no rush to remove tough cooling measures imposed over the past year to rein in soaring home prices. On Thursday, People’s Bank of China Governor Zhou Xiaochuan issued a stark warning about asset bubbles in the world’s second-largest economy, which has posted more robust growth this year driven by government spending and record bank lending. Speaking on the sidelines of a twice-a-decade Communist Party Congress, one of the most pivotal events in the country, Zhou said China will fend off risks from excessive optimism that could lead to a “Minsky Moment”, referring to a sudden collapse in asset prices after long periods of growth, sparked by debt or currency pressures. While China’s debt has built up rapidly in recent years, much is held by firms under state control. The government and China bulls argue that its debt levels are generally manageable, given that levels of sovereign and household debt are much lower than in advanced economies, while savings rates are far higher. The central bank report on Friday, however, suggested consumers are quickly catching up in the debt race, and much of the credit growth appears linked to the property market. Outstanding household consumer loans in both yuan and foreign currencies totaled 30.2 trillion yuan ($4.56 trillion) by end September, jumping 29.1 percent from a year earlier.

Kobe Steel Scam Hits Planes, Trains, Automobiles -  Kobe Steel Ltd. has made a startling admission: It sold products that failed quality control tests to about 500 companies. Worse still, it did so not in error but by falsifying data to make it appear that items had made the grade. Aircraft, electronics, car and bullet train manufacturers were among the recipients, raising obvious safety concerns. From Boeing Co. to Ford Motor Co., companies are scrambling to check any affected products. And Japan Inc. is facing up to another embarrassing scandal. Initially, the company confessed to falsifying data about the strength and durability of some copper and aluminum that was used in cars and trains and possibly planes and a space rocket, too. Then Kobe Steel said it also faked data about iron ore powder and materials used in DVDs and LCD screens. Chief Executive Officer Hiroya Kawasaki said on Oct. 12 more cases could emerge as the company continues its investigations. A day later it flagged misconduct related to more items including steel wire and copper piping, some of which were produced overseas.  The fabrication of data relating to aluminum was found at all four of Kobe Steel’s local plants in conduct the company described as “systematic.” For some items, the practice dated back some 10 years, according to Kobe Steel Executive Vice President Naoto Umehara. The dodgy materials used in bullet trains were supplied over the past five years, according to one customer. Details of how the deception unfolded have yet to fully emerge but the company has said it’ll release the findings of safety checks for the products in about two weeks, and the causes of the issue and planned countermeasures within a month.  There are carmakers such as Toyota Motor Corp. and Honda Motor Co.; they used the suspect materials in hoods and doors. There’s Boeing, which is examining parts it gets from Kobe Steel customer Subaru Corp. Hitachi Ltd. said trains it has exported to the U.K. contained compromised metal as well as bullet trains in Japan. Central Japan Railway Co., which runs the iconic trains between Tokyo and Osaka, said two types of aluminum parts used to connect cars to wheels fell short in quality tests. West Japan Railway Co. also found sub-standard parts. Ford said it used aluminum from the company in its Mondeo car hoods in China, although it hasn’t confirmed whether the parts were compromised. As yet, no company has flagged any serious safety concern as a result of the compromised products.

India’s Demonetization Experiment Fails to Demonetize: Cash Comes Full Circle - So it’s official: cash use is back in almost full force in the Indian economy. Cash withdrawals from ATM machines – a reasonable if incomplete proxy for the use of cash in the economy – are nearly back to the level of just before the demonetisation shock of 8 November 2016. RBI data on use of debit and credit cards to withdraw money from ATMs show that such withdrawals, which had collapsed to only Rs 850 billion in December 2016 largely because of the sheer unavailability of cash with such machines, amounted to Rs 2.27 trillion in July 2017, only slightly below the Rs 2.55 trillion withdrawals recorded for October 2016. It is worth noting that this reliance on cash is back despite the fact that the RBI is yet to remonetise the economy fully: currency with the public on 15 September 2017 was still 11 per cent below its level of a year earlier. It cannot simply be assumed (as was done in the Economic Survey 2016-17 Volume II) that this reflects lower demand from currency by the public, since there is no evidence that it is not supply-constrained. Rather, the aggressive return of cash use suggests that it has only been the lack of supply of cash that has constrained people from using it in payments and exchange settlement. Indeed, it is likely that if the RBI does fully remonetise, then cash use will increase further, since the economy is still growing and therefore the volume and value of total transactions must increase. What is more surprising is that total digital payments have not increased more along with economic growth. In fact such payments, which peaked dramatically in December 2016, are also back to the levels broadly seen in September-October 2016, despite the many incentives provided for such payments through official policy. This makes it apparent that demonetisation failed on this front as well, in addition to the spectacular failure of not being able to flush out “black money” from the system since almost all the banned notes were returned to banks. The aim of digitisation of the economy by forcing a comprehensive shift to cashless electronic means of payment was declared to be one of the primary goals of that expensive and economically damaging exercise. But now it seems that such a coercive process was untenable: the shift to cashlessness cannot be forced upon people, especially in the absence of other enabling and supporting conditions.

 Death of 11-year-old in India sparks debate on tying welfare to identity card - The death of an 11-year-old girl in India, who campaigners say died of hunger because her family's ration card was cancelled, has sparked debate about linking welfare to identity cards. Activists say Santoshi Kumari died last month after her family was denied subsidised grain because their biometric identity card, known as Aadhaar, was not linked to their ration card in government records. "The girl's family told us they had not eaten for six days when Santoshi died," Dheeraj Kumar with advocacy group Right to Food Campaign told the Thomson Reuters Foundation. "They had complained to the local officials about the faulty card several times, but no one had helped." State officials in the northern Indian state of Jharkhand said the girl died of malaria, not starvation, and the chief minister has ordered an investigation. "While there could be doubts over the cause of death, we have to ensure that no ration card is deleted because of non-availability of Aadhaar," state welfare minister Saryu Roy told reporters. "If someone has done this, then it is wrong." More than 1.1 billion Indian residents have an Aadhaar card, which uses fingerprints and irin scans to identify them. The database was set up to streamline welfare payments. But the government of Prime Minister Narendra Modi has been keen to mandate the use of Aadhaar for everything from filing income taxes to the registration of mobile phones. Activists say large numbers of the poor have been denied welfare benefits because of errors in the system. The government made Aadhaar mandatory for welfare, pension and employment schemes this year, despite a 2014 Supreme Court ruling that it cannot be a requirement for welfare programmes. "These are poor, illiterate people with no knowledge of technology. They are suffering because someone did not (link) the card properly," said Kumar. "States are under pressure to show they have linked all ration cards and other benefits to Aadhaar. But the system is riddled with errors, and there is no follow up, leaving poor people in the lurch."

Drone hits passenger plane in Canada - Oct. 16, 2017: A drone crashed into a commercial airplane in Canada, the first time such an incident has occurred in the country, the government said Sunday.A plane operated by charter airline Skyjet was approaching Quebec City's Jean Lesage International Airport on Thursday when a drone struck one of its wings, according to local media reports. There were six passengers and two crew members aboard the plane. "I am extremely relieved that the aircraft only sustained minor damage and was able to land safely," Canadian Transport Minister Marc Garneau said in a statement Sunday.  The rapidly growing use of drones by consumers around the world has led to an upswing in the number of encounters between the remote-controlled devices and planes. Transportation authorities have been trying to come up with rules to avoid a disaster. Earlier this year, Canada announced safety measures making it illegal to fly recreational drones within 5.5 kilometers (3.5 miles) of an airport, and restricting the height of a drone's flight to 90 meters (about 300 feet). Punishment for breaking the regulations can include a fine of as much as 25,000 Canadian dollars ($20,000) and a prison sentence. The drone that struck the passenger plane last week was following the 3.5-mile restriction, but was flying much higher than legally allowed, hovering some 450 meters (1,500 feet) above the ground. "If a drone were to hit the window of a cockpit and incapacitate the pilot, or were to damage in anyway an engine, this could have catastrophic results," Garneau said at a news conference.

NATO report casts doubt on ability to defend against Russian attack on eastern flank - NATO would be unable to repel a Russian attack on its Eastern European members, according to an internal alliance document cited by the German magazine Der Spiegel (German language) in its Saturday edition. The internal document, titled "Progress Report on the Strengthened Deterrence and Defense Capability of the Alliance," questioned the ability of the NATO Response Force to "react rapidly and – if necessary – sustainably." "NATO's ability to logistically support rapid reinforcement in the strongly expanded territory of the European commander's area of responsibility has atrophied since the end of the Cold War," Der Spiegel quoted the document as saying. It attributed NATO's deficiencies to a smaller command structure since the end of the Cold War and logistical difficulties on the alliance's eastern flank. Poland as well as Scandinavian and Baltic member states feel threatened by Russia and have urged the alliance to bolster its eastern flank against possible aggression.  In response, NATO has sped up the deployment and increased the size of the Response Force to 40,000 troops.

Malta car bomb kills Panama Papers journalist - The journalist who led the Panama Papers investigation into corruption in Malta was killed on Monday in a car bomb near her home. Daphne Caruana Galizia died on Monday afternoon when her car, a Peugeot 108, was destroyed by a powerful explosive device which blew the vehicle into several pieces and threw the debris into a nearby field. A blogger whose posts often attracted more readers than the combined circulation of the country’s newspapers, Caruana Galizia was recently described by the Politico website as a “one-woman WikiLeaks”. Her blogs were a thorn in the side of both the establishment and underworld figures that hold sway in Europe’s smallest member state.  Her most recent revelations pointed the finger at Malta’s prime minister, Joseph Muscat, and two of his closest aides, connecting offshore companies linked to the three men with the sale of Maltese passports and payments from the government of Azerbaijan.  No group or individual has come forward to claim responsibility for the attack.

Car-Bomb Kills "One-Woman WikiLeaks" Who Led The Panama Papers Revelations -- Meet Daphne Caruana Galizia, the journalist who led the Panama Papers investigation into corruption in Malta.  A blogger whose posts often attracted more readers than the combined circulation of the country’s newspapers, Caruana Galizia was recently described by Politico as a “one-woman WikiLeaks”. To John Dalli, a former European commissioner whom she helped bring down in a tobacco lobbying scandal, Galizia is “a terrorist.”  To opposition MPs, she’s a political force of nature, one who fortunately has her guns aimed at the other side of the aisle. “She single-handedly brought the government to the verge of collapse,” says one MP. “The lady has balls,” says another. Galizia’s mantra was simple: blog relentlessly about the “cronyism that is accepted as something normal here. I can’t bear to see people like that rewarded.” Her blogs were a thorn in the side of both the establishment and underworld figures that hold sway in Europe’s smallest member state. Well, sadly, all that is over now, as Galizia was killed today when her car, a Peugeot 108, was destroyed by a powerful explosive device which blew the car into several pieces and threw the debris into a nearby field.  As The Guardian reports, her most recent revelations pointed the finger at Malta’s prime minister, Joseph Muscat, and two of his closest aides, connecting offshore companies linked to the three men with the sale of Maltese passports and payments from the government of Azerbaijan. No group or individual has come forward to claim responsibility for the attack. Malta’s president, Marie-Louise Coleiro Preca, called for calm.

Daphne’s sons call for Muscat’s resignation -- Daphne Caruana Galizia's sons called for the prime minister's resignation today in the wake of her brutal murder on Monday. "Resign for failing to uphold our fundamental freedoms. Resign for watching over the birth of a society dominated by fear, mistrust, crime and corruption. Resign for working to cripple our mother financially and dehumanise her so brutally and effectively that she no longer felt safe walking down the street," Matthew, Andrew and Paul Caruana Galizia said. They also refused to endorse a reward for information offered by the government to catch those responsible for planting a car bomb which killed the 53-year-old writer. In a Facebook post, the three sons said:"After a day of unrelenting pressure from the President and Prime Minister of Malta for what’s left of our family to endorse a million-euro reward for evidence leading to the conviction of our mother’s assassins, this is what we are compelled to say."We are not interested in justice without change. We are not interested in a criminal conviction only for the people in government who stood to gain from our mother’s murder to turn around and say that justice has been served. Justice, beyond criminal liability, will only be served when everything that our mother fought for – political accountability, integrity in public life and an open and free society – replaces the desperate situation we are in.The government is interested in only one thing: its reputation and the need to hide the gaping hole where our institutions once were ‘The government is interested in only one thing: its reputation and the need to hide the gaping hole where our institutions once were. This interest is not ours. Neither was it our mother’s. A government and a police force that failed our mother in life will also fail her in death. The people who for as long as we can remember sought to silence our mother cannot now be the ones to deliver justice. "A government and a police force that failed our mother in life will also fail her in death. The people who for as long as we can remember sought to silence our mother cannot now be the ones to deliver justice.”

Catalonia Anxious and Divided on Eve of Rajoy’s Deadline for Independence Answer -  Yves Smith - As readers in Spain know, Catalonia’s regional president Carles Puidgemont again tried a long-shot gambit to resolve the standoff over Catalonia’s bid for independence. He again asked Spain to enter into negotiations over the region’s autonomy, this time with the attention-getting ploy of joining with secessionist leaders to sign a declaration of independence, but then suspending it for a few weeks to allow for negotiations with Spain. Spanish prime minister Mariano Rajoy promptly rejected the idea, first demanding a response as to whether Catalonia considered itself to be independent, then setting a deadline for an answer of 10:00 AM Monday. If Puidgemont says that Catalonia is independent, the Spanish government has given it another three days to reverse the declaration. Bloomberg reports that Catalonia’s government will ignore the demand.As we pointed out, later in the week the press reported on what looked to be a planted story, that a team of members of Rajoy’s party and the opposition were looking at Constitutional reform, in particular, tidying up provisions relating to regional autonomy. We though this might be a public relations move to further isolate the separatists, in that they could be presented as proceeding recklessly when their issues were conceivably be about to be addressed. Our readers dismissed this idea as not even rising to the level of being a trial balloon, although I would not underestimate the possibility of the press in other countries taking this story up if the confrontation in Catalonia escalates. If Rajoy takes action when the separatists haven’t taken a concrete step, he risks again looking trigger-happy, as he did with his overly heavy-handed crackdown on the referendum, when over 850 people were injured. It would seem better for him to resist his impulses to act, and at most make a statement, directly or through operatives, calling the separatists’ bluff. If they aren’t willing to say they are independent, then they have accepted the status quo, and Spain could even depict that as a mature response. But if they change their minds, the central government will take action as needed. In the meantime, Catalonia is on a knife edge, as Don Quijones reports below.

Puigdemont doesn’t clarify if he declared independence and proposes two months of dialogue - The regional president of Catalonia Carles Puigdemont has failed to clarify whether he made a declaration of independence in his written response to Spanish PM Mariano Rajoy. Spain's government gave Puigdemont until 10:00 am on Monday to clear up his stance on secession, following the Catalan's announcement last week that he had accepted the mandate for Catalonia to be an independent republic, but had decided to suspend a declaration of independence in the hope of dialogue. Rajoy reacted to the ambiguous move by formally asking Puigdemont to clarify whether he had declared independence or not, but in Puigdemont’s written response on Monday, the pro-independence leader did not specifically answer that question. Instead, the letter focuses once again on his desire for dialogue, as well as what he labels "repression" by the Spanish government."When on the 10th of October, due to requests from numerous international, Spanish and Catalan institutions and people, I proposed a sincere offer of dialogue, I did so not as a demonstration of weakness, but rather as an honest response in order to find a solution to the relationship between the Spanish state and Catalonia, which has been broken for many years," Puigdemont wrote. "The priority of my government is to, with all our strength, find a path for dialogue. We want to speak, as established democracies do, about the problem seen by the majority of the Catalan people, who want to take their path as an independent country in the European framework," he continued, proposing a two month period for dialogue and mediation.

Catalan Leader Defies Spain, Sends Evasive Reply To Rajoy Activating Second Ultimatum Deadline --The Catalan stand-off has been extended until Thursday as both sides hold their ground.After days of expectation and talks with his separatist allies, Catalan leader Carles Puigdemont stood by his decision to keep his region’s declaration of independence from Spain “in suspension” despite a demand for clarity from Spain prime minister Rajoy, effectively challenging the central government to follow through on promises to forcibly take control of the region by sending an evasive reply to the central government's Article 155 notification, which on Wednesday began the process of suspending home rule in the region.The Spanish Prime Minister's office was seeking a simple "yes" or "no" reply by 10 a.m. on Monday on the question of whether Mr. Puigdemont had or had not declared independence last Tuesday. Anything other than "no", the First Minister was warned, would lead to the activation of the so-called faced the use of Article 155 of the Spanish constitution. This article is the so-called “nuclear option” which allows Madrid to dissolve the regional government and call fresh regional elections. The central government can also take over the local police force and television channels. Eventually, Puigdemont chose more obfuscation and defiance: his four-page reply, obtained by Catalan radio stations Catalunya Radio and RAC1 and released by The Spain Report, neither confirmed nor denied he had proclaimed a new Catalan republic last week, but said the declaration remained “in suspension” and proposed two months of dialogue arguing that the Spanish people and Europe will only understand “dialogue, negotiation and agreement.” He did not say what he would do if talks did not take place by the middle of December.

Madrid moves towards direct rule over Catalonia (Reuters) - Spain moved closer on Monday to imposing central rule over Catalonia to thwart its push for independence after Catalan leader Carles Puigdemont missed an initial deadline to make his intentions clear. He now has until Thursday to back down. The Spanish High Court, meanwhile, banned the Catalan police chief from leaving the country while he is investigated on suspicion of sedition. In a confrontation viewed with mounting unease in European capitals and financial markets, Puigdemont failed on Monday to respond to Madrid’s ultimatum to clarify if he was declaring unilateral independence. In a letter to Spanish Prime Minister Mariano Rajoy, Puigdemont did not directly answer on the independence issue, instead making a “sincere and honest” offer for dialogue between the two men over the next two months. In reply, Rajoy said Puigdemont’s stance had brought Madrid closer to triggering Article 155 of the constitution, under which it can impose direct rule on any of the country’s 17 autonomous communities if they break the law. The Catalan government’s campaign to break away from Spain has pushed the country into its worst political crisis since a failed coup attempt in 1981. Thousands of people have demonstrated in the Catalan capital Barcelona and other Spanish cities both for against independence in recent weeks, although so far the crisis has been largely free of violence, with the exception of the Oct. 1 independence referendum called by the Catalan government, when national police assaulted voters with batons and rubber bullets in a bid to stop the ballot. 

 With Just Hours Until Spain's Ultimatum Runs Out, Catalonia Proposes Its Own Central Bank -- It's D-Day for Catalan President Carles Puigdemont who has just a few hours left until 10 am on Monday (4am ET) to respond to the Spanish government's ultimatum delivered last week by the prime minister, demanding to know whether Puigdemont did, indeed, declare independence last week. If Puigdemont says yes, fails to respond, or provides another meandering answer, Rajoy will start the process under Article 155 to seize control of the breakaway administration in the coming weeks.  And as the world, and traders, await with bated breath to hear Puigdemont' answer, at least 531 companies have already made their decision and transferred their legal bases out of Catalonia to other parts of Spain since the Oct. 1 referendum, according to El Mundo citing data from Spain’s College of Registrars. Furthermore, Spain’s largest banks have agreed not to recognize the government of Catalonia if it declares independence this week. However, in a sign that Puigdemont may just force Rajoy to activate the "nuclear option", late on Sunday Spain's Efe news agency reported that the Catalan government believes the region would continue within the European Union and euro zone if it declared independence,  which would require the creation of a Central Bank of Catalonia (BCC) "as a monetary authority of the new country", with a staff of 500 employees. While it is unclear if the proposition is a bluff, EFE cited a document that was prepared by the department of the Vice Presidency and Economy and Finance, directed by Oriol Junqueras, which was obtained by EFE, and which detailed what the Catalan economy would look like in a hypothetical republic. It was also unlear if there is any particular role for bitcoin or some other altcurrency in Catalonia's immedia future, if for some reason, the ECB decided that the breakaway territory would no longer be part of the eurozone, leaving a major question mark over what its future currency would be.

Catalans Defend Claim to Independence as Spain Prepares… Catalan President Carles Puigdemont defended his region’s claim to independence as the Spanish government signaled it will move ahead with the process of suspending self-rule this week. In a letter to Spanish Prime Minister Mariano Rajoy, Puigdemont said his focus for the next two months will be dialogue and called for a face-to-face meeting as soon as possible, insisting the illegal referendum held on Oct. 1 gives his government a mandate to found a new republic. Rajoy, writing in response, said Puigdemont is sowing discord among Catalans and gave him until Thursday at 10 a.m. to back down. He said that preparations are in place for Madrid to take direct control of the region. “It’s not hard in these three days for common sense to return,” Deputy Prime Minister Soraya Saenz de Santamaria said in a televised statement Monday. “It’s in his hands.” Catalonia’s push for independence marks the biggest challenge to Spain’s political order since its restive regions were granted autonomy after the death of Francisco Franco in 1975. Madrid -- backed by the European Commission -- refuses to contemplate secession by its biggest regional economy, accounting for a fifth of national output, and has ruled out any negotiations until Puigdemont withdraws his demands. “More than two million Catalans gave the regional parliament a democratic mandate to declare independence,” Puigdemont said in his letter. “Our proposal for dialogue is sincere, despite all that has happened, but logically it is incompatible with the actual climate of growing repression and threat.” 

Spanish Prosecutors Seek To Jail Popular Catalan Police Chief -- In a move that is set to further infurate the Catalan separatists for whom the breakaway region's police chief has emerged as a quasi-folk hero, and prompting an even more vocal push for independence, moments ago the Spanish Public Prosecutor's Office petitioned Madrid Judge Carmela Lamela, investigating charges of sedition in Barcelona on September 20, to jail Catalan Police chief Josep Lluis Trapero on remand, court reporters for Spanish media tweeted.  According to Bloomberg, Jordi Sanchez, head of the pro-independence campaign group the Catalan National Assembly, and Jordi Cuixart, who leads the Catalan cultural lobby group Omnium, are also to be interrogated by magistrates. The judge is expected to make a decision at 6 p.m. on Monday. According to the Spain Report, Major Trapero first appeared at the National High Court as part of the investigation on October 6, but was allowed to return to Barcelona and remain in his post after the hearing. The current Spanish criminal code describes the crime of sedition as unlawfully preventing officers of the law from properly enforcing it or otherwise executing their duties. Organisers of sedition in positions of authority may be jailed for up to 15 years.

Madrid prepared to halt Article 155 if Catalan premier calls early elections El Pais - The Spanish government will not take the unprecedented step of activating Article 155 of the Constitution – which would allow it to take control of certain autonomous powers in Catalonia – should the regional premier, Carles Puigdemont, call early elections in the northeastern Spanish region. Thursday at 10am is the second deadline set by the Spanish government for Puigdemont to confirm whether or not he has unilaterally declared independence for Catalonia, after his ambiguous statement during a parliament session last week and subsequent failure to respond to a request for clarification from Madrid, the deadline which expired on Monday morning. Puigdemont responded to Prime Minister Mariano Rajoy via a letter, but in it he failed to state whether or not he had declared independence. If the regional premier does not make the required clarification on the independence declaration and return to an observance of Spanish law tomorrow, the central government is prepared to activate Article 155, which would allow it to suspend elements of Catalonia’s self-governance. However, the activation of Article 155 is not automatic. The procedures required – which include approval from the Senate – could take several days, depending on the speed with which Rajoy wants to apply the process. This would open a window of opportunity for Puigdemont to call elections, given the difficult situation and internal tensions his Junts pel Sí party is suffering. The coalition is made up of two groups, the Catalan European Democratic Party (PDeCAT) and the Republican Left of Catalonia (ERC), and is governing in a minority. It is supported by the CUP, a far-left anti-capitalist organization, which has been calling on Puigdemont to immediately and unequivocally declare independence and proclaim a Catalan republic.

Spain To Activate Article 155 Process, Suspending Catalonia Autonomy - Spain announced it will trigger the so-called "nuclear option" of Article 155 under the Spanish Constitution, and move ahead with the process of suspending Catalan autonomy and the powers of the local government, after Regional President Carles Puigdemont for the second time in three days refused to drop his claim to independence.Spain deployed the ultimate constitutional weapon after Puigdemont said the regional parliament may declare independence unless the government in Madrid agrees to talks. Puigdemont’s response came to an ultimatum from Madrid to renounce his claims to full autonomy by Thursday or face the consequences. "It's not that difficult to reply to the question”, but there is still no definitive “yes” or “no”. Consequently, Madrid is poised to trigger Article 155 this Saturday, suspending the autonomy of the breakaway region.As previewed last night, the "final" deadline passed and Catalonian leader, Carles Puigdemont didfailed to satisfy Madrid's demands.Puigdemont had sent a new letter to Mariano Rajoy minutes before the second Article 155 deadline ran out at 10 a.m. on Thursday morning. That new letter did not provide the clarity the central government was seeking about the status of the independence of Catalonia, the Spanish Prime Minister's office said.“The suspension remains, it’s up to the Spanish Government to enforce article 155 with the authorisation of the Senate… If the central government persists in blocking dialogue and continues its repression, the Catalan Parliament may proceed, if it considers it appropriate, to approve a formal declaration of independence,” Puigdemont said in his letter to Rajoy. Puigdemont also said that his request for a face-to-face meeting had been ignored, and that Spanish “repression” of Catalonia was being stepped up with the jailing of two separatist activists on Monday. “My request for the repression to end has not been met either,” Puigdemont said. “On the contrary, it has increased.”

Catalan Leader Vows To Declare Independence If Spain Triggers "Nuclear Option" --The Spanish government crackdown on Catalan separatists has intensified this week, with a judge jailing two of the movements leaders and the country’s constitutional court officially declaring the region’s Oct. 1 referendum to be illegal. However, after confusing the Spanish government with his independence (non) declaration, regional leader Carles Puigdemont is refusing to back down ahead of tomorrow's second, and final, Spanish ultimatum.According to Reuters, Puigdemont told a meeting of his party on Wednesday he would formally declare independence Thursday morning if Spanish Prime Minister Mariano Rajoy follows through with his threat to invoke the so-called "nuclear option" of Article 155 of the Spanish Constitution, and suspend Catalonia’s regional autonomy - a decision that would likely lead to the arrest of Puigdemont and his government, followed by another violent crackdown on separatists. Madrid has set a second and final deadline of 10 am local time Thursday for the Catalonian government to recant and officially revoke its symbolic declaration of independence, which Puigdemont suspended last week while hoping to negotiate with the Spanish government, Reuters reported. Puigdemont has urged the European Union to mediate between Barcelona and Madrid, but EU member states have so far been reluctant to intervene, while Madrid has refused to even engage in any diplomatic contact.  In what some interpreted as an attempt to stall until international concern intensified, Puigdemont delivered a confusing speech in which he neglected to clearly explain his government’s planned course of action, and also refused to clarify whether his government had in fact declared independence, a strategy he employed again on Monday when Barcelona blew through Madrid’s original deadline for withdrawing its independence bid.

Bank Run Looms As Catalan Separatists Urge Supporters To "Pull Cash" --As tension escalate in Spain, Catalan Separatists are potentially about to do some real damage and hit Spain where it really hurts. In a tweeted message to their 270,000 followers, Assemblea Nacional urged supporters to pull cash from CaixaBank and Banco Sabadell branches between 8 am and 9am Friday to protest at their decision to shift their legal domiciles out of the region...Demà, prioritàriament de 8 a 9 h, ves a un dels 5 principals bancs i retira la quantitat que vulguis en efectiu. Són els teus diners!pic.twitter.com/TqQUESFOZJ— Assemblea Nacional (@assemblea) October 19, 2017 As the video begins..."1. Go to 1 of the 5 main banks and take out as much cash as you want. Don't forget, it's your money". As a reminder, both Banco Sabadell and Caxabank - the two largest banks of the Catalan region - moved their corporate headquarters out of Catalonia (with the help of the Spanish government) shortly after the referendum.

Spanish Cabinet to meet on Saturday to activate emergency rule in Catalonia -- Catalan premier Carles Puigdemont on Thursday sent a new letter to Spanish Prime Minister Mariano Rajoy threatening to declare independence. In response, Madrid confirmed its plans to activate emergency powers that will temporarily suspend elements of self-rule in the region. In his letter, Puigdemont’s wrote that “if the state government persists in hampering dialogue and continuing with its repression,” the regional assembly may, “if it deems it opportune, vote on the formal declaration of independence that was not voted on October 10.   The letter conveys the message that Puigdemont plans to carry on with his secessionist plans while admitting that independence was not, in fact, declared on Tuesday of last week, when he delivered a confusing speech in the regional assembly that most took to be a symbolic breakaway from Spain. That event triggered a series of formal written exchanges between Madrid and Barcelona in which the former demanded clarification of Catalonia’s status, while the latter skirted the issue and demanded talks instead. In line with his strategy throughout the crisis, Puigdemont insisted that his government is open to dialogue but keeps getting stonewalled by Madrid.But by ignoring the ultimatum given by Madrid to drop plans for secession, which expired at 10am on Thursday, this latest letter opens the door to the full activation of Article 155 of the Constitution, a provision that allows the central government to take direct charge of Catalan affairs. This would be an unprecedented step in the democratic history of Spain, a highly decentralized country where the regions – particularly Catalonia, Galicia and the Basque Country – enjoy extensive powers of self-rule.

Spain Activates "Nuclear Option": Will Seize Control Of Catalan Government, Force New Elections --Spanish Prime Minister Mariano Rajoy asked lawmakers to grant him unprecedented powers to force leaders of the Catalonia region to cease their independence push, a dramatic escalation in the confrontation between Spain and the separatist region, which the WSJ - and virtually everyone else - has said will be a major test for Spanish democracy.  According to The Spain Report, this is the first time in the modern democratic period that a central government has suspended home rule in one of Spain's 17 regions. Rajoy announced that his central government would use Article 155 of the Spanish Constitution to remove the Catalan president, Carles Puigdemont, and sack the entire Catalan regional government as part of a barrage of actions, and force new elections on the region within six months. Summoning the sweeping powers of Article 155, Rajoy said Saturday, was a last resort. Puigdemont and his regional administration will be removed from office once the Spanish Senate approves the government’s plan as soon as this week and Spanish government ministers will take over the management of the Catalan administration, Rajoy said according to Bloomberg. The responsibilities of the Catalan government will be administered in the interim period by central government ministries.Furthermore, the Catalan Parliament will not be allowed to present a new candidate for First Minister, to prevent Mr. Puigdemont from being reappointed.Rajoy said "This is not a suspension of home rule but the dismissal of those who lead the regional government". The Spanish Senate will be in charge of controlling the process. As a result, Rajoy said Spain’s central government would temporarily control Catalonia’s regional ministries until new elections are called. The prime minister said he is seeking to convene regional elections within six months.

EU leaders back Spain in Catalan crisis: German chancellor Angela Merkel has called for a constitutional solution to the political conflict over Catalonia and has expressed her support for the Spanish government. "We hope there are solutions found on the basis of the Spanish constitution," she said as she arrived at a summit of EU leaders in Brussels on Thursday, adding: "We back the position of the Spanish government." Nor was Merkel the only major European leader to back Madrid. French president Emmanuel Macron said the EU summit “will be marked by a message of unity of its members in regards to Spain.” France has openly supported the Madrid government during the crisis, with Macron recently accusing Catalan separatists of being partly motivated by "economic selfishness". The show of unity among EU leaders comes as the Spanish government prepares to activate the clause in the constitution that will suspend Catalonia’s regional powers. Meanwhile, the Catalan president, Carles Puigdemont, warned that should direct rule be imposed, he would lift the suspension on declaring independence that he voluntarily set on October 10.

 In Historic Result, 31-Year-Old Wins Austrian Elections, Worst Result For Establishment Party Since Hitler Rule --In another stunning defeat for Europe's establishment, as previewed earlier this morning Austria's 31-year-old Sebastian Kurz is assured victory in the Austrian National Council elections, with his People's Party set to take roughly 30.2% of the vote according to exit polls by Austrian broadcaster ORF, while just as shocking is that the anti-immigrant, nationalist Freedom Party appears set to top the Social Democrats in 2nd place with 26.8% of the vote: the two parties are expected to form a coalition government, while Chancellor Christian Kern's Social Democrats are looking at another devastating - for Europe's legacy parties - loss, sliding to 3rd spot with just 26.3% of the vote. It remains to be seen if and how Kurz will form a coalition with the anti-immigrant Freedom Party - a historic outcome for the nationalist party which could enter government for the first time in history - however one thing is clear: just like in Germany, where Merkel's CDU/CSU suffered its worst result since 1949, so in Austria the "establishment" SPÖ, or Social Democrat party just suffered what Europe Elects described as the "worst result since Hitler rule."

It’s time to put ‘Austria First’; says its new (and very young) leader - Black and blue and populist all over. That’s what Austria is tonight after 31-year-old Wunderkind Sebastian Kurz’s revamped Austrian People’s Party (OVP) won that nation’s elections. Kurz will become Chancellor because, and solely because, his total rebranding of his party to be a softer version of the anti-immigrant populist Austrian Freedom Party (FPO) swung enough voters to lead his party to victory. Kurz rose to fame by arguing against Muslim immigration, in favour of closing the border to refugees from the Balkans and leading the effort that resulted in a ban on the wearing of burqas. With the OVP hemmoraging support earlier this year and the FPO leading all public opinion polls, the party turned to the only man who had credibility with voters fed up with the cozy insider consensus that has ruled Austria since it regained independence after World War II. But even they probably did not imagine what would come next. The OVP was promptly rebranded as the “new OVP”. Its party list (Austria has a proportional representation system with parliamentary lists chosen by the party) would be labeled “Liste Kurz – Die Neue Volkspartei” (i.e. Kurz’s List – the New OVP). He even changed the OVP’s traditional colour, black, to a light blue. Since the FPO’s traditional colour has always been deep blue, the message was unmistakeable: Kurz is the safer, less harsh populist. The FPO was furious. Its leader, Heinz-Christian Strache, angrily complained that Kurz had stolen his party’s issues. In today’s election, however, even that brazen pilfering was not enough to stop the FPO from gaining nearly 7% from the prior election to finish second. Since the leader of the other traditional party, the Social Democratic Party of Austria (SPO) has said he wants to lead his party into opposition, most observers expect Kurz to lead a majority government that combines all shades of blue. The new OVP and the FPO agree on more than limiting migration and combating Islamic influence. They also agree that taxes should be cut. The prospect of a centre-right alliance combining smaller, business-friendly economic measures with a nationalistic “Austria First” cultural policy may frighten cosmopolitan elites in Brussels, London and other capitals of influence throughout the world but it is what nearly 60% of Austria chose today.

Austrian coalition talks set to begin, far right likely partner (Reuters) - Austria’s president gave the green light to conservative leader Sebastian Kurz on Friday to form a government, but Kurz gave little away about his coalition plans, leaving a tie-up with the far right the most likely outcome. Austria's President Alexander Van der Bellen and leader of the People's Party (OeVP) Sebastian Kurz shake hands after a media statement in Vienna, Austria, October 20, 2017. REUTERS/Heinz-Peter BaderKurz’s People’s Party (OVP) secured 31.5 percent of the vote in Sunday’s parliamentary election, winning by a clear margin but falling well short of the majority needed to control parliament in the affluent Alpine republic. “I would like to build a government that has the courage and determination to bring real change to Austria,” Kurz, 31, told reporters after meeting President Alexander Van der Bellen, who will oversee the process. Kurz campaigned on a platform that combined a hard line on immigration similar to that of the far-right Freedom Party (FPO) with traditional conservative principles like slimming down the state and cutting taxes. He said he would start by holding talks with all parties in parliament although only two of them, the Social Democrats (SPO) and FPO, have enough seats to give him a majority if they go into coalition with the OVP. 

Opinion: A right-wing coalition in Austria threatens the EU - The conservative Sebastian Kurz has emerged victorious from Austrian elections. As he now looks to forming a government, he should carefully consider the dangers of partnering with the far-right FPÖ, says Bernd Riegert.  Former Czech Foreign Minister Karel Schwarzenberg, a smart European, fears that Austria is undergoing "Orbanization." In his eyes, the potential rise of a strongly right-wing coalition between the People's Party (ÖVP) of chancellor-in-waiting Sebastian Kurz and the far-right Freedom Party (FPÖ) reflects the nationalist wave that is sweeping across the Alpine nation and which could lead to a complete restructuring of the state — as it has in Hungary under Prime Minister Victor Orban. If the young but totally power-conscious Kurz and the FPÖ Chairman Heinz Christian Strache become coalition bedfellows, migration policy and domestic security, as well as structural political issues, would begin to move in new, possibly questionable directions. Kurz and Strache share the belief that closed borders should be used first and foremost to keep asylum applicants and illegal migrants out of Austria. Kurz also convinced voters to cast their ballots for him through his partially incomprehensible calls for more deportation and migrant reception camps, either in Africa or on uninhabited islands. The number of asylum applicants in Austria is falling. Most migrants come from EU states. And yet the fear of "Überfremdung" exists— that is, a fear of foreign infiltration that poses a threat to cultural or national identity.  It is this fear that the ÖVP and the FPÖ harnessed to win the election. Strache's "homeland" party did best in the areas of Austria that have the fewest foreigners or migrants. This phenomenon could also be seen in eastern Germany where the far-right Alternative for Germany (AfD) was particularly successful.

Austria’s Rightward Lurch Is Europe’s New Normal — Rather than a sudden lurch to the right, the victory of conservative and far-right parties in Austria’s elections Sunday was another reflection of the new normal in Europe, where anti-immigration populism and nationalism are challenging the European Union’s commitment to open borders for trade and immigration. Nearly 58 percent of Austrians who voted cast ballots for center-right or far-right parties, with the far-right Freedom Party running neck-and-neck for second place with the establishment center-left. But the theme of the election was identity — anti-immigration and anti-Islamization — with the charismatic winner, Sebastian Kurz, just 31, tellingly absorbing much of the far-right’s agenda to transform his once-mainstream conservative People’s Party.Mr. Kurz must now decide whether to create a coalition with the far-right Freedom Party or to renew a coalition with the center-left Social Democrats, which would ease European concerns to some degree about another populist party in government. But the message is clear: populism is vibrant in democratic Europe, and especially so in its eastern precincts.Ivan Krastev, a political scientist who works in Vienna and Sofia, Bulgaria, sees the migration crisis, which has hardly ended, as the main threat to the European Union. “The resistance of liberals to conceding any negative effects of migration has triggered the anti-establishment (and particularly anti-mainstream media) reaction that is convulsing political life,” he wrote in his recent book, “After Europe.” Mr. Krastev sees the divisions over migration most sharply between the countries of Western Europe like Germany and those of the east, like Poland, Hungary and the Czech Republic, which view “the very cosmopolitan values on which the European Union is based as a threat.” The populist revolt is not simply against mainstream parties, he argues, but against meritocratic elites who have arguably lost touch with their roots.

Europe Could See Another Brexit-Like Rupture—Beyond Spain - Later this month it looks likely the Czechs will have a new Trumpian prime minister—Andrej Babis, a populist billionaire who wants to send Arab immigrants back home and promises to make the government work as well as his businesses do. To be fair to Babis, he’s a rather more subtle figure than the American president (not to mention a more successful businessman). He is, for instance, careful to emphasize his respect for the judiciary and, on immigration, he welcomes newcomers from Ukraine, pointing out that he himself comes from Slovakia. His main appeal is efficiency (he fumes about his former coalition partners playing with their phones in cabinet meetings). However, Babis is plainly opposed to increased European integration of the sort that Macron wants and is also against Brussels meddling in Eastern Europe. That means that, whatever the subtleties of Babis’s relatively centrist brand of populism, he is likely to be bundled in with Viktor Orban of Hungary and Jaroslaw Kaczynski of Poland as part of Europe’s authoritarian fringe. Kaczynski is not the formal leader of Poland, but he runs the right-wing Law & Justice Party that holds both the presidency and the premiership (which he’s delegated to others). A fierce critic of Merkel, especially on immigration, he’s at almost permanent war with the EU, with his battles ranging from institutional—after Brexit, he called for powers to be returned from Brussels—to the personal—he tried (unsuccessfully) to stop his more conciliatory fellow Pole, Donald Tusk, from becoming president of the European Council. For the EU’s part, Frans Timmermans, a European Commission vice president, is formally investigating Law & Justice’s judicial “reforms,” which look like an attempt to clear out any unsympathetic judges, and its interference in the press. At its worst, this could mean triggering Article 7, which would suspend Poland’s voting rights on the European Council. Kaczynski once boasted that he would make Warsaw into Budapest. That reflects how Hungary’s Orban has led the way. A far more diplomatic figure than Kaczynski, Orban, who once was an anti-Soviet firebrand, also stands accused of reining in the judiciary and besmirching his opponents (including the EU): His government is currently circulating a publicly funded “ national consultation,” a piece of cartoon propaganda about what it calls the “Soros plan,” whereby the EU would implement a dastardly scheme of Hungarian-born financier George Soros to dismantle Hungary’s anti-migrant border fences and pay migrants to come to Europe. Orban is expected to easily win Hungary’s elections next year.

 The Resurrection Of The Austro-Hungarian Empire --  “A few weeks from now, it will likely be possible to drive all the way from the Baltic Sea to the Aegean without ever leaving what we might call the “populist belt”” Yascha Mounk (The Czech Trump) The Austrian elections held on Sunday have seen a surge in support for the anti-immigrant and Eurosceptic forces within the Austrian political establishment. The “centre-right” People’s Party (“OVP”), led by the youthful Sebastian Kurz, won 31% of the national vote, according to the exit polls. Kurz campaigned on a platform of hard-line policies on borders, immigration and regaining sovereignty from the European Union (“EU”) which appealed to the Austrian electorate.The “far-right” Freedom Party (“FPO”), which has its roots in the post-war National Socialist movement, appears to be in second place, with 26% of the national vote. The FPO is even more hard-line then the OVP on the question of the refugee crisis and has warned of the “Islamification” of Austria. The stunning victory for the political Right in Austria comes after the surge in support for the Alternative for Germany party in the German elections, which I discussed recently. These election results will have spooked European leaders who had hoped that the populist wave had peaked earlier in the year, when Marine Le Pen of the National Front failed to break through in the French presidential elections.

One in three Greeks live in poverty or social exclusion, Eurostat shows - One in three Greeks live in conditions of poverty social exclusion, compared to an average of one in four citizens in European Union countries, according to data for 2016 that the EU's statistics service Eurostat made public on Monday.Specifically, 35.5 percent of the Greek population (3.8 million people) were living in social exclusion last year compared to 28.1 percent in 2008.The EU average, by contrast, was 23.4 percent (or 117.5 million people) living in conditions of social exclusion, just under the 23.7 percent rate in 2008.According to Eurostat, a person is living in poverty or social exclusion when they earn less than 60 percent of the average national income, when they are unable to procure basic consumer goods or to fulfil basic financial obligations.The situation is worse in Bulgaria and Romania where 40.4 percent and 38.8 percent of people are regarded as living in conditions of poverty or social exclusion.At the other end of the scale are the Czech Republic, Finland and Denmark with 13.3 percent, 16.6 percent and 16.7 percent respectively.

MPs move to block May from signing ‘no deal’ Brexit -- A powerful cross-party group of MPs is drawing up plans that would make it impossible for Theresa May to allow Britain to crash out of the EU without a deal in 2019. The move comes amid new warnings that a “cliff-edge” Brexit would be catastrophic for the economy.One critical aim of the group – which includes the former Tory chancellor Kenneth Clarke and several Conservative ex-ministers, together with prominent Labour, SNP, Liberal Democrat and Green MPs – is to give parliament the ability to veto, or prevent by other legal means, a “bad deal” or “no deal” outcome.Concern over Brexit policy reached new heights this weekend after the prime minister told the House of Commons that her government was spending £250m on preparations for a possible “no deal” result because negotiations with Brussels had stalled. Several hundred amendments to the EU withdrawal bill include one tabled by the former cabinet minister Dominic Grieve and signed by nine other Tory MPs, together with members of all the other main parties, saying any final deal must be approved by an entirely separate act of parliament.If passed, this would give the majority of MPs who favour a soft Brexit the binding vote on the final outcome they have been seeking and therefore the ability to reject any “cliff-edge” option.  A separate amendment tabled by Clarke and the former Labour minister Chris Leslie says Theresa May’s plan for a two-year transition period after Brexit – which she outlined in her recent Florence speech – should be written into the withdrawal bill, with an acceptance EU rules and law would continue to apply during that period. If such a transition was not agreed, the amendment says, exit from the EU should not be allowed to happen.

May to Plead With Merkel as Brexit Deadlocks Domestically Too; New Data Shows UK Lacks Foreign Reserves, Meaning Even More Vulnerable to Brexit -- Yves Smith - Theresa May is attempting to keep the sinking ship HMS Brexit afloat. She is running to Brussels to implore Angela Merkel to give the UK a break and endorse the UK position in a pending EU decision this week, that of having Brexit discussions start addressing trade, or more generally, the “future relationship” with Europe.  The emergency session looks and is desperate. The odds of Merkel (and Macron, and the majority of nations that back the German-French position) relenting are close to nil. The most May is likely to get is lip service from Merkel that endorses the plan of the EU lead negotiator Michel Barnier, which is to allow a bit of preliminary planning to take place as the next decision date for possibly approving allowing trade discussions to proceed moves back to December.Merkel is a famously cautious politician. She has been completely consistent: her priority is preserving the rest of the EU. The UK is not going to get any special treatment. Any deal it gets must fit in the parameters of the arrangements it has with other neighbors that have close economic relations with the EU. She has the full backing of German business. She has no reason to relent. By contrast, the UK has been irresponsible, unrealistic, and high handed since the date of the Brexit vote. The underlying assumption of the Brexiteers, that the EU needed the UK and would bend to its wishes, has proven to be false. Yes, countries that were expected to be “soft” on trade with the UK, such as Denmark and some Eastern European countries, may indeed be lobbying for the trade talks to proceed. Even if true, that’s not going to make any difference as far as the state of play is concerned. How could anyone have missed that they’d been deadlocked for not just one session, but two, and that the EU response was widely anticipated?  Even the Financial Times’ comment section, which usually has a decent representation of Brexit stalwarts, had close to universal derision for May’s late effort to get the negotiations back on track. The reason for the contempt is that even casual viewers who get an overdose of UK press baron Brexit boosterism can see May’s Hail Mary pass is an effort to shift blame to the EU when the UK bears responsibility for the mess it is in. As we and many others have pointed out, the Tory party is so badly divided that even if it were to make commitments, they aren’t credible since who knows how long May will be in charge (my current bet is longer than anyone thinks, precisely because the Tories are unable to get behind either Hammond or Johnson).

Brussels trip by PM fails to unblock stalemate as both sides harden stance - Theresa May’s last-ditch attempt to persuade European leaders to open talks on a transition period look doomed to fail as Downing Street appeared to rule out fresh concessions on the UK’s divorce bill and Brussels hardened its approach days away from a crunch summit. Calls to the French president, Emmanuel Macron, and the Irish taoiseach, Leo Varadkar, along with a 90-minute dinner in Brussels with the European commission president, Jean-Claude Juncker, and his chief negotiator, Michel Barnier, failed to move the dial in the prime minister’s favour, with senior diplomats insisting the UK had not done enough. A joint statement from Juncker and the prime minister following their dinner gave no indication of any movement in the British government’s favour, but instead included reference to the sequenced approach to the talks insisted upon by Brussels. “The prime minister and the president of the European commission reviewed the progress made in the article 50 negotiations so far and agreed that these efforts should accelerate over the months to come. The working dinner took place in a constructive and friendly atmosphere.” British officials were keen to point to the stated hope by Juncker for accelerated talks. They made clear that the prime minister did not make any further offers from the UK around substantive issues such as the divorce bill. But earlier in the day the latest leak of a draft statement from EU leaders, to be published at a European council summit in Brussels on Friday, made clear the desire among member states to continue to take a tough line with Britain. Following lobbying from France and Germany, it contained stronger language than a first draft leaked last week, demanding progress on all three of the opening withdrawal issues in order for trade talks to begin, and an additional mention of the need for a role for the European court of justice in protecting citizens rights. 

May Rebuffed in Personal Brexit Lobbying in Brussels, Yet Much of UK Press Spins Otherwise -  Yves Smith - It wasn’t a hard call to say that Theresa May’s emergency visit to try to get the EU to give the UK a Brexit break was certain to fail. The EU had signaled for over a month that the UK had not made enough progress in the talks thus far for them to agree to let the negotiations move to the next phase, of considering the “future relationship,” meaning above all, trade However, depending on which press account you believe, the meetings may have achieved the difficult task of making things worse. One of my theories of negotiation is that if two sides have no overlap in their bargaining positions, more interaction does nothing except make their interpersonal relations worse. It appear at most that May’s and David Davis’ personal lobbying at best made even clearer where the points of disagreement lie. One critical clarification came via the Guardian: the EU member states are more united against the UK on the stumbling block issues, most important, to pretty much finish the first phase negotiations, including reaching a general understanding on the so-called Brexit bill, before moving to new topics. We took note of the accommodating position taken by the EU’s chief negotiator, Michel Barnier, and speculated that he was both representing a deal as well as representing his principals, which in the end entails trying to get your side to make concessions.  That was if anything an understatement. Barnier is seen by some EU leaders as going beyond his remit . From the Guardian: Calls to the French president, Emmanuel Macron, and the Irish taoiseach, Leo Varadkar, along with a 90-minute dinner in Brussels with the European commission president, Jean-Claude Juncker, and his chief negotiator, Michel Barnier, failed to move the dial in the prime minister’s favour, with senior diplomats insisting the UK had not done enough.A joint statement from Juncker and the prime minister following their dinner gave no indication of any movement in the British government’s favour, but instead included reference to the sequenced approach to the talks insisted upon by Brussels… And even though May was set to have dinner with Juncker, that was never going to make a dent. Again from the Guardian:But earlier in the day the latest leak of a draft statement from EU leaders, to be published at a European council summit in Brussels on Friday, made clear the desire among member states to continue to take a tough line with Britain.

U.K. Fears Collapse of Brexit Talk Within Weeks - U.K. Prime Minister Theresa May’s government fears Brexit talks will break down unless the European Union gives ground at a key summit this week, according to a person familiar with her team’s views.Without a clear sign that negotiations will progress to trade and transition arrangements by December at Thursday’s summit of EU leaders, the entire Brexit process will be in danger of collapse -- and senior British ministers are losing faith in the EU’s willingness to strike a deal, the person said.The warning came as the prime minister met European Commission President Jean-Claude Juncker for talks over dinner in Brussels, in an attempt to smooth the path for progress at the summit in the Belgian capital starting Thursday. Afterwards, the pair said they’d had a “broad, constructive” meeting and agreed to step up attempts to reach a deal on the divorce. The prime minister and the president of the European Commission reviewed the progress made so far and “agreed that these efforts should accelerate over the months to come,” they said in a joint statement after the meeting. “The working dinner took place in a constructive and friendly atmosphere.” The warm words will do little to calm the nerves of businesses worried that the negotiations are failing to make progress as time runs out. The pound weakened as much as 0.3 percent against the dollar earlier on Monday, on the report of the U.K.’s concerns about the lack of agreement.

Britain's May wins Brexit reprieve, faces tough weeks ahead  (Reuters) - British Prime Minister Theresa May won a modest reprieve in stalled Brexit talks on Friday, with European Union leaders signaling their readiness to move the negotiations forward in the coming months. But despite a more positive tone, a weakened May now faces a delicate political balancing act as she tries to meet EU demands for more concrete pledges on Britain’s divorce bill without stoking a backlash from Brexit campaigners at home, some of whom would prefer she walk away from the talks. EU leaders said at a summit in Brussels that they would begin preparations to move into “phase two” of the Brexit negotiations in December, a step forward that would allow London to discuss its future trade relationship with the bloc. Yet they also made clear that May would have to move between now and the end of the year on settling a financial bill that EU officials have estimated at around 60 billion euros. “I think it is very clear what additional steps need to be taken,” German Chancellor Angela Merkel told a news conference at the end of the summit, saying movement on the financial settlement was crucial for progress in December. French President Emmanuel Macron was tougher, saying the two sides had not yet completed even half of the work on the financial settlement and accusing Britain of “bluffing” by using the media to suggest there could be no deal. “A lot is in the hands of Theresa May,” he said. An EU official said it took just 90 seconds for the 27 other leaders to adopt their Brexit conclusions at the end of the meeting, underlining how united they are. May has said she cannot provide a specific financial pledge until she knows the shape of the future relationship. The EU is insisting that the two sides agree on an exit bill, the rights of EU citizens in a post-Brexit world and Irish border issues before delving into future ties. 

The EU is treating Britain like a naughty child: it wants to humiliate us into a bad deal - We are constantly told how difficult it is to get agreement among the EU27 (ie, the European Union minus Britain) for anything. This week, however, they discussed at the European Council whether Britain had yet made “sufficient progress” over the first phase of Brexit talks to permit entry into the second phase, which will deal with trade negotiations. It had not, they agreed – “after a discussion,” the BBC reported, “lasting 90 seconds”.  So the Council announced that when it meets in December, it will review this matter again. If it feels like it, it will declare “sufficient progress” for phase two. If not, not. In the meantime, it condescends, it will talk to itself about what sort of trade matters it might wish to discuss with Britain one of these days.   In acting so haughtily, the Council claims to be following its own guidelines which it published at the end of April. These also insist that negotiations must be “conducted in transparency” and follow the “principle of sincere cooperation”: clearly the EU27 can interpret the rules with comical flexibility when it suits them. But the point to focus on is that a real negotiation is not taking place. All that is happening is that the Council has deliberately constructed a sequence of hurdles so that Britain must fall at them. We are being treated like a naughty child.   Theresa May, by contrast, has been trying to follow that “principle of sincere cooperation”. In Florence, she went out of her way to show her country’s goodwill towards the EU. She has already made specific phase one concessions – for example, on the rights of EU nationals resident in Britain (which she should have offered freely at the beginning), and on the “divorce bill” (where she has probably offered too much). In return, she has been snubbed or patronised.

Brexit: What′s the ′no deal′ fallout for the UK and EU? | What you need to know | DW | 18.10.2017: The UK's Prime Minister Theresa May has admitted that a "no deal" on Brexit would be better than a bad deal. Apart from being delusional, how damaging will it be for all concerned?If you thought the scenario of the UK leaving the EU with all that entails was bad enough, think again: If there is no deal at the end of negotiations to formally finalize the UK's exit in March 2019, many observers believe the apocalypse could be upon us. So what exactly would a "no deal" mean in practice?Steve Bullock, who worked at the UK Representation to the EU from 2010-2014 where he negotiated several EU regulations for the UK in EU Council working groups, describes it thus: "People have made the analogy of buying a car, but not coming to an agreement. What Theresa May is about to do is drive a reliable, working car down to the car dealer, set fire to it right there, and then say to him 'You have to sell me a car, or else I'm walking home.'"  With no deal in place, trading would defer to World Trade Organization rules. Tariffs and customs checks would be slapped on UK exports to the EU and vice versa. And this is where the problems become meaty, if you'll excuse the pun. Tariffs on agricultural products such as lamb and beef could be as high as 50 percent — effectively putting supply industries out of business. On the upside UK consumers could feast upon cheap, unsaleable Welsh lamb for the foreseeable future. And it's far from plain sailing for the fishing industry. On the surface (okay, no more puns) British fishermen could theoretically catch more fish because EU member states would lose their automatic right to fish in UK waters. But here's the downside: When it came to selling the fish, the fishermen would face tariffs on sales to their largest export market — yes, that would be the EU.

It’s a folly to dismiss City warnings over Brexit transition deal delay -- TheCityUK is a lobbying group whose dire warnings about the potential loss of trade and jobs from the City of London tend to infuriate true believers in Brexit. Too gloomy, say hardcore Brexiters. A few jobs may go, runs their argument, but Frankfurt, Paris, Luxembourg and Dublin are too small to inflict lasting damage on London. Besides, the rest of the EU will come to its senses eventually and realise that a fragmented European financial industry would serve nobody’s interests, apart from perhaps New York’s.  There is some truth in those objections, of course, since it is true that London currently plays in a different league as a European financial centre. But it is also time for all sides to acknowledge TheCityUK was 100% correct on a common-sense point it has shouted from the rooftops from the outset: a transitional deal that is signed at the eleventh hour of negotiations won’t be worth much. Sam Woods, a deputy governor of the Bank of England, captured the argument when he said “diminishing marginal returns” would start to kick in around Christmas. “Firms would start discounting the likelihood of a transition in the central case of their planning,” he said. Indeed, there was more than a whiff of contingency plans being executed when Goldman Sachs said this month it will lease eight floors of new office block in Frankfurt, enough to house 800 people. Does Goldman actually want to add 800 jobs in Frankfurt? One suspects not. Like most big London-concentrated investment banks, it would prefer Brexit to involve as little disruption to its business as possible. But, in the absence of transitional deal, it has to cover all possibilities. For Goldman et al, it doesn’t matter if UK division or EU belligerence is mostly to blame for the current stalemate. Banks just look at their own interests, which means keeping clients and local regulators happy.

UK Oil And Gas Costs To Rise 100% If Brexit Fails - naked capitalism Yves here. The analysis this article relies upon makes an assumption which isn’t valid, although it may not make any difference in this particular case. Many pundits in the UK have repeatedly claimed that the UK can fall back to WTO rules in the event of a failure to reach a Brexit deal. As we wrote in March: The Tories seemed unaware of the fact that there was no such thing as a “default to the WTO” if their Brexit talks founder, even though parties as remote as this site has flagged that as an impediment prior to the Brexit referendum. They government has apparently been trying to get some sort of special treatment from the WTO and not surprisingly isn’t getting much of anywhere. Apparently it’s news to them that the WTO operates by consensus, and with 162 members, that’s hard to achieve, and lacks any sort of established procedure for making decisions otherwise. And let us not forget that the WTO Director-General warned the UK several times before the vote that WTO deals take years to negotiate (as in typically more than five, and the approval process can easily take more than a year), that there were other countries in the pipeline and the UK would not be able to jump the queue. It’s not hard to imagine that new entrants who got in the hard way would not support the UK demanding all sorts of waivers. The Director-General did say post Brexit that individual countries could elect to trade with the UK on a WTO terms, but I don’t see how that happens outside of bi-lateral trade deals, which would be even more cumbersome to negotiate. Perhaps some countries would be willing to trade with the UK on what would be close to a slap-dash-y basis, but the ones most willing to play fast and loose would be the ones with the most to gain.

Universities told to guarantee free speech - Universities must pledge to uphold free speech on campus or face being blacklisted by the new higher education regulator, the government will announce today.It will force universities to challenge the culture of so-called safe spaces and to answer for the behaviour of student unions that “no platform” controversial speakers.Jo Johnson, the universities minister, said any that failed to protect freedom of speech could be fined, suspended or ultimately deregistered by the new Office for Students (OfS) in an extensive reorganisation of the sector.He told The Times that all universities would have a statutory duty to make the commitment in their governance documents as a condition of registration with the OfS. In a hard-hitting interview Mr Johnson said that he would also push for:

• ● More two-year degrees to save students money. Leading universities are reluctant to embrace two-year courses, which at present are offered by only a few and cost the same as three-year courses.
• ● A brake on degree grade inflation, which has led to fears that standards of excellence are dropping.
• ● Curbs on cheating and plagiarism.

Mr Johnson’s comments expand on a letter he wrote to universities in March, seen by The Times, which set out his ambitions. He said: “Freedom of speech is a fundamentally British value which is undermined by a reluctance of institutions to embrace healthy vigorous debate. Our universities must open minds not close them.” Speakers including Germaine Greer and Peter Tatchell have been targeted by student protests over their views on transgender issues. Greer eventually spoke at Cardiff University under tight security. Mr Johnson said it was “preposterous” for the feminist to be banned from speaking in campuses. “She has every right, if invited, to give views on difficult and awkward subjects,” he said. “No-platforming and safe spaces shouldn’t be used to shut down legitimate free speech.