Fed Policy Is to Keep Hiking Until Something Breaks - Tim Duy - Federal Reserve Chairman Jerome Powell took to the podium at the annual Jackson Hole monetary conference, delivering a message of support for the central bank’s policy of ongoing gradual interest-rate increases. This policy stance is less about commitment to estimates of key policy variables such as the natural rate of interest and more about data dependence. Unfortunately, Powell left the unsettling feeling that monetary policy can be summarized as “We plan to keep hiking until something breaks.”Central bankers center policy on the economic outcomes thought to occur in stable equilibriums. Currently, unemployment and policy interest rates are both below their natural values, while output growth exceeds potential growth. The values of these variables, however, can’t be observed directly and instead are imprecisely estimated. Focusing too heavily on those estimates can lead to policy errors. Powell highlights the error of the 1970s when the Fed’s estimates of the natural rate of unemployment were too low. The labor market was tighter than the Fed believed and helped contribute to inflation.Powell uses these episodes to justify the Fed’s current middle-of-the-road policy stance. Facing low rates of inflation and low unemployment, the Fed could simply not boost rates, essentially taking a page out of Greenspan’s playbook. Or, to avoid the mistakes of the 1970s, the Fed could hike more aggressively in response to an unemployment rate that is below the estimated natural rate. Considering the uncertainty about the true levels of these natural or equilibrium values, Powell defends the policy of gradual hikes as appropriate. They don’t want to overreact to either slow inflation or low unemployment. In short, Powell does not feel beholden to specific estimates of the natural rates of anything. This lack of commitment has important implications for monetary policy. We already knew the Fed was taking its estimates of the natural rate of unemployment with a grain of salt. The Fed would have tightened policy more aggressively if it truly believed unemployment rates below 4.5 percent threatened inflation stability in the near term. But we didn’t know how seriously the Fed would take its estimate of the natural rate of interest. Now we know — Powell probably isn’t taking it as anything other than a loose guideline.
Trump objections notwithstanding, Fed's Powell defends need for rate hikes -- Federal Reserve Chairman Jerome Powell said the fundamentals of the U.S. economic expansion look strong and support the case for continued gradual interest rate increases."There is good reason to expect that this strong performance will continue," Powell said Friday in remarks prepared for the Kansas City Fed's annual policy symposium in Jackson Hole, Wyo. "I believe that this gradual process of normalization remains appropriate."U.S. central bankers are raising interest rates gradually to keep inflation in check while at the same time giving the nearly decadelong expansion room to run. The policy has attracted the ire of President Donald Trump, who told Reuters in a recent interview that he was "not thrilled" with the Fed's tightening.Powell's speech discussed at length the challenges of monetary policy at a time when economic benchmarks — such as estimates of full employment or the neutral policy rate — are uncertain. The two risks faced by the Federal Open Market Committee are moving too fast and shortening the expansion, or moving too slowly and allowing for overheating and financial excesses, he said."I see the current path of gradually raising interest rates as the FOMC's approach to taking seriously both of these risks," Powell said. While unemployment is below the committee's longer-run estimate of a rate that corresponds with noninflationary use of labor resources, "there does not seem to be an elevated risk of overheating.""This is good news, and we believe that this good news results in part from the ongoing normalization process, which has moved the stance of policy gradually," Powell said. "As the most recent FOMC statement indicates, if the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate." Investors are pricing in another quarter-point increase from the central bank at their meeting next month. That would raise the target range for the benchmark lending rate to 2% to 2.25%. There is scant evidence that the Fed's removal of stimulus is hurting growth. Unemployment is low at 3.9%, and inflation, according to the Fed's preferred benchmark, is slightly above officials' 2% target. Powell, who Trump nominated for the job, is continuing an economic experiment that began under his predecessor Janet Yellen betting that the inflation response from a tight labor market would be muted.
The Fed Will Not Give Up "Dark Money" - Nomi Prins - When it comes to second quarter U.S. economic growth figures, interpretation is everything. On one hand, the projection of 4.1% second quarter growth is a sign of a surging economy set to grow for years to come. But on the other hand, it is seen as temporary sugar rush created by tax cuts and debt. It’s unsustainable in the light of higher tariffs, an escalating trade war that could impact large portions of the economy, and rising federal deficits that put America even deeper in debt. Another data point to determine which of these two camps is most accurate for predicting the future of the U.S. economy is job’s figures. July’s jobs report came in with fewer than expected jobs, a gain of 157,000 jobs vs. a forecast of 190,000. While that miss in itself may not mean much, since the overall jobless rate dropped to 3.9%, the fact that wages are growing slowly remains a concern. Also concerning is the record amount of household debt. Consumers are using it to spend and that is partially responsible for that 4.1% GDP growth, as I noted on Fox Business recently. But it’s not sustainable. Add it all up and there’s considerable reason to believe that the 4.1% growth rate is only temporary. It will not represent the full GDP growth figure over all of 2018, nor will it be the growth figure in 2019 or 2020. Even the Fed admits growth will slacken over the next couple of years. I don’t often agree with the Fed. But on this point, I agree with the Fed’s forecast for slower growth to come. That outlook presents options for the Fed to create more credit, or what I call dark money to support the markets, to confront inevitable periods of volatility ahead. Dark money is the #1 secret life force of today’s rigged financial markets. It drives whole markets up and down. It’s the reason for today’s financial bubbles. On Wall Street, knowledge of and access to dark money means trillions of dollars per year flowing in and around global stock, bond and derivatives markets.
Corporate profits after taxes set a new record. But the Fed is worried about wages - Yesterday (Aug. 29) in the Q2 GDP update corporate profits were reported for the first time. Since corporate profits are one of four long leading indicators identified by Prof. Geoffrey Moore, I have updated my look at them at Seeking Alpha. But of course corporate profits are a good way to measure how the producer sector is doing compared with ordinary workers. So below is a graph of corporate profits (green), the S&P 500 (blue), average hourly wages for non-managerial workers (dark red), and aggregate wages for all of those workers (light red), since the month Trump took office: Profits are up over 17% and stock prices up over 22%. Meanwhile average workers’ hourly earnings are up (before inflation) less than 3%, and even in the aggregate are up only 7%. And the Fed is worried about wage inflation.
Senate confirms Clarida to Fed, two others remain in limbo — The Senate voted Tuesday to confirm Richard Clarida to serve a four-year term as vice chairman of the Federal Reserve Board of Governors and a 14-year term as a member of the Fed board. The Senate voted 69-26 to confirm Clarida as vice chairman, with one Republican, Sen. Rand Paul, R-Ky., opposing the nomination. Clarida’s nomination to serve as a Fed governor was confirmed through a voice vote. His nomination drew criticism from Sen. Sherrod Brown, D-Ohio, ranking member on the Senate Banking Committee, who said Clarida did not sufficiently answer committee members’ questions during his confirmation hearing and afterwards in responses for the record. “He failed to provide the committee into meaningful insight into his views,” Brown said in a floor speech before the full Senate voted. He said the responses the committee got were “pretty much identical” to another Fed nominee, Michelle Bowman. Brown added that he was “not confident” Clarida would protect taxpayers and homeowners from the next financial crisis. .
PCE Price Index: July Headline & Core -- The BEA's Personal Income and Outlays report for July was published this morning by the Bureau of Economic Analysis. TThe latest Headline PCE price index was up 0.12% month-over-month (MoM) and is up 2.31% year-over-year (YoY). The latest Core PCE index (less Food and Energy) came in at 0.16% MoM and 1.98% YoY. Core PCE remains below the Fed's 2% target rate. The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. The first string of red data points highlights the 12 consecutive months when Core PCE hovered in a narrow range around its interim low. The second string highlights the lower range from late 2014 through 2015. Core PCE shifted higher in 2016 with a decline in 2017 only to bounce back later in the year. The first chart below shows the monthly year-over-year change in the personal consumption expenditures (PCE) price index since 2000. Also included is an overlay of the Core PCE (less Food and Energy) price index, which is Fed's preferred indicator for gauging inflation. The two percent benchmark is the Fed's conventional target for core inflation. However, the December 2012 FOMC meeting raised the inflation ceiling to 2.5% for the next year or two while their accommodative measures (low FFR and quantitative easing) are in place. More recent FOMC statements now refer only to the two percent target.
Comments on personal consumption expenditures: the September anomaly and the Fed's 2% inflation ceiling -- First, there is a long-time relationship going back 60 years in the data whereby the YoY% growth in retail sales is higher in the first part of an economic expansion, and lower in the latter part, compared with wider measures of spending, such as personal consumption expenditures (PCE's). In fact, it is so reliable it is one of my "mid-cycle" indicators. Well, it hasn't been that way for the past year. Here's the graph: YoY retail sales have been higher than PCE's in the past year -- and the YoY growth has been rising. So has the economic cycle been rejuvenated? Probably not, although the tax cut that took effect in January probably is having an effect.It all seems to boil down to an anomalously huge monthly surge in retail sales, even after adjusting for inflation, last September. It is easily seen in this next graph, which shows the monthly change in real retail sales (red) vs. real PCE's (blue): That's a 1.4% real, inflation-adjusted increase in retail sales in just one month! How anomalous? Well, here's the same graph expanded back to October 2009: Only three other months are comparable (1.0% or above), and only one of them, at the beginning of the expansion, is significantly larger. The suspicion has been that the spike in spending was due to the hurricanes along the Gulf Coast and perhaps also the California wildfires. If that's true, then in two months we'll see that spike drop out of the YoY comparisons, and the normal long-term relationship between retail sales and PCE's should assert itself. We'll see. A second point I want to make is about the Fed's asymmetric 2% inflation "target." In practice, it is actually a ceiling. We had a report by the Fed staff earlier this week warning that if they don't move to increase rates now, inflation could get out of control. Well, core PCE's are the Fed's favorite inflation metric. They are shown in blue in the graph below, which subtracts 2%, so that 2% YoY core PCE inflation is at the zero line: The Fed started raising rates with core PCE's running only a little over 1%. In other words, despite the fact that core PCE inflation running significantly below the Fed's alleged "target," it stopped easing and started tightening. Now that it has arrived at their "target," they are talking about the need to tighten more aggressively to prevent inflation. You know, in things like workers' wages.
Q2 GDP Revised up to 4.2% Annual Rate - From the BEA: National Income and Product Accounts Gross Domestic Product: Second Quarter 2018 (Second Estimate)Real gross domestic product (GDP) increased 4.2 percent in the second quarter of 2018, according to the “second” estimate released by the Bureau of Economic Analysis. The growth rate was 0.1 percentage point more than the “advance” estimate released in July. In the first quarter, real GDP increased 2.2 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 4.1 percent. With this second estimate for the second quarter, the general picture of economic growth remains the same; the revision primarily reflected upward revisions to nonresidential fixed investment and private inventory investment that were partly offset by a downward revision to personal consumption expenditures (PCE). Imports which are a subtraction in the calculation of GDP, were revised down. PCE growth was revised down from 4.0% to 3.8%. Residential investment was revised down from -1.1% to -1.6%. This was above the consensus forecast.
Q2 GDP Second Estimate: Real GDP at 4.2% - The Second Estimate for Q2 GDP, to one decimal, came in at 4.2% (4.23% to two decimal places), an increase from 2.2% for the Q1 Third Estimate. Investing.com had a consensus of 4.0%.Here is the slightly abbreviated opening text from the Bureau of Economic Analysis news release:Real gross domestic product (GDP) increased at an annual rate of 4.2 percent in the second quarter of 2018 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.2 percent.The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 4.1 percent. With this second estimate for the second quarter, the general picture of economic growth remains the same; the revision primarily reflected upward revisions to nonresidential fixed investment and private inventory investment that were partly offset by a downward revision to personal consumption expenditures (PCE). Imports which are a subtraction in the calculation of GDP, were revised down. (see "Updates to GDP" on page 2). [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.22% average (arithmetic mean) and the 10-year moving average, currently at 1.66%. Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 13.7% below trend.A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.35%. Six of the eleven recessions over this timeframe have begun at a higher level of current real YoY GDP.
Q2 GDP Revised Higher To 4.2%, Strongest In 4 years - After bursting higher in second quarter, when according to the first estimate of Q2 GDP, the US economy grew at an annualized 4.1% rate, moments ago the BEA reported that according to its second estimate of second quarter GDP, the US grew at an even stronger, 4.23% rate - higher than the 4.0% estimate, and the highest since the summer of 2016 - at a time when the Trump's $1.5 trillion fiscal stimulus was boosting the US economy. The upward revision to the second estimate of GDP growth mainly reflected upward revisions to business investment in intellectual property products and downward revisions to imports. While most of the components improved, there was a pullback in personal consumption which rose 3.8% in 2Q, down from 4.0% in the first estimate, and below the 3.9% estimated. In terms of contribution to the bottom line, the various line items were as follows:
- Personal Consumption: 2.55%, down from 2.68%
- Fixed Investment:1.07%, up from 0.94%
- Change in Private Inventories: -0.97%, up from -1.00%
- Exports: 1.10%, down from 1.12%
- Imports: 0.07%, up from -0.06%
- Government consumption: 0.41%, up from 0.37%
A big contributor to growth was nonresidential fixed investment, or spending on equipment, structures and intellectual property rose 8.5% in 2Q after rising 11.5% prior quarterSeparately, the GDP price index rose 3.0% in 2Q after rising 2.0% prior quarter, while core PCE q/q rose 2.0% in 2Q after rising 2.2% prior quarter as inflation cooled modestly.Also in today's report, the BEA said that corporate profits rose 1.2% in prior quarter; y/y corporate profits up 7.7% in 2Q after rising 5.9% prior quarter, and were broken down as follows:
- Financial industry profits increased 3.8% Q/q in 2Q after falling 2.1% prior quarter
- Federal Reserve bank profits down 4.7% in 2Q after falling 2.8% prior quarter
- Nonfinancial sector profits rose 5.1% Q/q in 2Q after rising 2.7% prior quarter
While the number is largely irrelevant, as it references a period nearly 3 months old, it confirms that the economy was heating up headed into the summer. The bigger question of what GDP will do this quarter will be answered in two months, however according to high frequency economic indicators, all signs point to a continuation of the trend, especially since the impact of Trump's fiscal boost is expected to peak some time around now.
Upward Revision for Q2 GDP – 3 graphs - Today’s GDP release saw a 0.1 percentage point increase in real gdp to 4.2% for Q2. The change was driven by upward revisions to fixed investment (from 5.4% to 6.2%), inventory investment and government spending (from 2.1% to 2.3%). Downward revisions were seen in PCE (from 4.0% to 3.8%), residential fixed investment (-1.1% to -1.6%), and exports. Imports were also revised down. Today’s revisions did little to change the course of future policy. Year over year GDP growth has seen a marked trend up since 2016Q2. Whether this robust path will continue is subject to some doubt. A big contributor to the upward tick was net exports. While it is too early to tell it seems likely that a lot of this will be reversed in the third and fourth quarters given the current volatility of trade policy.
Thinking about that Surge in Growth – Menzie Chinn - Two points from the 2018Q2 2nd release: GDO is smoother, and a breakout has not yet appeared. First, consider real GDP and real GDO (average of GDP and GDI) growth, q/q SAAR. While the quarter-on-quarter GDP growth is high, it’s not unparallelled (see discussion in this post). In addition, GDO, which has shown itself to be a better predictor of revised values of GDP, indicates less rapid growth (see Justin Fox’s article today). Second, returning to GDP, is there evidence of a breakout in growth? Consider recursive one-step-ahead regression residuals. OLS regressions Δyt = const are estimated recursively (i.e., the sample is progressively augmented after a starting sample) over the Great Moderation period, 1986-2018, and a test applied to see if the residual from the one-step-ahead forecast looks like it comes from a different distribution (the null hypothesis is same distribution). As indicated in the graph, no break occurs after the Great Recession. These results are robust to another specification (ARIMA(1,1,0)), except a structural break is found in early 2014 (at the 10% msl). I will say I won’t be surprised to see breaks in the future, particularly with volatility in the net export series likely due to both trade measures and the accounting effects of the TCJA.
Q2 Real GDP Per Capita: 3.55% Versus the 4.23% Headline Real GDP --The Second Estimate for Q2 GDP came in at 4.2% (4.23% to two decimals), up from 2.2% in Q1. With a per-capita adjustment, the headline number is lower at 3.55% to two decimal points. The adjacent chart includes an exponential regression through the data using the Excel GROWTH function to give us a sense of the historical trend. The regression illustrates the fact that the trend since the Great Recession has a visibly lower slope than the long-term trend.
Q3 GDP Forecasts -- From Goldman Sachs:We boosted our tracking estimate of Q3 GDP growth by one tenth to +3.0% (qoq ar). [Aug 30 estimate]. From Merrill Lynch: Weak trade data sliced 0.2pp from 3Q GDP tracking, leaving our estimate at 3.3% qoq saar. [Aug 31 estimate]. And from the Altanta Fed: GDPNow: The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2018 is 4.1 percent on August 30, down from 4.6 percent on August 24. [Aug 30 estimate] From the NY Fed Nowcasting Report: The New York Fed Staff Nowcast for 2018:Q3 stands at 2.0%. [Aug 31 estimate] CR Note: The range has narrowed, but it is still early. It looks like GDP will be in the 3s in Q3.
Senate Democrats want government to say if GDP growth helps middle class -- If you look at the numbers, the economic recovery under the Trump and Obama administrations is a story of steady growth — the US economy grew by 2.3 percent in 2017, and President Donald Trump was basically shouting from the rooftops about 4.1 percent growth last quarter. But it’s not being experienced that way by everyone.Wages are still growing overall slower than they have historically, even though workers in the bottom 40 percent of income distribution are starting to see them pick up. Hourly wages, adjusted for inflation, dropped by 0.2 percent in July.And many Americans are struggling in ways that seem out of step with a booming economy: A recent Urban Institute survey found that last year 40 percent of American families struggled to meet at least one of their basic needs, including buying food, paying medical bills, or covering utility bills, rent, or mortgage.But those gaps don’t show up in official measurements like the GDP, which measures growth in the overall economy. Now Democratic Sens. Chuck Schumer and Martin Heinrich are trying to change that. On Tuesday they are introducing a new bill that seeks to shed light on how economic growth in the United States is shaking out for individual Americans.The idea, they say, is to shed light on where economic prosperity is showing up across different income groups — and, potentially, where it’s not.The bill, the Measuring Real Income Growth Act of 2018, would require the Bureau of Economic Analysis (BEA), which releases quarterly GDP numbers, to also report how growth is distributed along the income scale. The bureau would have to put together distributional measures of economic growth to be released with quarterly and annual GDP reports starting in 2020, laying out how growth shows up across each decile of earners and the top 1 percent. The US economy posted strong 4.1 percent growth in the second quarter of 2018, but that’s an aggregate figure based on the amount of goods and services produced in the United States. It doesn’t indicate how that growth might differ for lower- and middle-income Americans, and it doesn’t reflect that, since the 1980s, economic growth has overwhelmingly benefited the wealthy more than the poor.
Why are we still relying on government to collect data? - I’ve been telling you for years (decades, actually) that Washington’s economic data are screwy. And because of that, the Federal Reserve and companies can’t really make informed decisions. Bloomberg News carried a story the other day that shows the Fed’s new chairman, Jerome Powell, also has doubts about data coming out of Washington. According to Bloomberg, Powell called upon First Data Corp., a global payment technology company, to find out how much consumers were spending. The problem is that bad weather had affected the public’s buying pattern — or might have. So, according to this story, Powell went to the source of real-time data — credit card receipts — rather than rely on government guesstimates. And this, I think, raises a good point. Why is Uncle Sam still in the data gathering business when there are much better ways to collect information in this technology-rich age we live in? Why spend all that money to get information that’s collected in the same way as before the invention of the computer and internet?
COLUMN-US economy accelerates towards cyclical peak- John Kemp (Reuters) - The U.S. economy shows signs of extending its nine-year expansion with the help of tax cuts and strong business and consumer confidence. Both the longevity of the expansion and the apparent limited slack in the labour and product markets suggest the current pace of growth is probably not sustainable in the medium term. The current cyclical expansion is 110 months old and will be the longest on record if the economy is still growing in July 2019. (tmsnrt.rs/2PlpDto) While longevity alone is not a good predictor of cyclical turning points, with most financial and economic indicators close to multi-decade highs, the balance of risks is shifting. “What matters primarily ... is not the passage of calendar time but what happens over time in and to the economy in motion. It is historical and psychological time, filled with events and processes, perceptions and actions. “There is a simple corollary: knowledge of the current phase of the business cycle and its age can help but must not be used in isolation,” Victor Zarnowitz, a leading U.S. expert on business cycles, wrote in 1992. “The variability in length of business expansions and contractions is sufficiently large for the timing of cyclical turning points to be very difficult to forecast. “The age of a phase alone is not of much help in predicting its end: what matters more is the dynamics of the evolving business situation. (“Business cycles: theory, history, indicators and forecasting,” Zarnowitz, 1992) Zarnowitz went on to observe: “The largest errors in forecasts ... are made in the vicinity of business cycle and growth cycle turning points, particularly peaks. “Many forecasts are overly influenced by the most recent events or developments; they rely on the persistence of local trends and are insufficiently cyclical in the sense they miss recessions and recoveries.”
At the Current Pace, the 2-10 Will Invert in December - Menzie Chinn - While the August ten year-three month (ten year-two year) spread is 0.87% (0.26), the corresponding figures as of 8/27 are 0.75%(0.18%), reflecting the downward trend. At the current pace the ten year-two year will invert in about 5 months. In Chinn and Kucko (2015), we document the predictive power of these spreads for recessions. In today’s SF Fed’s Economic Letter, Michael Bauer and Thomas Mertens follow up on their previous study, and conclude:The three long-term spreads and the one short-term spread all have very similar predictive accuracy, with AUCs of 0.85 to 0.89. The traditional 10y–3m spread performs better than the other three spreads by a slight margin. We also assess our predictors over a sample period that excludes the so-called zero-lower-bound period, when short-term interest rates were essentially zero (2009–2015) to give the best possible chance to the short-term spread, as did Engstrom and Sharpe. This helps its relative performance and puts it about on par with the 10y–3m spread. Engstrom and Sharpe found that their short-term spread statistically dominated the 10y–2y spread, and our findings are consistent with this result. However, we also show that the traditional 10y–3m spread is the most reliable predictor, and we do not find any evidence that would support discarding this long-standing benchmark as a measure of the shape of the yield curve. It is worth emphasizing again, however, that all of these term spreads are fairly accurate predictors and quite informative about future recession risk; the differences in forecasting accuracy are small. So, while I see the merit of looking at several indicators, and can see that in a horse race other spreads might marginally outperform (in particular) the 10yr-2yr spread, when one spread inverts, that is going to be highly suggestive. The 10yr-3mo spread will, at the current pace, go below zero in December 2019. Assuming a recession follows within a year, that suggests a recession by December 2020. PredictIt‘s odds of a recession by January 2021 has risen from 40-60 to 50-50 (and as high as 55-45) over the past 3 months.
The “Petrodollar” Has No Bearing on Any Country’s Ability to Employ Its People Fully -- “The petrodollar” or “petrocurrency” is a not a concrete thing. It is a shorthand name, a buzzword, for the system that has been in place since June, 1974, when an agreement was made between the Nixon Administration and Saudi Arabia. The terms of the agreement dictate that Saudi Arabia will accept only the United States dollar for oil (and ensure some price stability) in exchange for military protection of their oil fields. The agreement therefore pressures other oil producers to also use only the U.S. dollar.(The phrase petrodollars more accurately refers to the revenue derived from petroleum exports under the petrocurrency system. The agreement also has some implications and applications related to international trade and commerce that are beyond the scope of this article.)“The petrodollar,” the petrocurrency system, is just another tool for the U.S. government and its military (the Military-Industrial Complex) to use their outsized leverage against other countries. Oil and resources – not “the petrodollar” – are very likely a significant reason why the US has military bases around the world, why they attacked Libya and Iraq, and why they are currently threatening Iran. (There may be other reasons, some of which we may never know.) Regardless of the situation, “the petrodollar” has no direct bearing on the ability of the United States, or any other country, to provide for its people. The only thing that affects this is a country’s supply of real resources, and the fact that the country’s currency is the only one accepted for extinguishing tax obligations.
F-35 Program Cutting Corners to “Complete” Development - Officials in the F-35 Joint Program Office are making paper reclassifications of potentially life-threatening design flaws to make them appear less serious, likely in an attempt to prevent the $1.5 trillion program from blowing through another schedule deadline and budget cap. The Center for Defense Information at the Project On Government Oversight (POGO) obtained a document showing how F-35 officials are recategorizing—rather than fixing—major design flaws to be able to claim they have completed the program’s development phase without having to pay overruns for badly needed fixes. Several of these flaws, like the lack of any means for a pilot to confirm a weapon’s target data before firing, and damage to the plane caused by the tailhook on the Air Force’s variant, have potentially serious implications for safety and combat effectiveness. POGO also obtained a copy of the Pentagon’s previously unreleased plan to control costs that shows the proposed savings may quickly be overwhelmed by the program’s rising costs. In acquisition programs, a deficiency is a design flaw that affects the weapon system’s performance or safety. During the test and evaluation process, the testing personnel identify and categorize design deficiencies based on severity, breaking them down into Categories I and II, with degrees of priority within each category. Category I deficiencies “may cause death, severe injury, or severe occupational illness; may cause loss or major damage to a weapon system; critically restricts the combat readiness capabilities of the using organization; or result in a production line stoppage.” A recent Government Accountability Office (GAO) report found that, as of January 2018, the F-35 program still had 111 of these. Category II deficiencies “could impede or constrain successful mission accomplishment.” The program had 855 of these significant, though less catastrophic, design flaws.With the revelation that officials made paperwork fixes to make these serious deficiencies appear acceptable, it seems that much of that work is being ignored in the name of political expediency and protecting F-35 funding.
UN panel cites massive war crimes in US-backed war on Yemen - A draft report prepared by a United Nations human rights panel has spelled out in detail the massive and savage war crimes that have been carried out against the people of Yemen in the three-year-old war waged by Saudi Arabia and the United Arab Emirates with indispensable military and political backing from Washington.The report was produced by the Group of Independent Eminent International and Regional Experts on Yemen, a body formed by the United Nations human rights council in September of last year with a year-long mandate to investigate human rights abuses in the impoverished and war-ravaged country. The report attributes the vast majority of civilian casualties—which it places at 6,475 killed and 10,231 wounded, while admitting that the real toll is far higher—to Saudi air strikes that “have hit residential areas, markets, funerals, weddings, detention facilities, civilian boats and even medical facilities.” The report comes in the immediate wake of two horrific atrocities in the space of just two weeks that claimed the lives of at least 60 children and over a dozen others. The first took place on August 9, when a Saudi warplane launched a 500-pound bomb against a bus carrying students from their summer camp to a traditional end-of-summer ceremony, killing 40 children and at least 11 others. While Saudi officials denied responsibility for the attack, and the Pentagon claimed it was still investigating the matter, CNN reported from the scene that remains of the bomb dropped revealed it was made by the giant US arms contractor, Lockheed Martin. This was followed by another murderous attack on women and children fleeing a neighborhood in the besieged port city of Hodeidah on August 23. A Saudi missile struck the truck in which they were riding, killing at least 22 children and four women.As the report makes clear, these massacres are by no means an aberration.The Group of Experts reviewed 60 cases in which Saudi air strikes were carried out against residential areas, killing more than 500 civilians, including 84 women and 233 children. It investigated 29 cases in which strikes were carried out against public spaces, including hotels, killing another 300 civilians. It reviewed 11 air strikes targeting marketplaces, killing and maiming hundreds more. It also probed bombing raids staged against funerals and weddings, most infamously the October 2016 attack on Al-Kubra Hall in the city of Sana’a during the funeral of the father of a senior official, which killed at least 137 civilians and injured 695.
Pentagon Warns Saudi Arabia It May Cut Support Over Yemen Civilian Casualties - Apparently the Pentagon "talks tough" to its allies concerning war crimes and human rights issues only after a mass civilian casualty event makes world headlines.Such is the case after a Saudi coalition airstrike took out a school bus in northern Yemen earlier this month, killing 40 children and wounding many more, which momentarily drew the attention of Congressional leaders and celebrities alike to what's long been dubbed "the forgotten war". CNN reports late in the day Monday that the Pentagon has delivered an official warning to Saudi Arabia, saying the US is poised to withdraw intelligence, military, and logistical support for the coalition war against Houthi rebels in Yemen: The Pentagon has issued a warning to Saudi Arabia that it is prepared to reduce military and intelligence support for its campaign against rebels in neighboring Yemen if the Saudis don't demonstrate they are attempting to limit civilian deaths in airstrikes following a strike on a school bus that killed 40 children earlier this month, CNN has learned.And just how outraged are Pentagon officials over the confirmed deaths of 40 children and prior bombings of hospitals and funeral gatherings?Apparently US officials are merely "concerned" and say that "frustration is rising".CNN continues: Two officials directly familiar with the Pentagon's thinking tell CNN frustration is rising. Defense Secretary James Mattis and General Joseph Votel, head of US military operations in the Middle East, are particularly concerned that the US is supporting a Saudi-led campaign of airstrikes that have killed large numbers of civilians.This mere "concern" comes after it's long been known that the Pentagon provides direct targeting and intelligence support to Saudi coalition operations in Yemen since 2015. Perhaps the central irony to CNN's reporting is that it acknowledges the Pentagon's direct role in the war as a lead part of the coalition while simultaneously pretending the US magically becomes a mere passive observer the moment American-made jets use American-supplied laser guided bombs to obliterate a school bus full of kids. The below is CNN's actual commentary (and not The Onion): But after a series of recent strikes in which large numbers of civilians were killed, the Pentagon, as well as the State Department, have now delivered direct messages to the Saudis about limiting civilian casualties. "At what point is enough enough?" one official remarked to CNN.
The New Lobbying: Qatar Targeted 250 Trump ‘Influencers’ to Change US Policy - Longtime New York restaurateur Joey Allaham visited Manhattan’s Park East Synagogue late last year with an offer for lawyer Alan Dershowitz. Come visit Doha, the capital of Qatar, by invitation of the emir. Mr. Dershowitz says he hadn’t met Mr. Allaham before and initially demurred before agreeing to go. The professor also didn’t know he was on a list of 250 people Mr. Allaham says he and his lobbying-business partner, Nick Muzin, identified as influential in President Trump’s orbit. The list was part of a new type of lobbying campaign Qatar adopted after Mr. Trump sided with its Persian Gulf neighbors who had imposed a blockade on the tiny nation. Qatar wanted to restore good relations with the U.S., Mr. Allaham says. Win over Mr. Trump’s influencers, the thinking went, and the president would follow. “We want to create a campaign,” Mr. Allaham says he told Qatari officials in his business pitch soon after the blockade, “where we are getting into his head as much as possible.” Qatar’s lobbying operation over the next year was an unconventional influence plan to target an unconventional president—and shows how much Mr. Trump has changed the rules of the game in the influence industry. Because Mr. Trump often shuns traditional policy-making processes, relying on advice of friends and associates, interest groups have spent the past 19 months reorienting their lobbying. New approaches include advertising during the president’s favorite television shows and forming ties with people who speak to him. Qatar spent $16.3 million on lobbying in 2017 in the U.S., the year of the blockade, up from $4.2 million the year before, according to its federal filings on payments to registered foreign agents. As of June 2018, the country was directly employing 23 lobbying firms, up from seven in 2016, its filings show. It spent some of that on lobbyists with ties to Mr. Trump and paid others to ply the halls of Congress—a typical approach aimed at pressing lawmakers and top administration officials.
North Korea tells U.S. denuclearization talks may fall apart: CNN (Reuters) - North Korean officials have warned in a letter to the United States that denuclearization talks were “again at stake and may fall apart”, CNN reported on Tuesday, citing people familiar with the matter. The letter was delivered directly to U.S Secretary of State Mike Pompeo, and stated that North Korean leader Kim Jong Un’s government felt that the process could not move forward. "The U.S. is still not ready to meet (North Korean) expectations in terms of taking a step forward to sign a peace treaty," CNN reported, citing sources. cnn.it/2MAI9AT The 1950-1953 Korean War ended in an armistice rather than a peace treaty, leaving U.S.-led U.N. forces technically still at war with North Korea. The North has long made clear that it sees an official end to the state of war as crucial to lowering tensions on the Korean peninsula. The United States has been reluctant to declare an end to the Korean War until after North Korea abandons its nuclear weapons program. The Washington Post reported on Monday that U.S. President Donald Trump called off a visit to North Korea by Pompeo after the latter received a belligerent letter from a senior North Korean official just hours after the trip was announced last week. CNN reported that the letter was sent by the former head of North Korea’s spy agency, Kim Yong Chol, but it was not known how it was sent. The Washington Post said North Korea had been increasingly communicating through its U.N. mission. CNN reported that the letter also mentioned that if a compromise could not be reached and the nascent talks crumbles, North Korea could resume “nuclear and missile activities”.
US threatens North Korea with resumption of war games - Amid mounting signs that US-North Korea talks are breaking down, US Defence Secretary James Mattis announced yesterday that the Pentagon was ending its suspension of joint war games with South Korea. This highly provocative step is certain to further inflame tensions with North Korea following President Trump’s decision last Friday to cancel Secretary of State Mike Pompeo’s trip to Pyongyang for another round of negotiations.At a Pentagon press conference, Mattis declared: “We took the step to suspend several of the largest exercises as a good-faith measure coming out of the Singapore summit… We have no plans at this time to suspend any more exercises.” After his summit with North Korean leader Kim Jong-un in June, Trump announced that “we will be stopping the war games” with South Korea, describing the joint exercises as “very provocative.”Mattis noted that even after the Singapore summit, smaller joint exercises were “ongoing… all the time on the peninsula.” He made clear that the announcement was aimed at putting pressure on North Korea by threatening to restart major annual war games scheduled for early next year. “We’re going to see how the negotiations go and then we’ll calculate the future,” he said.While the media routinely describes the joint exercises as defensive, they have always been a rehearsal for war with North Korea. Last year’s massive Foal Eagle and Key Resolve drills which were delayed until after the Winter Olympics in South Korea in February, involved around 23,000 American and 300,000 South Korean troops. Since 2015, US-South Korean operational plans have dropped their defensive disguise and include “pre-emptive” strikes on North Korea and “decapitation” raids against its top leaders. The suspension of large-scale military drills, now being reversed, was the only US concession made to North Korea. In a joint statement, Trump and Kim agreed to the “complete denuclearisation of the Korean Peninsula,” but the process, which was not spelled out even in general terms, has been interpreted differently from outset by the two sides. The Trump administration has insisted that North Korea commit unilaterally to dismantle its nuclear facilities, hand over its nuclear weapons and allow highly intrusive inspections before any easing of crippling US and international sanctions or any moves towards a formal end to 1950–53 Korean War.
U.S. military says no plans to suspend more major exercises on Korean peninsula (Reuters) - The U.S. military has no plans yet to suspend any more major military exercises with South Korea, the defense secretary said on Tuesday, in the middle of a breakdown in diplomacy with North Korea over its nuclear weapons. Defense Secretary James Mattis told a Pentagon news conference that no decisions had been made about major exercises for next year but noted that the suspension of drills this summer as a good-faith gesture to North Korea was not open-ended. U.S. President Donald Trump’s June decision to unilaterally suspend the drills caught many American military planners off guard and was broadly criticized as a premature concession to North Korean leader Kim Jong Un, who Trump wants to give up his nuclear weapons. “We took the step to suspend several of the largest exercises as a good-faith measure coming out of the Singapore summit,” Mattis told reporters, referring to the June 12 meeting between Trump and Kim. “We have no plans at this time to suspend any more exercises,” he said, adding that no decisions had yet been made on major exercises for next year. Mattis also said smaller exercises deemed to be exempt from the suspension were ongoing. Mattis’ comments on the drills come at a delicate time for negotiations between the United States and North Korea after Trump scrapped plans for a meeting between top officials from both countries. At the June summit, the first meeting between a serving U.S. president and a North Korean leader, Kim agreed in broad terms to work toward denuclearization of the Korean peninsula. But North Korea has given no indication it is willing to give up its weapons unilaterally as the Trump administration has demanded.
Behind The Chaos Of Washington’s Korea Policy - After last week, it would be easy to believe that Washington’s North Korea policy is in a state of chaos. Last Thursday, Secretary of State Mike Pompeo named a new special envoy on North Korea and announced they were heading together to Pyongyang for high level talks. Little more than 24 hours later, President Donald Trump, in a series of tweets, cancelled the visit. Beneath the disarray, however, a certain order could be found. Based on conversations held this past week in Washington with senior administration officials, including two members of the North Korea negotiating team, as well as former national security officials who are consulted by Secretary Pompeo and the National Security Council, a broad consensus emerges. Interestingly, it is almost completely in sync with the views held by senior Japanese officials. The foundation of this consensus is a profoundly skeptical view of the possibility of achieving “final, fully verified denuclearization of North Korea,” the goal reiterated by new special envoy Steve Biegun. While there were some differences concerning exactly what might be achieved in the talks with Pyongyang, not a single official dealing with North Korea said he believes this ultimate aim is reachable. The only possible exception is the President himself. The second pillar of consensus is a deep concern that the South Korean government of Moon Jae-in, which has driven the opening to North Korea, is no longer bound by the need to move in tight coordination with Washington. Some even fear the alliance itself may be in jeopardy. As for China, the national security officials I met all tend to take a jaundiced view of Beijing’s role. They see China as eager to use North Korea as a tool to drive the U.S. off the Korean peninsula. For now, they believe it still supports Washington’s diplomacy, including maintaining large-scale economic sanctions, even if it is not ready to sharpen its pressure on the North Korean regime.
How Media Failures Complicate The Nuclear Talks With North Korea - North Korea recently again asked the Trump administration to stick to the three steps agreed upon in the Singapore Statement. The Washington Post columnist Josh Rogin characterizes the North Korean request as "belligerent": Pompeo received the letter from Kim Yong Chol, vice chairman of North Korea’s ruling Workers’ Party Central Committee, on Friday morning, and showed it to Trump in the White House, two senior administration officials confirmed. The exact contents of the message are unclear, but it was sufficiently belligerent that Trump and Pompeo decided to call off Pompeo’s journey ... Reuters amplified the alleged "belligerence" when it headlined: Trump called off Pompeo's North Korea visit after belligerent letter: report Reuters must know that Josh Rogin does not do "reporting". He is not a journalist but a neocon shill with a direct line to John Bolton. He publishes his effusions in the Opinion section of the paper, not in its news parts. CNN then entered the frail and reported the real content of the letter: North Korea warns Pompeo denuclearization talks are 'at stake,' sources say:Top North Korean officials warned the United States in a letter that denuclearization talks are "again at stake and may fall apart," sources familiar with the process told CNN. The letter was delivered to US Secretary of State Mike Pompeo, whose fourth trip to Pyongyang was abruptly canceled, hours before he was scheduled to depart with his new special envoy Stephen Biegun on Friday, sources said.Three sources with direct knowledge of the North Korean position on denuclearization said the letter stated that Kim's regime felt that the process couldn't move forward because "the US is still not ready to meet (North Korean) expectations in terms of taking a step forward to sign a peace treaty."The described demand by North Korea to follow the agreed upon steps is certainly not 'belligerent'.After the CNN reported the real content of the letter Reuters changed its 'belligerent' headline to: North Korea tells U.S. denuclearisation talks may fall apart – CNN but the URL to the piece on the Reuters website still reflects the original headline:
Trump hails Kim, sees no need to resume U.S.-South Korea war games (Reuters) - Days after canceling a planned visit to North Korea by his top diplomat citing insufficient progress in denuclearization talks, U.S. President Donald Trump hailed his personal relationship North Korean leader Kim Jong Un on Wednesday and said there was no reason to resume war games with South Korea. Trump’s statement came a day after his defense secretary hinted that the drills, which North Korea denounces as rehearsals for invasion, could resume. Trump tweeted a White House statement in which he once again questioned China’s role in helping to resolve the crisis over North Korea’s development of nuclear weapons that threaten the United States. The statement said Trump believed North Korea was under “tremendous pressure” from China, but Beijing was also supplying Pyongyang with “considerable aid,” including fuel, fertilizer and commodities. “This is not helpful!” the statement said. “Nonetheless, the President believes that his relationship with Kim Jong Un is a very good and warm one, and there is no reason at this time to be spending large amounts of money on joint U.S.-South Korea war games,” it added. “Besides, the President can instantly start the joint exercises again with South Korea, and Japan, if he so chooses. If he does, they will be far bigger than ever before.” The statement also said that the U.S. trade dispute with China and other differences “will be resolved in time by President Trump and China’s great President Xi Jinping. Their relationship and bond remain very strong.” Chinese Foreign Ministry spokeswoman Hua Chunying said the remarks regarding China’s role on the North Korea issue were “irresponsible”. “The U.S. side’s irresponsible distortion of facts and logic is world-leading and really not something the ordinary person can understand,”
Trump blames stagnant North Korea talks on US-China trade war - US President Donald Trump has blamed China for the lack of progress during the negotiations about denuclearisation between the US and North Korea.In the tweets, sent out on Thursday, Trump said China was putting pressure on North Korea to stall the developments in the talks, adding that his relationship with North Korean leader Kim Jong-un was "very good and warm". "President Donald J Trump feels strongly that North Korea is under tremendous pressure from China because of our major trade disputes with the Chinese Government," the first of four tweets on the subjects read. Trump continued by claiming China is providing North Korea with aid, money, fuel and fertiliser, adding that providing those goods was "not helpful". Chinese Foreign Ministry spokeswoman Hua Chunying called Trump's remarks on the North Korea issue "irresponsible" and "hard to understand" in a press briefing. Trump also said the US was not continuing war games with South Korea, but that he "can instantly start the joint exercises again with South Korea, and Japan, if he so chooses", and that "if he does, they will be far bigger than ever before." That statement goes directly against US Secretary of Defense James Mattis, who earlier on Wednesday said the US was continuing its military exercises with South Korea. This came after a June meeting with the North Korean leader, where the Trump administration decided to stall joint military exercises with South Korea as a "goodwill gesture". The gesture was not enough for North Korea to agree to unilaterally give up its weapons.
The North Koreans Get It- Trump's Quest For Peace Is Being Sabotaged By His Own Advisors - The media continues to get the President’s North Korean peace initiative all wrong: in some cases this is due to laziness, Washington-centric group-think, and just plain ignorance. In other cases, it is quite deliberate. Take, for example, the recent “news” that Trump canceled Secretary of State Mike Pompeo’s scheduled trip to Pyongyang due to a “belligerent” letter sent by the North Koreans to the White House. What is the source of this alleged development? A single report in the Washington Post put out there by one Josh Rogin, not a reporter but an opinion columnist with strong neoconservative inclinations. Rogin attributes this information to “two senior administration officials” while admitting that “[t]he exact contents of the message are unclear.” We don’t know what the letter said, and so we don’t know why Trump canceled the trip. In short, we don’t know anything. That’s the “news,” folks. What we usually get is either complete misinformation, as in the case of the “belligerent letter,” or else a priori speculation along the lines of “Why would Kim Jong-un give up his nuclear weapons after seeing what happened to Qaddafi?” A priori arguments are fine in the realm of economics, but they don’t work at all in the foreign policy realm. We need empirical evidence, and to get that it’s necessary to penetrate a famously opaque North Korea and get a handle on what Kim and the rest of the North Korean leadership want to get out of the negotiations. And, more importantly, we have to ask ourselves how well do the lords of Pyongyang understand the dynamics of American politics, which will ultimately determine US policy? The answer to this last question, it turns out, is pretty damn well, if the North Korean media is any indication. As reported in one of the few reliable news sources that specialize in North Korea, 38north.org, the North Koreans are basically wondering if Trump is in charge back home: Unlike the “mainstream” media, 38north.org quotes directly from the official voice of the regime, Rodong Sinmun: “Congress is tackling the president’s feet, the judicial branch is grabbing him by the collar, and news media are bashing him. [in the past]…infighting between vested interests inside US politics did more damage than differences of opinions between North Korea and the United States did. We see it as a higher priority to straighten out fragmented and messed-up US politics than a quick improvement in North Korea-US relations, which is important.”
Trump Says He’ll End Nafta After Reaching New Deal With Mexico -President Donald Trump said he will terminate the North American Free Trade Agreement and sign a new trade accord with Mexico, potentially leaving Canada out of the bloc. Trump announced the agreement with Mexico in a hastily arranged Oval Office event Monday with Mexican President Enrique Pena Nieto joining by conference call. Pena Nieto said he is “quite hopeful” Canada would soon be incorporated in the revised agreement, while Trump said that remains to be seen. Trump said he would speak with Canadian Prime Minister Justin Trudeau “in a little while” and hoped to begin negotiations with him “almost immediately.” As he announced the move, Trump said he would drop the name Nafta from the accord because of its unpopularity. “We’re going to call it the United States/Mexico Trade Agreement,” he said. Nafta “has a bad connotation because the United States was hurt very badly by Nafta for many years.” The president hailed the Mexico agreement as “a big day for trade.” The peso rose ahead of Trump’s remarks. U.S. stocks also advanced, with auto suppliers and rail companies among the top gainers. There is no deal reached yet with Canada, people familiar with the agreement said. The northern neighbor has been on the sidelines of the talks since July as Mexico and the U.S focused on settling differences. “We will only sign a new Nafta that is good for Canada and good for the middle class” and “we will continue to work toward a modernized Nafta.” Nieto said in a tweet on Monday that he spoke with Trudeau and stressed the importance of Canada rejoining Nafta talks. Still, an accord between the U.S. and Mexico is the biggest development in talks that began a year ago, punctuated by Trump’s repeated threats to quit altogether. Significant breakthroughs came during the past several days of bilateral talks on automobiles and energy. The three countries trade more than $1 trillion annually, much of it under the pact.
Trump Hails U.S.-Mexico Trade Pact, Says ‘We’ll See’ With Canada - President Trump moved closer to revising the North American Free Trade Agreement by striking a deal with Mexico, but cast new doubts over the quarter-century-old pact by threatening to leave out Canada.While the deal was created to foster harmonized rules across the continent, Mr. Trump said on Monday he was happy to sever Washington’s northern neighbor from that bloc if necessary. He proposed to rename the pact “the United States-Mexico Trade Agreement,” while setting terms that will hinder Ottawa’s efforts to join it. The Trump administration said it would give Canada until Friday to iron out crucial differences, including a revision that makes it harder for Nafta members to challenge U.S. trade penalties. While Mexico accepted that change, Canadian officials have said for months that would be unacceptable. “We will see whether or not we decide to put up Canada or just do a separate deal with Canada—if they want to make the deal,” Mr. Trump said. He added that he might prefer to block Canadian imports rather than negotiate a new pact, saying: “I think with Canada, frankly, the easiest thing we can do is to tariff their cars coming in.” Mr. Trump and Canadian Prime Minister Justin Trudeau spoke by phone on Monday and “agreed to continue productive conversations” about U.S.-Canada trade, according to a White House statement. Mr. Trump’s harsh rhetoric against Canada was the latest example of his hardball approach to trade policy, where he has chosen to impose intense pressure on other countries through threats or tariffs to try to win concessions. His strategy is driven by a belief that the U.S. has significant clout over other nations eager to sell into the world’s largest market and that prior administrations failed to use that. A spokesman for Foreign Minister Chrystia Freeland of Canada said Monday’s agreement was “encouraging,” but cautioned Ottawa would only sign on to a revamped trilateral deal “that is good for Canada and good for the middle class.” The minister said she would cut short a scheduled trip to Europe and instead travel to Washington on Tuesday to begin talks with her U.S. counterparts.The deal includes several provisions to alter a pact Mr. Trump has long branded “a disaster” for what he considers incentives encouraging U.S. companies to shift production to Mexico. The most significant is a clause that would boost the percentage of autos that would need to be made in North America to qualify for the tariff-free cross-border trade allowed by Nafta. It would also require a certain portion of cars to be made by high-wage workers—a response to longstanding U.S. union complaints over low-wage Mexican labor. The deal also includes provisions that would modernize the pact with rules governing digital commerce.
Kudlow: Auto Tariffs on Canada Possible If No Trade Deal Reached - The U.S. could use tariffs on automobiles from Canada if the two countries don’t reach a new trade agreement, National Economic Council Director Lawrence Kudlow said Monday, echoing President Trump’s earlier remarks.In an interview on CNBC, Mr. Kudlow praised the bilateral trade deal announced Monday between the U.S. and Mexico to rewrite portions of the North American Free Trade Agreement, and he urged Canada to follow suit.“We hope Canada is watching carefully at how successful negotiations can go,” he said.Mr. Kudlow said he believes the bilateral agreement between Mexico and the U.S. can advance through Congress, which will have to sign off on any new pact.He said U.S. officials would like to reach a bilateral agreement with Canada and will continue toward that path, noting that bilateral deals produce better and faster results. If a deal isn’t reached, however, “we might have to resort to auto tariffs,” Mr. Kudlow said. “Hopefully Canada will cooperate and move the ball in our direction,” he added.
"Canada Just Got Played": How Mexico Stabbed Canada In The Back In what was the biggest economic news of the day, Donald Trump concluded bilateral trade negotiations with Mexico, a deal which he called the US-Mexico Trade Agreement (profiled previously) and which will replace the trilateral NAFTA which has - for now at least - been scrapped until Canada also comes to the negotiating table and hammers out an agreement with the US (read: concedes), from a position of weakness and virtually no negotiating capital.There were some odd twists in the announced deal, for example the agreement on the "sunset clause", which as some pointed out is strange as it is a "trilateral matter" - i.e., one which would involve Canada - and it was unclear how it squares with the U.S.Mexico pledge that their talks were purely on bilateral issues.Confirming that Trump was engaging in some good old "divide and conquer", was the announcement from a White House official that, if Canada doesn't agree to a renegotiated NAFTA, it will go ahead with a two-way deal with Mexico, although another official claimed that splitting up the negotiations is "standard practice and not about squeezing Canada."That may not have been exactly true because even though Mexico’s foreign minister Luis Videgaray said it’s necessary for Canada to be part of the deal, he then said that if a trilateral Nafta deal with Canada is impossible, a bilateral agreement between the U.S. and Mexico would also be acceptable. At this point the alarm bells went off, and as Globe and Mail correspondent Adrian Morrow said, "it looks like the U.S. and Mexico went far beyond bilateral issues and agreed to a pile of trilateral stuff without Canada." He also noted that while it was unclear whether any of the negotiated terms were okay with Canada, "it puts enormous pressure on Ottawa to agree or hold up the deal."Furthermore, Morrow points out that unless Canada already agreed to these trilateral issues — sunset compromise, IP etc. — via its back-channel with Mexico, "the U.S. and Mexico have just massively cranked up the pressure." In other words, Mexico just stabbed Canada in the back in order to get a deal with the US on preferential terms to Canada, just as Trump desired, and in vivid demonstration of applied game theory in practice.
US union heads meet with Trump over NAFTA - Leaders of major US unions met with President Donald Trump last week to discuss terms of the renegotiated North American Free Trade Agreement (NAFTA). A new trade pact solely with Mexico was announced by the Trump administration on Monday. The meeting with labor officials last week demonstrated the reactionary alignment of the unions with the “American First” nationalism of the White House.A statement by AFL-CIO President Richard Trumka issued in advance of the meeting began by praising Trump. “From what we have seen up to this point,” the AFL- CIO chief declared, “it is clear that this administration has made some progress, yet there is more that must be done.” Trumka continued, “We are meeting with the president to reaffirm what a good deal for working people really looks like, starting with strong workers’ rights backed up by effective enforcement tools unlike those that have failed in the past and led to the unrelenting outsourcing of work to Mexico...” The talk of “workers’ rights” is a cover for the anti-immigrant and nationalist program of the trade union bureaucracy. The new trade deal is aimed at giving US corporations even greater advantage and extracting concessions from Mexico and America’s other trade rivals. It will not lead to any lessening of the war on jobs and living standards of workers in the US, Mexico or any other country but an escalation of that war. Far from defending workers’ rights, the unions have spent decades colluding with corporate America to destroy them. In the face of the globalization of capitalist production in the 1970s and 1980s, the nationalist and pro-capitalist unions abandoned any resistance to the employers and in the name of making their “own” capitalists more competitive, collaborated in the destruction of the jobs and living standards of millions of workers. The promotion of rabid nationalism takes place amid escalating social tensions in the US, reflected in the recent teacher strikes and mounting opposition by United Parcel Service workers to a sellout deal accepted by the Teamsters. The unions are attempting to deflect worker anger by channeling it away from the capitalist system and directing it against workers in other countries.
US-Mexico trade pact takes aim at Washington’s rivals and the working class - US President Donald Trump’s announcement Monday of a bilateral US-Mexico trade deal that will supersede the three-country North American Free Trade Agreement (NAFTA) is an economic and geopolitical power play with major ramifications, not just for Canada, the US and Mexico, but for global economic and international relations.Full details of the US-Mexico trade pact have yet to be negotiated, let alone made public. Nevertheless, it is clear that the Trump administration has wrenched major concessions from Mexico impacting energy, financial services, intellectual property and the auto sector.Trump and his senior aides went out of their way to frame Monday’s announcement as a threat aimed at Canada, with the US president declaring that NAFTA was dead and Canada would be able to join the new US-Mexico agreement only if it negotiated “fairly,” i.e., bowed to key US demands.“I think with Canada, frankly, the easiest thing we can do is to tariff their cars coming in,” said Trump, referencing his threat to impose a 25 percent tariff on auto imports from Canada. “It’s a tremendous amount of money,” he continued, “and it’s a very simple negotiation… But I think we’ll give them a chance to probably have a separate deal. We can have a separate deal or we can put it into this deal.”Trump went on to repeat his longstanding demand that Canada scrap, or at least dramatically curtail, its agricultural supply-management systems, which severely limit imports of American dairy products and poultry. Seeking to maximize pressure on Ottawa, whose negotiators were excluded from the NAFTA renegotiation for the past month on the grounds that the talks were focused exclusively on US-Mexican issues, the Trump administration is vowing to formally notify Congress it has negotiated a successor agreement to NAFTA this Friday, whether Canada is on board or not.
U.S., Mexico Agree to Weaken Rights to Dispute Trade Practices —The Mexican government agreed to Trump administration demands to weaken key provisions of the North American Free Trade Agreement that allow business and government to challenge other member countries over trade policies. The changes will make it harder for Canada to join the deal hammered out between the U.S. and Mexico and announced on Monday. It will also draw opposition from big American business groups whose support has generally been vital for trade deals to win U.S. Congressional support. U.S. Trade Rep. Robert Lighthizer said, in a briefing Monday with reporters, that the two countries had agreed to drop a portion of the 24-year-old pact that gives participating countries the right to challenge penalties imposed by the other nations to combat alleged “dumping” or subsidies. The three countries would still be able to challenge such trade cases at the World Trade Organization in Geneva. But that process is seen as much slower and more cumbersome than resorting to the panels that have been created specially just for the three Nafta members. The upshot is that is will be harder for member countries to challenge each other over allegations of dumping, or selling goods at artificially low prices to grab market share. Canada has said that preserving that provision—known as Chapter 19 in the current Nafta—is important for its continued support of any rewrite of Nafta. The Trump administration has ramped up use of such penalties against Canadian exports over the past year. “That provision will not exist” if the U.S.-Mexico pact is ratified, Mr. Lightzhizer said. Mr. Lighthizer also said that the two sides had agreed to soften the Investor-State Dispute Settlement chapter in Nafta, a provision designed to give multinationals the right to challenge government decisions in special arbitration panels. Corporations say such provisions make it easier to invest in foreign countries. The Trump administrations has sought to discourage American investment abroad. Mr. Lighthzier said the existing protections would remain for “certain sectors where there’s contact with the government,” such as oil and gas, infrastructure and telecommunications. Other industries would have more limited recourse to ISDS provisions, making it harder for them to use the measures to challenge government regulation as they currently often do. Big U.S. business groups—backed by Republican leaders in Congress—have warned that weakening ISDS could prompt them to lobby against the new pact. While the Trump administration appears to have succeeded in getting Mexico to sign on to its proposals to weaken the enforcement provisions of the pact, U.S. officials in return compromised by significantly watering down their demands for a “sunset” provision that would have made the agreement expire automatically after a few years unless each of the countries took the active step of renewing it.
ISDS and the US - Jared Bernstein - I’ve been touting the fact, i.e., as I understand it, that this new US/Mex NAFTA agreement just struck yesterday largely gets rid of investor dispute rules (investor state dispute settlement, or ISDS) that many progressive have long complained about. (To be clear, whether this deal is going anywhere is a whole other story; I’m skeptical.) I’m working on a piece about how the new deal looks a lot better for workers on both sides of the border than prior agreements, but re ISDS, the very knowledgeable Lori Wallach tell me it “ends the possibility of any future U.S.-Canada ISDS cases. This is huge given major US-Canada cross investment.” For Mexico, where domestic courts are less reliable, investors who want to bring a case must first exhaust domestic court and administrative remedies, before turning to new procedures that significantly raise the bar to investor compensation (the fact that the Business Roundtable is already complaining about this part of the deal is revealing in this regard). But their are still at least two big, existing problems. First, ISDS has been used by corporate bullies of rich countries to extract millions in fines and fees from poorer countries, and not for investor takings (which would be legit) but for protections prohibited by trade deals (examples here and here). What I want to see much more in U.S. trade agreements–and Jay might agree–is less protectionism of the advanced countries’ investor class and its IP and drug patents, and more lifting of standards in poor countries. The second problem with ISDS is broader: Through the backdoor of trade agreements, the ISDS process imposes extreme property rights’ concepts rejected repeatedly by Congress and U.S. courts, such as the notion that governments should pay “regulatory takings” compensation to property owners for the right to enforce environmental, health and other safeguards that could undermine the value of their property or investment. We must not solve the problem of weak rule of law among our trading partners by having the broad public bear investment risk or by changing fundamental principles of U.S. law. Instead, investment risk must be borne by the investors themselves; it is their skin, not ours, that should be in the game. Final point. While the US hasn’t lost a case, a country is only really exposed to ISDS risk when partner countries have substantial investments in the other countries in the deal. That’s why, according to Lori, “54 of the 56 NAFTA ISDS cases to date attacking U.S. or Canadian laws were brought by investors from the Canada or the U.S., not from Mexico.” Surely, this makes no sense. ISDS isn’t in place–or at least it shouldn’t be–to be invoked in advanced countries with mature legal systems. Let the nationally-sanctioned, highly functional court systems work it out! (Jay: agree or disagree?.)
Marrying NAFTA and The TPP: The US-Mexico “Free Trade Agreement” - Barkley Rosser - I really am not sure where to begin Trump’s announcement yesterday of a supposed US-Mexico Free Trade Agreement. Most of the publicity has been about its automobile section, which some in the US hope will increase automobile production in the US, although that is not definitely the case. The two main parts are to increase the portion of parts made in North America from 62.5% to 75% in order to avoid facing tariffs. This apparently would affect Toyota, Nissan, and Mazda most severely, but hardly any other non-North American producer. Maybe some of those companies might shift some production to North America, maybe at least production of parts, but there is no reason to believe any such increase will go to the US rather than to Mexico, although probably some would. The other part is that at least 40-45%% of production must come from workers earning more than $16 per hour. Offhand that looks like it might help US workers. However, average US auto wages are $22 per hour while Mexican average auto worker wages are $10 per hour. This may help Mexican workers get higher wages; but, it is not obvious it will do much for US auto workers. Of course this is the big stick Trump is using on the Canadians: if they do not get on board with this agreement, they will face tariffs… But this is a potential mess given the complicated supply chains between the Canadian and US auto industries, and it is notable that the US auto industry has not supported imposing tariffs on foreign cars, precisely because of this. Now as a matter of fact there are some parts of this agreement that look like improvements. These would include tightened environmental and labor union rules for Mexico, as well as stronger property rights protections for US intellectual property, although some would question if this latter is really so great: making Mexicans pay more for US Big Pharma drugs? Also, the bottom line of the auto part of this would raise car prices for consumers in both nations. However, here is the great irony. Both Mexico and Canada have already agreed to these environmental, labor, and intellectual property rights rules. They did so when they signed on to the Trans-Pacific Partnership (TPP) agreement, which in fact both of them are still parties to. Trump removed the US from this almost immediately after becoming president, also denouncing the TPP as something just awful, even though the US led the negotiations for it to come about. So the US is out of it, but all the other 10 nations, including both Mexico and Canada, have followed Japan’s leadership to continue with the agreement and make it happen. So accepting these conditions on the part of Mexico was not a big deal at all. They have already done so, just not with the US.
With Friday Deadline Looming, Trump Says NAFTA Deal Likely But Trudeau Holding Out For "Right Deal" With a bilateral deal between Mexico and the US already ironed out, Canada said an agreement to salvage the trilateral NAFTA - which technically no longer exists - is possible by the Friday deadline, but it will be hard work to resolve specific issues as talks with the United States entered a second day. Canadian Prime Minister Justin Trudeau said his government is trying to reach agreement with the U.S. this week. But Trudeau added that Canada won’t sacrifice its goal of getting the "right deal."“We recognize that there is a possibility of getting there by Friday, but it is only a possibility, because it will hinge on whether or not there is ultimately a good deal for Canada,” he said at a press conference in northern Ontario on Wednesday. “No NAFTA deal is better than a bad NAFTA deal.”“We’re going to be thoughtful, constructive, creative around the table but we are going to ensure that whatever deal gets agreed to is the right deal for Canada and the right deal for Canadians.”Trump earlier set a Friday deadline for the three countries to reach an in-principle agreement, and is pressuring Canada to strike a deal by week’s end, which is when the Trump administration plans to inform Congress that he intends to sign a new trade pact with Mexico in 90 days that would replace Nafta. If Canada holds out, Trump warned he would levy tariffs on Canada if it does not come on board with revised trade terms.This gives Canada three options according to Bloomberg: either strike a deal both can live with, cave to Trump’s pressure tactics or dig in and see what the U.S. will do. Canadian Foreign Minister Chrystia Freeland said Wednesday that she was optimistic that progress can be made this week, but she added that much work remained to be done to iron out the details: "When it comes to specific issues, we have a huge amount of work to do."
North America's Auto Supply Chain Up In Air As Canada Wants In On 'Nafta 2.0' --Major car manufacturers are still sifting through how, where, and with what they will make their products amid a rejiggered North American Free Trade Agreement (NAFTA). Canadian Prime Minister said in a statement Monday that he "welcomed the progress" in negotiating a new Nafta deal between the U.S. and Mexico and that he hoped the U.S. and Canada could also come to a "successful conclusion of negotiations."This afternoon I spoke with President Trump – get the details on our call: https://t.co/yQBs0nXGQF — Justin Trudeau (@JustinTrudeau) August 27, 2018 To that end, Canada's foreign minister Chrystia Freeland has been meeting in Washington D.C. this week with U.S. Trade Representative Robert Lighthizer over how Canada can take part in a new trade bloc. Auto industry analysts at LMC Automotive says Canada would have to be included in any new agreement, which it dubs "Nafta 2.0." Otherwise, a well-integrated supply chain honed over the 24 years of Nafta 1.0's existence would be upended. But with Congressional approval needed for a new deal and mid-term elections, a Nafta 2.0 could "be delayed . . ., adding to the uncertainty of the proposed agreement getting finalized."While the new deal with Mexico, and potentially Canada, includes new rules on intellectual property, textiles and financial services, Nafta 2.0 is creating the most uncertainty in the North American automotive industry, which became tightly integrated through Nafta 1.0.One provision requires that a higher percentage of vehicles imported to the U.S. be made at factories that pay up to $16 per hour. LMC says the provision "could significantly impact cost of OEMs and suppliers doing business in Mexico" where wages are up to 75 percent less than in Canada and the U.S. The new deal reached with Mexico includes provisions on the sourcing of parts used in vehicles sold on a tariff-free basis in North America. Among the main provisions are that 75 percent of the parts going into cars be sourced in either the U.S. or Mexico to qualify as tariff-free, up from the original 62.5 percent domestic content requirement in Nafta 1.0.
Is there even such a thing as a ‘Made in America’ vehicle anymore? --One of the most popular vehicles in the United States is a perfect example of why it would be so hard and so destructive to impose tariffs on Canadian-made cars in the name of protecting American ones. The Toyota RAV4 — the bestselling non-truck in America — is made in Woodstock, Ont. In fact, 247,633 of them were made there last year. The process to build each one is an intricate dance of manufacturers and suppliers in multiple countries, with hundreds of trucks a day crossing borders back and forth between Canada, the United States and Mexico to deliver parts.
- The engines are shipped from West Virginia and Alabama.
- The transmissions are made by a supplier in North Carolina.
- The seats are built in Woodstock, Ont., but a supplier brings in wire harnesses from Mexico and metal brackets from Kentucky.
- The sunroof and door frames are made in Stratford, Ont., with parts coming from all over North America.
There are more than 300 trucks a day pouring into the Woodstock plant, criss-crossing borders and making sure the operation has the parts it needs. "From Woodstock, there's a truck going to Michigan every single hour of every day to pick up parts," says Ray Tanguay, former CEO and president of Toyota Motor Manufacturing Canada. And there are other trucks going to various suppliers across the continent.The Woodstock plant operates under a "just in time" delivery process. That means there's no warehouse to store parts. All those trucks bring all those parts by the hour. They're unloaded and funnelled into the manufacturing process immediately. "Just in time means we are very dependent on suppliers' reliability and quality," says Tanguay, who most recently served as an adviser on the auto industry to the federal and Ontario governments. But it also means the entire process is dependent on trade agreements, border crossings and duty agreements. It's also dependent on the absence of paperwork.
Trump’s NAFTA Deal Simply Can’t Solve America’s Manufacturing Problems - President Trump and his Mexican counterpart, Enrique Peña Nieto, recently announced resolution of major sticking points that have held up the overall renegotiation of the NAFTA Treaty (or whatever new name Trump confers on the expected trilateral agreement). At first glance, there are some marginal improvements on the existing treaty, especially in terms of higher local content sourcing, and the theoretic redirection of more “high wage” jobs back to the U.S.These benefits are more apparent than real. The new and improved NAFTA deal won’t mean much, even if Canada ultimately signs on. The deal represents reshuffling a few deck chairs on the Titanic, which constitutes American manufacturing in the 21st century: a sector that has been decimated by policies of globalization and offshoring.Additionally, what has remained onshore is now affected adversely to an increasing degree by the Pentagon. The experience of companies that have become largely reliant on military-based demand is that they gradually lose the ability to compete in global markets. The three biggest reasons are:
- 1. The huge diversion of national R&D investment into grossly overpriced and mostly unjustifiable DoD R&D programs has tremendously misallocated a large proportion America’s finest engineering talent toward unproductive pursuits (e.g., the tactical fighter fiascos, such as the F-35 Joint Strike Fighter that, among myriad other deficiencies, cannot fly within 25 miles of a thunderstorm; producing legacy systems that reflect outdated Cold War defense programs to deal with a massive national power, as opposed to combatting 21st-century terrorist counterinsurgencies). The NAFTA reforms won’t change any of that.
- 2. By extension, the wasteful, cost-is-irrelevant habits of mind inculcated into otherwise competent engineers by lavish DoD cost-plus contracting have ruined these engineers for innovation in competitive, cost-is-crucial civilian industries.
- 3. The ludicrously bureaucratized management systems (systems analysis, systems engineering, five-year planning and on and on through a forest of acronyms) that DoD has so heavily propagandized and forced on contractors has, in symbiosis with the Harvard Business School/Wall Street mega-corporate managerial mindset, thoroughly wrecked efficient management of most sectors of American industry.
Let’s drill down to the details of the pact, notably automobiles, which have comprised a big part of NAFTA. Under the new deal, 25 percent of auto content can be produced elsewhere than North America, a reduction from 37.5 percent that could be produced outside before, because of themultinational nature of every major automobile manufacturer. Twenty-five percent is still a very large percentage of the high-end auto content, much of which is already manufactured in Europe—especially expensive parts like engines and transmissions, especially for non-U.S. manufacturers, that won’t be much affected by this deal.
EU Willing To Scrap Car Tariffs In US Trade Deal: Politico -- Trump's hard ball negotiating tactics appear to be bearing some fruit, with Politico reporting that Brussels is willing to scrap tariffs on all industrial products, including cars, in trade talks with the United States, EU trade chief Cecilia Malmström said Thursday."We said that we are ready from the EU side to go to zero tariffs on all industrial goods, of course if the U.S. does the same, so it would be on a reciprocal basis,” Malmström told the European Parliament’s trade committee. Sending the ball in the Trump's court, she said that "we are willing to bring down even our car tariffs down to zero … if the U.S. does the same,” adding that “it would be good for us economically, and for them."While the EU’s car tariff of 10% is higher than the general U.S. auto tariff of 2.5%, America imposes a 25% duty on light trucks and pick-ups.The European gambit may be a non-starter, as during a first meeting in Washington last week, an EU proposal for including cars in the discussions was rejected by the U.S. Brussels and Washington are holding preparatory trade talks to define the scope of a potential future agreement.Malmström’s comment goes beyond what was agreed in July in the joint statement between European Commission President Jean-Claude Juncker and U.S. President Donald Trump, which only mentioned eliminating tariffs, non-tariff barriers and subsidies for “non-auto industrial goods.” Malmström insisted that the discussions were not about “restarting TTIP” but aiming for “a more limited trade agreement.” Furthermore, Agriculture would not be in the agreement, nor public procurement as it looks to today, she said. Following the report, European automakers jumped to the top of the Stoxx 600, which pared declines along with the DAX pared some declines amid hope of improving trade tensions with the U.S., with most names rising over a percent: But as Bloomberg notes, any trade progress depends on a positive response from the U.S. And with frictions remaining on Nafta and China talks, any trade pact will continue to be shrouded in uncertainty. The conclusion: "fon't expect a sustainable uplift from this news."
Trump Rejects EU Offer For No Auto Tariffs - Earlier today, EU trade chief Cecilia Malmström surprised pundits and sent shares of European automakers higher when she said that Brussels was willing to scrap tariffs on autos, among all other industrial products, if the US would reciprocate. "We said that we are ready from the EU side to go to zero tariffs on all industrial goods, of course if the U.S. does the same, so it would be on a reciprocal basis,” Malmström told the European Parliament’s trade committee. Sending the ball in the Trump's court, she said that "we are willing to bring down even our car tariffs down to zero … if the U.S. does the same,” adding that “it would be good for us economically, and for them."As a reminder, while the EU’s car tariff of 10% is higher than the general U.S. auto tariff of 2.5%, America imposes a 25% duty on light trucks and pick-ups.So with Europe offering a trade olive branch to Trump, what was the US president's response? Simple: "It’s not good enough," Trump told Bloomberg News during his extended interview, in response to the EU proposal. The reason: "their consumer habits are to buy their cars, not to buy our cars." Trump then said that the "the European Union is almost as bad as China, just smaller." Trump had previously ordered his Commerce Department to investigate whether car imports imperil national security, under the same provision he invoked to impose global tariffs on steel and aluminum earlier this year. The president has indicated he could impose tariffs of as much as 25 percent on the foreign-made autos. The findings of the auto study are due by February, though the president could decide to act before then. This week, Trump threatened Canada with auto tariffs if the country failed to join his trade deal with Mexico to replace Nafta.
Ford Kills Plan To Build China Plant, Blames Trade War - Just hours after being downgraded to one notch above junk (in what would be one of the biggest 'fallen angels' of this cycle) - due to the erosion in Ford’s "global business position and the challenges it will face implementing" its restructuring effort that could rack up $11 billion in the next three to five years - Ford has canceled plans to import a new crossover model from a plant in China, claiming that President Trump’s tariffs compromised the business case for bringing the vehicle to the U.S. market. As Bloomberg reports, Kumar Galhotra, president of North America, said in a conference call with reporters that Trump’s move to slap China-built autos with an additional levy of 25 percent undermined the profitability of the Focus Active that Ford planned to start shipping into the U.S. about a year from now, adding that the company decided that it wasn’t worth investing more money in a vehicle that it would have sold fewer than 50,000 units a year in the U.S.“We have to make a judgment call on the profitability of that particular project,” Galhotra said.“Our viewpoint on Focus Active was that, given the tariffs, obviously our costs would be substantially higher, and the resulting profitability of that product, our resources could be better deployed."
Scapegoated China Stunned By Trump Tweets From Some Alternative Universe - Official newspaper China Daily launched a scathing attack on President Trump in an op-ed, considered a Beijing-by-proxy mouthpiece, blasting his repeated accusations against China on Twitter, proclaiming that his messages are from an alternative universe. Claiming that Trump is casting China as a "scapegoat," after accusing them of hacking Hillary's e-mail server:"that will not deter the US president from smearing China's image as he desperately needs a scapegoat in the run-up to the midterm elections, so he can divert public attention from the troubles the White House has become mired in". The relatively strongly-worded editorial also took aim at Trump directly, commenting:"To the thinking person, there are few things more disconcerting than a tweet by the US President, as they initially seem to accord to reality but then quickly turn into messages from some alternative universe."As The Economic Times reports, The Daily also expressed displeasure with another tweet where Trump blamed the Chinese communist regime for the lack of progress in the rapprochement with North Korea, and underlined that:"China, against whom he is launching a trade war, is an easy candidate for that role, since it has long been demonised by US politicians." The article further notes that Trump indiscriminately uses his Twitter account to unleash his anger at his 'enemies'"...there is method behind his twittering... to be fair, it is not just China that Trump is maligning. The Federal Bureau of Investigation and Department of Justice have also had their integrity impugned."The straight-from-officials 'opinion piece' concluded with a jab at the deplorables: "Since his supporters have shown a willingness to suspend disbelief, we can no doubt look forward to more such tales."
Exclusive: U.S. accuses China of ‘super aggressive’ spy campaign on LinkedIn (Reuters) - The United States’ top spy catcher said Chinese espionage agencies are using fake LinkedIn accounts to try to recruit Americans with access to government and commercial secrets, and the company should shut them down. William Evanina, the U.S. counter-intelligence chief, told Reuters in an interview that intelligence and law enforcement officials have told LinkedIn, owned by Microsoft Corp., about China’s “super aggressive” efforts on the site. He said the Chinese campaign includes contacting thousands of LinkedIn members at a time, but he declined to say how many fake accounts U.S. intelligence had discovered, how many Americans may have been contacted and how much success China has had in the recruitment drive. German and British authorities have previously warned their citizens that Beijing is using LinkedIn to try to recruit them as spies. But this is the first time a U.S. official has publicly discussed the challenge in the United States and indicated it is a bigger problem than previously known. Evanina said LinkedIn should look at copying the response of Twitter, Google and Facebook, which have all purged fake accounts allegedly linked to Iranian and Russian intelligence agencies. “I recently saw that Twitter is cancelling, I don’t know, millions of fake accounts, and our request would be maybe LinkedIn could go ahead and be part of that,” said Evanina, who heads the U.S. National Counter-Intelligence and Security Center. It is highly unusual for a senior U.S. intelligence official to single out an American-owned company by name and publicly recommend it take action. LinkedIn says it has 575 million users in more than 200 counties and territories, including more than 150 million U.S. members. Evanina did not, however, say whether he was frustrated by LinkedIn’s response or whether he believes it has done enough.
Trump To Launch Another $200BN In China Tariffs As Soon As Next Week- Stocks Tumble - Headlines from The Wall Street Journal that merely confirmed what everyone and their pet rabbit already knew - that $200 billion more China tariffs were set to hit next week as the comment period expires - sparked selling... everywhere. While WSJ admits that Trump has yet to make up his mind, they report sources say he backs the additional tariffs (which anyone who can fog a mirror would know from his stance for the last month). Trump's decision is hardly a surprise: as we said before, from Trump's perspective, i.e. the stock market, US GDP, consumer confidence and so on, he is winning the trade war, so he has little to lose especially with the Chinese stock market deep in bear market territory. And yet, the sharp drop in U.S. stocks suggested that investors were caught offside, and as Bloomberg notes, "Maybe the progress on NAFTA somehow lulled the market to believe he was putting on China on the back burner until the mid-term elections." Maybe, but when it comes to Trump, it's all through the lens of the stock market, and until something there snaps, the status quo will continue. What happens next? China will retaliate in kind once the U.S. tariffs become official. With EM in turmoil and the S&P 500 already at all-time high, "it's hard to put a positive spin on the news." Sure enough, Stocks dumped:
US, Canada to resume urgent trade talks Friday (AP) — Negotiators for the United States and Canada will meet again Friday morning to resume their urgent talks to revamp the North American Free Trade Agreement. Canadian Foreign Minister Chrystia Freeland met for less than five minutes late Thursday night with U.S. Trade Representative Robert Lighthizer. She told reporters she "had a couple of things to say." Freeland came into the USTR building a total of four times Thursday. She and Lighthizer held the longest negotiating sessions since she arrived in Washington Tuesday. Earlier Thursday, Freeland told reporters, "We continue to be encouraged by the constructive atmosphere that I think both countries are bringing to the table." On Monday, the United States and Mexico reached an agreement to replace NAFTA, a 24-year-old pact involving those two countries and Canada. But the new deal excluded Canada. Freeland hurried to Washington to try to repair the damage. She's seeking to forge a three-country deal by Friday, starting a 90-day countdown that would let Mexican President Enrique Pena Nieto sign the pact before leaving office Dec. 1. "We're working very intensively," Freeland says.
Loonie Slides As Canadian Officials Reportedly Doubt NAFTA Deal Will Get Done Despite outwardly optimistic appearances from Canada's Freeland, talks between Canadian and U.S. trade negotiators reportedly turned sour last night and Trudeau government officials are now expressing concern that a final NAFTA deal will not be concluded on Friday. “That was a long, intensive conversation with Ambassador Lighthizer and his team. The atmosphere remains constructive. ...We are making progress,” Ms. Freeland said after a session that ended at 8:30 p.m. She returned at 10:15 p.m. for another meeting that lasted just five minutes. Ms. Freeland told reporters that she had “a couple things to say” to Mr. Lighthizer and she would meet him again Friday. According to The Globe reports, USTR Lighthizer has refused to budge on eliminating Chapter 19 - which allows Ottawa to challenge punitive American tariffs on imports before binational panels - and refusing to keep current cultural protection provisions in a redrafted North America free-trade agreement. Ms. Freeland, who said on Thursday a deal is possible, had offered the Americans concessions on increased U.S. dairy exports to Canada U.S. and on intellectual property, but Mr. Lighthizer was unwilling to offer any concessions of his own on the two key Canadian demands. However, it's not all 'give' from Canada, as they are reportedly holding the line on Buy American demands, telling the U.S. that it must have the same access to bid on U.S. govt contracts or will impose Buy Canadian provisions on U.S. firm. As The Globe reports so ominously: There is now deep concern within the Canadian negotiating team that the talks which continue this morning will end in failure.
Freeland Confirms US, Canada Trade Talks To Continue, Sees Win-Win-Win Deal Within Reach - Canadian Foreign Affairs Minister Chrystia Freeland held a press conference at 1630ET to confirm the next steps in US-Canada trade talks pointing out that she believes US is negotiating with good faith (dismissing the US media's assumptions from Trump's leaked comments). Freeland added that "Canada will only sign a pact that benefits Canadians," adding that "a win-win-win agreement is within reach." She also noted that she has agreed with USTR Lighthizer that she will not negotiate in public, adding that "progress has been made, but there is more work to be done." Summary:
- In an anticlimactic conclusion to the week's top trade event, talks between the U.S. and Canada ended Friday without a deal on a new North American Free Trade Agreement, but the two parties were said to have made "some progress" and discussions are expected to continue next week.
- The Trump administration had given Canada until Friday to join a preliminary deal it reached earlier in the week with Mexico or risk being left out.
- Canadian Foreign Affairs Minister Chrystia Freeland is expected to brief reporters at 4:30 p.m. local time on Friday at the Canadian Embassy in Washington. She has been in Washington since Tuesday in an accelerated push to reach an agreement with the U.S. over revamping Nafta, after the US reached a bilateral deal with Mexico on Monday.
- The White House has issued a letter from President Trump to the House speaker and the president of the Senate about negotiations with Mexico and Canada on trade agreements.
U.S. and Canada End Friday Without Reaching a Deal on New NAFTA - Talks between the U.S. and Canada ended Friday without a deal on a new North American Free Trade Agreement, but discussions are expected to continue next week, according to a person familiar with the matter. Canadian Foreign Affairs Minister Chrystia Freeland is expected to brief reporters at 4:30 p.m. local time on Friday at the Canadian Embassy in Washington, according to a Canadian government statement. Freeland has been in Washington since Tuesday in an accelerated push to reach an agreement with the U.S. over revamping Nafta. The Trump administration had given Canada until Friday to join a preliminary deal it reached earlier in the week with Mexico or risk being left out. The Wall Street Journal reported earlier that the U.S. intends to notify Congress on Friday that it’ll proceed with changes to Nafta with Mexico, and that it remains open to continuing negotiations with Canada. Canadian Prime Minister Justin Trudeau on Friday said he’ll only sign an agreement that’s right for Canada. Trudeau reiterated his government wouldn’t concede to U.S. demands to dismantle its dairy system, known as supply management. Talks were also hung up on U.S. demands to eliminate dispute-resolution panels that Ottawa considers essential, two Canadian officials said Friday. Canada has been clear about its “red lines” around Nafta, Trudeau said at an event in Oshawa, Ontario. “We are looking forward to signing the right deal for Canada. But we have also been very clear, we will only sign a deal if it is a good deal for Canada.”
NAFTA Notice: A Final Deal Must Be Judged on Whether It Will Stop NAFTA’s Serious Ongoing Damage (PDF) Lori Wallach, Public Citizen - Note: The Trump administration gave notice to the U.S. Congress on Friday, Aug. 31 of its intent to sign a renegotiated North America Free Trade Agreement (NAFTA). Aug. 31 is the last day to give notice for a deal to be signed by outgoing Mexican President Enrique Peña Nieto. The U.S. reached agreement with Mexico on new terms, but talks with Canada are ongoing. The text of any deal would be made public only after 30 days’ notice. While much attention has been given to whether various deadlines can be met and the political and legal implications of various scenarios, the fundamental question is whether the content of a new agreement can halt NAFTA’s ongoing damage: “We understand that progress has been made on some essential NAFTA changes we have long sought, like razing NAFTA’s investor tribunals where multinational corporations have grabbed $392 million in compensation from North American taxpayers after attacking environmental and health policies. But swift and certain enforcement of what we understand are improved labor standards is lacking and must still be added or U.S. corporations will keep outsourcing jobs to Mexico to pay workers a pittance, dump toxins and import products back to the U.S. for sale here. Given the encouraging news about some of the key NAFTA changes we have long sought, we are closely monitoring the ongoing process with respect to improvements in labor enforcement that are necessary to counter NAFTA job outsourcing. We also closely monitoring the ongoing negotiations with Canada where several important consumer protection issues are at stake, including extended monopoly rights for pharmaceutical corporation that would increase medicine prices. Ultimately, we must see the final text to know whether our demands have been met. Any final deal must be judged on whether it will stop NAFTA’s serious ongoing damage, given the pact now helps corporations outsource more jobs to Mexico every week (Almost one million American jobs have been government-certified as lost to NAFTA) and launch new NAFTA investor attacks on health and environmental laws after already $392 million has been grabbed from taxpayers.
Trump's Plan to Balloon the US Trade Deficit - Trump claims that his various trade wars--against Europe, Asia, North America, and pretty much everybody else--are intended to bring down the US trade deficit. While it's true that the US trade deficit is large, many have argued that it's not really the result of unfair trading practices of the United States' trade partners but rather the Americans' woeful lack of savings. At any rate, despite all Trump's huffing and puffing, the United States' trade deficit for July exploded upwards:The Commerce Department said on Tuesday the goods trade gap surged 6.3 percent to $72.2 billion last month. Exports of goods dropped 1.7 percent to $140.0 billion, weighed down by a 6.7 percent plunge in shipments of food, feeds and beverages... Last month, there were also decreases in exports of capital and consumer goods, though motor vehicle exports rose. Imports of goods increased 0.9 percent to $212.2 billion in July, boosted by imports of food, industrial supplies and capital goods. Why is it that the US trade deficit looks like ballooning instead of narrowing despite all the American demagoguery aimed at virtually all of its trading partners? Phil Levy at Forbes offers a succinct explanation as to why the Trump administration's actions are precisely the opposite of what you'd do to decrease the American trade deficit: If there were a three-part plan to increase the trade deficit, the first part would attempt to boost investment in the United States while trimming national saving...The trick to expanding the trade deficit would be to make sure that federal budget deficits increase. Unless there is an offsetting move in other domestic saving, this should cut national saving. The combination of investment incentives and government dissaving would be a strong start toward growing the trade deficit. The second part of the plan would be to undercut growth in major trading partner economies...the trick would be to instill doubt and foster economic turmoil in partners such as the European Union and China. If the United States could effectively destabilize those economies, U.S. exports should fall. If you pair that with rapid U.S. growth, it should also grow the U.S. trade deficit. And, for the coup de grace, you'd engineer a currency crisis in other countries that drives up the value of the dollar relative to other currencies: The third and final element would be to try and stoke a currency crisis of some sort. Perhaps find an emerging market that is teetering and see if you can push it over the edge. Not only will this directly affect trade with the target country – as its currency falls, its goods look cheaper for the United States to import and U.S. goods look more expensive for export.
U.S. government to pay $4.7 billion in tariff-related aid to farmers (Reuters) - The U.S. Department of Agriculture said on Monday its farm aid package would include $4.7 billion in direct payments to farmers to help offset losses from retaliatory tariffs on American exports this season. The bulk of the payments, $3.6 billion, would be made to soybean farmers. That amounts to $1.65 per bushel multiplied by 50 percent of expected production, Undersecretary for Farm Production and Conservation Bill Northey said on a conference call. China has traditionally bought about 60 percent of U.S. soybean exports. But it has been largely out of the market since implementing tariffs on U.S. imports in retaliation for the Trump administration’s tariffs on Chinese goods. “An announcement about further payments will be made in the coming months if warranted,” Agriculture Secretary Sonny Perdue said. The aid package, announced at $12 billion in July, will also include payments for sorghum of 86 cents per bushel multiplied by 50 percent of production, 1 cent per bushel of corn, 14 cents per bushel of wheat, and 6 cents per pound of cotton. Payments for hog farmers will be $8 per pig multiplied by 50 percent of Aug. 1 production, while dairy farmers will receive 12 cents per hundred weight of production, Northey said. Sign-up for the program will begin on Sept. 4, to coincide with the 2018 harvest, and end in January. Farmers will need to present production evidence to collect payments and payments are capped at $125,000 per person. The program will also include $1.2 billion in purchases of commodities, including pork and dairy products, to be spread out over several months
Trump threatens to pull US out of World Trade Organization - President Donald Trump has threatened to withdraw the US from the World Trade Organization (WTO), claiming it treats his country unfairly."If they don't shape up, I would withdraw from the WTO," Mr Trump said in an interview with Bloomberg News. The WTO was established to provide rules for global trade and resolve disputes between countries.Mr Trump says the body too often rules against the US, although he concedes it has won some recent judgments.He claimed on Fox News earlier this year that the WTO was set up "to benefit everybody but us", adding: "We lose the lawsuits, almost all of the lawsuits in the WTO."However, some analysis shows the US wins about 90% when it is the complainant and loses about the same percentage when it is complained against. Mr Trump's warning about a possible US pull-out from the WTO highlights the conflict between his protectionist trade policies and the open trade system that the WTO oversees. Washington has recently blocked the appointment of new judges to the WTO's Geneva-based dispute settlement body, which could potentially paralyse its ability to issue judgments.US Trade Representative Robert Lighthizer has also accused the WTO of interfering with US sovereignty.It comes as President Trump set a Friday deadline for Canada to sign a new agreement with the US and Mexico. He has threatened to tax the country's automotive sector or cut it out entirely.The US president has been sounding off about unfair trade since even before he became president.Mr Trump said on Thursday that the 1994 agreement to establish the WTO "was the single worst trade deal ever made".The US has been embroiled in a tit-for-tat trade battle on several fronts in recent months.
Trump’s Handling of Turkey’s Economic Crisis Should Scare Us All - A Turkish lira crisis involving dollar-denominated debt, a current account deficit, and foreign-exchange reserves may seem like an arcane Wall Street concern, right up there with bond-market liquidity and congestion at Teterboro Airport. But Turkey’s economic crisis is anything but. It represents the truly scary financial trends that are keeping investment bankers up at night: the weakening of emerging markets that’s threatening to spill across borders, a massive wave of maturing corporate debt that needs to be refinanced, and the ending of an era of ultralow rates We can now add an even scarier trend to the list: President Donald Trump’s willingness to make things worse. While the U.S. government has historically been a supportive force during financial panics, Trump has been treating Turkey’s economic meltdown like a bargaining chip, one more weakness to be exploited. This shouldn’t just scare Turkey. It should scare everyone. Turkey’s economic troubles long predate the Trump administration. Over the past 15 years, President Recep Tayyip Erdogan has transformed a secular democracy on the cusp of EU membership into an illiberal autocracy, where the judicial, legislative, and executive branches of the government, as well as the media, are all controlled by one man, namely himself. It’s a country where tens of thousands of judges, teachers, police officers, journalists, and civil servants have been fired and jailed on dubious terrorism charges; a country where excessive government spending and excessive corporate borrowing have left the government with insufficient dollars to pay back its debts. Until recently, Wall Street was willing to fund this oncoming train wreck because Turkish debt and equities offered the possibility of much higher returns compared to U.S. and European securities. Sure, investors were troubled by Erdogan’s debt-fueled infrastructure binge and overreliance on foreign financing. But in an era of near-zero interest rates in developed markets, investors were inclined to overlook a lot, even Erdogan’s more eccentric beliefs—such as his unwavering conviction that high interest rates cause inflation (they don’t) and his assertion that Moody’s, the U.S. credit-ratings agency, is part of a plot to undermine his regime. (It’s not.) Then President Trump came along.
Judge rules against Trump's attempt to weaken federal unions – A federal judge struck down significant sections of three executive orders on government workers, dealing a blow to President Donald Trump's attempts to curtail the power of labor unions representing federal employees. In an opinion Saturday, U.S. District Judge Ketanji Brown Jackson said Trump exceeded his authority because Congress has established collective bargaining rights for federal employees through the Federal Service Labor-Management Relations Act.The three executive orders, signed in May, were an attempt to make good on a promise in Trump's State of the Union address to make it easier for the government to reward good workers and fire bad ones. But four labor unions representing federal workers sued, arguing that Trump was attempting to unilaterally dictate new terms to labor contracts they had already negotiated.Specifically, Trump's orders attempted to cap the amount of time union officials employed by the federal government can spend on union business, speed up disciplinary procedures and unilaterally adopt performance-based pay plans. Jackson said presidents do have the power to sign executive orders on federal employee-management relations – but only as long as they don't conflict with the law. On balance, the judge wrote in her 122-page decision, "this Court has decided that the unions have the better of this argument."
Trump Orders Pay-Freeze For Federal Workers -- Government Worker wages rose just over 2% in the last year (while private sector workers saw wages rise over 5%), but President Trump has "determined that for 2019, both across-the-board pay increases and locality pay increases will be set at zero," for non-military federal employees.Trump made the announcement in a letter released by the White House on Thursday to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, citing the need to “maintain efforts to put our Nation on a sustainable fiscal course. However, as Bloomberg notes, Congress can still raise federal workers’ pay in spending legislation. The Senate has already approved a 1.9% pay increase for next year but the House would still need to approve it. The House version of the legislation doesn’t include a raise. The two bills must now be reconciled.The president’s move could have ripple effects in the Nov. 6 congressional elections for members of his party in competitive House districts with large numbers of federal employees. Just south of Washington, those areas include Representative Barbara Comstock in northern Virginia and Representative Scott Taylor in Virginia Beach. Had Trump not acted by Friday, federal workers would have received an automatic across-the-board pay increase of 2.1 percent and locality pay increases averaging 25.7 percent under the 1990 Federal Employees Pay Comparability Act, according to the letter.
Trump Signs Executive Order on Retirement Savings – WSJ —President Trump signed an executive order Friday directing the government to review rules requiring retirees to start taking annual withdrawals from retirement funds after they turn 70½ and to consider making it easier for small businesses to offer employees 401(k) plans.The action was billed by the White House as a push to better prepare workers for retirement. As part of the initiative, the Treasury Department would review the rules on required minimum distributions from retirement plans to see if investors can keep more money for a longer time in 401(k)s, individual retirement accounts and other tax-sheltered savings plans. If successful, it could allow retirees to spread retirement savings over a longer period. The executive order also would direct the Treasury and Labor departments to consider issuing regulations that could make it easier and cheaper for smaller employers to band together to offer 401(k)-type plans for their workers. “Small businesses will be able to pool their resources so that they can have the same purchasing power or even more, frankly, as large businesses.” The arrangement has been available, but only to employers with an affiliation or connection, such as members of the same industry trade association. “We will try to find policy ideas that will make joining a 401(k) plan a more attractive proposition for small employers to the ultimate benefit of their employees,” said Preston Rutledge, assistant secretary of labor for the Employee Benefits Security Administration. Dan Kowalski, counselor to the secretary of the Treasury, said the initiative aims to make multiemployer plans more understandable and useful for employees and less costly and burdensome for employers. It will also look to modernize the life-expectancy tables that are used to determine required minimum distributions. The White House effort draws from a bipartisan Senate bill and a House Republican plan to make retirement and savings part of a push for tax legislation later this year. A bill known as the Retirement Enhancement and Savings Act hasn’t advanced much amid a slim congressional election-year calendar and partisan tensions over tax policy. However, the bill has attracted support from financial-services companies and AARP, the advocacy group for older Americans.
Trump warned evangelical leaders of 'violence' if GOP loses midterms: report | TheHill: President Trump reportedly told evangelical leaders at the White House on Monday that Republican losses in this year's midterms will lead to liberals "violently" overturning his administration's accomplishments for the Christian community. "This Nov. 6 election is very much a referendum on not only me, it's a referendum on your religion, it's a referendum on free speech and the First Amendment," Trump said during a private portion of an event in the State Dining Room, according to recorded excerpts obtained by NBC News. He added that there is an "unbelievable" amount of hatred and anger "for you and for me and for my family," partly because of what he's accomplished.If the GOP loses control of Congress, he warned, "they will overturn everything that we've done and they'll do it quickly and violently, and violently." It's unclear who specifically Trump was referring to. "There's violence. When you look at Antifa and you look at some of these groups — these are violent people," he said. Trump and other Republicans have frequently tried to connect liberals to the far-left group of anti-fascists known as Antifa, which has been responsible for violence and escalated tensions at various rallies around the country. Republicans are hoping to stave off Democratic efforts to retake control of the House and Senate. A RealClearPolitics average of polls shows Democrats with a nearly 7-point advantage on the generic ballot.
U.S. is denying passports to Americans along the border, throwing their citizenship into question - WaPo — On paper, he’s a devoted U.S. citizen. His official American birth certificate shows he was delivered by a midwife in Brownsville, at the southern tip of Texas. He spent his life wearing American uniforms: three years as a private in the Army, then as a cadet in the Border Patrol and now as a state prison guard. But when Juan, 40, applied to renew his U.S. passport this year, the government’s response floored him. In a letter, the State Department said it didn’t believe he was an American citizen. As he would later learn, Juan is one of a growing number of people whose official birth records show they were born in the United States but who are now being denied passports — their citizenship suddenly thrown into question. The Trump administration is accusing hundreds, and possibly thousands, of Hispanics along the border of using fraudulent birth certificates since they were babies, and it is undertaking a widespread crackdown. In a statement, the State Department said that it “has not changed policy or practice regarding the adjudication of passport applications,” adding that “the U.S.-Mexico border region happens to be an area of the country where there has been a significant incidence of citizenship fraud.” But cases identified by The Washington Post and interviews with immigration attorneys suggest a dramatic shift in both passport issuance and immigration enforcement. In some cases, passport applicants with official U.S. birth certificates are being jailed in immigration detention centers and entered into deportation proceedings. In others, they are stuck in Mexico, their passports suddenly revoked when they tried to reenter the United States. As the Trump administration attempts to reduce both legal and illegal immigration, the government’s treatment of passport applicants in South Texas shows how U.S. citizens are increasingly being swept up by immigration enforcement agencies. Juan said he was infuriated by the government’s response. “I served my country. I fought for my country,” he said, speaking on the condition that his last name not be used so that he wouldn’t be targeted by immigration enforcement.
Toddler dies after ICE detainment, lawyer alleges substandard care | TheHill: A migrant mother and her lawyers allege that substandard care at a detention facility run by Immigration and Customs Enforcement (ICE) is to blame for her toddler’s death six weeks after their release. Yazmin Juarez, 20, and her 18-month-old daughter, Mariee, came to the U.S. from Guatemala via the Rio Grande, according to CNN. Juarez sought asylum and was detained by ICE agents. She and her child were placed in the South Texas Family Residential Center in Dilley, Texas. Juarez’s lawyers say Mariee contracted a respiratory infection at the center, which "went woefully under-treated for nearly a month." Juarez sought treatment for her daughter and was prescribed medication that her lawyers say did not help her daughter. Upon their release, Juarez and Mariee flew to New Jersey to be with Juarez’s mother. Mariee was then hospitalized for respiratory failure and died six weeks later in Philadelphia, according to CNN. "A mother lost her little girl because ICE and those running the Dilley immigration prison failed them inexcusably," the law firm told CNN. "We are working with Yazmin and her family to obtain justice for the failures by ICE and others, and to ensure that no other family suffers such a needless and devastating loss."
Sparking More Calls for His Ouster, Chuck Schumer Cuts Deal With Mitch McConnell to Fast-Track Seven Trump Judges - In addition to openly refusing to pressure his caucus to unite against President Donald Trump's Supreme Court pick Brett Kavanaugh, Senate Minority Leader Chuck Schumer (D-N.Y.) is also helping his Republican counterpart ram through Trump's far-right lower court nominees at a torrid pace. immediate outrage from progressives, Schumer cut a deal with Senate Majority Leader Mitch McConnell (R-Ky.) on Tuesday that allowed the GOP to fast-track votes on seven of Trump's federal court nominees in exchange for... well, it's not exactly clear what he received in return, outside of getting to go home for a few days."Schumer is utterly useless," wrote journalist Chase Madar, a sentiment that was echoed across social media in response to the Democratic leader's dealmaking.Just hours after the deal was reported, all seven judges were confirmed, with the help of some Democrats.Because these judges—selected with the help of the right-wing Federalist Society—are relatively young, they are now in a position to shape American law for decades to come, threatening the planet, workers, and women's reproductive rights."Sen. Schumer, why are you cutting a deal with Mitch McConnell to fast-track Trump judges? Why won't you whip the vote to stop Kavanaugh?" wrote Indivisible in response to reports of the senators' agreement. "We're fighting to protect our courts and save our democracy. We expect you to do the same." While Schumer received much of the backlash on social media following his agreement with McConnell, activist and writer Jonathan Cohn pointed out that rank-and-file Democrats deserve some blame as well, given that they actually outnumbered Republicans in the Senate chamber for some of Tuesday's votes.
Trump: "I May Have To Get Involved" To Get To "Bottom Of Crooked Hillary Corruption" -- With his back against the well after longtime Trump Organization CFO Allen Weisselberg was granted immunity by US prosecutors one day after the National Enquirer's David Packer received a similar deal, on Saturday morning Trump continued his attacks on Attorney General Jeff Sessions, accusing the former senator of not understanding "what is happening" at his Justice Department.In a pair of tweets Saturday morning, the president wrote that Sessions was allowing Mueller "and his gang of 17 Angry Dems" to have a "field day" at the Justice Department with his decision last year to recuse himself from the investigation into the Trump campaign."Jeff Sessions said he wouldn’t allow politics to influence him only because he doesn’t understand what is happening underneath his command position. Highly conflicted Bob Mueller and his gang of 17 Angry Dems are having a field day as real corruption goes untouched. No Collusion!" the president wrote.Trump then quoted Sen. Lindsay Graham speaking about the possibility of a new attorney general, suggesting that the president may be considering Sessions' firing.“Every President deserves an Attorney General they have confidence in. I believe every President has a right to their Cabinet, these are not lifetime appointments. You serve at the pleasure of the President," Trump added, quoting Graham.Jeff Sessions said he wouldn’t allow politics to influence him only because he doesn’t understand what is happening underneath his command position. Highly conflicted Bob Mueller and his gang of 17 Angry Dems are having a field day as real corruption goes untouched. No Collusion!— Donald J. Trump (@realDonaldTrump) August 25, 2018.@LindseyGrahamSC “Every President deserves an Attorney General they have confidence in. I believe every President has a right to their Cabinet, these are not lifetime appointments. You serve at the pleasure of the President.”— Donald J. Trump (@realDonaldTrump) August 25, 2018 Trump's criticism of Sessions had escalated in recent days after the guilty verdicts handed down in the trial of Paul Manafort and the guilty plea from Trump's former attorney, Michael Cohen. In a rare statement on Thursday, Sessions appeared to rebuke Trump and pledged to remain untainted by political bias in his work at the agency. “While I am Attorney General, the actions of the Department of Justice will not be improperly influenced by political considerations. I demand the highest standards, and where they are not met, I take action,” Sessions said.
Ex-Watergate prosecutor: Immunity for CFO could lead to 'downfall' of Trump Organization | TheHill: A former Watergate prosecutor said Friday that the longtime chief financial officer of the Trump Organization receiving immunity could lead to the "downfall of the Trump Organization." Assistant Watergate special prosecutor Jill Wine-Banks made the comments on MSNBC just hours after reports broke that Allen Weisselberg was granted immunity as part of federal prosecutors' investigation into Trump's former personal lawyer, Michael Cohen. "With Weisselberg, there could be so many more crimes uncovered," Wine-Banks said. "And if he’s smart, he ought to get it all out now while he has immunity, and that could really lead to the downfall of the Trump Organization.” Her comments come during a week in which the president has faced major legal setbacks. On Tuesday, Cohen pleaded guilty to eight federal charges, including violating campaign finance law. In his plea, he said that he arranged payments to two women, one an adult-film actress and the second a former Playboy model, at Trump's direction “for the principal purpose of influencing the election." Prosecutors in Manhattan are considering criminal charges against the Trump Organization over the company's accounting of Cohen’s payment to adult-film actress Stormy Daniels, according to The New York Times. Federal prosecutors have also claimed that the reimbursements came in the form of sham legal invoices. Wine-Banks said that the report about sham invoices could be proof that the Trump Organization is guilty of a crime, adding that it has analogue to the Watergate investigation. “So I would say there’s a couple of Watergate analogies, which is ‘What did the president know and when did he know it?' Which is a question,” she said.
Christopher Steele Worked For Sanctioned Russian Oligarch While Composing Sham Dossier: Solomon - Former MI6 agent Christopher Steele - the author of the largely unverified "Steele Dossier," worked as a subcontractor for Russian billionaire and aluminum magnate Oleg Deripaska at the same time he was pontificating that Donald Trump's alleged (and still unproven) ties to Russia amounted to treason, according to The Hill's John Solomon. Steele's firm, Orbis Business Intelligence, was hired by a law firm working for Deripaska in 2012, marking the beginning of a relationship which extended at least throughout 2016 according to Solomon. Steele was tasked with researching a business rival of Deripaska, however Steele's work for the Russian billionaire evolved to the point where the former British spy was interfacing with the Obama administration on his behalf. To that end, Steele and twice-demoted DOJ official Bruce Ohr communicated extensively about the Russian Oligarch as recently as February 2016, which included efforts to obtain a Visa for Deripaska to attend an Asia-Pacific Economic Cooperation meeting int he US. Deripaska is now banned from the United States as one of several Russians sanctioned in April in response to alleged 2016 election meddling. Ohr, meanwhile, was demoted twice after the DOJ's Inspector General discovered that he lied about his involvement with opposition research firm Fusion GPS co-founder Glenn Simpson - who employed Steele. Ohr's CIA-linked wife, Nellie, was also employed by Fusion as part of the firm's anti-Trump efforts, and had ongoing communications with the ex-UK spy, Christopher Steele as well. What's more, Ohr met with Deripaska according to Solomon. By 2015, Steele’s work had left him friendly with one of Deripaska’s lawyers, according to my sources. And when Ohr, then the associate deputy attorney general and a longtime acquaintance of Steele, sought help getting to meet Deripaska, Steele obliged. Deripaska, who frequently has appeared alongside Russian President Vladimir Putin at high-profile meetings, never really dealt with Steele, but he followed his lawyer’s recommendations and met with Ohr, my sources say. -The Hill
Whistleblower Exposes Key Player in FBI Russia Probe: “It was all a Set-up” - Adam Lovinger, a former Defense Department analyst, never expected that what he stumbled on during his final months at the Pentagon would expose an integral player in the FBI’s handling of President Donald Trump’s campaign and alleged Russia collusion. Lovinger, a whistleblower, is now battling to save his career. The Pentagon suspended his top-secret security clearance May 1, 2017, when he exposed through an internal review that Stefan Halper, who was then an emeritus Cambridge professor, had received roughly $1 million in tax-payer funded money to write Defense Department foreign policy reports, his attorney Sean Bigley said. Before Lovinger’s clearance was suspended he had taken a detail to the National Security Council as senior director for strategy. He was only there for five months before he was recalled to the Pentagon, stripped of his prestigious White House detail, and ordered to perform bureaucratic make-work in a Pentagon annex Bigley calls “the land of misfit toys.” His security clearance was eventually revoked in March 2018, despite the Pentagon “refusing to turn over a single page of its purported evidence of Lovinger’s wrongdoing,” Bigley stated. Conservative watchdog group, Judicial Watch, recently filed a federal lawsuit against the Defense Department to obtain the withheld records. Lovinger also raised concerns about Halper’s role in conducting what appeared to be diplomatic meetings with foreigners on behalf of the U.S. government because his role as contractor forbids him from doing so, according to U.S. federal law. An investigation by SaraACarter.com reveals that the documents and information Lovinger stumbled on and other documents obtained by this news site, raise troubling questions about Halper, who was believed to have worked with the CIA and part of the matrix of players in the bureau’s ‘CrossFire Hurricane’ investigation into Trump’s 2016 presidential campaign. Halper, who assisted the FBI in the Russia investigation, appears to also have significant ties to the Russian government, as well as sources connected directly to President Vladimir Putin.
Meanwhile, Out in Left Field - Kunstler -With Russian “meddling” stalled in the dead letter office, The New York Times has apparently re-branded itself Floozie Central in its quixotic campaign to unseat the Golden Golem of Greatness by all means necessary. The Stormy Daniels affair, and its slime-trail of payoffs, is the slender thread that the Resistance hopes to hang Donald Trump on. It was hilarious to discover that Mr. Trump’s erstwhile personal lawyer, Michael Cohen, picked DC Swamp attorney and Clinton insider, Lanny Davis, to represent him in negotiations with Special Counsel Robert Mueller. It must be like the old days in the locker room of the Burning Tree Golf Club for Lanny and Bob. They go back at least to the days when the Clintons fended off accusations of issuing pardons to special friends for a $450,000 payoff on Bubba’s last day in office, January 19, 2001. And there must have been a reunion around 2010 on the Uranium One matter, in which a tidy $145-million from Russian Oligarch Central landed in the Clinton Foundation coffers after Madam Secretary Hillary signed onto a go-ahead with the U-1 deal. Meanwhile, way out in Left Field — Salt Lake City, actually —a forgotten lone ranger named John W. Huber is ostensibly toiling away on a roster of allegations so far ignored by the Mueller team, namely the politicization of the FBI and the Department of Justice, and the actions taken deviously by senior employees there against Mr. Trump during and after the 2016 election. Mr. Huber was tapped to carry out this assignment by Attorney General Jeff Sessions late in 2017. Mr. Huber has plenty to work with. The DOJ Inspector General, Michael Horowitz, has already issued a formal report filled with well-documented findings of lying and leaking among many high officials in FBI and the DOJ. Several of the featured players have already been fired from the agencies or demoted on the basis of those findings: Stzrok, McCabe, Ohr, Page…. The big question is how come none of these characters have been called to testify in front of a grand jury? The big answer is that a grand jury would have to be convened by the very agency that employed them — raising a reasonable suspicion of inside baseball in these matters.
Think Trump Is Doomed? Not So Fast. -- After a terrible, horrible, no good, very bad week, are the walls starting to close in on Donald Trump? Don’t be so sure—despite the current New Yorker magazine cover showing baying hounds chasing a terrified president, the dogs aren’t much closer to catching him than when last week began. As a new week dawns, the key questions remain political, not legal. Due to Justice Department precedents, a sitting president won’t face a criminal trial while in office. So did last week’s developments boost the chances for removal via the impeachment process? Probably not. Let’s start with longtime Trump lawyer and fixer Michael Cohen, who pleaded guilty to, among other things, facilitating hush money payments to Trump’s mistresses in violation of campaign finance laws. A Republican Party that has tolerated — and often cheered — countless Trump horrors won’t dump him for essentially failing to report a campaign expenditure. Trump could have legally paid off Stormy Daniels and Karen McDougal as long as he had paid them himself and his campaign reported the payments — with a description as bland as “litigation settlement” or “legal services.” In fact, the October 27, 2016, Daniels payment need not have been reported until after Election Day under Federal Election Commission rules. Coupled with the failed 2012 prosecution of former presidential candidate John Edwards, who similarly used campaign funds to pay off a mistress, and the fact that courts have held that a campaign finance violation can constitute a crime only if the violator knew that he was acting illegally, the GOP will likely give Trump yet another pass. Indeed, we’ve known the general contours of this story for many months, but Trump’s approval rating has held steady.
Fox's Bartiromo: Public can't see any credibility from Mueller investigation without including Clinton | TheHill - Fox Business anchor Maria Bartiromo said during her program Wednesday that she "can’t see the American people and the public see any credibility from the special counsel’s investigation if he is not looking at everything," including "that Hillary Clinton paid for the dossier." Bartiromo was referencing the dossier of alleged ties between the Trump campaign and Russia authored by ex-British intelligence officer Christopher Steele that was funded in part by the Democratic National Committee and the 2016 Clinton campaign. "The Robert Mueller investigation started off as collusion with Russia, there was no evidence of that. Then they moved to obstruction. Now we're talking about a porn star and paying the porn star," Bartiromo said. “I can’t see the American people, the public, see any credibility from the special counsel’s investigation if he is not looking at everything that occurred regarding Russia in the 2016 campaign. And that includes that Hillary Clinton paid for the dossier which was used to get a [Foreign Intelligence Surveillance Act] warrant to wiretap an American citizen." The Department of Justice in July released federal documents used in obtaining a warrant against Trump associate Carter Page during the 2016 presidential campaign. Those documents included the unverified dossier, compiled by Steele, that alleges ties between Trump campaign associates and Russia.
China Hacked Clinton's Private Email Server: Daily Caller - A Chinese-owned firm with operations in Washington D.C. hacked Hillary Clinton's private server "throughout her term as secretary of state and obtained nearly all her emails," reports the Daily Caller's Richard Pollock. The Chinese firm obtained Clinton’s emails in real time as she sent and received communications and documents through her personal server, according to the sources, who said the hacking was conducted as part of an intelligence operation. The Chinese wrote code that was embedded in the server, which was kept in Clinton’s residence in upstate New York. The code generated an instant “courtesy copy” for nearly all of her emails and forwarded them to the Chinese company, according to the sources. -Daily CallerDuring a July 12 House Committee on the Judiciary hearing, Texas Rep. Louie Gohmert (R) disclosed that the Intelligence Community Inspector General (ICIG) found that virtually all of Clinton's emails from her homebrew server were funneled to a "foreign entity." Gohmert did not reveal the entity's identity - however he said it wasn't Russia. A government staff official briefed on the ICIG's findings told the Daily Caller that the Chinese firm which hacked Clinton's emails operates in Washington's northern Virginia suburbs, and that it was not a technology firm - but a "front group" for the Chinese government. Two ICIG officials, investigator Frank Ruckner and attorney Janette McMillan, repeatedly warned FBI officials of the Chinese intrusion during several meetings, according to the Daily Caller, citing a "former intelligence officer with expertise in cybersecurity issues who was briefed on the matter."
Secret message board drives ‘pizzagate’-style harassment campaign of small businesses The harassment comes from a group of fervent online conspiracists who have been targeting private businesses and individuals with harassment campaigns and accusations of being involved with child-sex trafficking rings.Sparked by a video posted on a popular YouTube conspiracy channel, the group, whose members are also largely followers of the Qanon conspiracy theory, has flooded Voodoo’s Instagram and Facebook posts and left Yelp reviews accusing the owners of child sex trafficking. Last week, the chain’s original Portland outpost received more calls from conspiracy theorists than customers ordering doughnuts, Monaghan said.The group is fueled in part by a website called Big League Politics, a far-right media outlet that often publishes conspiracy content and has been used to raise funds for prominent Republican politicians. Some of the website’s stories appear to be sourced from a secret message board created by a Big League Politics staffer, in which members concoct elaborate, pedophilia-based conspiracy theories they hope will be published to a wider audience. The harassment campaigns highlight how conspiracy theories that form in deep corners of the internet can have real-world consequences. The same theory that led conspiracists to Sweet Jesus and Voodoo Doughnut previously focused on Comet Ping Pong, a Washington pizza shop where a man fired a rifle in 2016during a "self-investigation" of online rumors that a child-sex ring was being run out of its basement. The shop has no basement.Monaghan said he refers callers to the Portland Police Department. Sgt. Chris Burley, a department spokesman, said that “an enormous” number of emails and calls had been made to the department asking why they aren’t investigating Voodoo Doughnut.
What is Qanon? A guide to the conspiracy theory taking hold among Trump supporters - Signs and T-shirts emblazoned with some variation of the letter Q dotted a rally for Donald Trump in Tampa on Tuesday. Paper printouts declaring “We are Q” occupied small sections of the crowd.One rally-goer named Tyler held out a large coin with Q on it and explained the letter’s sudden prevalence among Trump supporters. “Qanon, the storm, the great awakening,” he told local TV station WPLG.“What Q stands for is military intelligence, most likely. He’s been talking to all of us. Letting us know the covert battles that are waging between the Deep State and President Trump.”Tyler, whose last name was not disclosed to WPLG, is one of a growing number of vocal followers of a conspiracy theory, known as Qanon, that has taken hold among some Trump supporters. The theory centers around an anonymous source, Q, who is trying to tell the world about a secret battle being waged by Trump and special counsel Robert Mueller against a pedophile ring filled with celebrities and political elites who have been covertly running the United States government for decades.
Giuliani criticizes Romanian anti-corruption crackdown in open letter: report | TheHill: President Trump's personal lawyer, Rudy Giuliani, wrote a letter to Romania's president criticizing the country's anti-corruption efforts, according to a report from The New York Times. In the open letter dated Aug. 22 to Romanian President Klaus Iohannis, Giuliani expressed concern about the “continuing damage to the rule of law being done under the guise of effective law enforcement,” according to the Times. Giuliani said the letter was sent as part of his work for his security company, Giuliani Security & Safety, with the former New York City mayor telling the Times he was “still an independent lawyer and consultant.”"It has nothing to do with the U.S. government,” Giuliani also said about the letter to Iohannis. “I advise on security, law enforcement and terrorism in many different countries. Private lawyers for the president have all had private practices.” The letter appeared to contradict the State Department’s official position on anti-corruption efforts in Romania, Politico reported.
Donald Trump slams Google search as 'rigged' even though it's not -- President Donald Trump has renewed his claims of bias against conservatives on the internet, accusing Google of rigging its results to show "bad" stories when users search for "Trump news." "Google search results for 'Trump News' shows only the viewing/reporting of Fake News Media," the president said Tuesday on Twitter. "In other words, they have it RIGGED, for me & others, so that almost all stories & news is BAD. Fake CNN is prominent. Republican/Conservative & Fair Media is shut out," he added. "Google & others are suppressing voices of Conservatives." Trump suggested that Google's actions could be "illegal" and he said that the situation would be addressed. He did not specify what actions he would take, or say what laws may have been violated. Later in the day, the President reiterated his claims to reporters. Trump, without evidence, accused Google of "taking advantage of a lot of people." Trump, grouping Google in with Facebook and Twitter, said the tech companies are "treading on very, very troubled territory and they have to be careful." Google search results for "Trump News" shows only the viewing/reporting of Fake News Media. In other words, they have it RIGGED, for me & others, so that almost all stories & news is BAD. Fake CNN is prominent. Republican/Conservative & Fair Media is shut out. Illegal? 96% of.... — Donald J. Trump (@realDonaldTrump) August 28, 2018
"Idiot" Trump Warns Facebook, Twitter And Google To Tread Carefully - President Trump doubled down on Tuesday threats against Facebook, Twitter and Google with new comments from the Oval Office, saying the social media platforms are "treading on very, very troubled territory and they have to be careful." "I think Google has really taken advantage of a lot of people and I think that's a very serious thing and it's a very serious charge," Trump told reporters following a meeting with the president of FIFA. "They better be careful because they can't do that to people." Trump: "Google has taken advantage of a lot of people...if you look at what is going on at Twitter, look at what is going on in Facebook, they better be careful..Google and Twitter and Facebook, they're really treading on troubled territory" pic.twitter.com/6SR2eFUOtg Meanwhile, free speech activists have petitioned the White House to encourage Trump to "request that Congress pass legislation prohibiting social media platforms from banning users for First Amendment-protected speech." The power to block lawful content should be in the hands of individual users – not Mark Zuckerberg or Jack Dorsey. -Petitions.whitehouse.gov Earlier in the day, Google responded to an accusation by Trump over Twitter that they're "rigging" search results against him, providing as evidence a "Trump News" search which showed predominantly "left" media publications popping up in the search results.....results on “Trump News” are from National Left-Wing Media, very dangerous. Google & others are suppressing voices of Conservatives and hiding information and news that is good. They are controlling what we can & cannot see. This is a very serious situation-will be addressed! — Donald J. Trump (@realDonaldTrump) August 28, 2018 To which Google replied "Search is not used to set a political agenda and we don’t bias our results toward any political ideology" Maybe they can explain why Trump's picture is just about the only thing that appears when one does a Google image search for the word "idiot"?
Trump’s Tweet Against Google Is Really about Boosting Koch-Funded “News” - Pam Martens - Yesterday, President Donald Trump accused Google in a Tweet of rigging its search results to suppress the “voices of Conservatives.” That’s the same complaint that the secretive Charles Koch network of super wealthy political operatives have been attempting to address with media front groups for more than a decade. Trump now appears to be using his bully pulpit in an effort to legitimize those Koch-funded media outlets.The billionaire fossil fuels magnate, Charles Koch, has a lot of balls in the air right now and some are at risk of falling to earth with a thud. He’s currently in a battle to beat out the National Republican Committee (RNC) as the go-to guy for voter database, data mining and targeted social media ads in the midterms and all future elections. (See our report: Koch Industries Is Staffing Up with Voter Data Scientists to Tip the November Election to the Extreme Right.) That effort had some air knocked out of it earlier this month when Politico reported that RNC Chair, Ronna McDaniel, sent out a memo warning Republicans to steer clear of the Koch operation out of fear that it might “weaponize that data against Republicans if their business interests conflicted with electing Republicans….” Charles Koch also has a problem with mainstream media’s repulsion of the Donald Trump administration, in which the Koch network has installed more than four dozen people who formerly worked for it. Charles Koch is the CEO of Koch Industries and it’s in the midst of an expensive media re-branding campaign to make itself appear wholesome instead of a Machiavellian mastermind of creating four decades of front groups working to deny climate change, gut Federal regulations and create a kleptocracy in the U.S. Unfortunately, Trump’s immigration policy, which produced TV images of infants in detention cages and Trump’s labeling prominent black women as “low IQ” or “a dog” on his Twitter page meant that Charles Koch had to attempt to distance himself from Trump while still keeping his troops in pivotal spots in the Trump administration.
Nearly Half of Republicans Think Trump Should Be Able to Close News Outlets -Nearly half of Republicans surveyed — 44 percent — believe the president should be able to shutter news outlets for "bad behavior," according to a new poll released Tuesday. The poll by Ipsos emphasizes the clear divide between party lines when it comes to the role of the media and its coverage of the Trump administration. Twenty-nine percent, nearly a third, of the more than 1,000 people polled said they believed the news media was the enemy of the American people, a phrase that was coined and popularized by President Donald Trump. That number jumps to 48 percent if you just examine Republicans surveyed. Trump often rants about the press coverage he gets and has dubbed unflattering stories about him and his administration as "fake news." While 68 percent of Democrats polled believe that reporters try their best to do honest reporting, only 29 percent of Republicans agreed, the poll shows. Only 12 percent of Democrats in the poll said they believed the president should have the authority to close news outlets engaged in "bad behavior" but a stark 43 percent of Republicans said this should be a policy.
Steve Bannon Wants to Nationalize Facebook and Google’s Data - Five months ago, a whistleblower accused Cambridge Analytica co-founder Steve Bannon of being personally involved in the company’s efforts to use data from tens of millions of people, harvested without permission from Facebook, to build detailed “psychographic” portraits of individual voters. Bannon has denied knowing how the data was collected, but was more than happy to take credit for the results on behalf of Cambridge Analytica’s most high-profile client, Donald J. Trump for President, Inc. Yes, buying bulk data, it seems, is all well and good when it comes to winning elections for Donald Trump, and nefarious when it is done for the purpose of selling ads. Bannon isn’t alone in this mindset: conservatives have grown exponentially less trusting of Silicon Valley in general, and social-media companies in particular, in the years since the 2016 election, as Facebook, Twitter, and Google have begun to crack down on hate speech, foreign propaganda, and conspiracy theories. In the past week, the president has tweeted repeatedly about his suspicions that tech companies have been suppressing conservative voices in favor of “fake news” like CNN and NBC. “We have literally thousands and thousands of complaints coming in, and you just can’t do that,” Trump said during a press conference on Tuesday. “So I think that Google and Twitter and Facebook, they’re really treading on very, very troubled territory, and they have to be careful. It’s not fair to large portions of the population, O.K.?” Bannon, an expert himself on the use and misuse of Big Data, offered an unusual solution Wednesday in a conversation with CNN’s Oliver Darcy:nationalization. Or at least something similar. “I think you take it away from the companies. All that data they have is put in a public trust,” Bannon explained. “They can use it. And people can opt in and opt out. That trust is run by an independent board of directors. It just can't be that [Big Tech is] the sole proprietors of this data . . . I think this is a public good.” These companies, he added, “have to be broken up just like Teddy Roosevelt broke up the trusts.”
Google shuts down YouTube channels in expansion of state-directed online censorship -- In a further expansion of state-directed Internet censorship, Google announced Thursday that it had deleted 58 accounts from its social media platforms YouTube, Blogger and Google+. The technology monopoly claimed, without meaningful substantiation, that the accounts it removed were part of a worldwide effort by “bad actors,” “influence operations” and “state-sponsored hacking” linked with the Iranian government. In a safety and security blog post, Google executive Kent Walker wrote that 39 YouTube channels, 6 blogs on Blogger and 13 Google+ accounts were identified and removed due to their supposed connection with Islamic Republic of Iran Broadcasting (IRIB), the primary Iranian media organization with close ties to the country’s Supreme Leader.Walker provided no detailed facts supporting the claims of Iranian influenced social media activity. Instead, he wrote: “We can’t go into all the technical details without giving away information that would be helpful to others seeking to abuse our platforms …”Much of the information used by Google as the basis of its assertion that the Iranian government was behind the accounts was provided by FireEye, a cyber-security firm managed by former military intelligence officers with close ties to Wall Street and the US State Department. On August 21, FireEye released a report that has been used to bolster a series of censorship moves, first by Facebook and Twitter and now Google, over the past week. The title of the report, “Suspected Iranian Influence Operation,” shows that the new campaign against “coordinated inauthentic activity” is following the pattern of the previous “Russian meddling” and “fake news” initiatives. Notably, FireEye said that it had only “moderate confidence that this activity originates from Iranian actors.” The company added that the possibility exists that “the activity could originate from elsewhere” or includes “authentic online behavior.”
Matt Taibbi on Facebook and Google Playing the Censor - Welcome to The Real News Network, everybody. As you know, we spoke recently with Nadine Strossen from the ACLU about the dangerous slippery slope we find ourselves on. But not only cheering on the fact that Facebook shut down the vile Alex Jones, but more importantly, not understanding the danger that that poses for all of us. And more to the point, to the civil liberties that we all seem to cherish. The platforms like Google and Facebook are where many of us increasingly get all of our information. We talk to our friends and family. We use it as a public space. But they and all the digital media that we use don’t belong to us. They’re private entities that are now making a regular habit of banning images and words for a variety of both nebulous and extremely dangerous reasons, or potentially dangerous reasons. Facebook and others are also teaming up with some pretty shady characters and businesses as they develop a new model of censorship. That should give us all pause. One of the people writing about this a great deal is journalist and writer Matt Taibbi, who has been writing about all this in the Rolling Stone and many other places. We’re going to focus on the articles he’s been doing for Rolling Stone. And Matt, welcome, good to have you here on The Real News.
What is FireEye? - In back-to-back announcements last week, the social media platforms Facebook, Instagram, Twitter, YouTube, Blogger and Google+ reported that they had removed hundreds of user accounts, pages, channels and posts on the grounds of “coordinated inauthentic behavior” and “spreading divisive content and misinformation.” The social media companies further justified their censorship measures with assertions that the closed accounts were linked to a political influence campaign of the Iranian government.On August 21, Twitter posted the following on its Twitter Safety account: “Working with our industry peers today, we have suspended 284 accounts from Twitter for engaging in coordinated manipulation. Based on our existing analysis, it appears many of these accounts originated from Iran.”On the same day, the head of Facebook cybersecurity policy, Nathaniel Gliecher, published a blog post titled, “What We Have Found So Far.” He wrote, “We've removed 652 pages, groups and accounts for coordinated inauthentic behavior that originated in Iran and targeted people across multiple internet services in the Middle East, Latin America, UK and US.”Two days later, Google SVP of Global Affairs Kent Walker published a blog entry titled, “An update on state-sponsored activity,” writing, “We identified and terminated a number of accounts linked to the IRIB (Islamic Republic of Iran Broadcasting) organization that disguised their connection to this effort, including while sharing English-language political content in the U.S.: 39 YouTube channels that had 13,466 total US views on relevant videos; 6 blogs on Blogger; 13 Google+ accounts.” Many of the shuttered accounts were connected to web sites with left-wing views and political positions opposing the crimes of the American, Saudi, and Israeli governments in the Middle East. Other accounts purported to be in support of US Senator Bernie Sanders and expressed support for Palestinians and opposition to the state of Israel. The common thread between the unified censorship of the social media companies was their reliance upon information provided by FireEye, an IT firm with close ties to the US State Department and Wall Street and managed by former military intelligence and law enforcement officers.
Harvey Weinstein Law Firm Gave Cuomo $25K Within Weeks Of Sex Probe Suspension - One year after Manhattan District Attorney Cyrus Vance Jr. was embroiled in a scandal for accepting $10,000 from Harvey Weinstein's lawyer after he declined to prosecute sexual assault charges, the same lawyer, David Boies, gave $25,000 to the campaign of New York Governor Andrew "America was never that great" Cuomo, according to state records reviewed by Capital & Main and Sludge. While Vance in May opted to reverse course and charge the Hollywood producer, Cuomo declared that an investigation into Vance’s original decision to not prosecute Weinstein was necessary because, the governor said, “it is critical not only that these cases are given the utmost attention but also that there is public confidence in the handling of these cases.” However, BuzzFeed on Tuesday reported that Cuomo reversed himself in June, sending a letter to New York Attorney General Barbara Underwood asking her to suspend the investigation for six months. The suspension effectively shields Boies from scrutiny of any potential relationship between his 2015 donation to Vance and Vance’s decision not to prosecute Weinstein. -Capital & Main Cuomo's June order came within weeks of the $25,000 donation to his reelection campaign, according to New York campaign finance records - approximately 10% of the $245,000 Boies and his firm have donated to Cuomo's campaigns since 2009.
White-Collar Criminals Got Off Scot-Free After the 2008 Financial Crisis — and That Helped Fuel President Trump’s Rise Marshall Auerback In the aftermath of the worst financial crisis since the Great Depression, bank officials at HSBC admitted to the Department of Justice that the bank violated the Bank Secrecy Act, the International Emergency Economic Powers Act and the Trading with the Enemy Act. This amounted to one of the largest and most destructive money laundering and anti-terror finance sanctions-busting in history. Fines were leveled, but no senior bankers went to jail. In another investigation, the DOJ implicated Deutsche Bank and UBS in a bid-rigging cartel that illegally manipulated LIBOR, the most important global benchmark interest rate. Professor Bill Blackestimates that the “dollar amount of deals affected by the collusion range[s] from $300-550 trillion in deals manipulated at any given time.” It was a scandal that may have been history’s largest financial crime, yet the U.S. Department of Justice refused to prosecute any of the elite bank officers involved. As we approach the 10th anniversary of the 2008 crash, ProPublica’s Jesse Eisinger reminds us that no top bankers were ever “held accountable for the biggest financial crisis since the Great Depression… No one. No top officer from any major bank went to prison.” . Trump stands accused of much the same. But how do you make a political case for the latter’s impeachment on the grounds of corporate corruption (even as the president virtually daily violates the Constitution’s Emoluments Clause), given the earlier reticence of multitudes of politicians, regulators, and DOJ officials to prosecute similar white-collar crimes whose impact dwarfed those allegedly committed by America’s 45th president? It says something about the way we have (to paraphrase the late Senator Daniel Patrick Moynihan) as a society gotten very soft on criminal deviancy that the practices alleged to have been perpetrated by Trump not only in the 2016 election,but also for decades before in his real estate ventures, no longer appear to be disqualifications for the office of the presidency, let alone grounds for impeachment. The previous Obama administration’s embrace of the concept that the systemically dangerous institutions (SDIs), particularly the largest banks, whose senior officials were “too big to jail,” meant that the bankers who grew wealthy from leading the largest and most destructive fraud schemes in banking history got off scot-free. And they also created a context in which the business practices of a candidate like Donald Trump were normalized to a degree that they were considered an insufficient bar to block him from the presidency.
Tax cuts boost US bank profits to record highs - On August 23, the Federal Deposit Insurance Corporation (FDIC) reported that US commercial banks and savings institutions brought in a record $60.1 billion in profits in the second quarter of this year. The sum easily surpassed the $56 billion in bank profits in the first quarter and was up $12.1 billion, or 25.1 percent, from the second quarter of 2017.In a statement, the American Bankers Association said the “real driver of earnings” last quarter was strong lending, though the group also credited tax “reform,” deregulation and the strength of the economy.The FDIC, however, acknowledged that the Trump administration’s $1.5 trillion tax cut, which dramatically lowered the corporate rate, was largely responsible for the increase in profits. A secondary factor, it said, was the rise in interest rates. The Federal Reserve has raised interest rates twice this year and is expected to raise them again once or twice before the end of the year.The vast bulk of the profit increase is occurring at the larger banks rather than the so-called “community banks.” Of the 5,542 insured institutions, some 5,111 are currently counted as community banks. This much larger group saw its net income rise by about $1.1 billion from a year ago, or 21.1 percent, to $6.5 billion in the second quarter. This means that the larger banks, about 1 percent of the total, took in almost 90 percent of the total profit.The profit surge was also propelled by stock buybacks and the weakening of rules on bank speculation. In June, the Federal Reserve loosened restrictions on high-risk trading conducted by the major banks after intensive pressure by Wall Street and the Trump administration. The change effectively released banks from restrictions on the kind of speculation that led to the 2008 financial crisis.
Did You Think the Volcker Rule Stopped Wall Street Banks from Owning Hedge Funds? Think Again. - Pam Martens - Americans were led to believe that the Volcker Rule (named after former Fed Chairman Paul Volcker), which was part of the much ballyhooed Dodd-Frank financial reform legislation signed into law by President Obama in 2010, had put an end to giant Wall Street banks holding Federally insured deposits while engaging in high-risk proprietary trading (trading for the house). It also banned depository banks from owning material amounts of hedge funds and private equity funds where speculative trading occurs and where serious losses can be hidden. So what are these big Wall Street insured depository institutions doing still owning hedge funds with billions of dollars in assets? Dodd-Frank was signed into law on July 21, 2010. The final interpretive Volcker Rule was not approved until December 2013 and that rule indicated it would not take full effect until July 21, 2015. Federal regulators have been massaging the rule ever since to the point that Wall Street banking powerhouses consider it the equivalent of a gnat on an elephant’s rump. The thinking behind the Volcker Rule is that banks holding Federally insured deposits, which could make them subject to a taxpayer bailout if they fail, should not be taking high risk gambles while simultaneously having access to a government safety net. Lehman Brothers owned two FDIC-insured banks when it blew up in 2008. Merrill Lynch, at the times of its shotgun marriage to Bank of America during the Wall Street collapse in 2008, owned three FDIC-insured banks. AIG owned the Federally-insured AIG Federal Savings Bank at the time of its insolvency in 2008 because of credit default derivatives it was backing for Wall Street banks. And then there was Citigroup, owner of Citibank, one of the largest insured banks in the country and the recipient of the largest taxpayer bailout in U.S. history from 2007 through 2010 because of its casino culture.We know that the biggest Wall Street banks assumed from the beginning that they could wiggle their way around the Volcker Rule because just two years after its passage, JPMorgan Chase, the largest depository bank in the nation, was caught gambling in exotic derivatives in London using depositors’ money. It was forced to eventually own up to $6.2 billion in losses from what became known as the London Whale fiasco.
Senator John McCain Wanted to Restore the Glass-Steagall Act: Here’s Why - Pam Martens - It’s not every day that one sees the names Democratic Senator Elizabeth Warren and Republican Senator John McCain as the leading co-sponsors on the same piece of legislation. But that’s exactly what happened on July 11, 2013, two years later on July 7, 2015, and again last year on April 6. Together with Maria Cantwell (D-Washington) and Angus King (I-Maine), the four last year re-introduced the 21st Century Glass-Steagall Act, an updated version of the Banking Act of 1933, which was also known as the Glass-Steagall Act.Senator McCain passed away on August 25, without seeing the passage of the legislation.If enacted, the legislation would separate traditional banks that hold deposits that are insured by the Federal Deposit Insurance Corporation (FDIC) – and ultimately backstopped by the U.S. taxpayer – from the investment banks on Wall Street that underwrite securities and engage in high risk trading in stocks and derivatives. Glass-Steagall kept the U.S. banking system safe for 66 years until its repeal under the Bill Clinton administration in 1999. It took just nine years after the repeal for Wall Street to collapse in epic fashion and usher in the greatest economic downturn since the Great Depression.Speaking about why he was co-sponsoring the legislation, Senator McCain made the following remarks on the Senate floor in 2013:“Unfortunately, core provisions of the Glass-Steagall Act were repealed in 1999, shattering the wall dividing commercial banks and investment banks. Since that time, we have seen a culture of greed and excessive risk-taking take root in the banking world; where common sense and caution with other people’s money no longer matters. “When these two worlds collided, the investment bank culture prevailed, cutting off the credit lifeblood of main street firms, demanding greater returns that were achievable only through high leverage and huge risk taking, which ultimately left the taxpayer with the fallout.”
Atlas Mugged: Elizabeth Warren's Plan To Nationalize Corporations - Ayn Rand’s novel Atlas Shrugged depicts a world where freedom and free markets are crushed by not-so-well-meaning politicians and bureaucrats. The lesson of the book is that prosperity is driven by entrepreneurs and capital. And, you need freedom and free markets to achieve it. This system is called free market capitalism. Rand’s plot twist: what would happen if all the entrepreneurs, the drivers of a dynamic economy, went on strike. She takes the ideals of socialism, where business is dictated by government mandate “for the benefit of workers and the people”, to its logical, destructive end. The strike accelerates the collapse of society and the strikers re-emerge to rebuild society. It was a story that Rand knew well, being a Russian émigré fleeing Bolshevik terror.Unfortunately, the book has become disturbingly prophetic. One of the scenes in Rand’s book is the story of Twentieth Century Motors, a leading automobile manufacturer until the company was reorganized to be under control of the workers and operated for their benefit. Among other things, worker pay was not based on individual productivity but on “fairness” to accommodate workers’ needs. That “noble” idea drove the company into bankruptcy and failure. While this is fiction, history is awash with real world examples of this.Enter Senator Elizabeth Warren and her proposed Accountable Capitalism Act. It is straight out of Atlas Shrugged. She proposes to regulate corporations with gross revenues of $1 billion or more, requiring them to obtain a federal corporate charter as a “United States corporation”. They would be regulated by a bureaucracy under the Office of United States Corporations. These corporations must be operated to “create a general public benefit” and must consider how its profit making activities affect not only their shareholders, but their employees, suppliers, “community and societal factors”, and the local and global environment. At least 40% of its board of directors must be elected by its workers. If they wish to support a political candidate, they must have approval of 75% of the board. This is a proposed takeover of corporations by the government. It’s a power grab. It is the socialist path to hell. I say this based on the tenets, economics, and history of socialism.
Corporate earnings climb 7.7%, reflecting tax windfall and strong economy: Pretax profits at U.S. companies climbed 7.7% from a year earlier, the most since 2014 and the seventh consecutive gain, according to Commerce Department data released Wednesday. Throw in the boost from lower taxes that went into effect this year under the Trump administration, and firms have plenty of wherewithal for more investment and hiring. The expanding coffers are reflected in a stock market hitting record highs. Businesses are also putting the cash to use: nonresidential fixed investment, which includes spending on equipment, structures and intellectual property, increased last quarter by 8.5%, revised from a previously estimated 7.3%, the data showed. Spending on business equipment rose an upwardly revised 4.4%. Firms are also on a stock-buyback spree following the tax windfall, with Goldman Sachs Group Inc. estimating that companies in the S&P 500 index will authorize $1 trillion in stock buybacks in 2018, a record and a 46% jump from last year. The big question is whether companies continue to be as enthusiastic about investing and employment, given the headwinds from a trade war and a fading benefit from the tax stimulus. The latest figures indicate that the boost from tax cuts “has already hit the corporate bottom line,” according to Chris Rupkey, chief financial economist at MUFG Union Bank in New York. After-tax corporate profits grew 2.4% last quarter from the prior period, down from an 8.2% jump at the start of 2018, according to the Commerce Department’s first estimate of second-quarter profits. “We just had one of the biggest giveaways in corporate and individual tax cuts in modern economic history, and it would be foolish to ignore these as the primary driver of economic growth this year,” Rupkey wrote in a note. “2019 is a different story.”
Breaking Banks: Crypto hijinks – podcast - Michael Terpin explains how hackers stole $24 million worth of cryptocurrency from his mobile phone and why he’s suing AT&T for $224 million. Luke Lombe of PlayChip describes his new ICO that combines fantasy sports leagues with crypto tokens.
Comerica scrambles to address fraud in prepaid benefits program -- Comerica Bank has shut down a component of its prepaid card program for federal benefits recipients after a recent spate of fraud cases.Fraudsters have exploited security flaws in Comerica's Cardless Benefit Access Service to drain accounts belonging to federal beneficiaries, including retirees who receive Social Security benefits and veterans who rely on disability payments to make ends meet.The service, which Comerica says is now discontinued, was part of the Direct Express program, a partnership between the Texas bank and the U.S. government that allows users without bank accounts to access their funds through prepaid cards.The Cardless Benefit Access Service allows consumers to withdraw funds if they have lost their card, even when they are away from their home state. But in hundreds of cases the program allegedly dispensed funds to fraudsters, who had previously gained access to cardholder data and posed as the benefits recipients.“Direct Express didn't put up a red flag, even though they had all the information about the money being wired to Florida, when we live in Massachusetts, but they just sent the money,” said Jackie Densmore, the caregiver for her brother-in-law, Derek Densmore, a disabled Marine who receives benefits. “We were thinking it was safe because it's the U.S. Treasury." Cardholders allege that criminals — potentially working with insiders, such as call-center employees or third-party card manufacturers — stole Direct Express card numbers, addresses and three-digit card identifiers, enabling them to make fraudulent online purchases. In some cases, criminals also called Direct Express to report cards as lost or stolen, or to have PIN numbers changed, and had payments routed to MoneyGram locations where they could pick up a check and cash it.Several victims of fraud claim Comerica has been slow in reimbursing them their money and in some cases has even suspended their accounts pending an investigation, restricting them from accessing new benefits payments. In some instances, they say Direct Express also charged cardholders fees to reissue and activate new cards after a fraud had been committed.
Wells Fargo Fires Over A Dozen Bankers For Doctoring Expense Receipts - In what may be the most innocent violation to emerge out of Wells Fargo in years, the WSJ reports that Wells has fired or suspended more than a dozen employees in its investment bank and is investigating dozens of others over violations of the company’s expense policy regarding after-hours meals.According to the report, Wells Fargo employees ranging from analysts to managing directors in New York, San Francisco and Charlotte, doctored receipts on dinners that they charged to the bank.“We became aware that certain Wells Fargo Securities team members were not complying with the after-hours meals reimbursement policies after they were brought to the attention of our leaders by concerned team members,” a Wells Fargo spokeswoman said in a statement. “We took action to address the issue and we continue to investigate the matter.”Wells Fargo, like most other big banks, reimburses staffers for food that they order when they have to stay late at the office to work on deals and other assignments for clients. Some bankers have been known to fabricate the receipts entirely, getting reimbursement cash for a "meal" that was never ordered.In this particular case, the violation was far less serious: as the WSJ reports, executives within the investment-bank division learned that some employees regularly placed dinner orders through delivery services like GrubHub, Seamless or Square’s Caviar earlier than the policy allowed, the people said. Later, employees allegedly altered the time stamps on emailed receipts to make their meals eligible for reimbursement.
MIT Professor: Big Banks Are Using Data Profiling to Prey on Unsophisticated - The Kansas City Fed’s annual symposium in Jackson Hole is typically a dry affair with central bankers and economists expounding on theories that are incomprehensible to the average working person. This past weekend’s event, however, Professor Antoinette Schoar of the Massachusetts Institute of Technology (MIT) spoke on the effect of investments by “JP Morgan Chase, Citi, Goldman Sachs and Bank of America into AI [artificial intelligence], machine learning and big data,” stating that their investments are “a multiple of all other banks.” Schoar warned that the “emergent Fintech technologies” that result from these large investments “might in fact reinforce concentration in the industry given the enormous economies of scale from having larger data sets.”The larger data sets in the banking industry that Schoar is talking about is akin to what Facebook is doing in micro-profiling its users in order to offer deeply granular information to advertisers and thus gain ever larger market share of ad dollars. What the mega Wall Street banks are doing with artificial intelligence and machine learning is separating its customers into categories of financially sophisticated, less sophisticated, and outright dummies. That data is then used to effectively prey on the financially unsophisticated.Schoar explained what is happening as follows:“The availability of much more detailed data about individual customers combined with powerful new analytics tools, such as AI and Big Data, allows for much more individualized pricing of services. Financial service providers are able to model not only the credit risk of customers but also their latent demand and financial sophistication. This allows for highly individualized pricing, including the ability of target customers’ behavioral biases and inattention to financial details.”
Bank of America Freezes Immigrant Bank Accounts - Bank of America has frozen the accounts of Saeed Moshfegh, an Iranian student getting his Ph.D. in physics at the University of Miami who has been in the country for more than a decade. To maintain the accounts, all he had to do was show proof of legal residency every six months, however, earlier this month, that all changed.“I think it’s onerous, but I’d been doing it,” said Moshfegh, who has lived in Florida for the past seven years.Earlier this month, Moshfegh went to his local branch in the South Miami district. He was instructed that the documentation this time could not be accepted. Bank officials insisted he produce different paperwork, according to Moshfegh. Due to his current student status, he maintains the documentation he supplied was correct.“This bank doesn’t know how the immigration system works, so they didn’t accept my document,” said Moshfegh.Locked out of his account, Moshfegh could not pay his rent, living expenses, along with his credit cards were suddenly rejected. It was like he was removed from the system.In recent months, Bank of America has been on a spree, freezing customers’ accounts after asking about their legal status in the US.Last month, the Washington Post reported that a Kansas family had their assets frozen after Bank of America questioned their citizenship. Josh Collins and Jessica Salazar Collins, whose accounts were frozen, said they received an unusual-looking letter from the bank asking about citizenship status.
Google and Mastercard Cut a Secret Ad Deal to Track Retail Sales - For the past year, select Google advertisers have had access to a potent new tool to track whether the ads they ran online led to a sale at a physical store in the U.S. That insight came thanks in part to a stockpile of Mastercard transactions that Google paid for. But most of the two billion Mastercard holders aren’t aware of this behind-the-scenes tracking. That’s because the companies never told the public about the arrangement. Alphabet Inc.’s Google and Mastercard Inc. brokered a business partnership during about four years of negotiations, according to four people with knowledge of the deal, three of whom worked on it directly. The alliance gave Google an unprecedented asset for measuring retail spending, part of the search giant’s strategy to fortify its primary business against onslaughts from Amazon.com Inc. and others.But the deal, which has not been previously reported, could raise broader privacy concerns about how much consumer data technology companies like Google quietly absorb."People don’t expect what they buy physically in a store to be linked to what they are buying online,” said Christine Bannan, counsel with the advocacy group Electronic Privacy Information Center (EPIC). "There’s just far too much burden that companies place on consumers and not enough responsibility being taken by companies to inform users what they’re doing and what rights they have.” Google paid Mastercard millions of dollars for the data, according to two people who worked on the deal, and the companies discussed sharing a portion of the ad revenue, according to one of the people. The people asked not to be identified discussing private matters.
CFPB's student loan ombudsman resigns in scathing letter to Mulvaney - Seth Frotman, an assistant director and student loan ombudsman at the Consumer Financial Protection Bureau, resigned in a scathing letter sent Monday to acting CFPB Director Mick Mulvaney, saying the bureau had “abandoned” consumers and was no longer enforcing the law. Frotman has spent seven years in the CFPB’s student lending office. The unit had much of its authority gutted under administrative changes Mulvaney instituted earlier this year. In the letter, Frotman alleged that Mulvaney had suppressed the publication of a report last year from the bureau’s staff that found large banks were ripping off students by charging them dubious account fees. Frotman's resignation will take effect Sept. 1. The “current leadership of the Bureau has abandoned its duty to fairly and robustly enforce the law,” Frotman wrote. Mulvaney is also the director of the White House Office of Management and Budget and has hired about a dozen political appointees to help oversee the CFPB. In May, he announced a restructuring that stripped the CFPB’s student lending office of all functions except consumer education.“The Bureau’s new political leadership has repeatedly undercut and undermined career CFPB staff working to secure relief for consumers,” Frotman wrote in the letter. “When the Education Department unilaterally shut the door to routine CFPB oversight of the largest student loan companies, the Bureau’s current leadership folded to political pressure.” The letter was sent to 10 lawmakers, including members of both the House Financial Services Committee and Senate Banking Committee, as well as Treasury Secretary Steven Mnuchin and Education Secretary Betsy DeVos.Under former CFPB Director Richard Cordray, the CFPB’s student loan office returned more than $750 million to student loan borrowers.Frotman said Mulvaney had undermined the CFPB’s independence and was shielding bad actors from scrutiny. “The current leadership of the Bureau has made its priorities clear — it will protect the misguided goals of the Trump Administration to the detriment of student loan borrowers,” Frotman wrote. “Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America.”
OCC goes it alone on first step toward CRA overhaul -- The Office of the Comptroller of the Currency issued more than 30 questions Tuesday asking the public how it can revamp a 40-year-old law that grades banks on their lending to low- and moderate-income communities.The questions are included as part of an advance notice of proposed rulemaking as the OCC begins the process of modernizing the Community Reinvestment Act of 1977 with the hope that other bank regulators will join later.“I really believe this ANPR starts the process of that discussion of how we can bring more [lending] to those communities across America,” Comptroller Joseph Otting said during a call with reporters. “The longer we wait on an ANPR is just the longer that those communities will be underserved and not have the hope that we can assist them in those respected communities.” Some of the key questions look at how so-called community assessment areas should be redefined, as the law was originally written to primarily look at areas where a bank is headquartered or has physical branches. This has become a greater challenge as there are rural areas in need of loans but have no bank branches, and online banking has expanded but does not count toward CRA credit.“Banks have a continuing responsibility to meet the credit needs of their communities, but in recent years banking has seen major changes,” Richard Hunt, president and chief executive of the Consumer Bankers Association, said in a statement. “Recognizing those changes and bringing CRA into the 21st Century will ensure community investment dollars are put to work where they are most needed.” Otting has also repeatedly pushed to expand the types of loans that would get CRA credit, including, for example, certain business loans that would be aimed at increasing job growth in a community. He suggested perhaps lifting a CRA restriction on lending through religious organizations. “I understand the difference between church and state but I think we should be able to clearly delineate those activities at a church because in a lot of the Latino and black communities across America, they go to the church for not only their religion but also often their financial literacy counseling, their home mortgage,” he said. “We should support those activities that allow financial institutions to support that and be able to get CRA credit.” Yet some community groups have raised concerns that expanding the types of loans or assessment areas included under the law would simply make it easier for banks to get CRA credit rather than placing a greater focus on areas that need loans the most. This debate is likely to be an area of focus for public comment in response to the ANPR.
There's no harm in OCC's single-agency approach on CRA — for now - The Office of the Comptroller of the Currency’s plan to issue its own set of questions on modernizing the Community Reinvestment Act is already a break from the past.Typically, the federal bank regulators — the OCC, Federal Deposit Insurance Corp. and Federal Reserve Board — embark on rulemakings jointly, which is the approach you'd expect for one as consequential as a CRA revamp. The agencies traditionally strive for coordination and consistency, so rules are the same regardless of charter type. But they evidently are not at the same page yet. The OCC says it will release its own advance notice of proposed rulemaking — amid reports that the agencies disagree on a CRA policy — that will not make any recommendations but will seek public comment on a path forward. For now, the decision to move forward poses few risks to the agency as it enters an information-gathering phase for future reforms. It will be critical to see if the agencies can get on the same page before rulemaking gets further along. The OCC’s initial step here is not surprising. Comptroller Joseph Otting has been intently focused on moving the CRA ball forward since he took the agency’s reins last year, and has discussed the idea before of the OCC issuing its own advance notice if the three agencies did not move forward together. An OCC spokesman stressed again on Monday that an ANPR would not have any policy implications. “It’s not unprecedented for agencies to issue ANPRs independently and move forward with actual rule proposals on an interagency basis later,” the spokesman, Bryan Hubbard, said in an interview. “It continues the process, it avoids unnecessary delays later and ideally it will produce a rule that will expand lending and investments to the communities that need it most, sooner rather than waiting.” Indeed, the OCC went ahead on its own ANPR on a separate issue as recently as last year, when under then-acting Comptroller Keith Noreika, it asked for public comment on changes to the Volcker Rule. But the regulators later acted jointly when all three joined the proposal unveiled in May to reform compliance procedures for the proprietary trading ban.
Is the OCC becoming a ‘lone wolf’ on bank policy? -- The Office of the Comptroller of the Currency is making regulatory history as a “lone wolf” regulator with the publication of its advance notice of proposed rulemaking to overhaul the Community Reinvestment Act. It’s hardly the first time. The process started with the agency’s revised policy on fair lending downgrades of CRA ratings issued last October. This revision, released by then-acting Comptroller Keith Noreika, eased the CRA regulatory burden for OCC-regulated institutions. Since then Comptroller Joseph Otting, not to be outdone by his placeholder, further eased the regulatory burden with a June bulletin relaxing CRA exam procedures and an additional release in August similar to the October revision.Yet the most recent step, independently seeking public comment on CRA reform, remains the most significant to date.Putting aside the critical public policy question of whether these OCC regulatory reforms are in the public interest, these efforts are being enacted without the Federal Deposit Insurance Corp. or the Federal Reserve through the normal interagency process.By taking steps to ease the regulatory burden on national banks and federal savings associations, the OCC is placing state-chartered banks at a competitive disadvantage. Holding companies with banks regulated by different agencies must now become fluent in multiple regulatory languages. This not only results in an unlevel playing field within the banking industry, but it is also at odds with President Trump’s objective to reduce the regulatory burden for all banks.This agency divide on CRA brings back “competition in laxity” memories from the 1970s, when banks would “charter shop” to get the friendliest regulator. In that case, the effort focused on loosening critical capital requirements and other safety and soundness regulations rather than compliance issues.Yet it is not unreasonable in today’s intensified M&A climate to imagine a bank with major merger plans, regulated by the FDIC or the Fed, jumping over to the OCC for a friendlier CRA rating.
Chase Bank hit with downgrade over jumbo mortgage underwriting, fintech gaps - Moody's Investors Service downgraded JPMorgan Chase's prime jumbo mortgage originator assessment to its second-highest rating, citing the bank's growing reliance on correspondents with delegated underwriting authority and shortcomings in its technology infrastructure.Moody's uses a five-tiered scale in its assessments. The downgrade to an "above average" rating, from the highest "strong" rating, followed decreases in three out of six components of the assessment. The property valuation and technology components were both downgraded to "above average," from "strong," while the underwriting policies and procedures component of the assessment was downgraded to "average," from "above average." "We respectfully disagree with the rating and feel it's based on insufficient information. While we provide select correspondent lenders with delegated underwriting authority, we also then conduct individual underwriting reviews on roughly half of those loans. These are high-quality loans that perform well," Amy Bonitatibus, chief marketing and communications officer of Chase Home Mortgage, said in an email. Concern about the share of loans originated through correspondents with delegated underwriting authority contributed to the downgrade. Correspondents represent 63% of the bank's jumbo production, according to an Aug. 24 Moody's report. The rest of JPMorgan Chase's production gets originated through either its retail or consumer direct channels. Securitized loan pools with higher shares of in-house originations perform better, Moody's recently noted in rating a JPMorgan Chase securitization that had a higher percentage of third-party originations.
Commercial Real Estate Paying The Lowest Return Since Before The Housing Crisis Investors taking on more risk in US commercial real estate are now receiving the lowest return since the housing crisis. The premium spread for buying BBB- tranches of commercial mortgage backed securities versus AAA is the lowest its been since May 2007, according to a new report from analytics company Trepp, the FT reports. The euphoria associated with the US economy even as the overall global economy is rolling over means that those bearing the brunt of risk for commercial mortgage backed securities are getting paid the least. This also comes as a result of investors chasing yield, which could be another obvious canary in the coal mine that the now record bull market could be reaching an apex. “As you get toward the latter innings of the credit cycle, people have money they need to put to work and they take on more risk for less return,” said Alan Todd, a CMBS analyst at Bank of America Merrill Lynch.Commercial mortgage backed securities are made up of a combination of types of mortgages which are then divided up by risk. Traditionally, as with any financial instrument, the more risk that investors bear, the more they get paid. But now, investors are looking more and more like they're "picking up pennies in front of bulldozers" as demand for AAA tranches of CMBS' has fallen. Meanwhile BBB- slices of CMBS continue to see an influx of demand. The conclusion?“You are probably not getting paid for the risk you are taking and that definitely concerns us,” Dushyant Mehra, co-chief investment officer at Hildene, told the Financial Times.The Federal Reserve's tightening could be another potential cause for the shift: higher quality fixed rate investments like AAA tranches of CMBS, have fallen in price as a result of Fed policy. This, in turn, has caused investors to seek out riskier products, like floating rate company loans, to juice returns.
Kushner Cos. fined $210,000 by New York for false documents -- The Kushner family real estate company has been fined $210,000 by New York City regulators following an Associated Press investigation that showed it routinely filed false documents with the city claiming it had no rent-regulated tenants in its buildings when it, in fact, had hundreds. The city buildings department on Monday fined the Kushner Cos. for filing 42 false applications for construction work on more than a dozen buildings when Jared Kushner, President Donald Trump's son-in-law and advisor, ran the business. The false documents allowed the company to escape extra scrutiny during construction that watchdog group Housing Rights Initiative has said led to harassment of low-paying, rent-regulated tenants to get them to leave. The Kushner Cos. did not immediately respond to a request for comment.
Fight over unpopular fair-lending standard rages long after court case — More than three years after a Supreme Court ruling validated "disparate impact" as a legal argument in fair-lending cases, the banking industry and housing advocacy groups are still at odds over how to interpret the decision. The ruling supported disparate impact — which holds lenders liable for discrimination even if it was unintended — under the Fair Housing Act. But it also suggested a higher legal bar for plaintiffs to make their case. The case, known as Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, is playing a central role in the Department of Housing and Urban Development's plan to change its disparate impact rule. Supreme Court The 2015 Supreme Court ruling supported disparate impact under the Fair Housing Act. But it also suggested a higher legal bar for plaintiffs to make their case. Bloomberg News In recent comment letters, banking industry representatives are calling on HUD to realign its rule with the 2015 court ruling in order to end frivolous lawsuits. On the other side, advocacy groups argue the court decision endorsed HUD's current framework. “Allegations of lending discrimination present a very serious charge, are expensive to defend, and can occasion an immediate reputational injury and business disruption,” wrote Rod Alba, the American Bankers Association’s senior counsel for mortgage finance, in a comment letter to HUD. “No matter how frivolous such suits may be, the threat may cause lenders to manage their end numbers, which creates another kind of risk that Inclusive Communities cautions against.” The department released six questions in June for public comment as part of an advance notice of proposed rulemaking. The department asked if the disparate impact rule should be clarified in a way to reduce uncertainty and decrease regulatory burden, and whether the rule should include any safe harbors for defendants for certain categories of claims. HUD received a total of 500 comment letters.
GSE reform could increase costs to borrowers: CBO — The Congressional Budget Office has found that restructuring the mortgage market would save the government tens of billions of dollars, but could also increase the cost of housing, presenting yet another hurdle for lawmakers looking to reform mortgage giants Fannie Mae and Freddie Mac.CBO estimated in a report released last week that the government-sponsored enterprises would guarantee $12 trillion of mortgage-backed securities over the next 10 years, costing the federal government $19 billion. The office projected that if Fannie and Freddie were eliminated, the government would save $18.1 billion compared to the current system, while a “guarantor as a last resort” system would result in $11.7 billion in savings and a hybrid public-private structure would result in $12.8 billion in savings. Each of these plans would decrease taxpayers’ exposure to credit risk, according to the report. The assessment is an update to an earlier study the CBO conducted in 2014.
The new face of mortgage fraud - Editor's Note: This is part one in a three-part series. Read part two and part three here. - In Grand Haven, a small resort town nestled on the eastern shore of Lake Michigan, a homebuyer walked into his credit union. The homebuyer brought with him an email he'd printed out, containing instructions for wiring about $50,000 in closing costs to Sun Title, the settlement company that was coordinating his purchase of a home the next morning. At first glance, the email appeared perfectly normal, down to the use of Sun Title's logo in the email signature. The contents of the message were seemingly innocuous, as the homebuyer had been expecting the wire instructions and was looking forward to finalizing the transaction. But the reality was far more sinister and the potential outcome even more disastrous, had it not been for an eagle-eyed manager at the credit union. Something was off about the email, the manager noticed. While the sender's name matched the Sun Title employee who had been working with the homebuyer, the message came from an account @suntitie.com, with an "i" where the "l" should have been. So the credit union manager and homebuyer called Sun Title to confirm the details. They quickly discovered the wire instructions hadn't actually come from Sun Title, but rather from a fraudster attempting an elaborate con known as a business email compromise scheme. "It never should have been caught," said Sun Title CEO Tom Cronkright. "We should have been hit really hard for that one." Digital processes have revolutionized the entire home buying experience by making it faster, cheaper and more transparent. But it's also opened the door to new types of fraud that exploit the increasingly virtual nature of these transactions.The industry has worked tirelessly to stamp out fraud committed by nefarious borrowers and rogue employees. Underwriting tools that rely on independent data have replaced paper-based verifications, making it harder for misrepresentations to slip past lenders. But business email compromise and similar schemes stand apart from more traditional forms of mortgage fraud because the perpetrators don't typically have a connection to the subject property or parties involved in a transaction. It's a distinction that's largely caught the industry off guard, even among professionals actively on the lookout for it.
Public real estate data makes housing market easy target for wire fraud - This is part two in a three-part series. Read part one and part three here. The mortgage industry is a ripe target for business email compromise schemes because of the increased presence of publicly available data about real estate listings and sales. Within 48 hours of a home going up for sale, the listing is syndicated across myriad multiple listing services and real estate websites. After it goes under contract, the property's status is changed to pending sale. That helps outsiders — including people not in the United States — perfectly time when they weasel into transactions. Meanwhile, digital communication has removed much of the personal connection between the players in a real estate deal. Participants might rarely, if ever, meet face-to-face, increasing the fraud risk because they do not know each other. A small measure of success was seen in June when federal enforcement agencies made 74 arrests and were able to seize $2.4 million of ill-gotten gains and disrupt or recover an additional $14 million from BEC. Among the victims were title companies and real estate attorneys. Showing the global nature of BEC crime, 29 of those people arrested were in Nigeria with one each in Canada, Mauritius and Poland. There were reported losses of $3.8 billion from 44,007 victims of BEC and a related fraud called email account compromise since 2013, when the Federal Bureau of Investigation's Internet Crime Complaint Center — known as IC3 — started tracking these schemes. In the first quarter of 2018, there were 4,081 victims with reported losses of $685.2 million. For the first five months of this year, adjusted losses from real estate-related BEC were $46.1 million, nearly equaling the amount for all of 2016 and is on pace to match the $111.2 million for 2017, the FBI said. Adjusted losses for all BEC fraud last year was $675 million. The June arrests included some of the scammers that preyed on Sun Title in 2015. But even before those arrests, Sun Title CEO Tom Cronkright and his business partner Lawrence Duthler, through a lot of detective work, were able to track down and recover $140,000 of the $180,000 Sun Title lost in the scam. "Through litigation or finesse, any data point or name we could get out of anyone that had visibility to where the funds went, we went after them," Cronkright said.
Fake employer mortgage fraud widespread in California, Fannie warns -- A mortgage scam in California where fraudsters provide fake employer information on loan applications is more widespread than originally suspected, Fannie Mae said in a new fraud alert.Fannie warned lenders about the scam in May, when it was first identified in Southern California. The new alert expands the scope of the fraud to Northern California and also adds 10 alleged fake companies being used on the fraudulent loan applications. It's unclear whether the geographic reach of the scheme has spread since the initial warning or if it was occurring statewide to begin with. However, the fake employers have been found in loan applications taken between 2015 and 2018. "If one of these entities is disclosed as the borrower's place of employment, exercise due diligence in reviewing the entire loan file," Fannie Mae advises in the alert. "Lenders must exercise caution in these situations and take appropriate steps." Other red flags associated with the fraud scheme include:
- Brokered and other third-party originated loans
- Employment and salaries listed that seems disconnected with borrowers' ages or experience
- Short times listed for current jobs
- Previous employment listed as "student"
- Paystubs with generic formatting or that don't include withholdings for medical and retirement benefits
- Letters for substantial gifts that can't be reverified
Fannie Mae's list of the alleged fake employers includes 45 companies with California addresses: (list)
Freddie Mac: Mortgage Serious Delinquency Rate Decreased in July -- Freddie Mac reported that the Single-Family serious delinquency rate in July was 0.78%, down from 0.82% in June. Freddie's rate is down from 0.85% in July 2017. Freddie's serious delinquency rate peaked in February 2010 at 4.20%. This is the lowest serious delinquency rate for Freddie Mac since March 2008. These are mortgage loans that are "three monthly payments or more past due or in foreclosure". The increase in the delinquency rate late last year was due to the hurricanes - no worries about the overall market (These are serious delinquencies, so it took three months late to be counted). I expect the delinquency rate to decline to a cycle bottom in the 0.5% to 0.75% range - but this is close to a bottom.
Fannie Mae: Mortgage Serious Delinquency rate decreased in July, Lowest since Oct 2007 --Fannie Mae reported that the Single-Family Serious Delinquency rate decreased to 0.88% in July, down from 0.97% in June. The serious delinquency rate is down from 1.00% in July 2017.These are mortgage loans that are "three monthly payments or more past due or in foreclosure". The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59%.This is the lowest serious delinquency for Fannie Mae since October 2007.
Many South Florida borrowers remain underwater 10 years later -- A decade after a collapse in the housing market triggered the 2008 Great Recession, South Florida still has many homeowners who owe far more money than their property is worth.And even with home prices creeping up in recent years, Broward County is ground zero for underwater mortgages.As of the second quarter of 2018, about 8% of Broward's homes w ere "seriously underwater," according to California-based Attom Data Solutions, a real estate research and analysis firm. That compares to 5% for Palm Beach County and 4% for Miami-Dade. Attom defines "seriously underwater" as properties where mortages and loans exceed the home's estimated market value by at least 25%.South Florida fared better than the U.S. average. One in ten homes across the United States was seriously underwater this spring, Attom reported. Daren Blomquist, senior vice president for the company, said South Florida home sales prices remain 10 to 15% below their peak in 2006. "That's kind of the number one factor" that leave homeowners owing more than the property may be worth, he said.Blomquist said Broward's high proportion of underwater homes, relative to neighboring counties, could be because many homeowners who bought before the recession "stuck it out" rather than go into foreclosure, meaning they still owe more than what they can fetch on the market. But they still have the house. "High foreclosure rates are kind of like the reset button," he said.
MBA: Mortgage Applications Decreased in Latest Weekly Survey - From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey: Mortgage applications decreased 1.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 24, 2018.... The Refinance Index decreased three percent from the previous week. The seasonally adjusted Purchase Index decreased one percent from one week earlier. The unadjusted Purchase Index decreased three percent compared with the previous week and was three percent higher than the same week one year ago. ... The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.78 percent from 4.81 percent, its lowest rate since the week ending July 20, 2018, with points increasing to 0.46 from 0.42 (including the origination fee) for 80 percent loanto-value ratio (LTV) loans.
Case-Shiller: National House Price Index increased 6.2% year-over-year in JuneS&P/Case-Shiller released the monthly Home Price Indices for June ("June" is a 3 month average of April, May and June prices). This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.From S&P: Las Vegas Leads Price Gains in June According to the S&P CoreLogic Case-Shiller IndexThe S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.2% annual gain in June, down from 6.4% in the previous month. The 10-City Composite annual increase came in at 6.0%, down from 6.2% in the previous month. The 20-City Composite posted a 6.3% year-over-year gain, down from 6.5% in the previous month.Las Vegas, Seattle and San Francisco continued to report the highest year-over-year gains among the 20 cities. In June, Las Vegas led the way with a 13.0% year-over-year price increase, followed by Seattle with a 12.8% increase and San Francisco with a 10.7% increase. Six of the 20 cities reported greater price increases in the year ending June 2018 versus the year ending May 2018. Before seasonal adjustment, the National Index posted a month-over-month gain of 0.8% in June. The 10-City and 20-City Composites reported increases of 0.4% and 0.5%, respectively. After seasonal adjustment, the National Index recorded a 0.3% month-over-month increase in June. The 10-City and 20-City Composites both posted 0.1% month-over-month increases. Nineteen of 20 cities reported increases in June before seasonal adjustment, while 17 of 20 cities reported increases after seasonal adjustment. “Home prices continue to rise across the U.S.” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “However, even as home prices keep climbing, we are seeing signs that growth is easing in the housing market. Sales of both new and existing homes are roughly flat over the last six months amidst news stories of an increase in the number of homes for sale in some markets. Rising mortgage rates – 30 year fixed rate mortgages rose from 4% to 4.5% since January – and the rise in home prices are affecting housing affordability. The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000). The Composite 10 index is off 0.9% from the bubble peak, and up 0.1% in June (SA). The Composite 20 index is 2.3% above the bubble peak, and up 0.1% (SA) in June. The National index is 9.8% above the bubble peak (SA), and up 0.3% (SA) in June. The National index is up 48.5% from the post-bubble low set in December 2011 (SA).The second graph shows the Year over year change in all three indices.
House prices continue to rise, exacerbating unaffordability -- Now that we have both the Case Shiller and FHFA house price reports for June, let's take a look at how they fit in to the overall market, and in particular on housing affordability. To begin with, let me repeat the general formula for the housing market: interest rates lead sales, sales lead prices, prices lead inventory. Turning to the reports, in June, the 20-city Case Shiller house price index rose 0.5% m/m: House prices are clearly still rising. On a YoY% basis, the index rose 6.2% (blue in the graph below). This continues a slight deceleration from the YoY% peak of 6.7% in March. Let's compare that with YoY% growth in the least volatile measure of sales, single family permits (red, quarterly to cut down on noise) divided by 2 for scale), and the quarterly FHFA house price index (green): On this graph it is easy to see how permits lead prices, although it is less apparent over the past few years. So let's zoom in on the last few years, measured monthly: Now it is easy to see that YoY prices as measured by the Case Shiller index did decelerate slightly in 2016, although the FHFA index didn't, coincident with the sharp deceleration in permits. The YoY change in single family permits peaked in the first six months of 2017, while both house price indexes continued to accelerate YoY into February and March of this year. While permits have decelerated significantly in the past year, prices have only started to decelerate in the last 4 months.As a result of the continued surge in house prices, affordability continues to suffer. Contrasted with the 6%+ rise in house prices in the last 12 months, Sentier Research also reported today that nominal median household income only rose 2.6% YoY through July. Here is the graph of Sentier's monthly median household income measure through last month (h/t Doug Short): Since we can expect house prices to continue to rise for awhile, unless mortgage rates decline, the increased unaffordability of housing means that we can expect further pressure on house sales, which as I reported last week, on balance have begun to turn negative.
Real House Prices and Price-to-Rent Ratio in June Bill Mcbride - In the Case-Shiller release this morning, the seasonally adjusted National Index (SA), was reported as being 9.8% above the previous bubble peak.However, in real terms, the National index (SA) is still about 9.6% below the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is still 15.7% below the bubble peak. The year-over-year increase in prices is mostly moving sideways now around 6%. In June, the index was up 6.2% YoY.Usually people graph nominal house prices, but it is also important to look at prices in real terms (inflation adjusted). Case-Shiller and others report nominal house prices. As an example, if a house price was $200,000 in January 2000, the price would be close to $285,000 today adjusted for inflation (42%). That is why the second graph below is important - this shows "real" prices (adjusted for inflation).The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA (through June) in nominal terms as reported.In nominal terms, the Case-Shiller National index (SA)and the Case-Shiller Composite 20 Index (SA) are both at new all times highs (above the bubble peak).The second graph shows the same two indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices.In real terms, the National index is back to December 2004 levels, and the Composite 20 index is back to June 2004. In real terms, house prices are at 2004 levels.
Zillow Case-Shiller Forecast: Slower House Price Gains in July -- The Case-Shiller house price indexes for June were released today. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close. From Aaron Terrazas at Zillow: June Case-Shiller Results and July ForecastIt’s hard not to notice the winds beginning to shift in the housing market. But those changes have yet to reach the point where they’ve fully transitioned from home buyer headwinds into tailwinds, and likely won’t until at least the end of the decade.Still, the signs of change are here: The U.S. National Case-Shiller Home Price Index climbed 6.2 percent in June from a year earlier, slightly slower than the 6.4 percent annual growth recorded in May. June prices rose 0.3 percent from May – slightly below expectations. But the slowdown, and the changes it brings, will be gradual. Inventory, when it begins to rise, will be coming up from incredibly low levels. Home value growth remains well above historic norms, even as it slows in some markets – and that rapid growth still makes saving an adequate down payment a challenge for many buyers. And while sellers are seemingly more open to cutting their initial asking price than in recent months, that trend is more prominent at the upper end of the market where there is more selection....Zillow’s expects Case-Shiller data for July, to be released September 25, to show national home-price appreciation of 6.1 percent year-over-year.The Zillow forecast is for the year-over-year change for the Case-Shiller National index to be smaller in July than in June.
Starter Homes Most Expensive Since Just Before Last Housing Crash - There is a simple reason why the US housing market is headed for its "broadest slowdown in years": prices for housing are just too high, a new report suggests. Which is odd considering the conventionally accepted narrative that "rising prices are better for everybody."According to a new report from the National Association of Realtors, prices for starter homes are the highest they have been since 2008, just prior to the collapse of the housing market, and when Ben Bernanke infamously said that there is no housing bubble and that "we've never had a decline in house prices on a nationwide basis" and therefore we'll never have one. The housing market suffered its worst crash on record shortly after. In the second quarter, first time buyers needed 23% of their income in order to afford a typical entry-level home; this was up from 21% in the year prior, and the highest in the past decade. This, of course, should surprise nobody as price gains in the housing market have long outpaced wages; in fact in most markets the average home price increase is double the growth in hourly earnings. Now, with the housing market starting to show signs of cooling off, those bearing the brunt of the increases are buyers at the low-end of the market and in areas where supplies are the tightest. This has probably not been helped along by the volatile cost of commodities like lumber which have been impacted by Canadian tariffs, among others. On top of that, rising interest rates are making mortgage prohibitively expensive for a broad section of the population. "When prices go up at the entry level, that’s where the affordability issue is most acute," Wells Fargo economist Charles Dougherty told Bloomberg. "People are hesitant to stretch the amount they’re willing to pay." Perhaps a better way of saying this is that no mere mortal can actually afford to buy there, and the only buyers are members of the 0.01% or those who have an extremely generous mortgage lender. None of this housing information is discussed at length by the FOMC or the government, which find no problem with a near record number of people getting priced out of the market. Nobody will be surprised when, as prices continue to rise, we are "surprised" by the next housing crisis.
New Home Prices -- As part of the new home sales report released last week, the Census Bureau reported the number of homes sold by price and the average and median prices. From the Census Bureau: "The median sales price of new houses sold in July 2018 was $328,700. The average sales price was $394,300." The following graph shows the median and average new home prices. During the housing bust, the builders had to build smaller and less expensive homes to compete with all the distressed sales. When housing started to recovery - with limited finished lots in recovering areas - builders moved to higher price points to maximize profits. The average price in July 2018 was $394,300, and the median price was $328,700. Both are well above the bubble high (this is due to both a change in mix and rising prices). The second graph shows the percent of new homes sold by price. About 2% of new homes sold were under $150K in July 2018. This is down from 30% in 2002. In general, the under $150K bracket is going away. The $400K+ bracket has increased significantly since the housing recovery started. Still, a majority of new homes (about 60%) in the U.S., are in the $200K to $400K range.
NAR: Pending Home Sales Index Decreased 0.7% in July -- From the NAR: Pending Home Sales Trail Off 0.7 Percent in July - Pending home sales stepped back in July and have now fallen on an annual basis for seven straight months, according to the National Association of Realtors®. The Pending Home Sales Index, a forward-looking indicator based on contract signings,decreased 0.7 percent to 106.2 in July from 107.0 in June. With last month’s decline, contract signings are now down 2.3 percent year-over-year.The PHSI in the Northeast climbed 1.0 percent to 94.6 in July, but is still 2.3 percent below a year ago. In the Midwest the index inched up 0.3 percent to 102.2 in July, but is still 1.5 percent lower than July 2017. Pending home sales in the South declined 1.7 percent to an index of 122.1 in July, and are 0.9 percent below a year ago. The index in the West decreased 0.9 percent in July to 94.7, and is 5.8 percent below a year ago. This was below expectations for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in August and September.
Pending Home Sales Slump For 7th Straight Month As Overheated Real Estate Markets Start To Drop - Amid its "broadest slowdown in years" the US housing market faces prices for starter homes at the highest they have been since 2008, just prior to the collapse of the housing market, and August is confirming that prices are indeed becoming an issue.Following the drop in Existing- and New-home sales (as well as another drop in mortgage apps), Pending-home sales missed expectations dramatically, dropping 0.7% MoM in July (+0.3% exp).This is the seventh straight month of annual declines in pending home sales... Lawrence Yun, NAR chief economist, says the housing market’s summer slowdown continued in July.“Contract signings inched backward once again last month, as declines in the South and West weighed down on overall activity,” he said.“It’s evident in recent months that many of the most overheated real estate markets – especially those out West – are starting to see a slight decline in home sales and slower price growth.”Yun blames affordability (and supply)... “The reason sales are falling off last year’s pace is that multiple years of inadequate supply in markets with strong job growth have finally driven up home prices to a point where an increasing number of prospective buyers are unable to afford it.”The US housing data just keeps getting worse... Again as we noted previously, none of this should come as a huge surprise since Sentiment for Home-Buying Conditions are the worst since Lehman... With The Fed set on its automaton hiking trajectory, we suspect home sales will continue to lag.
40% of Americans struggle to pay for at least one basic need like food or rent - Many people still struggle to pay bills — even for something as basic as food.That’s the difficult conclusion of a new report released this week by the Urban Institute, a nonpartisan, nonprofit policy group based in Washington, D.C., which surveyed almost 7,600 adults last December. Some 39.4% of adults said their families had trouble meeting at least one basic need for food, health care, housing, or utilities last year. Nearly 24% of respondents reported two or more hardships in 2017 and 14% said they experienced at least three of these. The Urban Institute’s “Well-Being and Basic Needs Survey” tracks individual and family health and financial security at a time when the economy is improving andunemployment is falling, but the researchers said the social safety net for low-income Americans “may be undergoing significant changes.” In fact, almost two-thirds of families with incomes below the federal poverty level — currently$25,100 for a family of four — had problems meeting these basic needs. The most common hardship Americans said they faced was food insecurity, with 23.3% of respondents saying they did not have reliable access to a sufficient amount of affordable and nutritious food. Other basic needs Americans had trouble meeting included paying medical bills (18% of respondents), getting medical care (17.8%), missing utility bill payments (13%) and missing rent or mortgage payments (10.2%). Adults under the age of 35 were 8.6 percentage points more likely to report a financial hardship, which echoes recent research that has suggested young adults experience more difficulty staying afloat financially. Women, black Americans, Hispanic Americans and single adults were also more likely to struggle to make ends meet. Close to 20% of people whose household income was 400% above the federal property level also experienced some sort of difficulty meeting a basic need.
Personal Income and Outlays August 30, 2018: The July personal income & outlays report is about exactly what the Federal Reserve is looking for: moderation to still solid levels of income and spending growth and steady readings on inflation that are right on target. Personal income rose 0.3 percent while consumer spending rose 0.4 percent, both hitting Econoday's July consensus. The PCE price index managed only a 0.1 percent gain which falls 1 tenth short of the consensus but the more closely watched core rate rose 0.2 percent to hit the consensus. The year-on-year rate for the core also hits the consensus, up 1 tenth to 2.0 percent which is exactly the Fed's target. Details on income are favorable with wages & salaries rising 1 tenth more than the headline, up 0.4 percent. Proprietor income and personal interest income both slowed in the month to pull down the total. The savings rate is neutral in today's report, down 1 tenth to what is still a very strong 6.7 percent. Spending data in July were held back for a second month by durable goods which reflects softness in vehicle sales. Service spending rose a solid 0.4 percent though down 2 tenths from June. One soft detail in the report is a 1 tenth slowing in real disposable income, up only 0.2 percent in July. Weakness here will definitely limit the strength of consumer spending which for right now, however, is right where the Fed wants it.
Personal Income increased 0.3% in July, Spending increased 0.4% --The BEA released the Personal Income and Outlays report for July:Personal income increased $54.8 billion (0.3 percent) in July according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $52.5 billion (0.3 percent) and personal consumption expenditures (PCE) increased $49.3 billion (0.4 percent).Real DPI increased 0.2 percent in July and Real PCE increased 0.2 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.The July PCE price index increased 2.3 percent year-over-year and the July PCE price index, excluding food and energy, increased 2.0 percent year-over-year. The following graph shows real Personal Consumption Expenditures (PCE) through July 2018 (2012 dollars). The dashed red lines are the quarterly levels for real PCE. The increase in personal income was below expectations, and the increase in PCE was at expectations.
July 2018 Headline Personal Income And Spending Little Changed: The headline data this month shows continued good month-over-month growth in income and spending. Consumer income growth is higher than spending growth year-over-year. The backward revisions this month were slight. The market looks at current values (not real inflation adjusted) and was expecting: [table]
- The monthly fluctuations are confusing. Looking at the inflation adjusted 3 month trend rate of growth, disposable income growth rate trend was unchanged while consumption's growth rate grew.
- Real Disposable Personal Income is up 2.9 % year-over-year (published 3.1 % last month and revised to 3.0 %), and real consumption expenditures is up 2.8 % year-over-year (published 2.8 % last month and revised to 2.7 %)
- The 2Q2018 GDP estimate indicated the economy was expanding at 4.2 % (quarter-over-quarter compounded). Expenditures are counted in GDP, and income is ignored as GDP measures the spending side of the economy. However, over periods of time - consumer income and expenditure grow at the same rate.
- The savings rate marginally declined to 6.7 % this month [last month it was 6.8 %].
The inflation adjusted income and consumption are "chained", and headline GDP is inflation adjusted. This means the impact to GDP is best understood by looking at the chained numbers. Econintersect believes year-over-year trends are very revealing in understanding economic dynamics. Per capita inflation adjusted expenditure has exceeded the pre-recession peak.
Real Disposable Income Per Capita in July - With the release of Friday's report on July Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 0.27% month-over-month change in disposable income was trimmed to 0.15% when we adjust for inflation. The year-over-year metrics are 4.58% nominal and 2.22% real. Post-recession, the trend was one of steady growth, but generally flattened out in late 2015. Things seem to have picked up slightly in 2018. The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013. It will be interesting to see how the recent tax legislation affects the trend over time. The BEA uses the average dollar value in 2009 for inflation adjustment. But the 2009 peg is arbitrary and unintuitive. For a more natural comparison, let's compare the nominal and real growth in per-capita disposable income since 2000. Nominal disposable income is up 85.1% since then. But the real purchasing power of those dollars is up only 32.2%.
Year-over-year Change in Real Personal Consumption Expenditures (PCE) --Bill Mcbride - Earlier I posted a graph showing real monthly personal consumption expenditures (PCE) based on the monthly BEA report.Here is a graph showing the year-over-year change in real PCE since 2003.In July, the YoY change was 2.8%, about the same level as for the last few years. There was a significant decline in real PCE during the great recession, and real PCE was fairly weak during the first few years of the recovery - partially due to the ongoing weakness in housing following the housing bubble and bust. More recently real PCE has been increasing at a fairly steady rate between 2.0% and 3.0% per year.
Consumer Confidence Explodes To 18 Year High As Income Expectations Hit Record - As 'soft' survey data continues to catch down to 'hard' real economic data's recent demise, Conference Board Confidence shuns the slump and explodes higher to 133.4 (exp 126.6) - the highest since Oct 2000. Current Conditions spiked to 172.2 (18 year highs), Expectations rebounded to 107.6 (highest since Feb), driving the headline to Oct 2000 highs.... Older households (Over 55) and high income earners saw confidence rise but younger households (under 35) and lower income earners are feeling worse. The Labor Differential spiked to the best since March 2001 (Jobs Plentiful - Jobs Hard To Get) Plan to buy homes, cars, and appliances all surged as income expectations spiked to record highs... However, before this huge beat, the surge in soft data is fading fast... as 'hard' data is back below Trump election levels... Expectations for stocks gains also rebounded in August.
Michigan Consumer Sentiment: August Final Remains Low - The University of Michigan Final Consumer Sentiment for August came in at 96.2, down 1.7 from the July Final reading.Investing.com had forecast 95.5.Surveys of Consumers chief economist, Richard Curtin, makes the following comments:Although there was a small uptick in late August, consumer sentiment remained at its lowest level since January. Most of the August decline was in the Current Economic Conditions Index, which fell to its lowest level since November 2016. These results stand in sharp contrast to the recent very favorable report on growth in the national economy. The dominating weakness was related to less favorable assessments of buying conditions, mainly due to less favorable perceptions of market prices and to a lesser extent, rising interest rates. Future income and job certainty have become the main reasons cited by consumers for their positive spending views (see the chart). This shift from attractive prices and interest rates to income is typical of the later stages of expansions, with references to income and job certainty peaking just before downturns. While nominal wage expectations and employment gains have remained strong, the anticipated inflation rate has also increased to its highest level in four years. Although a higher inflation rate is partly due to the potential for increased tariffs, the main cause has been the expectation of robust economic growth. Luckily, consumers have not yet judged the current rate of inflation as a significant source of erosion in their living standards or as a cause to reduce their buying plans. Achieving a soft-landing is always difficult, and especially so when monetary policy must lean against expansionary fiscal policies. Personal consumption can be expected to grow by 2.6% in the year ahead. [More...] See the chart below for a long-term perspective on this widely watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.
American Companies Hike Prices As Consumer Demand Soars - While businesses are already enjoying the benefits of lower taxes and regulatory relief from the Trump administration, they have yet another reason to celebrate, according to Bloomberg.By pouring hundreds of billions of dollars of tax cuts and extra government spending into an already stretched economy, Trump is fostering an environment where firms such as conglomerate 3M Co. can raise prices because demand for their products is strong.That’s a turn-around from the past decade, when executives often bemoaned their inability to lift prices because of their fear of sacrificing sales. The shift will help them pad profits that are already surging thanks to lower taxes. -Bloomberg“The power is with the seller,” said IHS Markit chief business economist, Chris Williamson. "Non-manufacturing firms told the Philadelphia Fed this month that they expect to raise prices 3 percent in the coming year, up from a 2 percent increase they forecast in May," reports Bloomberg. A separate survey of both manufacturing and non-manufacturing companies by IHS Markit found that their average selling prices rose at the fastest rate of the nine-year-old expansion in July before the pace eased a bit in August. –Bloomberg
Vehicle Sales Forecast: Sales Around 16.8 Million SAAR in August - The automakers will report August vehicle sales on Tuesday, September 4th. Note: There were 27 selling days in August 2018, unchanged from 27 in August 2017. From J.D. Power: Retail Sales Poised for Largest Gain of 2018; Spending Expected to Fall for Second Straight MonthNew-vehicle retail sales in August are expected to rise from a year ago according to a forecast developed jointly by J.D. Power and LMC Automotive. Retail sales are projected to reach 1,280,400 units, a 1.3% increase compared with August 2017. [16.8 million SAAR] (Note: August 2018 has the same number of selling days as last year.) “With no large disruptions from storms this year, new vehicle sales in August are expected to see the largest gain of the year,” said Thomas King, Senior Vice President of the Data and Analytics Division at J.D. Power. “Last year, Hurricanes Harvey and Irma made landfall during the end of the month, affecting Labor Day sales events. Labor Day remains one of the most heavily shopped periods in the year, accounting for nearly 3% of annual sales, as consumers take advantage of discounts that extend through the first weekend of September.” It appears August will be another solid month for vehicle sales. Through July, sales were down slightlycompared to the same period in 2017. Last year, August was the weakest sales month of the year at 16.45 million SAAR, due to the impact of the hurricanes. Following the hurricanes, sales were strong through the end of the year in 2017 as hurricane victims replaced cars damaged during the storms. So, even though sales will be up YoY in August, sales will probably down YoY for the last four months of the year.
US court rules that smart meters invade privacy - The United States Court of Appeals for the Seventh Circuit has handed down a landmark ruling, stating that data collected by smart meters is protected by the Fourth Amendment. The court held that residents have a reasonable expectation of privacy and government access of this data constitutes, in essence, a search. Jamie Williams, staff attorney at the Electronic Frontier Foundation, said: “The Seventh Circuit recognized that smart meters pose serious risks to the privacy of all of our homes, and that rotely applying analog-era case law to the digital age simply doesn’t work.” Previously, courts ruled that the Fourth Amendment does not protect household energy data, however this precedent was based on traditional analog meters, that revealed little information.
US wholesale inventories for July (P) 0.7% vs 0.2% est. -
- The US wholesale inventories for July (preliminary) rose by a greater than expected 0.7% vs the estimate of 0.2%.
- The retail inventories moved up 0.4% vs 0.0% last. The ex auto inventories rose by 0.1% vs 0.0%
- YoY wholesale inventories are up 5.2%
More Bad News For Trump: Goods Trade Deficit Surges Most In Over Three Years - While Trump is pushing to reform NAFTA even as the trade war with China gets worse, there was more bad news for Trump's trade agenda this morning, when the Advance Goods Trade Deficit came in at $72.2BN, worse than the $69BN consensus print, and just shy of the highest forecast (the range was $66BN to $72.5BN). It was also the biggest deficit since the record hit in March, and is fast approaching the record deficit print of $76 billion. Imports rose 0.9% in July to $212.2BN from $210.4BN in June, while exports fell 1.7% in July to $140.0BN from $142.5BN in June. But more troubling is that this was the biggest monthly increase since March 2015. Needless to say, for an administration that is desperate to shrink the US trade balance, this is an ominous sign and an indication that after some initial success in early 2018, Trump's policies appear to have reversed, perhaps as a result of the recent spike in the US Dollar, which may explain Trump's recent eagerness - and Powell's commentary - to moderate the strength of the greenback.
Dallas Fed: "Robust Expansion in Texas Manufacturing Continues" --From the Dallas Fed: Robust Expansion in Texas Manufacturing Continues Texas factory activity maintained its strong momentum in August, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, held steady at 29.3.Other indexes of manufacturing activity also indicated continued solid expansion in August. The new orders index changed little at 23.9, while the growth rate of orders index moved up three points to 19.9. The capacity utilization index was unchanged at 25.2, and the shipments index slipped five points to 26.0.Perceptions of broader business conditions remained highly positive this month, although uncertainty remained elevated. The general business activity index edged down to 30.9, while the company outlook index rose seven points to 27.3, with more than 30 percent of manufacturers saying their outlook had improved from July. The index measuring uncertainty regarding companies’ outlooks held fairly steady in August at 16.2, well above its readings in the first half of the year.Labor market measures continued to suggest robust hiring and longer work hours. The employment index remained at a 13-year high of 28.9. Thirty-four percent of firms noted net hiring, compared with 5 percent noting net layoffs. The hours worked index edged down to 19.0. The regional surveys for August have mostly indicated somewhat slower growth as compared to July. The last of the regional surveys (Richmond Fed) for August will be released tomorrow.
Richmond Fed: "Fifth District Manufacturing Firms Reported Strong Growth in August" - From the Richmond Fed: Fifth District Manufacturing Firms Reported Strong Growth in August Fifth District manufacturing activity expanded in August, according to results of the most recent survey from the Federal Reserve Bank of Richmond. The composite index rose from 20 in July to 24 in August, as all three components (shipments, new orders, and employment) increased. Respondents remained optimistic in August, expecting growth to continue in the coming months.Employment and wages continued to rise, yet manufacturing firms continued to struggle to find workers with the skills they needed, as this indicator dropped to −17, its lowest value on record. This was the last of the regional Fed surveys for August. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
August Regional Fed Manufacturing Overview - Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country's GDP.The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Bookoffers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, "The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated." Here is a three-month moving average overlay of each of the five indicators since 2001 (for those with data). The latest average of the five for August is 22.9, down from the previous month's 24.5. It is below its all-time high of 25.1, set in May 2004.
Chicago PMI Beats Expectations As 'Soft' Surveys Shrug Off Dismal 'Hard' Data -- With 'hard' real economic data slumping to its weakest since Nov 2017, 'soft' survey-based views of the economy have once again surged, ever-hopeful that the real recovery is right around the corner and stagnation in real wages (as inflation lowers the quality of American-dreamers' lives) is about to end... And building on that rising 'soft' survey data is today's Chicago Purchasing Managers Index which, despite dropping from July's 65.5 level, beat expectations of 63.0 and printed 63.6 (only lowest since April)... Chicago PMI printed near the middle of the forecast range of 61 - 66.2 from 25 economists surveyed. The number of components rising vs last month was only 3.
- Business barometer rose at a slower pace, signaling expansion
- Prices paid rose at a slower pace, signaling expansion
- New orders rose at a faster pace, signaling expansion
- Employment rose at a slower pace, signaling expansion
- Inventories rose and the direction reversed, signaling expansion
- Supplier deliveries rose at a slower pace, signaling expansion
- Production rose at a faster pace, signaling expansion
- Order backlogs rose at a slower pace, signaling expansion
So production and new orders accelerated BUT employment and prices paid slowed? ok...
Chemical Activity Barometer "Softens" in August Note: This appears to be a leading indicator for industrial production. From the American Chemistry Council: Chemical Activity Barometer Softens as Pace of Growth SlowsThe Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), was flat in August remaining at 122.14 on a three-month moving average (3MMA) basis. This continued a general softening trend since the first quarter. The barometer is up 3.8 percent year-over-year (Y/Y/), a slower pace than of that earlier in the year and similar to that seen in the second half of 2017. The unadjusted CAB also was flat, and follows a 0.3 percent decline in July. August readings indicate gains in U.S. commercial and industrial activity well into the first quarter 2019, but at a slower pace as growth has turned over...Applying the CAB back to 1912, it has been shown to provide a lead of two to fourteen months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve’s Industrial Production Index.
Weekly Initial Unemployment Claims increased to 213,000 -- The DOL reported: In the week ending August 25, the advance figure for seasonally adjusted initial claims was 213,000, an increase of 3,000 from the previous week's unrevised level of 210,000. The 4-week moving average was 212,250, a decrease of 1,500 from the previous week's unrevised average of 213,750. This is the lowest level for this average since December 13, 1969 when it was 210,750.The previous week was unrevised.The following graph shows the 4-week moving average of weekly claims since 1971.
Labor Slack and the Participation Rate (Spreadsheet included) - Bill Mcbride - Back in June, Politico obtained some responses to questions from Senators by recently confirmed Richard Clarida: Clarida, who has been nominated for Fed vice chairman, indicated that he believes there’s more slack in the labor market. He noted that the labor force participation rate for prime-age workers, particularly men, has not gone back to pre-recession levels. “I also think this group could represent an additional margin of slack in the sense that some of them could be enticed to reenter the labor force as the demand for labor continues to strengthen,” he said.This is an interesting question.The decline in the overall Labor Force Participation Rate (LFPR) following the great recession can be divided into three parts: 1) economic weakness, 2) age related demographics, and 3) ongoing trends such as young people staying in school longer, more people working longer, more people taking time off mid-career to travel, and many other reasons. What we'd like to know - as Clarida noted - is how much of the decline in the LFPR has been due to economic weakness. This would give an idea of how much slack is remaining in the labor market. Removing the age related demographic changes is straightforward, but accounting for the ongoing trends is much more difficult (but important as the following graphs will show).The first graph shows the overall participation rate (all civilians 16+ years old) and the employment population ratio. The Labor Force Participation Rate (Blue) was unchanged in July at 62.9%. This is the percentage of the 16+ year old population in the labor force.The overall LFPR has declined significantly since the recession, and has been mostly moving sideways recently. The second graph shows the overall LFPR (NSA and SA) since 1987, and what we'd expect the LFPR to be - since 2007 - just based on changes in age groups. To adjust by age groups, the participation rate for each age and sex group was held to the 2007 levels (all data NSA). The decline in the participation rate is due to age related demographics. As large groups move from high participation ages to lower participation ages, the overall participation rate declines. Some analysts just looked at age related demographics to estimate the remaining slack in the labor force participation rate. However, as I've noted many times, there are long term trends that are important too.
What the compressed yield curve means for employment --Aside from the threat of a recession down the road, is there cause for concern by economic Progressives in the fact that the yield curve has tightened (i.e., the difference in interest rates between long and short term bonds has become very small)? In a word, Yes. Four times during the 1980s and 1990s the difference in the interest yield between 2 and 10 year treasury bonds got about as low as it is now (blue in the graphs below). That occurred in 1984, 1986, 1994, and 1998. Even though on none of those 4 occasions a recession followed, on 3 of 4 of those occasions YoY employment gains (red, divided by 2 for scale) subsequently declined: In both 1984 and 1994, YoY employment gains peaked within 2 months of the low point in the yield spread. In the 1980s, that decline continued right through and a little beyond the 1986 low in spreads. In both cases YoY gains in employment declined by roughly half. Only in 1998 was there no appreciable effect.On all 4 of those occasions the Fed lowered interest rates until the economy started to rebound - quickly in the case of 3 of them.In other words, even if the Fed stops raising rates now, and the yield curve does not get tighter or fully invert, my expectation is that monthly employment gains will decline to about half of what they have recently been -- i.e., to about 100,000 a month -- during the next year or so.
US service workers who rely on tips more susceptible to depression -- A recent study published by the American Journal of Epidemiology found that service workers in the United States who rely on tips are more susceptible to mental illness than un-tipped employees.Workers in restaurants, salons, transportation services and other areas tend to be more reliant on tips because hourly wages in these occupations are often the lowest in all sectors. However, the uncertain nature of tips and irregular schedules contributes to higher rates of stress and depression among service workers.The study found that, in particular, women in tipped service positions “had greater odds of reporting a depression diagnosis or symptoms relative to women in non-service work.”The most common signs of mental illness include depression, sleeplessness and chronic stress, which are frequently found in individuals who work the most tiresome and demanding service jobs. Such work requires constant physical and mental activity, often exacerbated by the pressure imposed on workers by managers to meet profit demands.According to Sarah Andrea, a Ph.D. candidate at the Oregon Health and Science University-Portland State University School of Public Health and the lead author of the study, “the higher prevalence of mental health problems may be linked to the precarious nature of service work, including lower and unpredictable wages, insufficient benefits, and a lack of control over work hours and assigned shifts.” Ever-changing work schedules in service industry occupations (as well as in retail, warehouse, and many other part-time positions) have become commonplace within most American companies and undoubtedly cause immense distress among workers. These individuals must juggle personal and family obligations while being straddled with randomly assigned work schedules. The Economic Policy Institute released a study in 2015 which found that a staggering 17 percent of the labor force must work under precarious schedules.
Foxconn dramatically alters plans for Wisconsin facility - In a revealing interview with the Milwaukee Journal Sentinel, Louis Woo, special assistant to Foxconn CEO Terry Gao, confirmed that the new multibillion-dollar taxpayer-subsidized factory, planned for southeastern Wisconsin, will be a smaller, robotic-based Generation 6 factory. Woo stated this smaller factory will be the country’s first thin-film transistor fabrication, or “TFT Fab,” operation.On May 23, the Nikkei Asian Review had reported that Foxconn would no longer be building the proposed, and agreed-upon, Generation 10.5 factory. Foxconn vehemently denied the story at the time, but now has confirmed the long-planned scaling back of its operations, while swindling the working class of Wisconsin for billions of dollars.The now-proposed Generation 6 (Gen 6) factory will not be able to produce the larger screens a Generation 10.5 (Gen 10.5) factory would be capable of producing. According to Bob O’Brien, cofounder and president of Display Supply Chain Consultants, the scaling down of the factory means that investment required is much less.O’Brien told the Milwaukee Business Journal in May that a $10 billion investment would make sense for a Gen 10.5 plant, but that a Gen 6 plant would require a $2 billion to $3 billion investment. This smaller plant will be focused on building smaller screens, artificial intelligence, 5G cell phone technology and 8K image resolution. Louis Woo further stated that Foxconn wasn’t “really interested in television,” despite this corporate handout being sold to the working class as boon for LCD television production in an economically depressed area. It now appears the “factory jobs” promised will not be forthcoming.
ICE raids North Texas factory, arrests 160 immigrant workers --In what is being described as the largest workplace raid conducted in the past decade, US Immigration and Customs Enforcement (ICE) agents arrested 160 immigrant workers in a North Texas factory. The raid was conducted as part of an ongoing criminal investigation into Load Trail, a company that makes vehicle trailers. The company began as a family-owned operation in 1996 and has now grown to employ over 500 workers. The arrested migrant workers, allegedly undocumented, were working at the Sumner-based facility, located 100 miles northeast of Dallas.The raid, carried out jointly by ICE and Homeland Security Investigations (HSI), involved a massive display of force with the aid of Air and Marine Operations (an agency within the US Customs and Border Protection) and 300 field agents, who swooped into the factory to carry out the arrests.Katrina Berger, the special agent in charge, told the Dallas Morning News that the raid went smoothly without any serious incidents and that ICE had “taken steps to ensure it’ll be conducted in a humane and safe manner.” Berger also added, ominously, that there was “nothing that necessitated medical attention.” This version of a smooth, humane operation is in fact quite different from what transpired. Dennis Perry, a 42-year-old worker at the Load Trail factory, described a far more frightening and chaotic scene. Talking to the Morning News, Perry said that soon after his break during the first shift, he saw armed agents pouring in from all the entrances: “They just came and raided from every entrance there was …[and then] they drew their guns and told everyone to hit the ground.” Another witness told ABC News, “I know I just heard helicopters everywhere and I saw a whole lot of people running and so I turned to run and the first corner I hit I got guns drawn down on me.”
Becoming Serfs - Chris Hedges - You know the statistics. Income inequality in the United States has not been this pronounced in over a century. The top 10 percent has 50 percent of the country’s income, and the upper 1 percent has 20 percent of the country’s income. A quarter of American workers struggle on wages of less than $10 an hour, putting them below the poverty line, while the income of the average CEO of a major corporation is more than 300 times the pay of his or her average worker, a massive increase given that in the 1950s the average CEO made 20 times what his or her worker made. This income inequality is global. The richest 1 percent of the world’s population controls 40 percent of the world’s wealth. And it is getting worse. What will the consequences of this inequality be economically and politically? How much worse will it get with the imposition of austerity programs and a new tax code that slashes rates for corporations, allowing companies to hoard money or buy back their own stock rather than invest in the economy? How will we endure as health care insurance premiums steadily rise and social and public welfare programs such as Medicaid, Pell Grants and food stamps are cut? And under the tax code revision signed by President Trump in December, rates will increase over the long term for the working class. Over the next decade, the revision will cost the nation roughly $1.5 trillion. Where will this end? We live in a new feudalism. We have been stripped of political power. Workers are trapped in menial jobs, forced into crippling debt and paid stagnant or declining wages. Chronic poverty and exploitative working conditions in many parts of the world, and increasingly in the United States, replicate the hell endured by industrial workers at the end of the 19th century. The complete capture of ruling institutions by corporations and their oligarchic elites, including the two dominant political parties, the courts and the press, means there is no mechanism left by which we can reform the system or protect ourselves from mounting abuse. We will revolt or become 21st-century serfs, forced to live in misery and brutally oppressed by militarized police and the most sophisticated security and surveillance system in human history while the ruling oligarchs continue to wallow in unimagined wealth and opulence.“
North Carolina congressional districts unconstitutionally gerrymandered to aid Republicans, court rules -- A panel of three federal judges held Monday that North Carolina's congressional districts were unconstitutionally gerrymandered to help Republicans over Democrats and said it may require new districts before the November election, possibly affecting control of the House. The judges acknowledged that primary elections have already produced candidates for the 2018 elections, but said they were reluctant to let elections take place in congressional districts that courts have twice found violate constitutional standards. North Carolina legislators are likely to ask the U.S. Supreme Court to step in. The court currently has eight members since Justice Anthony M. Kennedy's retirement this summer. Senate hearings on President Trump's nominee, Judge Brett Kavanaugh, commence Tuesday. The North Carolina case is a long-running saga, with federal courts first striking down the Legislature's work as a racial gerrymander and then as a partisan gerrymander.The Supreme Court told the three-judge panel to take another look at the case in light of the court's decision in a Wisconsin partisan gerrymandering case, in which the justices said those who brought that case did not have legal standing.
Breaking: Common Cause, League of Women Voters, and NC Democratic Party Oppose Redrawing North Carolina Congressional Districts for 2018, All But Assuring It Won’t Happen Election Law Blog - With a Justice Kavanaugh on the Court by the time the Supreme Court reaches the merits, I expect there will never be a remedy for the partisan gerrymandering of these congressional districts.
Thousands of Indian Asylum Seekers in US Jails - Over 4,200 Indians have so far been jailed for illegally crossing US-Mexico border this year, according to available data reported by US media. It's a big jump from 3,100 Indians detained in all of 2017. Most are seeking asylum based on claims of religious and political persecution in their country of origin. Portland-based newspaper "The Oregonian" found that the single largest group of detainees at Sheridan Federal Prison in Oregon came from India. It reported that there were 50 Indians among the 124 migrants being housed at the prison. The others hailed from Nepal, Armenia, Brazil, Mexico and parts of Central America.: India has become the biggest source of illegal immigrants crossing into the United States. In 2014 about 136,000 people came to the U.S. from India, about 128,000 from China and about 123,000 from Mexico, census figures show. As recently as 2005, Mexico sent more than 10 times as many people to the U.S. as China, and more than six times as many as India, according to the WSJ story. The United States Department of Homeland Security estimates that there were 12.1 million undocumented immigrants living in the United States as of 2014. The top countries of origin are:
The Billion Dollar Homeless Scam | Zero Hedge - New York City will be spending $2.06 billion on its Department of Homeless Services. There are 61,421 homeless people in the city which is spending $33,539 per homeless person. That’s only a little short of the starting salary of an FDNY firefighter at $39,000. More money will be spent on the homeless than on the firefighters who save New Yorkers from burning buildings. The FDNY will have to make do with $2.04 billion, and the health department with $1.6 billion. That’s impressive for DHS, a department that was only created in 1993 by the disgraced Dinkins administration and is now burning through more cash than agencies fulfilling actual vital city functions. Two years ago, DHS had over 2,600 employees. That’s 1 employee to every 23 homeless people. Meanwhile 234 New Yorkers get only 1 police officer to serve and protect them from criminals. Has this vast infusion of cash solved homelessness in the city? Nope. New York’s homeless population has kept on growing until it now has more homeless people than any other city. New York City’s homeless growth rate is also faster than that of any other city. Maybe because it spends more than any other city. But Los Angeles is catching up. Its $4.6 billion package of homeless tax increases are staggering. Los Angeles doubled its homeless budget to $450 million. Los Angeles County plans to spend $374 million. That’s 1 percent of a budget meant to service a population of over 10 million going to just 53,193 people. As Los Angeles threw more money at the homeless problem, its homeless population increased 26%. New York City and Los Angeles only account for 3 to 5 percent of the country’s population, but for a quarter of the country’s homeless population. Even considering inflated real estate prices in both cities, a national problem should not be this disproportionately concentrated in only two cities. San Francisco will be spending $279 million on 7,499 homeless people. Seattle is spending $63 million, up from $39 million four years ago, while the Puget Sound area may be spending up to $1.06 billion. Seattle’s homeless population is up 44% in two years to 5,500. The Seattle Times claims that Seattle has a higher concentration of homeless than New York and Los Angeles. New York, Los Angeles, Washington D.C., Portland, Seattle and the Bay Area are responsible for much of the national growth in homelessness. Activists blame the crisis on soaring real estate prices. While those are some of the most expensive cities in the country, they’ve been that way for quite some time.
Federal Court: First Amendment Protects Sharing Food With Homeless People - In a colorful decision that managed to invoke the Boston Tea Party, Lady Macbeth and Jesus of Nazareth, the 11th U.S. Circuit Court of Appeals ruled on Wednesday that feeding the homeless is “expressive conduct protected by the First Amendment.” The decision revives a challenge brought by a local chapter of Food Not Bombs, which sued Fort Lauderdale, Florida for requiring a permit to share food in public parks. Thanks to the city's ordinance, Fort Lauderdale has become infamous for cracking down on compassion. In 2014, police arrested a 90-year-old man and two ministers who were simply trying to share food with the homeless. “We are very pleased with this ruling, and we look forward to continuing our community organizing in Fort Lauderdale,” Nathan Pim, a member of Fort Lauderdale Food Not Bombs and a plaintiff in the case, said in a statement. “We hope we are one step closer to something we've fought for over many years—simply being able to help people without being threatened with arrest by people who should be working with us.”
"Predatory" Chicago Funeral Homes Make Killing Amid Soaring Murder Rate - Chicago funeral homes are raking it in amid the city's largely ignored murder epidemic, reports Fox News. Taking advantage of a taxpayer-funded scheme which guarantees up to $7,500 in funeral expenses for the families of homicide victims, several funeral directors have been accused of inflating prices or charging families for services which were never performed. “Every funeral home in the state knows that victims get $7,500 for a funeral and it’s their goal to charge the entire amount because it’s easy money,” Susan Johnson, executive director of Chicago Survivors, told Fox News.Johnson, whose organization helps people who have lost loved ones to homicide, claims some zero in on people receiving money from the Illinois Crime Victim’s Compensation fund. The state – along with the federal government – provides eligible victims of violent crime with up to $27,000 in financial assistance for out-of-pocket expenses. The families of murder victims get $7,500 for funeral costs.According to the National Funeral Directors Association, the average cost of a funeral for an adult is between $7,000 and $8,300. The Federal Trade Commission puts the figure slightly higher at around $10,000. -Fox NewsThe $7,500 from the Crime Victim's Compensation Fund is intended to be applied towards a casket, transportation, staff s alaries and other memorialization costs.
US prison strike enters second week amid media blackout - Prisoners in across the United States are in the second week of their strike as solidarity rallies have been held in many locations. The strike, which began August 21 and is set to last a total of 19 days, has been largely ignored by the mainstream media, and reliable information about the strike’s progress has been scant. What information that has emerged has been provided by various anarchist groups reporting on the strike and in touch with inmates. The Facebook and Twitter pages of the Anarchist International Workers of the World (IWW), the Anarchist Black Cross, as well as Itsgoingdown.org, a web site dedicated to supporting the uprising, have documented strike actions by prisoners across the US. On August 9, prisoners in New Mexico began their strike early, in response to the brutal and dehumanizing conditions imposed upon them. Writing on Twitter, a supporter of the strike affiliated with the Incarcerated Workers Organizing Committee (IWOC), a branch of the IWW, described some of the treatment meted out to inmates that prompted their rebellion: “[C]onditions at GEO Group prison reached a tipping point and the strike took place early due to administration cutting family visits, harassing families, strip searching elder family members, and STIU [Security Threat Intelligence Unit] targeting, harassing, and abusing inmates. 3 housing units joined in this movement to take a stand against the cruel conditions. Retaliation is ongoing.”As of August 20, all of New Mexico’s 11 prisons were placed on “lockdown”—where all prisoners in a facility are confined to their cells—as collective punishment for the work stoppages and to prevent further organizing amongst inmates. In South Carolina, there have been reports of widespread participation in the strike, and facilities there are rumored to be on lockdown. At McCormick Correctional Institution in that state, IWOC has reported that the entire prison population has stopped work, with the exception of 12-15 prisoners in the “privileged” unit, a section reserved for informants.
The Nationwide Prison Strike: Why It’s Happening and What It Means for Ending Mass Incarceration - Earlier this spring, violence broke outin the Lee Correctional Institution in South Carolina, resulting in seven deaths and many injuries. Incarcerated leaders in the South Carolina prison system decided they had had enough. Brutal treatment from corrections officers, deteriorating prison conditions, and incredibly long, punitive sentences had led to a condition of hopelessness in South Carolina’s prisons.Leaders within the South Carolina prison system began reaching out to incarcerated allies across the country, including the Free Alabama Movement, who had led a prison strike in 2016. A decision was made: It was time to launch a national prison strike to raise awareness around the brutality of mass incarceration.On Tuesday, these incarcerated leaders and their partners are launching a “Nationwide Prison Strike” to raise awareness of not only the horrific conditions throughout the American prison system but the broader injustices that have led to our current system ofmass incarceration — from racist police practices to unjust sentencing laws to the lack of support people experience when they come home from prison. The Nationwide Prison Strike, scheduled to last from Aug. 21 to Sept. 9, is centered around 10 specific policy demands. These demands include significantly reducing the number of people in jail and prison, improving prison conditions, properly funding rehabilitation, and addressing racism throughout the criminal justice system.None of the demands, taken individually, is new to the criminal justice movement. Many organizations, including the ACLU, have fought against the rise of mass incarceration and the horrendous conditions of American prisons. Yet this may be the first occasion in which incarcerated leaders have coordinated nationally to list their specific policy agenda to end the system that has imprisoned them. The strike’s organizers are emphasizing Demand #10, also known as the #Right2Vote campaign, a demand that all American citizens of voting age — including all people in jail, prison, or on parole — have the right to vote. In an early planning call, one organizer noted that the right to vote was the right from which all other rights flowed and stressed the need for people outside of prison to support this change. Presently, only Maine and Vermont permit all incarcerated and formerly incarcerated citizens the right to vote.
We Saw Nuns Kill Children: The Ghosts of St. Joseph’s Catholic Orphanage --It was a late summer afternoon, Sally Dale recalled, when the boy was thrown through the fourth-floor window. “He kind of hit, and— ” she placed both hands palm-down before her. Her right hand slapped down on the left, rebounded up a little, then landed again.For just a moment, the room was still. “Bounced?” one of the many lawyers present asked. “Well, I guess you’d call it — it was a bounce,” she replied. “And then he laid still.” A nun was standing at the window, Sally said. She straightened her arms out in front of her. “But her hands were like that.” I watched the deposition — all 19 hours of grainy, scratchy videotape — more than two decades later. By that time sexual abuse scandals had ripped through the Catholic Church, shattering the silence that had for so long protected its secrets. It was easier for accusers in general to come forward, and easier for people to believe their stories, even if the stories sounded too awful to be true. Even if they had happened decades ago, when the accusers were only children. Even if the people they were accusing were pillars of the community. But for all these revelations — including this month’s Pennsylvania grand jury report on how the church hid the crimes of hundreds of priests — a darker history, the one to which Sally’s story belongs, remains all but unknown. It is the history of unrelenting physical and psychological abuse of captive children. Across thousands of miles, across decades, the abuse took eerily similar forms: People who grew up in orphanages said they were made to kneel or stand for hours, sometimes with their arms straight out, sometimes holding their boots or some other item. They were forced to eat their own vomit. They were dangled upside down out windows, over wells, or in laundry chutes. Children were locked in cabinets, in closets, in attics, sometimes for days, sometimes so long they were forgotten. They were told their relatives didn’t want them, or they were permanently separated from their siblings. They were sexually abused. They were mutilated. Darkest of all, it is a history of children who entered orphanages but did not leave them alive.
Child Abuse Charges Dropped Against New Mexico "Jihadis" After Local DA Screws Up - Thanks to an error by the Taos, New Mexico District Attorney's office, 11 counts of felony child abuse charges against three of the five suspects who ran a New Mexico "Jihadi" compound where a dead child was found were dropped on Wednesday. BREAKING: Judge dismisses original 11 child abuse counts against Siraj Wahhaj and Jany Leveille citing failure of DA’s office to adhere to 10 day rule to have preliminary hearing— Brandon Evans (@BrandonKOAT) August 29, 2018After Judge Sarah Backus recused herself from the case, District Judge Emilio Chavez was forced to drop the charges against Lucas Morton, Subhanna Wahhaj and Hujrah Wahhaj after the state failed to indict them within a 10-day window, forcing the frustrated judge to admonish the DA for placing him in such a position. "The rule for dismissal without prejudice reads if the preliminary hearing is not held within the time of this rule, the court shall dismiss the case without prejudice and discharge the defendants," Judge Emilio Chavez said. Meanwhile, the DA didn't even show up for the hearing. Another Taos County judge called out the DA for failing to even schedule a preliminary hearing in the case. "There was no excuse and no reason why the District Attorney's office could not have requested these preliminary hearings. I don't know if they are overworked or they don't have enough people at their office. I don't see the district attorney here or the chief deputy district attorney, but it is disturbing to me that the district attorney would put this court in that kind of a situation," said Judge Jeff McCelroy. He added that the case was "a situation where the court is being caught between very public, very shocking information and a complete failure to follow proper procedures in prosecuting the case."
The School Shootings That Weren't - How many times per year does a gun go off in an American school? We should know. But we don't. This spring the U.S. Education Department reported that in the 2015-2016 school year, "nearly 240 schools ... reported at least 1 incident involving a school-related shooting." The number is far higher than most other estimates. But NPR reached out to every one of those schools repeatedly over the course of three months and found that more than two-thirds of these reported incidents never happened. Child Trends, a nonpartisan nonprofit research organization, assisted NPR in analyzing data from the government's Civil Rights Data Collection. We were able to confirm just 11 reported incidents, either directly with schools or through media reports. In 161 cases, schools or districts attested that no incident took place or couldn't confirm one. In at least four cases, we found, something did happen, but it didn't meet the government's parameters for a shooting. About a quarter of schools didn't respond to our inquiries. "When we're talking about such an important and rare event, [this] amount of data error could be very meaningful,"
Detroit School District Shuts Off Drinking Water After 16 Schools Test Positive for Copper, Lead - Less than a week before the new school year, the Detroit Public Schools Community District (DPSCD) announced Wednesday it would shut off drinking water in all schools after tests at 16 turned up high levels of copper or lead, The Detroit News reported Wednesday."Although we have no evidence that there are elevated levels of copper or lead in our other schools where we are awaiting test results, out of an abundance of caution and concern for the safety of our students and employees, I am turning off all drinking water in our schools until a deeper and broader analysis can be conducted to determine the long-term solutions for all schools," DPSCD Superintendent Nikolai Vitti said in a statement reported by The Detroit Free Press. Vitti said he immediately turned off water Tuesday at the 16 schools that tested positively and had provided water bottles until water coolers could be delivered, The Detroit News reported. Vitti began water testing at all 106 of the DPSCD's schools this spring independent of any federal, state or city requirement, The Detroit Free Press reported. He said this round of testing would be the first to evaluate every source of water in the schools, including sinks and drinking fountains.When test results came back for the initial 24 schools tested, there were already 18 schools where water had been shut off due to water quality concerns. Tuesday's shut-off of the 16 schools that tested positively raises the total tally of schools with shut-off water to 34.
Arizona court strikes Invest in Ed initiative from November ballot After a teacher walkout in Arizona in the spring, mirroring similar moves in other states, hopes were high that the new revenue stream generated by the Invest in Ed initiative would alleviate low teacher salaries and underfunded classrooms. A poll showed 78% of respondents in the state supported the teachers' corresponding #redfored movement. This recent Arizona ruling, which came when legislative budget analysts reported that the immediate impact of the omission around indexing would result in a hit to many taxpayers earning less than $250,000, is seen as a boon for the Arizona Chamber of Commerce and Industry, which fought to block the initiative. The group argued that raising income taxes on the wealthiest Arizonans would be a drag on the state economy and potentially drive higher-income Arizonans out of the state. Increases in funding, however, do not always correlate to increased quality of education, especially for the highest-need students. And even though the public shows increasing support for teachers and thinks they don't earn enough money, ongoing teacher strikes can test the patience of many parents, even those who, overall, support teachers. At the end of the day, school leaders don't have much control over the overall budget landscape, but what they can do to strive use the funds that they do have as purposefully as possible, addressing the day-to-day working conditions that teachers value.
Teachers across Washington state prepare to strike over wages and conditions --After enduring years of stagnant wages and rising enrollment, teachers and support staff in two districts in the US state of Washington have gone out on strike. School workers throughout most of the state have overwhelmingly authorized strikes if their demands for higher pay and smaller class sizes are not met.Since May, many school boards in the state have been engaged in negotiations with teacher and support staff unions—almost all affiliates of the Washington Education Association (WEA), the state affiliate of the National Education Association—on contracts for the school year starting in September. The length of teacher contracts is staggered throughout the state to prevent the emergence of unified struggle of school workers statewide for better wages and conditions. The unions are working to contain the anger of teachers and isolate and suppress any strikes that do break out. In the teachers’ strikes earlier this year—including in West Virginia, Oklahoma and Arizona—the unions worked to shut down opposition and prevent it from developing into a broader movement of teachers and the entire working class.This year, contracts ended for Seattle, and school workers in most of the state are preparing to strike if their demands are not met. While demands vary from district to district, they generally include the demand that some of the additional education funding mandated by the state Supreme Court be used to provide more training, smaller class sizes, and long-overdue wage increases of at least 15 percent and 37 percent for teachers and support staff, respectively. In a 2012 ruling, the Washington Supreme Court ruled in favor of parents who sued the state on behalf of their children enrolled in public schools in the state, arguing that the state was failing to adequately fund K-12 public education and was thereby violating the state’s constitution. The Washington constitution dictates that child education shall be the “highest priority” of the state. After the state proved unwilling to adequately fund K-12 education, the Court made the unprecedented move of holding the state in contempt. The ongoing saga has forced the state to allocate an additional $7.3 billion in education funding this year at the expense of social programs. Washington has one of the nation’s most regressive tax structure and a two-thirds majority requirement for new taxes. The state is home to the world’s two richest people, Amazon CEO Jeff Bezos and Microsoft cofounder Bill Gates. So far, about 40 contracts have been agreed on and another 200 remain outstanding.
More Washington State teachers strike as unions seek to contain struggle -- Teachers in the southwestern Washington districts of Washougal and Evergreen will begin strike action Tuesday as their local unions failed to reach a deal that could be sold to their memberships. Other districts in the area are set to follow suit Wednesday if no deal is struck.Teachers and support staff across the state are demanding significant increases in pay. Years of underfunding have left teachers among the lowest paid in the nation in a state that has experienced astronomical growth in the cost of living.Evergreen and Washougal teachers will begin the school year on strike Tuesday morning after a long weekend of frantic, closed-door negotiations involving the Evergreen Education Association and Washougal Education Association failed to produce an accord with the school districts to prevent a strike before the 5:00 p.m. Monday deadline. Teachers in both districts voted by more than 90 percent to authorize a strike last week if a deal was not reached before August 28, the beginning of the school year.On Monday, Evergreen Public Schools announced in a press release that schools would be closed Tuesday, though it did not preclude the possibility of reaching a last-minute agreement as talks were set to continue into the evening.Washougal Public Schools officials announced that they would be locking teachers out Tuesday after their latest offer, which they claim would give teachers a 26 percent increase in base pay, was rejected by Washougal Education Association negotiators, who disputed the amount offered to teachers. Teachers in the district voted by 96 percent for strike authorization on August 21.Teachers in Evergreen and Washougal will join Longview teachers, who went on strike starting Thursday after rejecting a 6.9 percent pay offer from the district. Meanwhile, teachers in four other districts in southwest Washington may strike. Teachers in Ridgefield voted by 97.8 percent to authorize a strike on August 17, while teachers in Battle Ground, Hockinson, and the larger city of Vancouver, near Portland, also voted to strike last week if there is no contract by Wednesday. Camas teachers were set to vote at a Monday evening meeting on strike authorization.
Mass support for teachers’ walkouts in Washington state -- Teachers across Washington state continue to walk out, demanding restoration of educational funding and adequate salaries. Contracts for all school workers have been reopened as a result of a legislative funding package and a state Supreme Court decision known as McCleary. The suit was first filed in 2007 by families alleging the state failed to meet its constitutional obligation to provide adequate education for its children. In 2014, the state was held in contempt and fined $100,000 a day, but money from the state legislature—still woefully inadequate—has only just been released. Across the state, strike votes and mass rallies of educators and community supporters are taking place, including:
- Camas voted for strike action with 95.7 percent approval.
- Sumner will strike September 5 if there is no agreement. At a standing-room-only school district meeting last week, Bonney Lake High School teacher Michael Howard told the crowd, “That money is ours—we’re not asking for it, we’re telling you.” Bus driver and food service workers also voted to authorize a strike.
- Lake Tapps is being offered only 3.1 percent and has voted to strike.
- Hockinson district educators voted for strike action after failed bargaining on Sunday and Monday.
- Battle Ground teachers rejected a 16.5 percent offer over three years by 98.4 percent.
- In Tacoma, hundreds rallied Tuesday morning, protesting an insulting 3.1 percent increase as negotiations continued.
- Puyallap teachers in their hundreds protested the lack of an agreement in Pioneer Park.
- A mass rally was held in Centralia, which has already voted to strike. “Two-point-one million comes to Centralia and they’re not wanting to pass those funds to us, our teachers,” said Lauri Johnson, a choir teacher, to KIRO7, adding, “We had 40 teachers leave us this last June to local schools.”
- A Spokane meeting of hundreds of educators was a sea of roaring red-shirted teachers threatening to strike, as bargaining continued in the state’s second largest district.
- In Seattle, the largest district, a mass membership meeting was held Tuesday to vote on joining the growing list of districts seeking sizeable pay increases and more funding for education.
Seattle teachers vote to authorize strike - Teachers in Seattle, Washington voted Tuesday night to authorize a strike by the start of the school year on September 5 if a tentative agreement is not reached between the local school district and the teachers union. The strike authorization vote was held at a general membership meeting of the Seattle Education Association (SEA), which is negotiating a contract for over 5,000 teachers, support staff and other educators in the state’s largest school district. Thousands of teachers turned out to the downtown hall where the meeting was held. Though the meeting was closed to the media, teachers told the WSWS Teacher Newsletter that educators were in a militant mood and repeatedly demanded a strike vote as union officials stalled. Teachers are particularly angry over stagnating wages, which cannot keep up with rising living costs. Seattle is 24 percent more expensive than the typical US city, and the cost of a two-bedroom apartment is nearly 80 percent higher than the national average.The strike vote is the latest expression of opposition after the series of statewide revolts by educators in West Virginia, Oklahoma, Arizona, Colorado, Kentucky, North Carolina and other states earlier this year. Teachers in Los Angeles, the second largest school district in the United States, are currently voting on strike action.As in these earlier struggles, teachers in Seattle and throughout the state of Washington are pitted against the entire political establishment—Democratic and Republican—along with the trade unions, the National Education Association (NEA) and American Federation of Teachers (AFT). The unions, which have collaborated for decades in the bipartisan assault on public education, have sought to isolate each section of teachers and prevent their battles from coalescing into a nationwide fight.The strike vote takes place as teachers in several smaller school districts in the state of Washington—including Battle Ground, Longview, Vancouver, Hockinson, Ridgefield, Evergreen and Washougal—have walked out, cancelling classes. Of the 295 districts in Washington state, more than 200 do not yet have a teacher contract in place.
Los Angeles teachers vote 98 percent for strike authorization - After six days of balloting, Los Angeles teachers voted by a resounding 98 percent for strike authorization, expressing their anger and determination to fight for better wages and the defense of public education. Los Angeles Unified School District is the second largest school district in the country, with 640,000 students and over 33,000 teachers.The vote follows a similar strike authorization by Seattle teachers and coincides with a series of teacher strikes in the state of Washington. Many teachers were very aware that Washington state teachers were spreading their strikes, demanding substantial pay increases, as educators seek to continue the “teacher spring” into the fall. Earlier this year statewide walkouts by educators swept through West Virginia, Oklahoma, Arizona, Colorado, North Carolina, Kentucky and other states.This strike authorization vote is the first in the district since the nine-day strike in 1989. Following the financial crash, thousands of Los Angeles teachers called in sick in 2009 after hearing about possible layoffs. Tens of thousands of teachers were laid off nationwide during the two terms of the Obama administration.The issues facing Los Angeles teachers are the same for educators across the country: large class sizes, stagnant pay, lack of support staff or services for special education. According to the Organization for Economic Cooperation and Development, the average LA teacher makes just 60 percent of what similarly educated professionals are paid.Relatively speaking, California teachers are paid more than in other states, but the cost of living is much higher. Due to stagnant pay and higher health care costs, the state suffered a net loss of 18,000 elementary and secondary teachers between 2003–2016, exacerbating already overcrowded classrooms and deteriorating conditions. By demanding more full-time counselors, school psychologists, nurses and librarians, teachers are seeking to address both the decline in educational conditions and the trauma of their students caused by inequality, poverty and official neglect. In the short time since the school year resumed, three Rancho Cucamonga high school students and an elementary student have committed suicide. Shockingly, suicide is now the second-leading cause of death among Americans 10–14 years old and 15–24 years old.
Target’s latest sale is aimed at underpaid teachers who buy their own classroom supplies --If you stop by Target this week, look around for shoppers whose carts are teeming with pencils, construction paper and markers. They may be teachers putting your children’s education on a credit card — to the tune of nearly $500 a year, on average. The retailer is offering a 15 percent school supply discount for teachers through July 21. It will surely come as a relief to educators who for years have spent their own money to keep their classrooms stocked with necessities.And that’s the problem.Target’s sale is a nice idea, education advocates say. But the need for a discount also reveals the systemic problem of classrooms buoyed by the personal finances of teachers who say they are already vastly underpaid — an issue that has triggered teacher walkouts and demands for wage increases across the country.According to federal data, nearly all public school teachers use their own money to gather school supplies, at an average cost of $479 a year, The Washington Post’s Moriah Balingit reported in May. About 7 percent of educators spend more than $1,000 a year on supplies. Target’s discount is a way to “see the lack of investment and lack of priority for school kids,” said Randi Weingarten, president of the American Federation of Teachers. Elementary and secondary teachers are about 30 percent more likely to work at a second job, compared with workers in other professions, according to the Brookings Institution, citing Labor Department data.Salary varies widely from state to state, with K-12 educators making an average of about $58,000 nationally, The Post reported. The average starting salary for teachers is about $30,000, according to the National Education Association, and teachers in 38 states make less on average now than they did nine years ago, Weingarten said.
US education secretary floats plan to use federal funds to arm teachers --US Department of Education Secretary Betsy DeVos is reportedly considering the diversion of federal school money normally used to provide mental health resources for students and expand learning options and classroom technology to purchase guns instead. In the wake of the Parkland, Florida, school shooting last February, which killed 17, the Trump administration is calling for “hardening” schools and arming teachers to the horror of educators and students around the country.DeVos created a federal school safety commission and held “listening sessions” in Kentucky and Washington, DC, which featured speakers calling for privatizing education with school vouchers and increasing police known euphemistically as “school resource officers.” Many participants, however, called for additional counselors and mental health specialists. Even at these carefully vetted events virtually no one endorsed the Trump demand to arm teachers.The commission is expected to include a section in its report on the best practices for arming school personnel. In rural Lee County, Virginia, the school board has already voted to use grant money for arming teachers. “It’s a cheap way to add security to our schools and the best option we could do,” school board Chairman Mike Kidwell said. “Any state or federal funds, in my opinion, that could go toward arming someone like this is money well spent.” Both Oklahoma and Texas have now asked for clarification on the legality of using federal funds through the Student Support and Academic Grants section of the Every Student Succeeds Act (ESSA) to purchase firearms. The federal fund contains $1.1 billion specified for ensuring “safe and healthy students,” emphasizing access to a well-rounded education, which includes “a wide variety of disciplines—such as music, the arts, social studies, environmental education, computer science and civics.”
A Firsthand Look at Teachers Training to Pack Heat – A muscular white man in his mid-40s with a buzz cut and a tight black shirt is barking directions at the crowd: “When you hear the whistle, we’re going to line up against the yellow line on the ground. We’re practicing stance, draw, aim…Stance, draw, aim…” He demonstrates leveling his feet, pulling a pistol from his side holster, and pointing it forward with arms extended and elbows locked. His gun is aimed at a large rectangular target with a life-size photograph of a young white man in sunglasses menacingly pointing a gun. Today is the second day of a free, three-day class offered by the Buckeye Firearms Association, an Ohio-based gun rights organization. The attendees are mostly public school teachers and employees. There is a red-headed superintendent from a school district in northeastern Ohio, a couple in their late 20s who both teach physical education just outside Toledo, a slight woman who is a principal of a rural high school, and a pot-bellied custodian of a rural elementary school. Some have come from schools and districts that have already approved arming teachers and other campus staff, while others are there in hopes of going home to lobby for the practice in their communities. Many are here in secret and have been assured of the trainers’ discretion.
Reading Teens Become "Dying Breed": A Third Of Teenagers Haven't Read A Single Book In The Past Year - A new study has found that a third of teenagers haven’t read a single book in the past year as internet aged activities dominate their lives. The research also shows that a minute portion of sophomore aged teens are picking up newspapers to read up on the real world.Researchers from San Diego State University analyzed four decades’ worth of data from an ongoing, nationally-based lifestyle survey studying teens, finding that twelfth-graders reported reading two fewer books each year in 2016 compared with 1976.Approximately one-third of these teens did not read a book for pleasure in the year prior to the 2016 survey, nearly triple the number reported in the 1970s, the study finds. “Bookworm teens have always been few and far between, but now they seem like a dying breed,” Daniel Steingold of Study Finds writes.The meteoric rise of internet-based activities cannot be understated: between social media, texting, gaming, and surfing the web, the average high school senior spent six hours a day online in 2016 — double the time from a decade earlier. Eighth graders (4 hours a day) and tenth graders (5 hours a day) didn’t lag far behind.Naturally, many of these hours have come at the expense of traditional media, including books, newspapers, and magazines. In the early 90s, a third of tenth graders reported reading the daily paper — this figure dropped to an astonishing two percent by 2016. During the late 70s, 60 percent of 12th graders read a book or magazine almost daily, but only 16 percent did by 2016.According to Jean M. Twenge, the study’s lead author, the ability teens now have to jump between digital media, such as texting, web surfing and gaming potentially creates a burden on their ability to dive into long reads such as textbooks. “Think about how difficult it must be to read even five pages of an 800-page college textbook when you’ve been used to spending most of your time switching between one digital activity and another in a matter of seconds,” Twenge said. “It really highlights the challenges students and faculty both face in the current era.”
YDSA Urges Socialists To 'Infiltrate' Public Education - The Young Democratic Socialists of America organization is urging socialists to “take jobs as teachers” in order to exploit the “political, economic, and social potential the industry holds.”“Why Socialists Should Become Teachers,” an 11-page pamphlet crafted jointly by YDSA and the Democratic Socialist Labor Commission, contends that education is “a strategic industry to organize,” and offers prospective socialist educators “a basic roadmap for how to get a job in education.” The pamphlet begins by outlining the “success” of the recent West Virginia teachers strike, which it attributes to “creative shop floor organizing” from teachers who believed in “socialist politics.” “Our immediate win in West Virginia was a 5% raise for all public sector workers, plus halting charter school legislation and attacks on seniority,” the document boasts.“But crucially, our movement’s demand was that the money come from highly profitable corporations that have long exploited West Virginia’s natural wealth.” While the funding debate has yet to be resolved, the pamphlet credits socialist agitators with pressing for corporate tax increases, saying most union leaders simply expect lawmakers to “figure out where the money comes from” after securing pay raises.
Schools, Universities Are Liberals' Trojan Horse For New World Order Indoctrination -- From NFL players ‘taking a knee’ during the national anthem, to preschoolers being brainwashed with the ideology of transgenderism, these left-leaning movements have one goal in mind, and that is to undermine and destroy the foundation of the Western nation state. This month, the Liberal propaganda machine shifted into overdrive, publicizing yet another divisive scandal to forward their agenda of creating a New World Order. Atlanta school Principal Lara Zelski clearly did not have her local community in mind when she informed parents and faculty that the morning recital of the pledge of allegiance would be eliminated, substituted with a pledge to "school family, community, country and our global society.” "Over the past couple of years it has become increasingly obvious that more and more of our community were choosing to not stand and/or recite the pledge,” Zelski said. “There are many emotions around this and we want everyone in our school family to start their day in a positive manner." Zelski never reveals any numbers to support what she means by “more and more of our community” who are purportedly snubbing the flag. This is how the proponents of a “global society” move forward with their destructive agenda. Using the Hegelian dialectic, they press some hot-button ‘issue’ – same-sex marriage, unisexual bathrooms, transsexual rights, Civil War statues in the public square, marijuana use, you name it – that is guaranteed to pit America’s two primary political ideologies fiercely against each other. Then they sit back and watch the fireworks display of their creation.
Berkeley Students Teach Peers About Whiteness And Decolonizing-- This fall, University of California, Berkeley students can learn about “white comfort/coddling,” “decolonizing Palestine,” and making research less “isolating” for “marginalized” students. The courses in question are offered through UC Berkeley’s DeCal program, which the university describes as “legitimate university courses run by students” that qualify for academic credit and can even fulfill graduation requirements.In one course, titled Deconstructing Whiteness, students will “confront uncomfortable conversations about privilege and positionality” in order to “understand where white bodies have the responsibility to be in movements against white supremacy and in solidarity with marginalized peoples and groups of color.” The description makes clear that the course “will not be to coddle white fragility, but to deconstruct and relearn whiteness through case studies, speakers, and intense, critical readings.” The course syllabus outlines questions to be addressed during the class, such as “How does recentering what we see as violent and violence reposition who needs protection?” “What are liberal whites’ roles in colonization of education?” “What does the trope of the ‘Good White Person’ do for allyship and conversations around equality?” and “What is one way that the history of white people as inherently innocent, and their tradition as ‘natural’ and therefore good, be disrupted?” The course also addresses “Environmental Racism,” arguing that “food practices [have] been gentrified,” as well as units on “White Comfort/Coddling,” “White Emptiness of Culture/Cultural Appropriation,” and “White Entertainment.” Yet another course, titled Demystifying the Research Process: Decolonizing Methods in Academic Research, calls for students who seek to “increase representation of marginalized students in grad school and research programs” and to “build a community of researchers of color.”
Report: Baylor Secretly Infiltrated Sexual Assault Survivor Groups - According to a report from PR Week, Baylor officials placed a mole within several support groups for sexual assault survivors as a way to control their messaging and keep the university from looking bad. Baylor currently faces a Title IX lawsuit from 10 anonymous former students for their alleged serial mishandling of sexual assault cases over the past decade, and Baylor football players have been accused of committing 52 rapes over four years. Per PR Week, the school attempted to curtail the voices of sexual assault survivors by embedding an insider (identified as Matt Burchett, director of student activities at Baylor) into survivor groups and getting them to soften their stances. Burchett reportedly used his role as the school’s chief event planner and student life liaison to gain the trust of the groups. He would pretend to help them organize activities, all while siphoning information back to Baylor officials and to Ketchum, a PR firm retained by the school in the wake of reporting on its handling of sexual assaults. When these groups organized on campus to comfort each other and demand action from former chancellor Kenneth Starr, “[Burchett] would coordinate with them, befriend them, and pretend he was helping them organize vigils and demonstrations [about] sexual assault,” the source added. Burchett would pass on what he learned to school officials, the communications department, and Ketchum, the source added. In an email described to PRWeek, Kevin Jackson, VP of student life and Burchett’s supervisor, said the director of student activities was “adept at this kind of thing.”
DOJ Sides With Asian-Americans Against Harvard In Landmark Affirmative Action Lawsuit -- The Department of Justice on Thursday lent its support to Asian-American students suing Harvard University over "personal rating" affirmative action policies they claim are discriminatory - a case with far-reaching consequences for reversing Obama-era policies "to promote diverse educational settings," reports the Wall Street Journal. The statement of interest filed Thursday by the Justice Department supported the claims made by the plaintiffs, who have sued Harvard for allegedly limiting the number of Asian-American students it admits and holding them to a higher standard than students of other races. -WSJThe 37-page DOJ brief filed on Thursday concludes that Harvard violated the law with the "personal rating" system, and that it has failed to demonstrate how its use of the system is narrowly tailored to suit a competing interest. "Harvard acknowledges that it voluntarily uses race as a factor in deciding whether to offer certain young adults admission to, and the substantial educational benefits of, its elite institution," reads the DOJ brief. "Harvard seeks to justify this use of race to award educational opportunities as necessary to its pursuit of the ‘educational benefits of diversity.’ But Harvard has failed to carry its demanding burden to show that its use of race does not inflict unlawful racial discrimination on Asian Americans.""As a recipient of taxpayer dollars, Harvard has a responsibility to conduct its admissions policy without racial discrimination by using meaningful admissions criteria that met lawful requirements," said Attorney General Jeff Sessions in a statement.The lawsuit, originally filed in Boston federal court in 2014 by Students for Fair Admissions, has become a "closely watched battle over how one of the nation's most selective colleges chooses who gets admitted," and whether the university has been discriminating based on race. On Monday, the Ivy League school argued that the lawsuit should be dismissed because the case is founded on "invective, mischaracterizations and in some cases outright misrepresentations," adding that the judge should rule in their favor since the lawsuit is nothing but a "litigation vehicle" to advance the ideological objectives of the plaintiffs' group, led by Edward Blum.
What You Really Pay For In College: Credentials, Not Education - In Episode 4, Season 3 of “Last Chance U,” Coach Jason Brown told his players, “Ignorance is life threatening, man.” The Independence Juco coach said, “Eighty-nine percent of NFL and NBA players are bankrupt three years after retirement.” “I know you guys can’t comprehend half that shit,” the coach yells, referring to what is being taught in class. It doesn’t matter. He tells his players to go to class, sit in the front row, stay off their phones and, “you’ll get a C.” He then admits on camera for Netflix and his players, “I didn’t learn one thing in high school or college.” After giving his players a few examples of things he doesn’t know, he said, “But, I’m a cold hustler.” His message: “It’s a game.” Play football to get an education and a degree. Will you learn anything? Probably not. Crazy as it sounds, Dr. Bryan Caplan is on the same page as Coach Brown. What makes college worth it — signaling. Caplan explains, “Graduation tells employers, ‘I take social norms seriously - and have the brains and work ethic to comply’. Quitting tells employers, ‘I scorn social norms - or lack the brains and work ethic to comply.’” In his outstanding book The Case Against Education: Why the Education System Is a Waste of Time and MoneyProfessor Caplan rejects the idea that all education teaches useful job skills and those job skills pay off in the labor market. Instead, we learn our job skills on the job. A degree signals that students have the discipline to suffer through the boredom to conform to what society expects and what employers want. You don’t use history or math on the job, unless you are a math or history teacher.
No College, No Problem- Silicon Valley’s Student Loan Solution - In the emerging new American world, you might not have to bury yourself in student loan debt in order to get a job: Even Silicon Valley tech giants like Google, Apple and IBM are playing by a new set of employment rules that looks beyond the exorbitantly expensive piece of paper on which a diploma is printed.A college degree has long been a mainstay of any kind of employment that can net you a job that does something more than simply make ends meet. Socially, it’s been a clear dividing line between the haves and have-nots.Sometimes employers will require that you have a college degree even if it that degree is entirely irrelevant to the job at hand. The rationale has been that a college education provides you with a broad learning background and shows a certain sort of ambition and, hopefully, intelligence that can be put to practical use with enough training.But it’s a very expensive rationale when you consider that new research estimates that by 2023, some 40 percent of student loan borrowers will default.And waiting in the wings for new employees is a line-up of companies that have crossed off college degrees from their list of requirements. It’s a line-up that extends into Silicon Valley even.Take Google, for instance, whose former SVP of People Operations, Laszlo Bock, feels that strict college degree requirements could lead to employers overlooking some of the best minds out there. “When you look at people who don’t go to school and make their way in the world, those are exceptional human beings. And we should do everything we can to find those people,” the New York Times quoted Bock as saying.“We want people who can think outside the box, think on their feet, and not be chained intellectually by linear thinking,” “Just because someone has earned a degree and managed to make it through to the end, doesn’t mean they can think out of the box. In fact, it often means they can’t. That is especially true in America, where job applicants tend to lack broad experiences, geographically and culturally.”
Nation’s top student loan official resigns — The government's top official overseeing the $1.5 trillion student loan market resigned in protest on Monday, citing what he says is the White House's open hostility toward protecting the nation's millions of student loan borrowers.Seth Frotman will be stepping down as student loan ombudsman at the end of the week, according to his resignation letter , which was obtained by The Associated Press. He held that position since 2016, but has been with Consumer Financial Protection Bureau since its inception in 2011.Frotman is the latest high-level departure from the CFPB since Mick Mulvaney, President Donald Trump's budget director, took over in late November. But Frotman's departure is especially noteworthy, since his non-partisan office is one of the few parts of the U.S. government that was tasked with handling student loan issues.The office was at the center of the lawsuits against for-profit colleges like Corinthian Colleges and is currently heading up a lawsuit between the CFPB and Navient, one of the nation's largest student lenders. The Navient lawsuit has been mired in bureaucratic red tape as the Department of Education, headed by Betsy DeVos, has been unwilling to help the CFPB with their lawsuit . Since its creation, the student loan office has returned $750 million to harmed borrowers. "You have used the bureau to serve the wishes of the most powerful financial companies in America," Frotman wrote, addressing his letter to Mulvaney. "The damage you have done to the bureau betrays these families and sacrifices the financial futures of millions of Americans in communities across the country."
30% of student loan borrowers can’t keep up with debt after just six years -- In order to compete in the economy of tomorrow, many young Americans will need to earn an advanced degree — around 65 percent of all jobs in the United States will require some post-secondary education by 2020.But wages have not grown significantly over the past several years, and student debt holders are being pinched.The result: More than 30 percent of student loan borrowers are in default, late or have stopped making payments after just six years.That figure was published in an opinion piece in The New York Times written by Ben Miller, senior director for post-secondary education at the left-leaning Center for American Progress. Miller submitted a request under the Freedom of Information Act in January of 2018, and found that the default rates reported by the Department of Education may underestimate the severity of what students are facing.Historically, the Department of Education has only reported the default rates of students three years after graduation, which come out to just over10 percent. These figures are significant — by comparison, three-year credit card default rates are under one percent — but not surprising.But when Miller looked at information on students loan borrowers six years after graduation, he found that 15.5 percent were in default, 4.8 percent were more than 90 days late on their payments and 10.2 percent were not making payments on their loans at all. That means more than 30 percent of borrowers were unable to keep up with their payments after just six years. This 30 percent figure is particularly important. Current Department of Education protocol is to issue sanctions on colleges where the three-year default rate is 30 percent or higher. By not looking at the longer-term figures, the Department of Education and Congress may be turning a blind eye to schools that are not adequately preparing students to pay off the loans they are taking on.
How U.S. Education Became A "Debt Sentence" - With the student loan crisis showing no signs of improvement, there's little to no light at the end of the tunnel for America's debt-ridden graduates. As Statista's Niall McCarthy notes, The National Association of Realtors say 45 million people across the U.S. are carrying student debt with a fifth of them owing $100,000 plus. Unsurprisingly, that is impacting home ownership and the Realtors say that 83 percent of people aged 22 to 35 who have not purchased a home blame their student debt. The Northeast of the country is the worst affected and according to a CNBC report, 75 percent of New Hampshire's graduates carry outstanding debt, the worst in the country, with the average amount owed $36,367. Utah has the lowest rate of debt and graduates there owe an average of $20,000.The following infographic shows how third-level education in the U.S. has gone from being a dream to being a "debt sentence" for millions of American students. Federal Reserve data shows that the amount of student loans stood at $480 billion in 2006 and by 2018, the debt mountain had risen to $1.53 trillion. The reasons for the debt are numerous and complex, but are likely to include increases in tuition costs, less students finishing their courses and the lingering impact of the financial crisis. As a reminder, in a fiery resignation letter, Seth Frotman, who until Monday morning was the Student Loan Ombudsman at the Consumer Financial Protection Bureau (CFPB), warned that current leadership “has turned its back on young people and their financial futures.” i.e., loans are not being forgiven. Frotman concludes the resignation letter with a warning that the “system is rigged to favor the most powerful financial interests.” He also mentioned millions of borrowers are "trapped in a broken student loan system", by which he meant one in which borrowers are expect to repay their lenders: I have met with dozens of state law enforcement officials and, more importantly, I have heard directly from tens of thousands of individual student loan borrowers.A common thread ties these experiences together — the American Dream under siege, told through the heart-wrenching stories of individuals caught in a system rigged to favor the most powerful financial interests.
The Incredible, Rage-Inducing Inside Story of America’s Student Debt Machine - The Public Service Loan Forgiveness (PSLF) program, backed in the Senate by Ted Kennedy and signed into law by President George W. Bush in 2007, was the first of its kind, and when people talk about “student loan forgiveness,” they’re usually talking about PSLF. For borrowers working public service jobs—as social workers, nurses, nonprofit employees—there was another possibility: They could have their debt forgiven after making 10 years’ worth of on-time payments. It was implemented to address low salaries in public service jobs, where costly degrees are the price of entry but wages often aren’t high enough to pay down debts. A Congressional Budget Office report last year found that public-sector workers with a professional degree or doctorate earn 24 percent less than they would in the private sector. In Massachusetts, a public defender in 2014 made just $40,000, only about $1,000 more than the court’s janitor. Meanwhile, 85 percent of public-interest attorneys in 2015 owed at least $50,000 in federal student loans, according to one study. More than half owed at least $100,000. According to a 2012 study, 65 percent of newly hired nonprofit workers had student debt, and 30 percent owed more than $50,000. In order to keep people working as public defenders, or rural doctors or human rights activists, something had to be done. PSLF was an attempt at a fix. Successful PSLF participants,according to one estimate, pay back as much as 91 percent of their original loan amount, so enrollees primarily save on interest. The program’s appeal was that it offered a clear path for people who struggled to pay back loans, or struggled to envision how they would ever pay them off without abandoning public service jobs for higher-paid positions elsewhere. Several companies, including one called FedLoan Servicing, contracted with the Education Department to handle loan repayment, and until 2012, when the government assigned all PSLF accounts to FedLoan, borrowers had to keep track of their progress toward forgiveness. Now, the Trump administration has begun disassembling one of the only checks on companies like FedLoan, the Consumer Financial Protection Bureau, all while arguing that these companies are off-limits to state attorneys general like Healey—essentially trying to give them legal protection.
Abolish student debt! Public education is a social right! -- Millions of college students are returning to campuses across the United States looking forward to a busy semester of classes, sports and extracurricular activities. They are also facing the prospect of piling on thousands of dollars more in debilitating student loan debt. This year’s freshman class will join the ranks of the more than 44 million Americans, one quarter of adults in the country, who owe an astounding $1.5 trillion dollars in student debt. Crushing student debt has become a defining feature of life for millions of young people. Nearly three quarters of those who graduate from a four-year college have student debt, averaging $37,000 each, with an average monthly loan payment of $393. Many more will have to leave college without attaining a degree due to financial and personal pressures and still be saddled with debt. All student debt must be immediately abolished! Everyone should be able to attain a college education without being required to enter the modern equivalent of indentured servitude. Public education is a social right that can only be guaranteed to everyone for free through a direct assault on the capitalist system. Student debt payments are crippling young people as they leave college, with many forced to put off buying a new car, a home or getting married and starting a family. Close to half of those with student loan debt report that they would be unable to afford to pay for an unexpected expense of $400, such as an emergency car repair. The jobs that young people are able to find out of college do not pay enough to cover the costs of their monthly payments. A recent report by the New York Times found that 30 percent of those who started paying on their loans in 2012 were in default, severely delinquent or not repaying their loans five years later.
America’s Broken Retirement System is a Recipe for Political Chaos - Lynn Parramore - As stocks go up and unemployment comes down, an increasing number of older Americans find themselves dodging bill collectors and spiraling into debt. Many warn of severe economic repercussions if this continues. But there’s more—large swaths of downwardly mobile seniors who thought of themselves as middle class is also a recipe for political chaos. Economist Teresa Ghilarducci, an expert on retirement security and Director of the Schwartz Center for Economic Policy Analysis at The New School, explains what’s happening and what’s at stake if we don’t fix it.
- Lynn Parramore: A new report shows that American seniors are filing for bankruptcy at three times the rate that they did in 1991. But headlines say the economy is humming. Why are older people so broke?
- Teresa Ghilarducci: The rise of the elder bankruptcy rate is no surprise, even if unemployment is low and stock values are up. Poor elders have terrible job prospects and very few households hold significant amounts of stock, bonds, and other financial assets. The erosion of retirement income security started decades ago.
A Jolt To The Jugular! You’re Insured But Still Owe $109K For Your Heart Attack --Drew Calver took out his trash cans and then waved goodbye to his wife, Erin, as she left for the grocery store the morning that upended his picture-perfect life. Minutes later, the popular high school history teacher and swim coach in Austin, Texas, collapsed in his bedroom from a heart attack. He pounded his fist on the bed frame, violent chest pains pinning him to the floor. “I thought I was dying,” the 44-year-old father recalled. He called out to the only other person in the house, his oldest daughter, Eleanor, now 7. A neighbor rushed him to the nearby emergency room at St. David’s Medical Center on April 2, 2017. The ER doctors confirmed the trauma to Calver’s heart and admitted him to the hospital’s cardiac unit. The next day, doctors implanted stents in his clogged “widow-maker” artery. The heart attack was a shock for Calver, an avid swimmer who had competed in an Ironman triathlon just five months before. Despite the surprise, even from his hospital bed, Calver asked whether his health insurance would cover all of this, a financial worry that accompanies nearly every American hospital stay. He was concerned because St. David’s is out-of-network on his school district health plan. The hospital told him not to worry and that they would accept his insurance, Calver said. The hospital charged $164,941 for his surgery and four days in the hospital. Aetna, which administers health benefits for the Austin Independent School District, paid the hospital $55,840, records show. Despite the difference of more than $100,000, with the hospital’s prior assurance, Calver believed he would not bear much, if any, out-of-pocket payment for his life-threatening emergency and the surgery that saved him. And then the bills came.
Cavemen did not have cavities - The human diet has changed radically since the days of the hunter-gatherers. And the change has been hard on our bodies:"Much of what we eat today, often in large quantities, isn't exactly what one could call all-natural. And if you really are what you eat, then we are already quite a different species. Bodies that for hundreds of thousands of years ate 'all-natural' have been challenged to adapt fast to tidal waves of nachos and pizza."Dental plaque provides a small window through which to view this massive evolutionary upheaval. Anyone who has been to the dentist knows how tough it is to remove plaque. Bad for you, but good for science. Its toughness makes plaque a great reservoir of data for bioanthropologists. Diet affects plaque, and by comparing the plaque in ancient and modern human teeth, scientists can infer what kinds of things we ate and what lived in our mouths. In the pre-Twinkie era, both early humans and our close relatives had mouths that were quite healthy. There are almost no examples of Neanderthal cavities. Paleolithic and Mesolithic human skulls are almost devoid of cavities. "As human diets began to modernize, as we began cooking and cleaning more of our daily foodstuffs, a strange thing happened: The bacterial colonies in our mouths became far less diverse. Hunter-gatherers from seven thousand years ago had far more microbial diversity in their mouths than did Stone Age agriculturalists. Bacteria that had coexisted and coevolved with our bodies and diets, that had adapted, were crowded out by a new environment, and our mouths became colonized by nastier bacteria. We further repopulated our mouths with the ever more widespread use of processed sugars. The incidence of cavities exploded. We began to suffer chronic oral disease, something that became most bothersome, and sometimes even deadly, in the pre-antibiotic, pre-brushing, pre-dentist era.
China’s refusal to share virus is “scandalous… many could die needlessly” - US health experts are alarmed and outraged that the Chinese government appears to be withholding samples of the deadly, rapidly evolving bird flu virus, H7N9, from US research labs, according to a report by The New York Times. The samples are critical for studying the virus and developing life-saving treatments and vaccines in preparation for potential outbreaks or pandemics. Usually, countries share viral samples “in a timely manner” without any fanfare under an agreement established by the World Health Organization to address such potential flu threats. But according to the Times, China has failed to share the samples for more than a year, despite persistent requests from government officials and researchers, including those at the Centers for Disease Control and Prevention. Moreover, scientists and experts worry that, as the US and China continue to butt heads on trade agreements, the issue of sharing biological samples and other medical-related materials could worsen. “Jeopardizing US access to foreign pathogens and therapies to counter them undermines our nation’s ability to protect against infections which can spread globally within days,” Michael Callahan, an infectious-disease specialist at Harvard Medical School, told the Times. Given that this flu virus is a potential threat to humanity, not sharing it immediately with the global network of WHO laboratories like CDC is scandalous. Many could die needlessly if China denies international access to samples. H7N9 is a type of bird flu that emerged in China in 2013 and has since sparked a string of sporadic epidemics annually in Asia. Its official case count totals 1,565 people in that time, with 766 reportedly infected in an outbreak that lasted from October 2016 to September 2017. Luckily, in the outbreaks so far, the virus hasn’t seemed to spread readily from person to person, limiting its reach. But, when people do fall ill with the virus, the infection tends to be severe. In past outbreaks, about 39 percent of those sickened died. And, like many flu viruses, it has the potential to mutate rapidly. That combination of rapid mutation and deadliness is what has experts worried about its potential to ignite a global pandemic.
Flesh-Eating Genital Infections Caused By Common Diabetes Drugs - The FDA has issued a warning over a rare form of flesh-eating bacteria which targets the genitals, caused by several widely-used diabetes medications, reports Bloomberg's Michelle Cortez. The condition, known as "necrotizing fasciitis of the perineum," or Fournier's gangrene, has only affected 12 diabetes patients over a five-year span (seven men and five women), one of whom died - so if you come down with it the support group is going to be small. Also, if you'd like to never eat again, click here (don't do it). The drugs covered by the warning include Johnson & Johnson’s Invokana, AstraZeneca Plc’s Farxiga and Eli Lilly & Co.’s Jardiance. Known as SGLT2 inhibitors, they were approved in 2013, 2013 and 2016, respectively. The drugs help the body lower blood-sugar levels via the kidneys, and excess sugar is excreted in a patient’s urine. Urinary tract infections are a known side effect. –Bloomberg This is horrifying. Flesh-eating bacterial infection of the genitals linked to best-selling diabetes drugs (like Farxiga, Invokana and Jardiance). Just a dozen cases in the 5 years on the market, but all severe and one death. Yikes. Be cautious.— Michelle Fay Cortez (@FayCortez) August 29, 2018 Cortez notes that in the past three decades, the FDA only found six other cases of the condition - all men, while reviewing all other diabetes drug classes. The FDA estimates approximately 1.7 million patients were prescribed one of the affected medications from a retail pharmacy in 2017, while Bloomberg Intelligence believes the drugs are anticipated to generate as much as $7.1 billion in sales by 2020. All of the drugs in the class except Merck & Co.’s Steglujan, the most recently approved, have been linked to the condition. The manufacturers must add information about the risk to the prescribing information and medicine guides given to patients. AstraZeneca said it is working with the agency on updating the label and noted that it hadn’t seen any cases of the condition during the development of Farxiga. -Bloomberg And now for the fine print from the FDA:
STDs Hit Record Highs As Antibiotic Resistant Gonorrhea Concern Emerges- CDC The US saw record numbers of sexually transmitted diseases (STDs) in 2017 - as nearly 2.3 million cases of gonorrhea, chlamidya and syphilis were reported, marking the fourth straight year of sharp increases, according to preliminary data from the Centers for Disease Control (CDC). What's more - the CDC is now warning that antibiotic-resistant gonorrhea is now spreading, while prevention efforts have stagnated as people use condoms less frequently. Via the CDC:
- Gonorrhea diagnoses increased 67 percent overall (from 333,004 to 555,608 cases according to preliminary 2017 data) and nearly doubled among men (from 169,130 to 322,169). Increases in diagnoses among women — and the speed with which they are increasing — are also concerning, with cases going up for the third year in a row (from 197,499 to 232,587).
- Primary and secondary syphilis diagnoses increased 76 percent (from 17,375 to 30,644 cases). Gay, bisexual and other men who have sex with men (MSM) made up almost 70 percent of primary and secondary syphilis cases where the gender of the sex partner is known in 2017. Primary and secondary syphilis are the most infectious stages of the disease.
- Chlamydia remained the most common condition reported to CDC. More than 1.7 million cases were diagnosed in 2017, with 45 percent among 15- to 24-year-old females.
"We are sliding backward," said Jonathan Mermin, director of the agency’s national STD center. "It is evident the systems that identify, treat and ultimately prevent STDs are strained to near-breaking point." According to the CDC, while most cases of chlamydia, gonorrhea and syphilis are curable with antibiotics, most cases go undiagnosed and untreated, increasing the risks of infertility, stillbirth, and an increased risk of contracting HIV. Treatment options for gonorrhea are now limited to the antibiotic ceftriaxone - as the disease has become resistant to nearly every other class of antibiotic. Doctors will usually prescribe a single shot of ceftriaxone with an oral dose of azithromycin, another antibiotic. Call it a benefit to big pharma thanks to the "sharing economy." “We expect gonorrhea will eventually wear down our last highly effective antibiotic, and additional treatment options are urgently needed,” said Gail Bolan, director of CDC’s Division of STD Prevention.
3 STDs are more common than ever before in the US — and a 'super gonorrhea' is coming in hot - There were 2.3 million cases of chlamydia, gonorrhea, and syphilis diagnosed in the US last year, according to preliminary data released by the Centers for Disease Control and Prevention. It marks a record high for the country and the fourth year in a row of "steep, sustained increases" in these three infections, according to a CDC press release.The data was presented at the National STD Prevention Conferencein Washington on Tuesday, CNN reported.From 2013 to 2017, gonorrhea diagnoses increased by 67% and nearly doubled in men, syphilis diagnoses increased by 76%, and chlamydia remained the most common condition reported to the CDC. "We are sliding backward," Dr. Jonathan Mermin, the director of the CDC's National Center for HIV/AIDS, Viral Hepatitis, STD, and TB Prevention, said in the press release. "It is evident the systems that identify, treat, and ultimately prevent STDs are strained to near-breaking point." Chlamydia, gonorrhea, and syphilis are all caused by bacteria and treatable with antibiotics. When untreated, these infections can lead to more serious health problems, including infertility, ectopic pregnancy, and higher HIV risk. One part of the problem is that people often do not know they're infected. "It's important for the public to understand that most sexually transmitted infections are transmitted by people who do not know that they're infected," Dr. Edward Hook, the scientific committee chair of the National STD Prevention Conference, told CNN. The CDC's press release also notes the growing threat of antibiotic-resistant gonorrhea— sometimes called "super gonorrhea." Such gonorrhea has become resistant to "nearly every class of antibiotics" once used to treat it, the release said.
Ebola Deaths In DRC Spike 21% In Four Days, Bordering Countries On High Alert --The latest Ebola outbreak in the Democratic Republic of the Congo (DNC) has claimed 67 lives, up from 55, according to Robert Redfield, director of the CDC. On Friday the WHO said that the virus has spread to an area of "high security risk," and that ongoing local conflicts have made finding and monitoring infected people extremely difficult. "Really, in two weeks, we’ve gone from 24 cases to 105 cases," said Redfield, who just returned from the hot zone where an outbreak centered in North Kivu is responsible for 105 confirmed or suspected cases, according to the Washington Post. There are currently 77 confirmed cases, 28 probable cases in which biological samples are not available for laboratory testing, while 3,000 people have received an experimental Ebola vaccine. Update on #Ebola in #DRC for 24 August, with data up to 23 August: Total of 105 cases (77 confirmed & 28 probable), including 67 deaths. In addition, 10 suspect cases are under investigation https://t.co/aC1yUqAb6Z— Peter Salama (@PeteSalama) August 25, 2018 Redfield said the rapid spread of the disease was primarily because many health workers at a hospital in the town of Mangina, where the outbreak started, contracted the virus after treating early patients without recognizing that they had Ebola. The disease spreads through contact with the bodily fluids of victims, putting health workers and patients’ family members at greatest risk, notes the Post. "In the next couple of weeks, we’ll have greater clarity," about the scope of the outbreak, said Redfield.
Coffee Does Not Merit Cancer Warning Label Ordered In California, FDA Says - The Food and Drug Administration has stepped into a simmering debate in California as to whether coffee should come with a cancer warning label. In March, a judge sided with a nonprofit organization called the Council for Education and Research on Toxics that argued that coffee contains high levels of acrylamide, a cancer-causing chemical compound produced as beans roast. Coffee companies didn't deny acrylamide's presence but argued that it was found at low levels that posed no significant health risk and was outweighed by other health benefits. That argument wasn't compelling to Los Angeles County Superior Court Judge Elihu Berle. He ordered coffee companies in California to carry a cancer warning label under Proposition 65, the state's Safe Drinking Water and Toxic Enforcement Act. The law, which requires the state to maintain a list of harmful substances and businesses to notify customers of exposure, has led to both a reduction in carcinogenic chemicals and quick settlements over labels on foods. On Wednesday, FDA Commissioner Scott Gottlieb said in a statement that "if a state law purports to require food labeling to include a false or misleading statement, the FDA may decide to step in."He added that a large body of research has found little evidence that coffee causes cancer and instead suggested that it might reduce the risk of some cancers: "Strong and consistent evidence shows that in healthy adults, moderate coffee consumption is not associated with an increased risk of major chronic diseases, such as cancer, or premature death, and some evidence suggests that coffee consumption may decrease the risk of certain cancers."The cancer label warning, he said, may "mislead consumers to believe that drinking coffee could be dangerous to their health when it actually could provide health benefits."The agency also announced that it sent a letter of support to the California Office of Environmental Health Hazard Assessment, which proposed a regulation to exempt coffee companies like Starbucks from putting the warning label on their products.
‘Should I Throw Out My Cheerios?’ and Other Questions About Roundup in Children’s Food --Recently, Environmental Working Group (EWG) released a headline-making report on Roundup in children's cereal and other oat-based foods. Much of the news coverage agrees with us that parents should be concerned. It's first important to understand how a chemical like glyphosate, the main ingredient in Monsanto's Roundup, gets into our food supply. You've probably heard of Roundup, a weed killer sprayed on genetically engineered corn and soybeans. But Roundup is also used as a desiccant—a drying agent sprayed just before harvest on oats and other grains to make harvesting cheaper and easier. This use of Roundup is what caused the high levels of glyphosate in the oat-based foods we tested. Based on our research and other studies, glyphosate is likely present in foods other than oats. The Food and Drug Administration has been testing foods for glyphosate since 2015, but has not made its data public. Quaker Oats, General Mills and other companies would have you believe that because the amounts of glyphosate EWG found in their products are within the limits allowed by the Environmental Protection Agency, there's nothing for parents to worry about. But just because something is legal, doesn't mean it's safe. The EPA's current legal limit for glyphosate on oats and many other grains is 30 parts per million, or ppm. But just a few years ago, it was 300 times lower—only 0.1 ppm. The EPA raised the legal limit after farmers began using glyphosate as a desiccant, which was surely not a coincidence. Glyphosate has been linked to an elevated risk of cancer by California state scientists and the World Health Organization. Just days before we released our report, a California jury ordered Monsanto to pay $289 millionin damages to a school groundskeeper who said years of working with glyphosate caused his terminal cancer. California's standard for glyphosate in food is set at the dose of glyphosate expected to cause no more than one case of cancer in every 100,000 people who ingest it over a lifetime. We think that's too high of a risk, particularly for children and fetuses. EWG's benchmark added an additional 10-fold safety factor, resulting in an elevated risk of cancer for no more than one in 1 million people. The added safety factor for children is supported by the federal Food Quality Protection Act. (Read more about how we developed our glyphosate health guideline here.)
Fight Against Glyphosate Could Reignite Push for Agent Orange Justice --A jury's verdict in California that a groundskeeper got cancer from repeated exposure to Monsanto's Roundup weedkiller is offering new hope for justice for millions of plaintiffs an ocean away. During the Vietnam War, Monsanto was one of the primary companies that supplied Agent Orange to the U.S military, which sprayed 44 million liters (approximately 11.5 million gallons) of the dioxin-containing herbicide on the jungles of South Vietnam. As a result, at least three million Vietnamese people have suffered from cancer, neurological damage and reproductive problems that have been passed down three or four generations, Viet Nam News reported. "The verdict serves as a legal precedent which refutes previous claims that the herbicides made by Monsanto and other chemical corporations in the U.S. and provided for the U.S. army in the war are harmless," spokesman for Vietnam foreign ministry spokesperson Nguyen Phuong Tra said, as The Independent reported Sunday. In 2004, the Vietnam Association for Victims of Agent Orange/Dioxin (VAVA) filed its first class action suit against 37 U.S. companies, including Dow Chemical and Monsanto, but the case was rejected three times. U.S. courts said there was no legal precedent for the case, that the companies were acting on the orders of the U.S. government and that there was not enough evidence linking Agent Orange with negative health effects, according to Viet Nam News. But VAVA Chief of Office and Director of Liaison Lawyers Office Quách Thành Vinh told Viet Nam News that the recent verdict that Monsanto award former groundskeeper Dewayne Johnson $289 million in damages could help other victims of toxic chemicals get justice, including the three million Vietnamese victims of Agent Orange his organization represents. U.S. and Vietnamese governments have linked dioxin and Agent Orange exposure to more than 10 diseases.
Vietnam demands Monsanto pays compensation for Agent Orange victims -- Vietnam has demanded Monsanto pay compensation to the victims of Agent Orange, which the company supplied to the US military during the Vietnam War.It came in response to the firm being ordered to pay $289m (£226m) to a school groundsman who claims his use of its Roundup weedkiller contributed to his terminal cancer. “The verdict serves as a legal precedent which refutes previous claims that the herbicides made by Monsanto and other chemical corporations in the US and provided for the US army in the war are harmless,” a spokesman for Vietnam’s foreign ministry, Nguyen Phuong Tra said.He told state media: “Vietnam has suffered tremendous consequences from the war, especially with regard to the lasting and devastating effects of toxic chemicals, including Agent Orange.”Agent Orange was a chemical herbicide and defoliant used by the US military to depriveViet Cong guerilla fighters of food and concealment. Between 1961 and 1971, the US military sprayed around 12 million gallons of the chemical substance on over 30,000 miles of southern Vietnam. Dioxin, a highly toxic element of Agent Orange, has been linked to major health problems such as birth defects, cancers other deadly diseases. Millions still suffer to this day, as deformities are passed down to the offspring of exposed victims including Vietnamese and American forces.Monsanto has argued: “The government set the specifications for m aking Agent Orange and determined when, where and how it was used. Agent Orange was only produced for, and used by, the government.”
Bees become ‘addicted’ to harmful pesticides, scientists warn -- Bees become addicted to pesticides in the same way that humans grow dependent on cigarettes, new research has found.The more of the nicotine-like chemicals they consume, the more they appear to want, a study has shown.The findings suggest that the risk of potentially harmful pesticide-contaminated nectar entering bee colonies is higher than was previously thought.Controversial neonicotinoid pesticides are chemically similar to nicotine, the addictive compound in tobacco.In 2013 the European Union imposed a partial ban on three widely used neonicotinoids because of evidence that they may be harmful to bees.The ban has now been extended to cover all crops not grown in greenhouses, despite strong opposition from some groups including the UK's National Farmers' Union, but it could be revoked following Brexit.In a series of studies, a team of British researchers offered bumblebees a choice of two sugar solutions, one of which was laced with neonicotinoid pesticides. They found that over time the bees increasingly preferred feeders containing the pesticide-flavoured sugar. Dr Richard Gill, from the Department of Life Sciences at Imperial College London, said: "Given a choice, naive bees appear to avoid neonicotinoid-treated food. However, as individual bees increasingly experience the treated food they develop a preference for it. "Interestingly, neonicotinoids target nerve receptors in insects that are similar to receptors targeted by nicotine in mammals.
Rise in Insect Pests Under Climate Change to Hit Crop Yields, Study Says - Global warming could increase both the number and appetite of insect pests, new research finds, which could pose a serious threat to global crop production.The study finds that global warming of 2C above pre-industrial levels—which is the limit set by the Paris agreement—could cause pest-related yield losses from wheat, rice and maize to increase by 46 percent, 19 percent and 31 percent, respectively. And each additional degree of temperature rise could cause yield losses from insect pests to increase by a further 10-25 percent, the research shows. Losses from pest infestation are likely to be largest in China, the U.S. and France—three of the world's most important grain producers, according to the findings. At present, around 10-16 percent of global crop production is lost to pests—including insects, fungi and bacteria.Thousands of insect species are known to threaten food production. One of the most well-known pests, the desert locust, feeds on a wide range of crops—including rice, maize and sugarcane—and can swarm and strip a crop field within an hour.Other insects, such as the western corn rootworm, target specific crops. The rootworm, for example, feeds on maize during both its larval and adult beetle life stages and currently costs U.S. farmers around $1bn a year in lost revenue.The new study, published in Science, explores how climate change could alter the activity of 38 of the world's most-studied insect crop pests.Climate change could increase the activity of insect pests in two ways, according to the research team, which was led by Prof. Curtis Deutsch, an ecologist from the University of Washington.First, rising temperatures boost the rate at which insects can digest food—causing them to demolish crops at a faster rate. Second, in temperate regions, warming temperatures could cause insects—which are ectothermic or "cold-blooded"—to become more active and, thus, more able to reproduce.
If the world ate the USDA-recommended diet, there wouldn't be enough land to grow it – CBC --If everyone in the world followed the USDA-recommended diet, there wouldn't be enough agricultural land to grow all the food, a new study has found.The researchers from the University of Guelph and the University of Waterloo, both in Ontario, said an additional gigahectare of fertile land — roughly the size of Canada — would be required to feed everyone, highlighting the fact that dietary guidelines should be based on more than just nutrition.The study, funded by a Canadian government grant through the Natural Sciences and Engineering Research Council, sought to address the issue of sustainability in the global diet.The researchers drew from current yield data (production, imports and exports by nation) for various crops from the Food and Agriculture Organization of the United Nations to estimate the amount of land required to grow what the USDA considers a healthy diet low in calories and saturated fats. "Our analysis shows that there is not enough land for the world to adhere to the USDA guidelines under current agricultural practices," they wrote in the study, which was published earlier this month in the peer-reviewed journal PLOS ONE. "This is despite the fact that the USDA guideline diet is already less land-intensive than the current U.S. diet." "It's important to know that this may have global implications if we were to have everybody follow this diet … and there would be land limitations to implementing it," said Anand, who used the USDA guideline because it was the most readily available one when the researchers began their study six years ago.
Missouri Becomes First State to Regulate the Word 'Meat' - Missouri is the first state in the country to enact a law that criminalizes certain uses of the word "meat."The mandate, which came into effect on Tuesday, prohibits companies from "misrepresenting" products as meat if they are not from "harvested livestock or poultry." The measure was approved by the legislature in May and signed by former-Gov. Eric Greitens on June 1. Violators could be fined $1,000 and face imprisonment for a year, according to USA TODAY.The initiative was backed by the state's pork producers, the Missouri Farm Bureau and the Missouri Cattlemen's Association."The big issue was marketing with integrity and ... consumers knowing what they're getting," Missouri Cattlemen's Association spokesman Mike Deering told USA TODAY. "There's so much unknown about this."The terminology change could force a costly overhaul of certain brands' marketing and packaging in the state,Munchies reported. For instance, companies such as Gardein sell products such as Meatless Meat; Whole Foods' 365 brand touts Meatless Meatballs, Meatless Burgers and Meatless Breakfast Patties. It could also hamper Memphis Meats, a San Francisco-based startup developing "lab-grown" tissues cultured from animal stem cells. Additionally, the St. Louis Dispatch reported that plant-based burger company Beyond Meat just expanded its manufacturing facility in Columbia. It employs more than 200 workers in mid-Missouri and is poised to add another 250 employees.
Animal Activists Face Felony Charges for Rescuing Dying Birds -- I'm one of six activists currently facing up to 10 years in federal prison. Our crime? We walked onto a factory farm and carried out a pair of dying turkeys from among thousands languishing in a filthy shed. We then rushed them to a vet for life-saving medical care.The farm I visited is owned by Norbest, a company that sells turkeys in rural Utah. Its marketing showcases a gorgeous alpine vista and sprawling meadows with "mountain-grown" turkeys.But the reality we found was a nightmare. The birds were crammed into filthy industrial sheds by the thousands. I saw gaping head wounds, turkeys struggling to stand in their own feces and dying birds amongst the living.During another visit, on a particularly frigid night, the team spotted a lump in the middle of the road. This something revealed herself to be someone—a young turkey later named Grace. She had likely fallen from a transport truck and, against all odds, had survived her injuries.Grace was wrapped in a blanket and received personal care before a vet appointment the following morning. She would occasionally make eye contact, accompanied by a gentle chirp. Unfortunately, the vet explained, both of her fragile legs were broken and she had extensive internal injuries. The kindest thing we could do was to let her go. Her small body was given one last kiss before her breathing stopped.Grace was a p recious individual who was never given a chance at life, like millions of other turkeys trapped on farms across the country. Unlike her brothers and sisters, she was at least shown compassion and a gentle touch in her last hours. That makes her, disturbingly, one of the lucky ones.
First Yellowstone-area grizzly hunt in 40 years blocked by federal judge (Reuters) - A federal judge in Montana on Thursday issued a court order temporarily blocking the first trophy hunts of Yellowstone-area grizzly bears in more than 40 years, siding with native American groups and environmentalists seeking to restore the animals’ protected status. The 14-day restraining order by U.S. District Judge Dana Christensen in Missoula, Montana, came two days before Wyoming and Idaho were scheduled to open licensed grizzly hunts allowing as many as 23 bears in the two states to be shot and killed for sport. Groups opposing the hunts had sought a restraining order while waiting for the judge to rule on the larger question of whether the federal government should return Endangered Species Act safeguards to grizzlies in the greater Yellowstone region. Christensen heard arguments from both sides on Thursday and took the case under advisement without indicating when he would render a decision. But in granting the restraining order, he said that the conservation and tribal groups had shown that they were “likely to succeed on the merits” of their lawsuits. Wyoming and Idaho had been scheduled to open their newly established hunting season for grizzlies outside Yellowstone National Park starting on Saturday. U.S. law prohibits hunting altogether inside the park, and Montana has decided against opening a grizzly season, citing concerns about long-term recovery of a bear population that is arguably one of the most celebrated and photographed in the world. The stage for grizzly hunting in the region was set in June 2017 when the U.S. Fish and Wildlife Service announced that the large, hump-shouldered bears would cease to be listed as a threatened species in and around Yellowstone. That left grizzly management to the discretion of the states, and prompted lawsuits challenging the action.
Sweden's reindeer at risk of starvation after summer drought -- Sweden’s indigenous Sami reindeer herders are demanding state aid to help them cope with the impact of this summer’s unprecedented drought and wildfires, saying their future is at risk as global warming changes the environment in the far north.The Swedish government this week announced five major investigations aimed at preparing the country for the kind of extreme heatwave it experienced in July, when temperatures exceeded 30C (86F) and forest fires raged inside the Arctic circle.But it has yet to come up with any concrete measures for the country’s 4,600 Sami reindeer owners – the only people authorised to herd reindeer in Sweden – and their 250,000 semi-domesticated animals, raised for their meat, pelts and antlers.The owners are asking for emergency funding to help pay for supplementary fodder as a replacement for winter grazing lands that could take up to 30 years to recover from the summer’s drought and fires. “We are living with the effects of climate change,” Niila Inga, chair of the Swedish Sami Association, told the SVT news agency. “The alarm bells are ringing. We face droughts, heatwaves, fires. This is about the survival of the reindeer, and of Sami culture, which depends on them.” The owners are warning that without help some of their herds may not survive the year. They are also concerned that some young reindeer calves may have become so weakened by the prolonged drought they would not be able to follow their mothers to new feeding grounds. Since Sami owners do not own the land their reindeer graze on, Inga told the Local, they need laws allowing them to improve grazing land. Funding is also urgently needed to look into the growing difficulties reindeer have finding the lichen that form a key part of their diet.
What do you do when the well runs dry? -- We don’t know how lucky we are, what we have and what we could lose if we’re not careful. It becomes evident after driving the High Plains from Omaha to Dodge City, and then down through the Panhandle enroute to the place where we bought the Southwest from the Mexicans at the end of a gun barrel. The borderlands. Things get tougher south of the Nebraska border, south of Lindsborg, Kan., hometown of Storm Laker Carol Peterson. The corn looks punky but they grow it, some dryland counties yielding 48 bushels per acre, some 90. Where they irrigate, increasingly as you drive southwest, they run 140- to 200-bushel corn. And in those spots where the yields rival Iowa’s, the Ogallala Aquifer serving eight states of the Great Plains has dropped by 150 feet since 1950. It is some 300 feet deep by my reading in most places. Including right around Dodge City, where thousands of feeders are laid in on the northeast city limits to give the Old West home of Miss Kitty the smell of … money. Or trouble ahead.The fields are planted in circles and not squares to accommodate the center pivots. Some corn fields I saw, with irrigators over them, stood no taller than that soybean field along Hwy. 39 just south of Odebolt.It makes you wonder what the point is. We are giving it away at $3 and yet corn acreage increased in Kansas by 17% in 2017. The property taxes may be low but so is the Republican River. You see the huge feed bunks under tarp from the road fed primarily by Iowa and Illinois corn, which grow it aplenty from what the markets tell us. And it makes you wonder how long it can last.The attitude seems to be that the water is there for our use and will be gone — in 20 or 50 years, nobody can say for certain — because it is being drawn down a half foot or more a year in many parts of Kansas but can only be replenished at a half-inch per year. The arithmetic is simple, and the geologic modeling fairly complete.
By 2050, nearly 300 mln people could lack enough zinc or protein and 1.4 bln women and children will be vulnerable to iron deficiency (Thomson Reuters Foundation) - Rising carbon emissions could make vital food crops from wheat to rice less nutritious and endanger the health of hundreds of millions of the world's poorest, scientists said on Monday. Certain staple crops grown in open fields with elevated carbon dioxide levels had up to 17 percent lower levels of protein, iron and zinc compared to those grown amid less of the gas, according to a study in the journal Nature Climate Change. Global emissions of carbon dioxide, largely from fossil-fuel use, are at record highs and the primary cause of global average temperature rise, which countries are seeking to curb to avoid the most devastating effects. Nearly 200 countries reached an agreement two years ago in Paris to curb emissions. The research found that by 2050, nearly 300 million people could lack enough zinc or protein and 1.4 billion women and children will be vulnerable to iron deficiency - all linked to carbon emissions - fuelling the risk of disease and early death. While carbon emissions and global warming disrupt food production through extreme weather such as drought and floods, these findings warn of a direct yet mostly invisible impact on people's diets, said Matthew Smith, an author of the study. "It's more hidden ... most people wouldn't necessarily notice if they lost 5 percent of iron or zinc from their wheat, but it could have broad ranging health effects," said the research associate at the Harvard T. H. Chan School of Public Health. The main theory behind the link is that carbon dioxide makes plants grow faster and create fewer micro-nutrients, he added. By mid-century, areas at highest risk of growing less nutitious food are some of the world's poorest - India, Africa, the Middle East and Southeast Asia - which rely on grains most vulnerable to the effects of carbon, such as wheat and rice.
Study shows air pollution may be causing cognitive decline in people - A trio of researchers from Beijing Normal University, Yale University and Peking University has found a link between air pollution and human cognitive decline. In their paper published in Proceedings of the National Academy of Sciences, Xin Zhang, Xi Chen, and Xiaobo Zhang outline their study and what they found. Most everyone knows that air pollution can cause physical ailments, particularly those associated with the lungs, but new evidence suggests it can also cause mental harm. In this new effort, the researchers have built on the findings of other studies that have suggested air pollution can cause cognitive decline.The study by the trio consisted of carrying out math and verbal testing of 25,000 people living in 162 counties in China and then comparing those results with air pollution conditions. The researchers noted that the tests were given to people of both genders from teens to geriatrics.In looking at their results the researchers report finding that the higher the levels of pollution the lower the test scores as people grew older. They note that the biggest impact was on males, especially those with less education. The researchers suggest this was likely because less educated men work outside more in China and are thus more exposed to polluted air. They note also that the fact that the decline was seen as progressive over time is a strong indicator of air pollution being the cause, rather than other sources. They suggest their findings offer additional evidence of long-term exposure to air pollution causing a decline in cognitive abilities. They note also that they found some evidence of an increase in the rate of neurodegenerative diseases. The researchers acknowledge that they do not know how pollution might be causing cognitive decline, but suggest it might have some impact on white matter in the brain, considering the role it plays in coordinating communications between brain regions. Also, it is not clear which air pollution constituent might be to blame. In their study, the researchers tested only for nitrogen, sulfur dioxide and particulates smaller than 10 micrometers in diameter. That left out a whole segment of possibilities including carbon monoxide, ozone and larger particulate matter.
Air pollution could cause a significant reduction in intelligence, major study says -- Air pollution could impede cognitive ability as people get older, according to a study from researchers in China and the U.S. The research, published online in the Proceedings of the National Academy of Sciences on Monday, found that long-term exposure to air pollution impeded people's performance in both verbal and math tests.The skills of thousands of people in China were monitored for the study over a period of more than four years, according to reports. The impact of air pollution on verbal tests, researchers found, became more pronounced as people got older. This was especially the case for men and the less educated. "The damage on the aging brain by air pollution likely imposes substantial health and economic costs, considering that cognitive functioning is critical for the elderly for both running daily errands and making high-stake decisions," the paper said. Air pollution poses a serious problem to people all over the world. 4.2 million people die each year from exposure to outdoor air pollution, according to the World Health Organization (WHO), while 91 percent of the planet's population live in areas where the air quality exceeds WHO guideline limits. "Polluted air can cause everyone to reduce their level of education by one year, which is huge," the Yale School of Public Health's Xi Chen, one of the report's authors, said.
Air pollution causes ‘huge’ reduction in intelligence, study reveals - Air pollution causes a “huge” reduction in intelligence, according to new research, indicating that the damage to society of toxic air is far deeper than the well-known impacts on physical health.The research was conducted in China but is relevant across the world, with 95 per cent of the global population breathing unsafe air.It found that high pollution levels led to significant drops in test scores in language and arithmetic, with the average impact equivalent to having lost a year of the person’s education. “Polluted air can cause everyone to reduce their level of education by one year, which is huge,” said Xi Chen at Yale School of Public Health in the US, a member of the research team. “But we know the effect is worse for the elderly, especially those over 64, and for men, and for those with low education. If we calculate [the loss] for those, it may be a few years of education.”Previous research has found that air pollution harms cognitive performance in students, but this is the first to examine people of all ages and the difference between men and women. The damage in intelligence was worst for those over 64 years old, with serious consequences, said Chen: “We usually make the most critical financial decisions in old age.” Air pollution causes seven million premature deaths a year but the harm to people’s mental abilities is less well known. A recent study found toxic air was linked to “extremely high mortality” in people with mental disorders and earlier work linked it to increased mental illness in children, while another analysis found those living near busy roads had an increased risk of dementia.
Air Pollution Shortens Human Life by One Year, on Average - In a summer marked by air quality alerts as wildfires rage in the western U.S., a study has been published finding that air pollution lowers the average lifespan by one year worldwide. The study, published in Environmental Science and Technology Letters Aug. 22, was the first to assess the impact of particulate matter pollution smaller than 2.5 micrometers (PM2.5) on human life expectancy on a per country basis, ScienceNews reported. The researchers used 2016 data from the Global Burden of Disease project in an attempt to make the health impacts of air pollution more concrete. "Talking about mortality figures and large body counts, you see people's eyes glaze over," study author and University of Texas at Austin environmental scientist Joshua S. Apte told ScienceNews. "People care not just about whether you die—we all die—but also how much younger are you going to be when that happens." For people living in the U.S., that's a little over four months, The New York Times reported. But it can be much more in more polluted developing countries, up to 1.9 years in Egypt and 1.5 in India. In general, countries in Asia and Africa see lifespans reduced from between 1.2 and 1.9 years, according to the study. The researchers also assessed how much longer lifespans could be if countries limited air pollution to the World Health Organization guideline of 10 micrograms of PM 2.5 per cubic meter of air, ScienceNews reported.Overall, the global lifespan would increase by a median of more than half (0.6) of a year, equivalent to the health impact of curing breast cancer or lung cancer, the study's authors wrote. In Egypt, life expectancies would increase by 1.3 years, and in China, by around nine months. In India, limiting air pollution to WHO guidelines would increase a 60-year-old's chance of surviving to 85 in that country by 20 percent, ScienceNews reported.
EU tackles cancer risk in football pitches - How much should society spend to save a life? That’s the issue facing EU and national regulators as they try to decide whether to lower the permitted concentrations of possibly cancer-causing chemicals allowed in the rubber pellets on artificial football fields. The cost would be high — ranging from €40 million to €3.1 billion — for the necessary industry changes that could prevent an estimated two to 12 cancer cases over a decade. But the issue is about more than euros for Nigel Maguire, whose son Lewis died in March just after his 20th birthday. Maguire, a former executive in the U.K.’s National Health Service, thinks the chemicals in the artificial football fields his son played on as a goalie had something to do with the cancer that killed him. Rubber pellets used in artificial football pitches are often made from scrapped tires, which contain low concentrations of a plethora of hazardous and cancer-causing chemicals. Goalkeepers like Lewis are thought to be the most vulnerable from any potential harm, as they often dive and can accidentally ingest the little black pellets.Scientific committees in the European Chemicals Agency (ECHA) are debating a proposal presented last week by the Netherlands to lower the allowed limits for these chemicals.
As classes begin, Detroit schools shut off drinking water due to high levels of lead and copper - The Detroit Public School system has shut off drinking water at every one of the 106 school buildings it operates because of elevated levels of lead and copper found in water testing at 16 out of 24 schools. The announcement is an admission that the catastrophic conditions in Flint, Michigan, caused by the profit-driven decision to shift the city’s water system to polluted water from the Flint River, are replicated for school children in Detroit, the largest city in Michigan and the poorest big city in America. The notice to teachers and parents about the decision to cut off water avoids the obvious implication: for years, hundreds of thousands of school children and thousands of teachers have been exposed to poisoning by lead, copper and other toxins, with incalculable consequences on their long-term health. A spokeswoman for the school district told the Detroit Free Press that there was “no evidence at all that children have been impacted from a health standpoint,” but the district has said that it will not be carrying out any tests on the students to check for high lead levels. Officials of the Detroit Water and Sewerage Department and the Great Lakes Water Authority said there was no excess lead or copper in the water being delivered to school buildings, indicating that the source of the pollution was internal to the buildings themselves, the result of decades of inadequate investment in their plumbing infrastructure.Superintendent Nikolai Vitti sent a robocall to parents on Sunday, August 26, alerting them to the lead-tainted and copper-tainted water coming into DPS water fountains and kitchens where school lunches are prepared. On Monday, as teachers entered schools to prepare for the new year, they were alerted that lead had been found in some schools and not others. Those schools found to have lead would have water coolers and water bottles available. On Tuesday, teachers received a note from the superintendent informing them of test results showing excess lead or copper levels in water at 16 of the 24 schools tested. Coupled with earlier tests from 2016 and the spring of 2018, this brought to 34 the number of schools where drinking water has been turned off.
Kansas Didn't Tell Residents Their Water Was Contaminated For Years - The Kansas government allowed hundreds of residents in two Wichita-area neighborhoods to drink watercontaminated by a cleaning chemical called perchloroethylene, also known as PCE or tetrachloroethylene,The Wichita Eagle reported Sunday.The state discovered the tainted groundwater at a Haysville dry cleaner in 2011 but the Kansas Department of Health and Environment (KDHE) did not act for more than six years. KDHE did not test nearby private wells or alert residents about the contamination.Similar contamination was discovered at another dry cleaning site near Central and Tyler in Wichita, but the state did not notify residents for four years.KDHE said they initially assumed the contaminated groundwater in Haysville was traveling southwest away from the private wells. They did not realize until 2017 that the groundwater was actually flowing southwest and directly along the wells.The delay in notification can be blamed on a 1995 state law requested by the dry cleaning industry called the Kansas Drycleaner Environmental Response Act that actually instructs health authorities not to look for contamination from shops. One family's private well that was tested had water containing 49 parts per billion of PCE, about 10 times what the U.S. Environmental Protection Agency allows.
Red tide: Florida powerless to stem killer algae bloom- In Florida, the uncontrolled growth of an alga known as "red tide" has the state in emergency. The beaches of pristine waters now have a dark colour. The red tide has left tons of dead animals, has affected local businesses and has worried the inhabitants who do not know how long this phenomenon will last. The breeze brings a penetrating stench of rotten fish and the water, which is usually crystal blue, now has a copper brown colour. Dozens of dead fish float in the surf. "When the concentration of red tide is high it kills everything," says Dr Rick Bartleson, research scientist at The Sanibel Captiva Conservation Foundation Marine Laboratory (SCCF).The "red tide" Mr Bartleson refers to is a toxic microscopic alga, Karenia brevis, which every year comes naturally to the Gulf of Mexico."This red tide has been off the charts," says Dr Bartleson, who has been studying the phenomenon for several years. It has lasted much longer and spread much more than usual. This season the toxic algae began in October 2017 and has since expanded by about 150 miles (240km) on Florida's west coast. The situation is so serious that Rick Scott, Florida's Governor, has declared a state of emergency due to impacts of the red tide in seven counties that include Collier, Lee, Charlotte, Sarasota, Manatee, Hillsborough and Pinellas. Since November 2017, the red tide has taken a toll on the marine life around this extremely diverse paradise. At least 29 manatees are confirmed to have died due to the toxin by the Fish and Wildlife Conservation Commission (FWC). Seventy-four more deaths are being investigated. The FWC has documented 588 stranded sea turtles and attributes 318 of them to the red tide. But the red tide can also affect people. According to the National Oceanic Service, sea waves can cause K. brevis cells to release toxins into the air, causing skin irritations and respiratory problems. For people with chronic conditions such as asthma, the red tide can make them very sick.
Is a super bloom on the way? Scientists worry a ‘brown tide’ will merge with red tide - The Florida Fish and Wildlife Conservation Commission is reporting an outbreak of Trichodesmium, sometimes called a brown tide, in waters offshore of Manatee County. It is a separate species but similar to the well documented Karenia brevis, a photosynthetic organism responsible for the persistent red tide hitting Manatee and other nearby counties along 130 miles of coastline. Concerns are now being raised that if the two blooms merge, it could essentially deepen an ongoing red tide. Kathleen Rein, a chemist at Florida International University, said a Trichodesmium bloom in the midst of the ongoing red tide crisis could be “very bad news.” While unable to address the size, location or movement as of Thursday, Rein said, “I can tell you that Trichodesmium is a cyanobacteria. It is photosynthetic, like Karenia. Its growth is believed to be simulated by iron in Saharan dust. It fixes nitrogen, then the fixed nitrogen can be used by Karenia brevis to help it grow. Let’s hope the two blooms don’t find each other.” So far, FWC is only reporting that the brown tide is being detected in offshore waters, though it can appear anywhere this time of year. . Blooms can get so big that they can be seen from space and while some can produce toxins, they are typically not harmful to marine life on their own. Unless the brown tide merges with red tide and essentially becomes a red tide’s food source. Mote Marine scientist Vincent Lovko said Trichodesmium is unique in that it forms well offshore and instead of getting nutrients from the water, pulls nitrogen from the air. While some strains can be toxic, Lovko said there has never been a reported toxic brown bloom in the Gulf of Mexico. Lovko said Trichodesmium is more present on the surface than K brevis, which lingers about a meter under the water. The problem is when the surface bloom starts to die and sinks into the red tide, it can provide a food source to the red tide, potentially extending its natural lifespan.
Surprise Python Hybrid Could Pose Greater Threat to Everglades Wildlife - Burmese pythons have long posed a threat to the indigenous wildlife in Everglades National Park since pet owners abandoned a few of them there in the 1980s, The Guardian reported.They have displaced American alligators as the Everglades' top predators and have been found responsible for putting a dent in the populations of raccoons, opossums and bobcats, according to The National Parks Traveler.Now, an Aug. 19 study from the U.S. Geological Survey (USGS) has revealed a surprise finding about the pythons that could make them an even bigger threat to biodiversity in the famous national park and across South Florida: some had DNA from the Indian python, which is a smaller, faster species that prefers dry ground to swamps, according to The Guardian.Researchers are now concerned the hybrid snakes could adapt even better to the South Florida environment and expand their range."When two species come together they each have a unique set of genetic traits and characteristics they use to increase their survival and their unique habitats and environments," lead study author and USGS geneticist Margaret Hunter told The Guardian. "You bring these different traits together and sometimes the best of those traits will be selected in the offspring. That allows for the best of both worlds in the Everglades, it helps them to adapt to this new ecosystem potentially more rapidly."One concern is that hybrid snakes might slither out of the swamp and hunt prey on dry land, since Burmese pythons prefer the water and Indian pythons prefer higher ground. "If the Indian pythons have a wider range, perhaps these Everglades snakes now have that capability," Hunter told the Miami Herald. "It's quite interesting and quite surprising, but we don't know the extent it's in the population."
Great Barrier Reef headed for ‘massive death’ -- John "Charlie" Veron -- widely known as "The Godfather of Coral" -- is a renowned reef expert who has personally discovered nearly a quarter of the world's coral species and has spent the past 45 years diving Australia's Great Barrier Reef. But after a lifetime trying to make sense of the vast ecosystems that lie beneath the ocean's surface, the 73-year-old is now becoming a prophet of their extinction. "It's the beginning of a planetary catastrophe," he tells CNN. "I was too slow to become vocal about it." In 2016 and 2017, marine heat waves caused by climate change resulted in mass bleaching, which killed about half of the corals on the Great Barrier Reef, along with many others around the world. "Somewhere between a quarter and a third of all marine species everywhere has some part of their life cycle in coral reefs," he says. "So, you take out coral reefs and a third to a quarter of all marine species gets wiped out. Now that is ecological chaos, it is ecological collapse." One of the natural wonders of the world, the Great Barrier Reef is 2,300km long -- roughly the length of Italy -- and is the only living organism that can be seen from space. When Veron, a former Chief Scientist at the Australian Institute of Marine Science, first went diving on the vast reef in the early 1960s he felt like "his life started." "It was so much packed into a small area, so much life, so much activity, even noisy. It was really a metropolis, it was really humming and buzzing," he says. At that stage, he had no idea about what was in store for this vibrant underwater habitat. "I was a climate change skeptic, at first," he says. He realized that climate change was "serious" in the mid-1980s, and around 1990 he became "alarmed" about its impact on coral reefs. Veron says the mass bleaching events in the past few years -- and the prospect of losing one of nature's greatest treasures -- were a wake-up call for the world in the wider battle against climate change.
Scientists find corals in deeper waters under stress too -- Coral reefs around the world are threatened by warming ocean temperatures, a major driver of coral bleaching. Scientists routinely use sea-surface temperature data collected by satellites to predict the temperature-driven stress on reef communities, but new research shows that surface measurements alone may not accurately predict the full extent of thermal stress on deeper corals. A new study led by scientists at Scripps Institution of Oceanography at the University of California San Diego and the Coral Reef Research Foundation (CRRF) in Palau describes a novel approach for predicting warm temperature-induced stress on corals from the sea surface through a deeper expanse ranging from 30-150 meters (100-500 feet) known as the mesophotic zone.Corals at this depth are thought of by some in the science community as being safer from ocean warming than their shallow-water counterparts. But the Scripps Oceanography team found that even in the deep, corals are episodically exposed to thermal stress at intervals different than those corals near the surface.The researchers utilized nearly two decades of data sets—including sea level, sea-surface temperature, and temperature observations that ranged between the surface and deep into the mesophotic zone—to develop a forecast tool for the vertical extent of how corals will be stressed by temperature. This research was conducted at three reef locations around the island nation of Palau, located in the tropical Pacific Ocean. This novel approach to measure and predict temperature stress on coral reefs is described in a new study published Aug. 27 in the journal Geophysical Research Letters.
300 Endangered Sea Turtles Killed in Illegal Fishing Net Off Mexico's Pacific Coast -- Fishermen found roughly 300 dead sea turtles off the southern Pacific coast of Mexico on Tuesday.The olive ridley turtles, which Mexico classifies as being at risk of extinction, were entangled in an abandoned illegal fishing net, Reuters reported.Olive ridleys, named for their greenish skin and shell, descend on a number of Mexican states along the Pacific coast between May and September to lay eggs.Mexico's office of the federal attorney for environmental protection (PROFEPA) said the turtles were found in a 393-foot long net that is not approved for fishing, according to the Associated Press.They were dead for about eight days and badly decomposed when they were found in the water near Puerto Escondido, Oaxaca, PROFEPA said. Earlier this year, World Animal Protection released a report highlighting that 640,000 metric tons of fishing nets are lost or discarded in our oceans each year, trapping and killing countless marine mammals, including endangered whales, seals and turtles. Shallow coral reef habitats also suffer further degradation from the gear, which can take up to 600 years to decompose. The grisly discovery comes just days after 113 endangered turtles were found dead in the southern state of Chiapas. The turtles were found dead between July 24 and Aug. 13 in different parts of the Puerto Arista sanctuary. The cause is still being investigated, but experts said the animals could have died from asphyxiation, fish hooks or harmful algae, PROFEPA told Reuters.
Plastic straw ban? Cigarette butts are the single greatest source of ocean trash -Environmentalists have taken aim at the targets systematically, seeking to eliminate or rein in big sources of ocean pollution — first plastic bags, then eating utensils and, most recently, drinking straws. More than a dozen coastal cities prohibited plastic straws this year. Many more are pondering bans, along with the states of California and Hawaii. Yet the No. 1 man-made contaminant in the world’s oceans is the small but ubiquitous cigarette butt — and it has mostly avoided regulation. A leading tobacco industry academic, a California lawmaker and a worldwide surfing organization are among those arguing cigarette filters should be banned. “It’s pretty clear there is no health benefit from filters. They are just a marketing tool. And they make it easier for people to smoke,” . “It’s also a major contaminant, with all that plastic waste. It seems like a no-brainer to me that we can’t continue to allow this.” A California assemblyman proposed a ban on cigarettes with filters, but couldn’t get the proposal out of committee. A New York state senator has written legislation to create a rebate for butts returned to redemption centers, though that idea also stalled. San Francisco has made the biggest inroad — a 60-cent per pack fee to raise roughly $3 million a year to help defray the cost of cleaning up discarded cigarette filters. Cigarette butts have now also fallen into the sights of one of the nation’s biggest anti-smoking organizations, the Truth initiative. . As in a couple of previous ads delivered via social media, the organization is going after “the most littered item in the world.” It’s no wonder that cigarette butts have drawn attention. The vast majority of the 5.6 trillion cigarettes manufactured worldwide each year come with filters made of cellulose acetate, a form of plastic that can take a decade or more to decompose. As many as two-thirds of those filters are dumped irresponsibly each year, according to Novotny, who founded the Cigarette Butt Pollution Project. The Ocean Conservancy has sponsored a beach cleanup every year since 1986. For 32 consecutive years, cigarette butts have been the single most collected item on the world’s beaches, with a total of more than 60 million collected over that time. That amounts to about one-third of all collected items and more than plastic wrappers, containers, bottle caps, eating utensils and bottles, combined.
UK doubles down on plastic bag charges as it plans to expand and increase levy - The U.K. government is set to extend its 5 pence (7 cent) plastic bag charge to all retailers, subject to consultation. The charge, which was introduced in 2015, currently applies to big businesses only.The government said Thursday that it would also consult on increasing the minimum charge to at least 10 pence.The introduction of the 5 pence charge has proved effective. Plastic bag sales in major supermarkets have fallen by 86 percent since it was introduced, according to the government."We are committed to being a global leader in tackling plastic pollution. It blights our seas and land and chokes our wildlife," Environment Secretary Michael Gove said in a statement."Thanks to the public's support, our plastic bag charge has been hugely successful," Gove added. "It has taken 13 billion plastic bags out of circulation in the last two years alone."The issue of plastic pollution is a serious one. Europeans produce 25 million tons of plastic waste per year, according to the European Commission. Less than 30 percent of this is collected for recycling. The U.K. government has recently taken steps to mitigate the impact of plastic on the environment. In January, for example, a ban on the manufacture of products containing "microbeads" came into force.
Global warming is intensifying El Niño weather - As humans put more and more heat-trapping gases into the atmosphere, the Earth warms. And the warming is causing changes that might surprise us. Not only is the warming causing long-term trends in heat, sea level rise, ice loss, etc.; it’s also making our weather more variable. It’s making otherwise natural cycles of weather more powerful. Perhaps the most important natural fluctuation in the Earth’s climate is the El Niño process. El Niño refers to a short-term period of warm ocean surface temperatures in the tropical Pacific, basically stretching from South America towards Australia. When an El Niño happens, that region is warmer than usual. If the counterpart La Niña occurs, the region is colder than usual. Often times, neither an El Niño or La Niña is present and the waters are a normal temperature. This would be called a “neutral” state.The ocean waters switch back and forth between El Niño and La Niña every few years. Not regularly, like a pendulum, but there is a pattern of oscillation. And regardless of which part of the cycle we are in (El Niño or La Niña), there are consequences for weather around the world. For instance, during an El Niño, we typically see cooler and wetter weather in the southern United States while it is hotter and drier in South America and Australia.It’s really important to be able to predict El Niño/La Niña cycles in advance. It’s also important to be able to understand how these cycles will change in a warming planet. Fortunately, a study just published in Geophysical Research Letters helps answer that question. The authors include Dr. John Fasullo from the National Center for Atmospheric Research and his colleagues. El Niño cycles have been known for a long time. Their influence around the world has also been known for almost 100 years. It was in the 1920s that the impact of El Niño on places as far away as the Indian Ocean were identified. Having observed the effects of El Niño for a century, scientists had the perspective to understand something might be changing.
Hawaii Devastated by Flooding as Lane Rainfall Nears U.S. Record -- Although Hawaii avoided a direct hit by Hurricane Lane, which weakened to a tropical storm over the weekend, areas of the Big Island were inundated with waist-deep water and flash flooding. Mountain View, located on the east side of the island, received a preliminary total of 51.53 inches of rain from Aug. 22-26—the third highest storm total rainfall from a tropical cyclone in the U.S. since 1950, according to the National Weather Service. The highest total is the 60.58 inches of rain dumped on Nederland, Texas during Hurricane Harvey last year. The second highest—and the highest tropical cyclone storm total rainfall in Hawaii—is the 52.00 inches measured at Kanalohuluhulu Ranger Station during Hurricane Hiki in 1950. Authorities rescued 39 people from floodwaters on Friday and Saturday, the Associated Press reported. No storm-related deaths have been reported. The heavy downpour triggered landslides, caused a road to collapse in Haiku and rendered the neighborhood inaccessible, and even opened up sinkholes. Lane also dropped 36.76 inches of rain on Hilo Airport, the wettest four-day period ever observed at Hilo, with records dating back to 1949. Hilo also saw 15.00 inches of rain on Aug. 24, the fifth wettest calendar day on record.
Hawaii Takes A New Spot In U.S. Rainfall Records, After Hurricane Lane Drenches State -- Hurricane Lane drenched parts of Hawaii with 3-4 feet of rainfall, with one weather station tallying the third-highest "total rainfall from a tropical cyclone in the United States since 1950," the National Weather Service says. The slow-moving storm caused floods and landslides as it moved west of the islands, back out over the Pacific Ocean. Lane diminished as it neared Hawaii, but it still brought torrential rains as it lingered to the south and west of the islands. At one point over the weekend, the entire state was placed under a flash flood watch, Hawaii Public Radio reported. "Significant flash flooding" hit multiple areas across the northeast and east-facing slopes of the Big Island, according to the National Weather Service. The agency reported water rescues in Hilo and the town of Keaau. And complicating matters further, several highways were closed by either landslides or floodwaters. On the Big Island, the town of Mountain View recorded 51.53 inches of rain from Wednesday to Sunday. That's the third-highest total ever measured from a U.S. storm, with the highest total being the 60.58 inches that fell on Nederland, Texas, over several days during Hurricane Harvey in 2017. The weather service says the second-highest total is the 52 inches recorded during Hurricane Hiki's hit on Hawaii in 1950. Hilo International Airport got 36.76 inches of rain, making it "the wettest four-day period ever observed at Hilo, with records dating back to 1949," the NWS says. On Sunday, surfers who wanted to take advantage of high waves were forced to navigate through trees, limbs and other debris that floodwaters and ocean currents had deposited on the beach. Farther inland, some residents used their bodyboards to paddle through flooded areas.
John Kerry trolls Infowars for claiming he used an 'energy beam' from Antarctica to control Hurricane Lane | TheHill: Former Secretary of State John Kerry trolled Alex Jones’ far-right conspiracy theory website Infowars on Friday after it accused Kerry of being responsible for Hurricane Lane. Infowars host Owen Shroyer was interviewing Darrell Hamamoto, a professor of Asian American studies at the University of California at Davis, Thursday about climate change as Hurricane Lane made its way across the Pacific Ocean toward Hawaii. Shroyer claimed an energy wave had been fired out of Antartica and split into two hurricanes that were heading for Hawaii.“Boom. An energy beam," he said. "See if you guys can just pause it on that still frame so that — boom, right there. See if you guys can — right there. There’s the still frame right there. What is that coming out of Antarctica?” Hamamoto brought up that Kerry went to Antarctica after the presidential election, before Shroyer suggested the former secretary of State was somehow responsible for the hurricanes. “Yeah, why is John Kerry going down to Antarctica just a week after the election to discuss climate change and then you have energy beams coming out of Antarctica spilling hurricanes?” Shroyer asked. “What is John Kerry doing down there? That’s awfully suspicious to me.” Kerry shared the segment on Twitter, joking that he had been “busted.” The secret's out - busted! https://t.co/hj2E94C7og — John Kerry (@JohnKerry) August 25, 2018
Hurricane Maria caused an estimated 2,975 deaths in Puerto Rico, new study finds - CBS — Hurricane Maria killed far more people in Puerto Rico than initially thought, accounting for an estimated 2,975 deaths on the island from September 2017 through February 2018, according to a new analysis. The study found that those in low-income areas, and elderly men, were at greatest risk of dying. The independent analysis was commissioned by the governor of Puerto Rico and conducted by researchers at George Washington University's Milken Institute School of Public Health. CBS News obtained a report on the findings from Carlos Mercader, executive director of the Puerto Rico Federal Affairs Administration."The reality is that we take this very seriously," Mercader said on CBSN. "We mourn those people that died because of this storm and we have a responsibility of making sure that we prepare Puerto Rico for a future event like this," he said. To arrive at the 2,975 figure, the study looked at historical death patterns from 2010 to 2017 to estimate how many people would have died had Hurricane Maria not hit the island. That figure was then compared to the actual number of deaths from September 2017 through February 2018 — obtained in records provided by the Puerto Rico Vital Statistics Records division of the Puerto Rico Department of Health — to determine what the report describes as the "estimate of excess mortality due to the hurricane."The study found that while all age groups and social strata were affected by the hurricane, the risk of death was "45% higher and persistent until the end of the study period for populations living in low socioeconomic development municipalities."It also f ound that men age 65 and older were at heightened risk of death through February, the end of the study period.
63,000 Flee Deadly Myanmar Dam Collapse - A dam collapsed in Myanmar's central Bago region Wednesday following heavy monsoon rains, displacing tens of thousands and killing at least four, as AFP reported that ministry officials confirmed Friday."According to the information we got as of this morning, four people were killed and three went missing during the floods," Ministry of Social Welfare, Relief and Resettlement director Phyu Lei Lei Tun said, according to AFP.The incident comes little over a month after a dam collapse in Laos killed more than 20 and raises further concerns about the safety of dams in Southeast Asia, Reuters pointed out. The breach occurred in the Swar Chaung dam's spillway at 4 a.m. Wednesday and flooded Swar, Yadeshe and neighboring villages, CNN reported.Flooding affected at least 85 villages and displaced more than 63,000 people, Reuters reported.The breach also damaged a bridge on the highway linking the major cities of Yangon and Mandalay and the capital, Naypyitaw, disrupting traffic.Residents had expressed concerns about the level of water in the dam's reservoir, but officials assured them it was safe just days before the collapse.Ministry of Agriculture, Livestock and Irrigation official Kaung Myat Thein said that there was no way to predict a spillway collapse, according to Reuters. "We could not know one day before, one hour before," he said.
Beaver lifestyle impacts global warming - An institution in Finland has released evidence on the growing beaver population and its habitat and the impact on climate change. The University of Helsinki said the rising number of beaver dams has caused an increase in water levels in rivers and ponds, resulting in organic carbon from the soil being released into the atmosphere. Petri Nummi, a lecturer at the university, has been observing links between beavers’ lifestyle and global warming. “An increase in the number of beavers has an impact on the climate since a rising water level affects the interaction between beaver ponds, water and air, as well as the carbon balance of the zone of ground closest to water,” he said. There is an indication of beaver ponds becoming carbon sinks or sources of the gas and it is estimated that these ponds and meadows could potentially release up to 820,000 tons of carbon annually. Beaver families tend to change territories every three to five years, leaving the abandoned dam to gradually disintegrate. However, the dam may fill up again because of returnee beavers. These habitats undergo constant changes between terrestrial and aquatic ecosystems.
Dams and reservoirs can’t save us. This is the new future of water infrastructure. --In the recent past, humans thought of freshwater as a constant. Sometimes there was drought, and sometimes there was flood, but water levels always returned to normal eventually. So we built dams and reservoirs, hulking infrastructure they imagined as a bulwark against the pains of any short-term variation, on the assumption that the dry times would end and the basins would refill. But these gigantic objects are becoming dinosaurs in a new climactic age, characterized by growing human demand for freshwater and worsening, lengthening droughts. As Michael Hightower, a research professor of civil engineering at the University of New Mexico, puts it: “You don’t see people building new reservoirs, because they know there’s not going to be water to put in those reservoirs.”That means water engineers need to radically rethink the traditional approach to water infrastructure. They will need to get creative. In some cases, it may mean going back to basics and installing cisterns in backyards to harvest the rain. In others, it may mean doing as the astronauts have done since the advent of space travel: drinking one’s own recycled urine. That’s because water, especially in dry places, is finite. Rivers and streams and lakes usually originate as snowmelt or rainfall, and in dry parts of the world, those sources are in decline as droughts strike harder and more regularly. Meanwhile, human populations are growing, and using freshwater faster than it can be replenished. Potable water is a rare commodity and growing more precious by the decade.
Extreme heat is killing farm workers--the government doesn’t have a plan to protect them - In the Lake Apopka region of Florida, a typical August day might yield a high temperature of 92 degrees F, a heat made all the worse by the stifling humidity. The weather is bad enough for office workers who spend most of the day next to an air conditioner. For farm workers, who spend their August picking blueberries outdoors, the heat can be oppressive, even fatal.Heat can induce dehydration, nausea, exhaustion, stroke and death. Even among workers who endure little discomfort, heat can take a toll over time. Chronic dehydration, for example, can lead to kidney failure. Despite these risks, there is no federal standard protecting workers from extreme heat.“Hotter temperatures beget fewer full work days, exhaustion and fatigue,” said Jeannie Economos, the pesticide safety and environmental health project coordinator for the Farmworker Association of Florida. “It’s even worse when you have to pick fast because farm workers are paid by the piece, not the hour. This is a big deal when you’re trying to bring home wages that can support a family or pay a car bill — plus these folks don’t have health insurance.” Economos led a group of experts, advocates and reporters around a farm near Lake Apopka Sunday to explain the risks of extreme heat. “We’re finding more and more people that have dehydration. They have symptoms of heat stress, so they’re really concerned about that. Plus, workers are afraid to report their symptoms,” Economos said. “Their afraid to report to their supervisor or the crew leader or the labor contractor if they have symptoms of heat stress because they’re afraid they’ll be pulled off the job.” Undocumented migrant farm workers are especially vulnerable, as they are less likely to demand rest, shade or water for fear of retaliation.
Apocalyptic threat’: dire climate report raises fears for California’s future -- California’s summer of deadly wildfires and dangerous heatwaves will soon be the new normal if nothing is done to stop climate change, a report released on Monday warns. City heatwaves could lead to two to three times as many deaths by 2050, the report says. By 2100, without a reduction in emissions, the state could see a 77% increase in the average area burned by wildfires. The report also warns of erosion of up to 67% of its famous coastline, up to an 8.8F (4.9C) rise in average maximum temperatures, and billions of dollars in damages. “These findings are profoundly serious and will continue to guide us as we confront the apocalyptic threat of irreversible climate change,” said the state’s governor, Jerry Brown, in a tweet about the report, the fourth statewide climate change assessment released since 2006.Rising temperatures could lead to up to 11,300 additional deaths in 2050, the report says, and the overall number of days marked by extreme heat will “increase exponentially in many areas”.The effects of those extreme heat days will probably weigh most heavily on the state’s most vulnerable residents, including the more than 100,000 people who are homeless in California, many of whom live on the streets without reliable access to fans, air conditioners, or running water. “The 2006 heatwave killed over 600 people, resulted in 16,000 emergency department visits, and led to nearly $5.4bn in damages,” the assessment reports. “The human cost of these events is already immense, but research suggests that mortality risk for those 65 or older could increase tenfold by the 2090s because of climate change.”
Mendocino Complex: Ranch Fire now 90 percent contained - Firefighters are nearing full containment on the Mendocino Complex Fire, the largest wildfire in California history, which has now been burning for more than a month. The Ranch Fire was 90 percent contained as of late Monday, a full month after the fire started, Cal Fire said in an incident update. The River Fire has been fully contained. Glenn County evacuations were lifted for residents Monday, leaving only Mendocino National Forest and Cow Mountain Recreational Areas closed to visitors, according to the incident report, which noted “good progress” on the Ranch Fire. The massive two-fire complex, which affected Mendocino, Lake, Colusa and Glenn counties, has dwarfed previous record holders. The Ranch Fire, the larger of the two blazes that comprised the Mendocino Complex Fire, had reached 410,182 acres as of Monday evening. Last year’s Thomas Fire in Southern California was previously the largest recorded blaze in state history. It reached 281,893 acres in December. The cause of the Mendocino Complex Fire, which started July 27, is still under investigation. The devastating blaze killed one firefighter and injured three others. It has also destroyed 280 structures, 157 of them residences, Cal Fire said. Responders continue to work on fully containing the Ranch Fire, with firefighters focusing on firing operations of interior areas and reinforcing containment lines in the northeastern flank of the fire, the Cal Fire update said. Crews continue to work on building containment lines in the northwestern portion of the fire area.
Feds embrace controlled burns as weapon against wildfires -- The Forest Service plans to step up its use of prescribed fire — and it's counting on the South to help promote the idea.Controlled fires are widely accepted in managing forests in parts of the South, and other parts of the country could learn from the experience there, the Forest Service said in a report outlining its wildfire strategy."For cultural, historical, and biophysical reasons, the use of prescribed fire is widely accepted in large parts of the Southern United States," the agency said in the report, which was released earlier this month. "The lessons learned by land managers and communities in the South might be useful in helping to overcome constraints elsewhere in the United States."Southern forest managers said their regional tradition of using fire to clear forests of potential fuel for wildfires has made the population there more willing to accept trade-offs such as smoke and to entertain the idea that fires set on purpose can be contained — a key to adopting the technique more widely."It can be done in a way that smoke is not a problem," said Wib Owen, executive director of the Southern Group of State Foresters. "I think that it can be done even in populated areas." The Forest Service report calls for more prescribed fire, as well as letting some naturally set wildfires burn under controlled conditions, along with forest-thinning and timber sales. The agency said it can treat 17 million acres of high-fire-risk forests through timber sales and more than twice as much — 35 million acres — through prescribed burns and other methods.
NASA map shows glowing particle clouds over Earth from wildfires and hurricanes - There's something in the air: From sources such as wildfires, car emissions and, yes, even feces, tiny particles fly into our bodies with nearly every breath. That reminder comes courtesy of NASA, whose Earth Observatory offered a stunning map last week highlighting "the mishmash of particles that dance and swirl through the atmosphere." Satellites and sensors from the agency picked up aerosols swirling densely in climates around the world on Aug. 23, from smoke billowing from California wildfires to sea salt flung high from raging cyclones in the Pacific Ocean.A model, called the Goddard Earth Observing System Forward Processing, uses data-driven equations to produce the visualization. Aerosols on the map, all coded by color, hint at major events unfolding on that August date.The raging wildfires that destroyed parts of California produced black carbon particles, which show up in a glowing red on the map. That red glow also appears over central Africa, too, this time from intentional fires started by farmers to maintain grazing and crop lands, the agency said. Sea salt aersols, which appear as blue, swirl near Hawaii as Hurricane Lane approached the state. Larger blue swirls hint at sea salt stirred up by twin typhoons Soulik and Cimaron, which neared South Korea and Japan at the time, the agency notes. Purple clouds, representing dust particles, suggest strong winds across the Sahara as well as China's Taklamakan Desert and the Gulf of Oman. Some aerosols, such as smoke from a fire or volcanic ash, are visible to the naked eye. Particles can also stem "from construction sites, unpaved roads, fields, smokestacks or fires," the Environmental Protection Agency noted.
World On Fire - The world is on fire. Or so it appears in this image from NASA's Worldview. The red points overlaid on the image designate those areas that by using thermal bands detect actively burning fires. Africa seems to have the most concentrated fires. This could be due to the fact that these are most likely agricultural fires. The location, widespread nature, and number of fires suggest that these fires were deliberately set to manage land. Farmers often use fire to return nutrients to the soil and to clear the ground of unwanted plants. While fire helps enhance crops and grasses for pasture, the fires also produce smoke that degrades air quality.Elsewhere the fires, such as in North America are wildfires for the most part. In South America, specifically Chile has had horrendous numbers of wildfires this year. A study conducted by Montana State University found that: "Besides low humidity, high winds and extreme temperatures—some of the same factors contributing to fires raging across the United States—central Chile is experiencing a mega drought and large portions of its diverse native forests have been converted to more flammable tree plantations, the researchers said." More on this study can be found here: https://phys.org/news/2018-08-massive-south-central-chile.html#jCpHowever, in Brazil the fires are both wildfires and man-made fires set to clear crop fields of detritus from the last growing season. Fires are also commonly used during Brazil’s dry period to deforest land and clear it for raising cattle or other agricultural or extraction purposes. The problem with these fires is that they grow out of control quickly due to climate issues. Hot, dry conditions coupled with wind drive fires far from their original intended burn area. According to the Global Fire Watch site (between 8/15 and 8/22) shows: 30,964 fire alerts.Australia is also where you tend to find large bushfires in its more remote areas. Hotter, drier summers in Australia will mean longer fire seasons – and urban sprawl into bushland is putting more people at risk for when those fires break out. For large areas in the north and west, bushfire season has been brought forward a whole two months to August – well into winter, which officially began 1 June. According to the Australian Bureau of Meteorology (Bom), the January to July period 2018 was the warmest in NSW since 1910. As the climate continues to change and areas become hotter and drier, more and more extreme bushfires will break out across the entire Australian continent. NASA's Earth Observing System Data and Information System (EOSDIS)Worldview application provides the capability to interactively browse over 700 global, full-resolution satellite imagery layers and then download the underlying data. Many of the available imagery layers are updated within three hours of observation, essentially showing the entire Earth as it looks "right now. This satellite image was collected on August 22, 2018. Actively burning fires, detected by thermal bands, are shown as red points.
NOAA Issues Geomagnetic Storm Warning: "A Crack Opened In Earth's Magnetic Field & Plasma Started Pouring In" -- According to NOAA Space Weather forecasters, a powerful G3-class geomagnetic storm is in progress on August 26th as Earth passes through the wake of a coronal mass ejection (CME) that arrived with little notice approximately 24 hours ago. Strong magnetic fields in the CME’s wake have cracked into Earth’s magnetosphere, allowing solar wind to enter. So far auroras have been sighted in Scandinavia, Canada, and northern-tier US states such as Michigan and New York. “The geomagnetic field is expected to be at active to G3 (Strong) geomagnetic storm levels on day one (26 Aug) due to continued influence from the 20 Aug CME. Quiet to active conditions, with a slight chance for G1 (Minor) storm conditions, are likely on day two (27 Aug) with quiet to unsettled levels likely on day three (28 Aug) as CME effects gradually wane,” said the U.S. Dept. of Commerce, NOAA, Space Weather Prediction Center. Steven Herman, the White House bureau chief of Voice of America (VOA News), reported the strong geomagnetic storm on earlier Sunday morning. He shared a note listing the potential impacts of the storm, which included power systems, spacecraft, satellite communication networks, and even radio disruptions.A sunspot has formed as large as the Earth and now an active warning about a geomagnetic storm. https://t.co/AY9BIhLBJF pic.twitter.com/2CDuVmmJP5— Steve Herman (@W7VOA) August 26, 2018 The K-index, a chart that measures the earth’s magnetic field with an integer in the range 0–9 with 1 being calm and 5 or more indicating a geomagnetic storm, hit the 4 threshold was reached at 21:43 UTC on August 25, followed by K-index of 5 (G1 Minor) at 01:54 UTC on August 26, K-index of 6 (G2 Moderate) at 02:57 and K-index of 7 (G3 Strong) at 05:59 and 07:38 UTC.
Climate change is melting the French Alps, say mountaineers - For the tourists thronging the streets and pavement cafes of Chamonix, the neck-craning view of Mont Blanc, the highest mountain in the Alps, is as dazzling as ever. But the mountaineers who climb among the snowy peaks know that it is far from business as usual – due to a warming climate, the familiar landscape is rapidly changing. “Global climate change has serious and directly observable consequences in high mountains,” says Vincent Neirinck from Mountain Wilderness, a campaign group that works to preserve mountain environments around the world. One of the consequences of climate change is the ongoing retreat of glaciers. “In the Alps, the glacier surfaces have shrunk by half between 1900 and 2012 with a strong acceleration of the melting processes since the 1980s,” says Jacques Mourey, a climber and scientist who is researching the impact of climate change on the mountains above Chamonix. The most dramatic demonstration of glacial retreat is shown by the Mer de Glace, the biggest glacier in France and one of Chamonix’s biggest tourist hotspots which would now be unrecognisable to the Edwardian tourists who first flocked there. “The Mer de Glace is now melting at the rate of around 40 metres a year and has lost 80m in depth over the last 20 years alone,” says glaciologist Luc Moreau. A stark consequence of the melting Mer de Glace is that 100m of ladders have now been bolted onto the newly exposed vertical rock walls for mountaineers to climb down onto the glacier.
Warm Waters Under Arctic Ice a 'Ticking Time Bomb' - Scientists warn that a warm layer of salty ocean water accumulating 50 meters beneath the Arctic's Canadian Basin could potentially melt the region's sea-ice pack for much of the year if it reaches the surface.The findings were published Thursday in the journal Science Advances by researchers from Yale University and Woods Hole Oceanographic Institution.This "archived" heat is currently trapped under a surface layer of colder freshwater, but if the two layers mix, "there is enough heat to entirely melt the sea-ice pack that covers this region for most of the year," lead authorMary-Louise Timmermans, a professor of geology and geophysics at Yale University, told YaleNews.The researchers discovered that the heat content of the warm, salty layer doubled from 200 to 400 million joules per square meter in the past 30 years.The warming layer is "a ticking time bomb," the study's co-author John Toole of the Woods Hole Oceanographic Institution told CBC."That heat isn't going to go away," he added. "Eventually ... it's going have to come up to the surface and it's going to impact the ice."Scientists believe the warm water is coming from the Chukchi Sea in the south, where ice cover has beenrapidly melting and being exposed to the summer sun. Strong northerly winds are driving these warm waters north and flowing beneath the Canadian Basin.
Climate change means an Arctic shipping route has opened up for the first time - Enough sea ice has now melted that container ships can now use a shipping route through the Arctic. Ships carrying oil and gas have previously used the route with the help of ice breakers, but they may no longer be needed during the summer months.The first container ship to do the trip without an icebreaker will be the Venta Maersk – a 42,000 ton ice-class ship that can carry 3,600 containers. The route will cut journey times by two weeks and ships will no longer have to use the Suez canal. The Venta Maersk was set to leave Vladivostok, eastern Russia, through the Bering Strait between Russia and Alaska, then across the top of Russia before arriving in St Petersburg by the end of September.The northern route can be up to two weeks quicker than the more traditional routes, but the necessity for nuclear ice-breaker ships which accompany the vessels made it more costly. But the Arctic sea-ice hit a record low in January this year, and Data released by the National Snow and Ice Data Centre in Colorado showed ice cover was less than a third of what it was five years ago. Temperatures in the area have been soaring 30°C above average, meaning the ice levels have hit record lows.
US 2nd Fleet Reactivated, Preparing For Arctic Warfare With "Bad Actors" - Following a sharp increase in Russian naval activity in the arctic and North Atlantic, the Trump administration has reactivated Navy's 2nd Fleet to deal with "bad actors on the world's stage," according to Vice Adm. Andrew "Woody" Lewis, who took command of the reestablished forces. In a Friday ceremony aboard the aircraft carrier George H.W. Bush, Lewis warned of foreign adversaries who intend to undermine American dominance, referring to (but not naming) Russia - which has vast military assets in the Arctic Circle, a region estimated to contain 15% of the world's remaining oil and up to 30% of natural gas deposits. “There are some bad actors on the world’s stage,” Lewis told the crowd. “We call them competitors in our strategic documents. They intend to undermine and rewrite the order that America established at the end of world war II and threaten the very birthright freedoms that we hold sacred.” -Navy Times“Second Fleet has a storied history and we’ll honor that legacy,” Lewis told those in attendance. “However, we will not simply pick up where we left off. We are going to aggressively and quickly rebuild this command into an operational warfighting organization. We will challenge assumptions, recognize, our own vices and learn and adapt from our own failures in order to innovate and build a fleet that’s ready to fight.”The 2nd Fleet's boundaries will extend "well past the old submarine stomping grounds of the Cold War into waters north of Scandinavia and the Arctic Circle," near the submarine headquarters of Russia's Northern Fleet, according to John Richardson, Chief of Naval Operations.
NASA Reveals Plan For Permanent Moon Base: "We Want Lots Of Humans In Space" - At a conference at the Johnson Space Center in Houston last week, Jim Bridenstine, a top official of the National Aeronautics and Space Administration (NASA), told reporters that the agency wants “lots of humans in space,” according to Space.com. Bridenstine, who became the top official in April, had a meeting with Space.com and other journalists, during which he spilled the beans about a new program that plans to construct ‘Gateway’ modules to orbit the moon and close gaps in space exploration. Each gateway module would be a spacecraft that orbits the moon rather than a land-based settlement, which would be easier for astronauts to stay in low orbit and conduct brief surface missions lasting between one and two months.“When you look back at history, look back at the end of the Apollo program, 1972 when we didn’t go back to the moon… you look back and there was a period of time there after Apollo and before the space shuttles when we had a gap of human spaceflight capability,” Bridenstine said. “And then you go forward and look at the retirement of the space shuttles in 2011, and now we’re getting to the point where we’re ready to fly commercial crew. We’ve got a gap of about eight years in our ability to fly crew into space.“When we think about the [end of the] International Space Station, we want to make sure that a gap doesn’t materialize,” he said. “I believe it is important to do everything in our power to prevent another gap from occurring and that is why it is important to start this conversation now.”Bridenstine told reporters that NASA should had taken the opportunity to explore the moon almost a decade ago:“If you go back to 2009, the United States, through NASA, made a critical discovery, which is the moon has hundreds of billions of tons of water ice. To me, that should have changed our direction immediately,” he said. “From 1969, when we first landed on the moon, up until 2009, a lot of people believed that the moon was bone-dry. In 2008, the Indians did an experiment and they realized there was water ice on the moon and then we did an experiment and realized how much water ice could potentially be on the moon at the poles.”“So the question is — during those 40 years, we missed that. What else have we missed?”
India’s emissions will double at most by 2030 - In a global climate regime built around national climate pledges – known as “nationally determined contributions” (NDCs) – it becomes essential to understand the likelihood of meeting these pledges. However, understanding how national conditions will affect these pledges can be difficult, especially in rapidly changing developing countries, such as India. India is undertaking multiple transitions driven by demography, urbanisation and energy access, amid rapidly changing policies and technologies. All these factors will shape its emissions future, which has considerable importance to the future of global emissions.This means assessing how its emissions will be affected by national development goals, such as access to energy, becomes important for projecting future emissions. Our paper, recently published in Environmental Research Letters, explores these challenges.We interpret seven recent studies that project India’s emissions up to 2030 in the context of the country’s energy needs for development. (Therefore, the paper only explores CO2 emissions from energy – 68% of India’s total greenhouse gas emissions in 2012.)An important motivation for the study is the wide range of existing projections of India’s emissions, which defy clear discussion or policy interpretation.Our analysis begins by making explicit the implied policy assumptions underlying these scenarios. The figure below shows how studies with similar p olicy assumptions cluster together in terms of emissions and economic growth projections. This process illuminates the link between particular policy directions and their potential emissions impacts.
Global Carbon Sink Holding Up So Far- Stuart Staniford - NOAA makes available data on CO2 concentrations on Mauna Loa in Hawaii that go back to 1959. This is the famous Keeling curve, and the annual averages look like this: . This next graph compares the annual increase in carbon in the atmosphere to fossil fuel emissions of carbon (from BP): Since the amount of carbon in the atmosphere is increasing slower than carbon emissions, clearly some of the emissions are absorbed (by the ocean and by land plants) each year. The fraction of emissions absorbed is almost constant, but has increased slightly over time: But I think a more interesting way to look at the question is this. Think of the sink as reflecting the fact that the CO2 in the atmosphere is not in equilibrium with the CO2 in the ocean and terrestrial ecosystems. These latter components change slowly - the ocean is huge and takes around a thousand years to turn over, so changes in the atmosphere in the last few decades are far from fully equilibriated. Likewise, changes in terrestrial ecosystems have only just begun. From that perspective, we might expect the amount of carbon being absorbed by the ocean and biosphere to be proportional to how far the current atmospheric concentration is from pre-industrial concentrations (generally believed to be about 280ppm). If we plot this - the size of the annual carbon sink vs the departure from pre-industrial, we see that it is indeed linear: There are of course substantial year to year fluctuations depending on just how well global plants grew in any particular year (given weather). But if you try fitting a quadratic to that data (allowing for the possibility of the sink degrading over time), it lies exactly on the linear curve - there is no indication of a tailing off. This is somewhat reassuring with respect to the "Inevitable Near Term Human Extinction" (INTHE) view of climate change. One class of mechanisms that could lead to a runaway climate feedback would be if the biosphere were to start to turn from a net sink to a net source as a result of climate change - for example, forests burning, dying back from disease, the Amazon turning to savannah etc. While all of these things are happening to a modest degree, the fact that overall, the global climate sink continues to behave in a predictable linear way suggests that this particular class of runaway feedbacks are not biting hard yet.
Shell Oil Quietly Urges Lawmakers to Support Carbon Tax - Lobbyists for Shell Oil Co. told members of Congress this year that Shell supports a nationwide carbon tax and encouraged lawmakers to price greenhouse gas emissions, E&E News has learned.The company's in-house lobbyists met with lawmakers in the Senate and the House, including Rep. Carlos Curbelo (R-Fla.), who introduced a carbon tax bill last month. In a lobbying disclosure form dated last month, Shell said its representatives had taken part in "discussions in support of a robust, transparent federal carbon price" in the second quarter of the year."We see carbon pricing as an essential policy tool to tackle climate change and pave the way for a smooth energy transition," a Shell spokesman said in a statement."Shell has long supported a strong and stable government-led carbon pricing framework," the spokesman said. "It's our view Government-led carbon pricing mechanisms are the lowest cost way to develop low carbon technologies for a low carbon economy." A small but growing number of conservative advocacy groups and energy companies have talked openly about their support for a U.S. carbon tax, in particular in exchange for rolling back environmental regulations. The chance of passing carbon tax legislation is remote in the Republican-led Congress, but Shell is quietly laying the groundwork for similar bills in the future.Shell is not the only oil and gas major actively lobbying members of Congress for a carbon tax, industry sources said. Experts say the industry is not homogeneous in its approach to a carbon tax, with some majors taking more ambitious positions. The Climate Leadership Council, a group led by former secretaries of State James Baker and George Shultz, began promoting a $40-per-ton carbon tax plan in June 2017.
Carbon Markets Represent the Commodification of Earth - Forest carbon offsets neither protect forests nor reduce emissions. They allow continuation of business as usual. Under forest carbon offset schemes, forests are priced according to the carbon they contain, and credits can be earned by preserving those forests. Corporations can then buy those credits that are then used to further pollute rather than decrease their emissions.For example, at the notorious Chevron refinery in Richmond, California, “offset” emissions will continue to devastate surrounding communities, and the gross level of emissions remains the same.The tortured equations of forest carbon offsets also impact Indigenous and forest dependent communities globally, through forced relocations of entire societies so that governments can take over forests and sell the carbon stored as offsets. Beyond the social injustice of forest carbon offsets is the simple scientific fact that offsets literally mean a net result of standing in place. If today’s living species are to survive, this will not suffice; what is required are drastic reductions in emissions at the source.If we’re looking for a solution to climate change, then putting a price on carbon isn’t a serious strategy. It can’t address the roots of the problem, and isn’t designed to.However, if we’re driven less by concern over global warming than by incentives to try to help business muddle through a post-1970s profit crisis in an era of growing environmental regulation, then carbon pricing makes more sense. In other words, deciding what to think about carbon pricing means deciding who you are and what side you’re on.
Climate change action off the agenda under Morrison government - Australian Energy Minister Angus Taylor has unveiled a new energy policy focused exclusively on reducing electricity prices, in a strong signal the Morrison government will abandon all efforts to lower carbon emissions. The move comes a week after the issue of climate change precipitated the ousting of former prime minister Malcolm Turnbull. “My No.1 priority is very, very simple,” Mr Taylor said in a speech on Thursday. “It is to reduce power prices, and to do this while we keep the lights on.” He would do this, he said, by empowering consumers to shop around, cracking down on price gouging, and increasing “reliable supply” – a phrase that has come to refer to keeping coal-fired power stations running. “It’s ironic that in a country with an abundance of natural resources – coal, gas, water, solar, wind – we should be in the position we are today. We have to leverage those resources, not leave them in the ground.” Not a single policy to increase investment in renewables or lower emissions was announced.
Ontario cuts natural gas price after revoking cap-and-trade regulations -Premier Doug Ford says the Ontario government will remove the cost of the now-repealed cap-and-trade system from natural gas bills. Ford says the change means families will save $80 a year and small businesses will save $285 annually. He says the government has issued a directive to the Ontario Energy Board that will see the price of natural gas reduced by 3.3 cents per cubic metre starting on Oct. 1. The Tory government cancelled cap-and-trade last month and has launched a court challenge of Ottawa’s ability to impose a carbon tax on the province. The premier has said that cutting the carbon pricing system will help him lower gasoline prices for vehicles by 10 cents per litre.
California might bail out controversial desert pumped hydro plant -Eagle Crest Energy Company has been trying to build a hydroelectric power plant since the early 1990s. But the developer has struggled to find a buyer for the electricity, and environmentalists have fought the project, saying it would damage the national park. Now the California Legislature may step in to help the developer. Ten lawmakers have signed on to Assembly Bill 2787, which would require utilities to buy energy from “pumped storage” hydropower projects like Eagle Crest. The bill is opposed by the California Public Utilities Commission, which approved a resolution Thursday saying the legislation could force Californians to pay billions of dollars for an energy project they don’t yet need. The 1,300-megawatt, $2.5-billion Eagle Mountain project would be built on land surrounded by Joshua Tree National Park, about 70 miles east of Palm Springs.
Percent of Cropland Used for Biofuels in the U.S. - Big Picture Agriculture (see graphics) Ten percent of U.S. cropland acreage is devoted towards ethanol/biofuels production. This is some of the very best, richest soil in the world, requiring expensive corporate inputs backed by taxpayer subsidies, and, requiring water, including large amounts of fossil aquifer water. This amounts to 38.1 million acres, according to Bloomberg. Land use for ethanol and biodiesel includes well over one-third of the corn cropland, and about ten (or as high as 13) percent of soybean cropland. Twenty-two percent of this cropland is devoted to growing wheat, and other grain and feed to be exported. Presumably, that export total does not include the cropland used to grow and raise livestock and ethanol for export. (This year, again, ethanol exports are shattering previous year's levels.) I assume Bloomberg places acres such as almond trees into the "food we eat" category, some of which also gets exported. Generally, but not always, the idle and fallow land is less arable. In summary, land use in the U.S. for cropland is one-fifth of the total, or 391.5 million acres, much of that across the Great Plains Midwest which was covered by prairie grasses up until one-hundred-fifty years ago.
Batteries, mine production, lithium and the “cobalt crunch” -- Growth in Li-ion batteries depends on a number of imponderables, such as how rapidly the world converts to electric vehicles, how quickly battery manufacturing capacity can be ramped up and where the electricity to power millions of EVs will come from. This post ignores these issues, concentrating instead on the question of whether the mining sector can increase production of the metals and minerals needed to support a high-battery-growth scenario without running out of reserves. The data are not good enough to reach a firm conclusion, but the main uncertainty seems to be whether cobalt production from the Congo, which presently supplies over half of global demand, can be relied on. Lithium and cobalt reserves will not be exhausted in the time frame considered (out to 2030) but will be close to it if no additional reserves are discovered. Unless otherwise specified the data used in this post are from the following three sources:
- The 2018 BP Statistical Review of World Energy, which provides annual production and price data for lithium, cobalt, graphite and rare earths since 1995 but reserve data for 2017 only.
- The United States Geological Survey (USGS) annual Mineral Commodity Surveys, which provide annual production and reserve data for cobalt since 1990 but incomplete data for lithium (US production is excluded) and no price data.
- The British Geological Survey (BGS), which provides annual production data for all metals since 1970 but no data on reserves or prices.
Opinion is pretty much unanimous in projecting rapid growth in Li-ion batteries in coming years: The Apricum Group predicts a compounded annual growth rate (CAGR) of 22% through 2025: Global battery demand will increase fivefold from ~100 GWh today to ~500 GWh by 2025.Bloomberg predicts a CAGR of 29% in EVs through 2030, with Sales of electric vehicles (EVs) increasing from a record 1.1 million worldwide in 2017, to 11 million in 2025 and then surging to 30 million in 2030. Mining Weekly predicts 32% CAGR through 2025: The automotive industry’s use of lithium-ion batteries is on track to grow seven-fold to 650 GWh by 2025, from 70 GWh in 2017; the increase in energy storage, although from a lower base, will add to this. A number of other articles predict plus-15% CAGRs in Li-ion battery dollar sales volume between now and 2025, with examples here, here and here. These percentages will, however, understate demand growth for Li-ion metals and minerals because they assume decreasing battery costs.
Trump EPA to reconsider Obama-era mercury rule --EPA will reconsider a rule that restricts mercury and toxic air emissions from power plants, the agency confirmed to E&E News today.Agency spokeswoman Molly Block said it will initiate a federal review of a draft proposal to determine whether the Mercury and Air Toxics Standards, or MATS, were "appropriate and necessary." It also will evaluate the overall standards."EPA knows these issues are of importance to the regulated community and the public at large and is committed to a thoughtful and transparent regulatory process in addressing them," Block said in an email.Bloomberg BNA first reported the news.Most power plants have already complied with the regulation, which required the installation of pollution control technology. Others have shuttered. Several power companies now want the regulation to remain in place."If EPA recklessly disrupts the legal obligations to meet the Mercury & Air Toxics Standards, across the country coal plant owners will face legal challenges to prior utility commission approvals of pollution control costs incurred to meet those obligations," John Walke, director of the federal clean air, climate and clean energy program with the Natural Resources Defense Council, said in an email. "Worse, EPA could let coal plant owners turn off installed pollution control equipment whose costs are being charged to consumers. Americans will suffer, needlessly." Conservatives, though, have argued reassessing — and potentially ditching — the rule is necessary. They noted the Supreme Court in 2015 said the Obama EPA needed to assess industry's compliance costs in its analysis before determining whether the regulation was appropriate and necessary.
Surge in coal use scuttling climate change efforts - Energy analysts expect coal consumption in Southeast Asia and India to grow, as demand for the cheapest fuel is driving rapid economic expansion and offering big profits to investors in the electricity sector. Environmentalists across the world are watching this rebound in the coal industry with great concern because it runs counter to international efforts to reduce reliance on fossil fuels by 2050 in order to stem the rise in global temperatures. “Coal is the most carbon-intensive fossil fuel and phasing it out is a key step in achieving the emissions reductions needed to limit global warming to 1.5 degrees Celsius,” said Paola Yanguas Parra, policy analyst at Climate Analytics. Parra insisted that, in order to achieve the carbon-emission reduction milestone of the Paris Agreement, Climate Analytics research suggested that every country must stop burning coal by mid-century, so efforts to get rid of coal must start now. The Global Coal Exit List, which was released at the UN Climate Summit in Bonn, Germany, last year, revealed that more than 770 companies were still actively engaged in coal-related business, that 225 firms were planning to expand coal mining and that 282 were planning new coal-fired power stations.This revival in the coal industry has also been mentioned in leading energy-monitoring reports since 2017. The International Energy Agency (IEA) reported that coal production last year had risen by 3.1 per cent, while coal consumption in the energy sector had also increased, by 1 per cent.According to the IEA’s 2018 coal overview, higher production has been noticed in all major coal-producing countries except Germany and Poland, while global trade in coal in 2017 rose by 3.3 per cent from the year earlier. The IEA said the growth in the coal industry could be blamed on the policy reversal in the United States and greater demand for coal in China and India. These largest coal consumers have both increased their demand for cheap fuel to produce power. “Coal will still be our primary source of energy for the upcoming decades, despite renewable energy becoming the biggest competitor due to its rapid growth and cheaper cost. But I believe coal still plays an important role in ensuring the stability of the energy sector,” said Sacha Parneix, GE Power’s commercial general manager. “There is no doubt that coal has a bad reputation for being a major pollutant and it is true that the improper use of coal will have serious environmental impacts, but right now we have more advanced technologies to mitigate these limitations and allow us to safely use coal.”
Some U.S. electricity generating plants use dry cooling – EIA - Cooling systems are often the largest source of water use in power plants because of the large amount of heat that must be removed to condense the steam used to drive turbine generators. Historically, this cooling was provided by water sources such as rivers and lakes, but the number of power plants using dry cooling—a cooling system that uses little to no water—has increased in recent years. Dry cooling systems have relatively high capital costs and require more energy to operate. These factors result in lower overall power plant efficiency, but dry cooling systems use about 95% less water than wet systems. Many types of power plants generate electricity by boiling water to produce steam, which is then passed through a turbine. Plants that burn coal and biomass, nuclear plants, some natural gas plants, and even some solar facilities use this type of system. Once the steam has passed through the turbine at these plants, it must be cooled to condense back to a liquid, which is returned to the boiler or steam generator. Most steam-generating plants in the United States use water to cool and condense steam. According to the U.S. Geological Survey, electric power generation accounts for about 40% of total water withdrawals in the United States, much of which is used for cooling. More than 61% of the thermoelectric generating capacity in the United States uses recirculating cooling systems that reuse cooling water. These systems keep water in closed-loop piping so that the water can be used repeatedly. Plants that use once-through cooling systems account for 36% of U.S. thermoelectric generating capacity. These systems withdraw large amounts of water from nearby bodies of water to cool the condenser, and then they discharge the water back to the original source at higher temperatures. Dry and hybrid cooling account for 3% of U.S. thermoelectric generating capacity, most of which has come online since 2000. Dry cooling systems use ambient air to cool and condense steam. These systems are classified into two types: direct and indirect systems. In direct dry cooling systems, steam is condensed using ambient air, meaning no water is consumed. In indirect dry cooling systems, steam is condensed in conventional water-cooled condensers, but the cooling water is kept in a closed system. As a result, no water is lost to evaporation, which means very little water is used.
Electricity Costs -- NYC -- During The Late Summer Heat Wave -- August 28, 2018 -- Link here for New York state and NYC. Click on the area of the map that interests you.
ISO New England, a bit farther north, see graphic below, link here. And, yes, it will cost $300/MWh if one chooses to do laundry at noon. From wiki:In the U.S., it costs approximately 45 cents to dry a load of laundry in an electric dryer, based on a 5,600-watt dryer, 40-minute run-time, and a 12-cent-per- kilowatt-hour rate. A kilowatt-hour (kWh) is equal to the energy of 1,000 watts working for one hour. My math suggests at $300/MWh that same chore will cost about $1.00. Air conditioning? [rate calculation graphic]
Atomic weapons and nuclear power spark outrage in Georgia - Shell Bluff, Georgia, lies just across the Savannah River from a nuclear weapons facility and just down the road from an aging nuclear power plant. The river is one of the most toxic waterways in the country. The weapons facility is one of the most contaminated places on the planet, and the power plant is about to double in size. Locals are outraged.“We believe that Plant Vogtle is going to exacerbate the existing contamination that’s already in the area and make things worse,” said Lindsay Harper, deputy director of Georgia WAND, a women-led advocacy group working to end nuclear proliferation and pollution. “We believe that more money should be put toward cleaning up the contamination instead of continuing to produce more.” Organizers from Georgia WAND and other advocacy groups gathered in Atlanta Saturday to discuss Plant Vogtle and related environmental issues and to register voters. The town hall marked the first stop on a bus tour organized by environmental leaders from across the South. The Freedom to Breathe Tour will highlight environmental hazards facing marginalized communities — starting with the expansion to Plant Vogtle, the only nuclear project under construction in the country. In 2009, Southern Company began building two reactors, which are expected to go online in 2021 and 2022, respectively. The expansion has stoked fears of contamination in what is already a heavily polluted area, leading advocates to call for more testing. “We need independent monitoring in the area that can help us to paint a larger, broader picture of what’s actually going on,” Harper said. “We need more information. We need more money for information.” Both the power plant and the weapons facility across the river produce a radioactive form of hydrogen called tritium that has been tentatively linked to Down syndrome in infants. Monitoring has found “elevated levels” of tritium in the groundwater near Plant Vogtle— too little to threaten public health, officials say, but enough to raise eyebrows. Locals are also worried that pollution from the plant may be causing cancer. Epidemiologist Joseph Mangano found evidence of an uptick in infant mortality and cancer deaths in Burke County, seat of Plant Vogtle, after the facility went online in 1987. It is unclear if the power plant was responsible for the increase.
The $4.7 Billion Nuclear Bill That No One Wants to Pay -- The primary owner of a power plant with two partially built nuclear reactors in South Carolina walked away from the $9 billion project last summer because of high construction costs and delays. Now no one wants to pay for it. The utility overseeing the Virgil C. Summer plant is asking ratepayers across the Palmetto State to shoulder its construction expenses of $4.7 billion, citing a law passed last decade. But local lawmakers are trying to force South Carolina Electric & Gas Co. to pick up more of the tab.A federal judge handed lawmakers an initial victory earlier this month, ruling that a temporary state-imposed rate cut for customers could stand. The utility, known by its acronym SCE&G, is appealing the decision.This dust-up is part of a larger U.S. dispute over how much public support should be provided to support nuclear power at a time when the industry is struggling to compete with lower-cost natural gas and renewable energy.The South Carolina plant and a similar project in Georgia both encountered massive cost overruns that led to the bankruptcy of nuclear project builder Westinghouse Electric Co. The company that owns the Georgia plant, which like the South Carolina project also received state support, said earlier this month that it would take an earnings charge to cover more than $1 billion in new cost overruns. “What is happening in South Carolina is reflective of how challenging the economics of nuclear power are across the country,” Existing plants across the U.S. are also struggling, prompting new calls for public assistance to keep them from closing. New York, New Jersey and Illinois are putting up public money to refurbish old plants or allowing utilities to charge rate payers for fixes, citing nuclear power as an important source of clean energy. Other states with power plants, like Ohio and Pennsylvania, have thus far resisted those efforts. Some in those states argue that the power companies should be left to fail or succeed on their own. “I just think they’re going to have to work their way through this themselves,” Ohio Gov. John Kasich said last year when FirstEnergy Corp. asked lawmakers to support rate increase to save two nuclear plants in that state.
FirstEnergy plans to close remaining coal-fired power plants in by 2020 - Toledo Blade -- FirstEnergy Solutions Corp. will shut down its remaining coal-fired power plants by June 1, 2022, including its massive W.H. Sammis plant along the Ohio River near Steubenville, Ohio. The Sammis plant at one time was America’s second-largest emitter of lung-damaging sulfur dioxide and was the subject of a landmark lawsuit over air pollution less than 20 years ago. It underwent $1.7 billion of improvements aimed at bringing its air emissions down to a healthy level only a decade ago. First Energy’s closures announcement was made in a news release Wednesday by FES, a subsidiary of Akron-based FirstEnergy’s Corp. FES and another FirstEnergy subsidiary, FirstEnergy Nuclear Operating Co., filed for bankruptcy last spring in hopes of having the parent company retool itself as one focused on electricity transmission. It for decades has done that as well as electricity generation.“Our decision to retire the fossil-fueled plants was every bit as difficult as the one we made five months ago to deactivate our nuclear assets,” Don Moul, FES Generation Companies president and chief nuclear officer, said in a written statement. “The action in no way reflects on the dedication and work ethic of our employees, nor on the strong support shown by their union leaders and the communities where the plants are located.”The plants employ a combined 550 workers. There are about two dozen other coal-fired power plants operating in Ohio and Pennsylvania, according to the U.S. Energy Information Agency. Much like the future closures of the Davis-Besse and other nuclear plants that FES announced in March, the company blamed upcoming closures of its coal-fired power plants on an inability to compete against strong market forces favoring natural gas.
First Energy sends a message to Trump in string of coal plant closures - The Ohio-based First Energy announced a string of coal power plant closures on Wednesday night, but said it could reverse its decision if the Trump administration takes action. The utility had been lobbying the Trump administration over the last several months to implement a plan to save the plants. Trump ordered Energy Secretary Rick Perry to develop a plan to save both coal and nuclear plants on June 1. Critics have called the Trump plan a "bailout" for uneconomic power plants that cannot compete in a changing energy market dominated by low-cost natural gas. The utility said in a statement that it "is closing the plants due to a market environment that fails to adequately compensate generators for the resiliency and fuel-security attributes that the plants provide.” But a fuel-security plan is on Trump’s mind: The president said earlier this month that he was preparing to release what he called a "military plan" to help coal plants. The plan is expected to subsidize the ailing coal units based on a national security argument the White House is developing. "As with nuclear, our fossil-fueled plants face the insurmountable challenge of a market that does not sufficiently value their contribution to the security and flexibility of our power system," said Don Moul, First Energy's president of its generation companies and its chief nuclear officer. "The market fails to recognize, for example, the on-site fuel storage capability of coal, which increases the resilience of the grid." The company said that based on the timing of any federal policy action, these decisions could be "reversed or postponed."
Icy feelings about offshore wind project are misguided - - It is clear to me that the opponents to the proposed Icebreaker offshore wind project in Lake Erie are intent on redefining chutzpah. This vital, six-turbine project — which would be the first built in fresh water in North America — is prudent and past due. The opponents are feckless and suffer from Not In My Back Yard (NIMBY) syndrome that their language and objections do a horrible job of disguising. This is not to say there can't and shouldn't be a healthy debate as to the merits of offshore wind energy or even wind writ large. But the opposition seems to have no problem sweeping their dependence upon far more destructive sources of energy — in such exotic places as Belmont and Carroll counties — under the rug. I know of what I speak, having worked for nearly six years investigating and photographing the impacts of high volume hydraulic fracturing (HVHF, aka fracking) on Appalachian communities. Cleveland Yacht Club members, boat associations and some birders point to the potential negative effects of this project on their interests. I would just say that kind of advocacy would be welcomed in Appalachia, where the natural gas and coal we have all used for decades has had a profound impact on the Appalachian forests and the species that depend upon them, such as pileated woodpeckers, and threatened or endangered species like the hellbender salamander, woodland box turtle, Indiana bat and northern long-eared bat. These forests are sometimes compared to the equatorial rainforests with respect to species diversity and richness. Opponents to this wind project are apparently fine with fossil fuel energy generation as long as it is taking place in the poor and rural southeastern part of the state. Hearing yacht club members complain about wind energy when they likely rely heavily on natural gas and oil from the fracking process, or worse yet have invested in such companies, and on coal from mountaintop removal and strip mines, is tough to take, having seen the devastation caused by extracting these energy sources. If their objections were shared with Appalachian Ohio, I am quite sure those communities would wonder what all the fuss over wind power is about.
Oil, Natural Gas Production Increases in Utica Shale - – Two horizontal wells in Columbiana County yielded significant production during the second quarter of 2018, as oil and gas exploration in this part of the Utica shale continues to ramp up. According to production data on the quarter ended June 30 provided by the Ohio Department of Natural Resources, two wells operated by Chesapeake Exploration LLC at its Paige well pad in Franklin Township yielded more than 800 million cubic feet of natural gas apiece. Chesapeake’s Paige 3H well produced 844.052 million cubic feet of gas over 88 days, while the Paige 1H yielded 836.414 million cubic feet over 87 days – the best production numbers from single Utica wells in Columbiana County yet. Chesapeake reported 52 producing wells in the county that yielded a combined 5.771 billion cubic feet of gas during the period. Hilcorp Energy Co. also reported strong results from its Columbiana County wells in Fairfield and Elk Run townships.The Elkrun-Scheel 11H well yielded 537.077 million cubic feet over 91 days, while the 13H well produced 562.306 million cubic feet over the same period.In Fairfield Township, Hilcorp’s Fairfield-Unkefer 14H well produced 347.981 million cubic feet with just 31 days of recorded production during the quarter, according to ODNR. Hilcorp reported eight Columbiana County wells in production during the quarter that yielded a total of 2.573 billion cubic feet of gas.Another operator, Atlas Noble LLC, reported its seven wells in the county produced 647.810 million cubic feet of gas. Together, the 67 wells reporting production in Columbiana County delivered 8.992 billion cubic feet of natural gas during the quarter, while oil production was negligible. Natural gas production in Mahoning and Trumbull counties proved below average, as wells there did not produce significant quantities of oil or gas. Hilcorp’s seven wells in Poland Township together elicited 350.1 million cubic feet of gas, Northwood Energy’s three wells in North Jackson and Ellsworth townships produced 58.9 million cubic feet, while Pin Oak Energy’s two wells in North Jackson yielded 28.2 million cubic feet during the quarter, according to ODNR. In Trumbull County, Pin Oak reported five operating wells that together produced 99.4 million cubic feet of gas, while Enervest Operating LLC reported a single well in operation that produced 10.4 million cubic feet of gas. Overall production of natural gas and oil in Ohio’s Utica shale skyrocketed by 42.25% versus the same period in 2017, ODNR reported. Wells across the Utica yielded a total of 554.306 billion cubic feet of natural gas during the second quarter of 2018 compared to 389.662 billion cubic feet of gas produced during the second quarter of 2017, the agency said. Utica wells across Ohio pumped out 4.488 million barrels in the second quarter – nearly an 11% increase from the year prior. During the second quarter of 2017, Utica wells produced 4.044 million barrels of oil.ODNR said 2,002 horizontal wells in the Utica reported production during the period, the bulk of which occurred in the southern sector of the Utica, mostly encompassing hot spots in Belmont, Noble and Guernsey counties.
Ohio's natural gas production up 42% — Ohio’s horizontal shale well oil and gas production continues to climb, as the Ohio Department of Natural Resources reports in its release of the second quarter production figures.Natural gas production from the second quarter of 2018 showed a 42.25 percent increase over the second quarter of 2017, while oil production increased 10.98 percent for the same period.Ohio’s horizontal shale wells produced 4,488,104 barrels of oil and 554,306,916 Mcf (545 billion cubic feet) of natural gas in the second quarter, according to figures released Aug. 28 by the ODNR.Five years ago, in 2013, those second quarter figures were 574,440 barrels and 15,065,106 MCF. Experts say production has increased in part because of new drilling and completion techniques, including longer well laterals, which can now stretch more than 19,000 feet.Nationally, natural gas production from the Marcellus and Utica shale plays in the Appalachian basin accounted for about 29 percent of U.S. total production in July 2018.The ODNR quarterly report lists 2,035 horizontal shale wells, 2,002 of which reported oil and natural gas production during the quarter.The top two gas-producing wells come from the 1H and 3H legs of the Borovich well in Belmont County’s Richland Township. The top-producing well yielded 3,168,398 MCF, up from the first quarter’s production of 2,705,060, which also led the state. A second Borovich leg produced 2,974,278 MCF. (Scroll down to see lists of top 10 wells.)Guernsey County’s Millwood Township is home to the top six oil-producing wells, and three of the quarter’s top producers came from the Yanosik wells. The Yanosik A 2H leg produced 100,723 barrels, compared to 168,493 barrels produced in the first quarter’s top well. Of the wells reporting oil and natural gas results:
- The average amount of oil produced was 2,242 barrels.
- The average amount of natural gas produced was 276,877 Mcf.
- The average number of second quarter days in production was 85.
Ohio reports 42.3% increase in Utica natural gas production - Production of natural gas in Ohio’s Utica Shale grew by 42.3% in the second quarter of 2018, according to the Ohio Department of Natural Resources.Production was a record high 554.31 billion cubic feet of natural gas, the state agency said Tuesday in releasing the latest data.That is a big jump from the 389.66 Bcf projected in 2017, it said. Oil prices fell Tuesday as some investors took profits on recent strong gains, but losses were limited the day after a U.S.-Mexico trade agreement eased worries about tensions between the two countries.It was also up from the 531.3 billion cubic feet produced in Q1 2018.The top-producing well for natural gas was an Ascent Resources well in Belmont County’s Richland Township, with nearly 3.2 billion cubic feet of natural gas in the quarter.Ascent also has the No. 2 well in Belmont County and the third and fourth biggest gas wells in Jefferson County.Chesapeake Energy had the fifth biggest gas well in Harrison County.No. 6 and 7 were Ascent wells in Belmont and Jefferson counties, respectively.The eighth best gas well was an Eclipse well in Monroe County and No. 9 and 10 were Ascent Resources’ wells in Jefferson County.Oil production in the Utica Shale also increased, ODNR said.It was up 10.98% in 2Q 2018. Production was 4,488,104 barrels of crude oil, up from 4,044,072 barrels in 2Q 2017. Production was 3,942,251 barrels in 1Q 2018. The top oil well in Ohio in 2Q was an Eclipse well in Guernsey County’s Millwood Township with 100,723 barrels of production.
Ohio Reports Sharp Uptick in Unconventional Oil Production -- Ohio’s unconventional oil production bounced back in the second quarter, reaching 4.5 million bbl, an 11% increase from the year-ago period, according to data released by the Ohio Department of Natural Resources (ODNR). Oil volumes were also up from 1Q2018, when they came in at 3.9 million bbl. Oil production has fluctuated over the last several quarters, reflecting a broad shift to dry gas production that occured about two years ago across much of the Appalachian Basin when oil prices were lower. But operators have returned to wetter areas in Ohio and elsewhere in the basin, stoked by higher oil prices.Unconventional natural gas production, meanwhile, continued to climb, setting a new record. ODNR said. Driven by the Utica Shale, gas production was 554.3 Bcf in the second quarter, up from 389.7 Bcf in the year-ago period and 531.3 Bcf in 1Q2018.ODNR’s quarterly report listed 2,035 horizontal shale wells, 2,002 of which reported oil and natural gas production. Ohio law does not require separate reporting of natural gas liquids or condensate. Those totals are included in natural gas volumes.The average amount of oil produced by each well during the second quarter was 2,242 bbl, while the average amount of natural gas produced was 276.9 MMcf. The average number of second quarter days in production was 85. To date, the state has issued 2,873 Utica Shale permits and 2,402 of those wells have been drilled. That’s compared to the 2,589 Utica permits and 2,104 that were drilled at about the same time last year. Fifty-two Marcellus Shale permits have also been issued to date, while 36 Marcellus wells have been drilled in the state.
Ohio Oil and Gas Industry Rebounds, Needs Workers - – The oil and gas industry across the state of Ohio is on the rebound and is searching for workers to staff positions representatives say will be in demand for the future.Pipeline construction workers, rig operators, welders and thousands of assorted jobs connected with oil and gas processing and end use are among the areas where industry specialists see the most opportunity for employment, industry specialists add.“We’re coming out of a downturn, which is really exciting and starting to see some reinvestment,” Mike Chadsey, director of public relations for the Ohio Oil and Gas Association, told about 25 guests during a question-and-answer session with representatives of organized labor, faith-based groups and educators.The event was held at the International Brotherhood of Teamsters Local 322 in Youngstown and organized by Strategic Resources Consulting.Critical job shortages at the moment are evident in transportation, Chadsey said, since the industry depends heavily on moving materials during the construction phase of well pads, for example. “Well pads require 500 to 600 trips, hauling in equipment, water, sand, then hauling it back out again,” he said.Chadsey told the group that should a prospective worker earn their commercial driver license, or CDL, then a job is waiting for them. “If you were to come up to one of our companies and say ‘I’m drug free and have a CDL,’ I could guarantee you would be walking out with a job,” he said.Other positions such as industrial engineers, petroleum engineers and diesel mechanics are also in high demand at the moment as energy programs accelerate their drilling programs, Chadsey said.However, it’s likely demand for workers will increase substantially should related developments such as Royal Dutch Shell’s $6 billion ethane cracker plant in Monaca, Pa., and new combined-cycle electrical plants that are fueled by natural gas take shape across the region. “Our feet are planted firmly back on the ground,” Chadsey said of the industry. “We’re going to see the opportunity for increased employment as cracker plants and power plants come online. That’s going to require more drillers to drill more holes to produce more gas, and more pipelines to deliver that gas to downstream opportunities.”
Fracking not the problem with water in Youngstown | vindy.com: For the umpteenth time, Youngstown residents will be asked to ban fracking, and for the umpteenth time – eighth – The Vindicator will oppose the foolhardy Home Rule Charter amendment. That said, we do have a suggestion for Ray and Susie Beiersdorfer and their anti-fracking cohorts: Turn your attention to the real issue that poses a threat to the city’s water. It’s called House Bill 602 and is sponsored by Republican Mike Duffey of Worthington, R-21st. To put it simply, Duffey is proposing a snatch-and-grab of this valuable commodity. If the bill becomes law, the cities of Youngstown and Niles, which paid for the construction of Meander Reservoir and the creation of the Mahoning Valley Sanitary District, would be placed in financial jeopardy. That’s because Duffey’s legislation would ban the surcharges cities like Youngstown and Niles levy on suburban water customers. The two communities, along with the village of McDonald, buy drinking water in bulk from the MVSD, which operates a water purification plant in Mineral Ridge. The cities then sell the water to their customers within their boundaries and in the suburbs. The surcharges paid by the suburbanites are designed to cover the additional costs of supplying water and maintaining the delivery network. The legislation proposed by Rep. Duffey would financially punish communities for charging suburbanites more for water. Although the bill would allow municipalities to recoup costs tied to the maintenance of their water systems, it doesn’t say what constitutes maintenance.
Five New Horizontal Wells Approved for Columbiana County – The Ohio Department of Natural Resources has approved five horizontal wells in Columbiana County, according to the latest data released from the agency.Houston-based Hilcorp Energy Co. secured three new permits during the week ended Aug. 25 to drill horizontal wells in Fairfield and Elk Run townships, according to ODNR. Two Fairfield wells are slated for the Tarka pad and the Elk Run well is planned for the Johnston pad, ODNR reported.Chesapeake Exploration LLC, whose parent Chesapeake Energy Corp. last month announced a deal to sell its Utica assets for $2 billion to Encino Acquisition Partners, received two permits to drill wells in Washington Township. Those wells are targeted for the Sevek pad.ODNR issued two additional permits to Chesapeake for wells in Jefferson County and a single permit to XTO Energy for a well in Belmont County.As of Aug. 25, ODNR had issued 2,873 permits in the Utica shale region of eastern Ohio. There are 2,402 wells drilled in the oil and gas play and 1,957 wells in production.The number of rigs operating in the Utica region of Ohio stood at 20 during the week, ODNR reported. There were no new permits issued in the upper Utica section of western Pennsylvania, which includes Lawrence and Mercer counties, according to the Pennsylvania Department of Environmental Protection.
Construction Continues on Shell’s Ethane Cracker Complex — Motorists who travel along Ohio Route 7 and W.Va. Route 2 may have noticed very large pieces of equipment traveling via barge on the Ohio River last week. The parts are being shipped to the construction site of the ethane cracker plant at Monaca, Pa. Pike Island Locks & Dam officials confirmed the shipments were headed to Monaca and moving through their locks on the river. One piece came through Wednesday afternoon, while another load arrived at the locks at about 11 p.m. Thursday.Thursday night’s pieces, which appeared to be two large, white tanks on top of a barge-like container, were being pushed north by a vessel owned by Louisiana-based McDonough Marine Service. The $6 billion Monaca plant is being built by Shell Chemical with construction expected to last for a few years before it is complete. The plant is expected to manufacture 50 different products, all of which are types of plastics for manufacturing. Planned construction of the Monaca plant was announced in 2016 with work getting underway about 18 months later.Meanwhile, residents of Belmont County and beyond are awaiting news on PTT Global Chemical’s final decision on whether to build a similar plant at Dilles Bottom south of Shadyside. Preparations have been underway for the possibility of a cracker in Belmont County, including the purchase of land in the area of Dilles Bottom. The first announcement about potential construction of the plant by Thailand-based PTT came about three years ago. In January, word was released that South Korea’s Daelim Industrial Co. was partnering with PTT on the project — a collaboration that was officially announced in March.
No Signs Of Slowing The Marcellus-Utica -- The beast in the East continues to grow. Despite takeaway capacity challenges in the Northeast, especially in Pennsylvania, where a lack of available pipeline is pushing up inventories and keeping natural gas prices low, production continues to escalate to record levels. In a recent report charting the growth of natural gas production in the Appalachia region, Deloitte noted that in 2007 Appalachia was the world’s 32nd largest natural gas producing region. By 2017 it was the third largest, trailing only all of the U.S. and Russia.“The speed and magnitude of Appalachia’s emergence onto the global natural gas scene is unprecedented and due mainly to the Marcellus and Utica shale plays,” Deloitte reported.According to the U.S. Energy Information Administration’s (EIA) Drilling Productivity Report, gas production in Appalachia has grown to 28.8 Bcf/d through August, significantly more than the next-closest basin, the Permian, which produced 10.8 Bcf/d that month. According to the Pennsylvania Department of Environmental Protection, first-quarter 2018 natural gas production in the state was 1.4 Tcf, an increase of 10% over the same period last year. Meanwhile, the Ohio Department of Natural Resources reported that the state produced 531 Bcf of natural gas in the first quarter of the year, an increase of 42.85% over the first of quarter 2017. The EIA attributes the remarkable production gain— the average production per rig in the Marcellus-Utica has increased by 13 Bcf/d since 2012—to efficiency improvements in horizontal drilling and hydraulic fracturing capabilities in the region, which include faster drilling, longer laterals, advancements in technology and better well targeting. The EIA reported in December that the average lateral length per well in West Virginia had increased from about 762 m (2,500 ft) in 2007 to more than 2,134 m (7,000 ft) in 2016. The leader in lateral length in the Marcellus-Utica—and everywhere else—is Eclipse Resources, which, according to the company, has through June drilled 15 super laterals averaging 5,600 m (18,375 ft) in length.
Rover seeks go-ahead from FERC to start remaining supply laterals — Energy Transfer Partners asked US regulators on Friday to approve startup of the final two laterals on its 3.25 Bcf/d Rover natural gas pipeline as it seeks to create additional capacity to meet downstream demand. The operator said in a filing with the Federal Energy Regulatory Commission that shippers have "urgently requested" that Rover place into service the CGT and Sherwood laterals, as well as associated compression and metering stations, to allow their stranded Appalachian Basin gas supplies to be delivered to Midwest markets. The filing seeks approval of commencement of service by September 15. The pipeline is designed to move gas from the Marcellus and Utica shale production areas across the US as well as to the Dawn Hub in Ontario. It is among a handful of infrastructure projects meant to boost takeaway capacity from the prolific producing region. "The project schedule for rehabilitation and restoration of the remaining ground movement areas outside of the construction right-of-way for the CGT lateral and the Sherwood lateral forecasts completion by December 18, 2018, and January 2, 2019, respectively," the operator said. The latest request followed FERC's August 23 approval of the start of service on Rover's Burgettstown and Majorsville supply laterals as well as associated compression and metering stations (CP15-93). That was expected to allow for 100% of long-haul contractual commitments to begin Saturday. The Sherwood lateral will tie into the Sherwood processing complex, although a significant production uplift is likely contingent upon the in-service of additional processing capacity at the facility. Sherwood processing plant owner MPLX's second quarter earnings call indicated the facility was running at a 92% utilization rate during the April-June period. MPLX said it was planning to bring two additional trains online by the end of 2018 with a combined 400 MMcf/d of processing capacity. Rover's CGT lateral connects to TransCanada's Columbia Gas Transmission system.
Court removes playgrounds from drilling consideration list - A Pennsylvania court last week largely backed a move by the state environmental agency to consider the potential impact of a shale gas well on public natural resources before drilling is allowed. But it removed the agency's attempt to add playgrounds and common areas at schools to the list of resources.That part of the measure was "vague," according to the court.It also removed language defining "critical" ecosystems because the agency's definition may have included species that do not justify "conservation measures."The state's revision of the drilling law requires companies to display potential impacts on public goods, while allowing state agencies to consider implications for resources. An industry trade group has sued to block the changes. The case is ongoing, with oral arguments set for this fall (Laura Legere, Pittsburgh Post-Gazette, Aug. 25).
Hydraulic Fracturing Should Be At Least 1/4 Mile From Residential Areas; Report - Current laws in Pennsylvania allow hydraulic fracturing operations to occur too close to homes and businesses, according to a new report that suggests individuals who reside or work in the area may be placed at risk for serious health side effects. In a study published in the medical journal PLOS One on August 16, researchers from the Southwest Pennsylvania Environmental Health Project determined that hydraulic fracturing gas extraction operations should be at least a quarter of a mile away from homes and businesses. They should likely be even further away from facilities with more vulnerable populations, such as schools, the report indicates. Problems from fracking have previously been linked to negative environmental effects to the surrounding communities, due the impact on drinking water, as well as increased dust and exhaust from drilling rigs, compressors and the transportation of the water, sand and chemicals. The process has also been linked to increased earthquake activity. The extent of the potential harm to humans living close to these fracking sites has yet to be determined.This latest report was created by a panel of 18 experts, including scientists, researchers, health experts and environmental advocates, who looked at the minimum setback requirements and compared them to what was known about the health risks of fracking. The panelists could not agree on how far minimum setback requirements should keep fracking operations from homes and businesses, with preferred distances ranging from 1/4 to two miles. However, the panel agreed that the current laws were not protective enough, given the health risks previous studies and research has linked to hydraulic fracturing. “The results suggest that if setbacks are used the distances should be greater than ¼ of a mile from human activity, and that additional setbacks should be used for settings where vulnerable groups are found, including schools, daycare centers, and hospitals,” the researchers concluded. “The lack of consensus on setback distances between 1/4 and 2 miles reflects the limited health and exposure studies and need to better define exposures and track health.”
Three (3) ‘Mama Bears’ Arrested Protesting the Mariner East 2 Pipeline - The Battle of Mariner East 2 continues to heat up. Three “Mama Bears” – local moms who fiercely oppose Sunoco’s pipeline plan – were arrested and led to off to jail in handcuffs early Saturday while protesting the massive Sunoco project near Glenwood Elementary School.More than two dozen fellow protesters supported the three Mama Bears – two of whom are senior citizens – who sat in the Sunoco right-of-way while holding a “bake sale” or “picnic” on a pleasant morning.The Mama Bears waited for about an hour, just 300 yards from the school, which is located in what pipeline foes often refer to as the “blast zone.” They were surrounded by dozens of stuffed teddy bears and even handed out homemade cookies.Police led Abbie Wysor and Barbara Montabana, both of Delaware County, and Ann Dixon, of Philadelphia, to jail after they were ordered by police to dismiss. The three women refused to leave. They were charged with a summary offense, defiant trespass, and released after less than two hours.The Mama Bear’s lawyer, Tanner Rouse, said the protesters have “tremendous gratitude” for law enforcement. “The state police treated them with great respect,” Rouse said. “These are people who respect the law but the law has left them exposed – with a great risk to the elementary school.”
Transco Seeks FERC OK to Start Up Atlantic Sunrise by Sept. 10 - Transcontinental Gas Pipe Line Co. LLC (Transco) has asked FERC for authorization to begin full service on its 1.7 million Dth/d Atlantic Sunrise expansion by Sept. 10, bringing the project a step closer to uncorking more Northeast production attempting to reach East Coast markets.In a Federal Energy Regulatory Commission filing Friday, Transco said the remaining portions of its 200-mile project are wrapping up construction and will be ready for service early next month, including the greenfield 30-inch diameter Central Penn Line North and 42-inch diameter Central Penn Line South segments; the Chapman and Unity Loops on Transco’s Leidy Line; and the greenfield Compressor Station 605 (30,000 hp) and Compressor Station 610 (40,000 hp).Transco is also already ready to place around 62,000 hp of additional compression online across three existing stations in Pennsylvania and Maryland, along with two new meter stations and various other facilities and modifications related to the project, the operator told FERC.Transco previously added interim service associated with the completion of brownfield portions of the project, including an incremental 400,000 Dth/d that came online last August, and another 150,000 Dth/d approved to enter service in May. Atlantic Sunrise would create an additional path for constrained gas in northeast Pennsylvania to reach markets in the Mid-Atlantic and Southeast via the Transco mainline that runs along the Atlantic seaboard. The project could provide a key capacity upgrade for Transco’s Zone 5 and Zone 6 market areas in time for the 2018/19 winter, helping to address the constraints that sent spot prices skyrocketing this past January.
Eclipse, Blue Mountain to Merge, Creating $1.4B Appalachia Focused Company Two E&P companies with heavy focus in the Utica and Marcellus have agreed to a merger.Independent exploration and production companies Eclipse Resource Corporation (based in Pennsylvania) and Blue Ridge Mountain Resources (based in Irving, Texas) have agreed to a merger with an enterprise value of $1.4 billion.The all-stock deal was announced August 27 and will result in Blue Ridge becoming a subsidiary of Eclipse. The deal’s equity value is $908 million.The merger positions the newly formed company to be a top-tier energy company with a strong focus on the Appalachian region. Currently, Eclipse focuses on the Utica and Marcellus shale plays in southeastern Ohio. And Blue Ridge has 34 currently producing operated wells within the Marcellus, according to the company’s website. The Utica has been identified as a significant growth area.The deal is expected to create one of the largest Utica-focused operators with 4Q 2018 estimated production of 500-560 MMcfe per day and 227,000 net undeveloped core acres providing more than 20 years of wet and dry gas inventory. Eclipse president and CEO Benjamin W. Hulburt described the merger as a “compelling opportunity” for both companies. Blue Ridge president and CEO John Reinhart will become president and CEO of the new company.“We believe the combined company will possess a substantial scale advantage and an excellent foundation for significant organic growth with attractive cash flows while maintaining the optionality for bolt-on value-accretive acquisitions within the basin,” Reinhart stated in a release. The deal is scheduled to close in the fourth quarter of 2018.
PennEnergy To Buy Bankrupt Rex Energy For $600.5 Million - After more than a decade operating as a public oil and gas producer, State College, Pa.-based Rex Energy Corp. has agreed to sell itself to fellow Appalachia shale player PennEnergy Resources LLC for $600.5 million. As part of the agreement, PennEnergy will acquire substantially all of Rex’s assets plus assume certain liabilities of the company which filed for bankruptcy earlier this year, according to filings with the U.S. Securities and Exchange Commission on Aug. 27. Rex is a pure-play Appalachian Basin-focused company targeting wet gas windows in the Pennsylvania Marcellus and Ohio Utica shales.
PA Supreme Court Victory for ME2 Pipeline re Two Zoning Cases -- Two different townships in the Philadelphia area, amped-up by and using money from Big Green groups like THE Delaware Riverkeeper (aka Maya van Rossum), tried to stop Sunoco Logistics Partners’ Mariner East 2 (ME2) pipeline project by claiming it violated local zoning ordinances. The construction of ME2 is governed by the PA state Public Utility Commission and the state Dept. of Environmental Protection. It is not a federal (i.e. FERC) project. Because it is a state-oversight project, the issue of primacy (whose rules and regulations govern) resides at the state level and not at the local level. Two local townships–one in Chester County the other in Delware County–argued in separate cases before PA Commonwealth Court that local zoning regulations for siting the pipeline should still apply. Commonwealth Court, in a pair of decisions earlier this year, ruled against that view (see PA Town Loses Appeal to Block ME2 Pipe with Local Zoning Ordinance and PA Appeals Court Rules ME2 Pipe NOT Under Local Zoning). Using Big Green money, both towns appealed their cases to the PA Supreme Court. On Tuesday, the Supremes declined to hear either case, meaning the Commonwealth Court ruling stands and this issue is now, finally, done. Antis’ attempts to stop the ME2 project by using local zoning ordinances is a closed door…The PA Supreme Court Tuesday declined to hear the appeal of two Commonwealth Court decisions finding local zoning ordinances do not apply to the Mariner East Pipelines in Chester and Delaware counties.The Court denied the appeal of Delaware RiverKeeper v. Sunoco Pipeline (No. 952 C.D. 2017) and denied the appeal of Meghan Flynn, et al v. Sunoco Pipeline (No. 942 C.D. 2017).
Eyes trained on natural gas project through Finger Lakes - — The $141 million Empire North project that would pump more natural gas from fracking operations in Pennsylvania through the Finger Lakes region has caught the attention of local environmentalists.High-volume hydraulic fracturing, also known as “fracking,” was banned in New York state in 2014 over health risks. The process involves injecting large amounts of water, sand and chemicals deep underground at high pressures to release oil and natural gas from rock formations.Despite the ban, fracked gas is what’s piped through the state and supplies New Yorkers. Concerns center on emissions, oversight and the impact on climate change.For some, it also presents an ethical issue.“Yes, we did ban fracking,” said Sue Dazie, a Victor resident involved with environmental causes in the region. “So, why should we allow (natural gas from fracking) through our state? We have already turned it down and now they want us to pay a price through our towns.”Drawing attention are plans to build a natural g as compressor station in Farmington that lies along the route the Empire North project takes through Ontario County. In the Finger Lakes region, Empire runs 249 miles of pipeline transporting natural gas to more than 1 million customers, according to project parent company National Fuel. Any natural gas in New York state is now due to the abundance and cost of natural gas from the Marcellus Shale and Utica Shale that is hydraulically fractured, said Karen Merkel, corporate communications for National Fuel. “All of our gas is coming from Northeast production,” Merkel said, citing states such as Pennsylvania, Ohio and West Virginia, where fracking takes place. “It is most economical, so 100 percent of what’s transported today across New York state is hydraulically fractured.”
Appalachia, Permian, Haynesville drive U.S. natural gas production growth - EIA - Gross production of natural gas in the United States has generally been increasing for more than a decade and in recent months has been more than 10% higher compared with the same months in 2017. This growth has been driven by production in the Appalachian Basin in the Northeast, the Permian Basin in western Texas and New Mexico, and the Haynesville Shale in Texas and Louisiana. These three regions collectively accounted for less than 15% of total U.S. natural gas production as recently as in 2007, but now they account for nearly 50% of total production. Production in these regions has increased in part because of new drilling and completion techniques, including longer well laterals that have increased well productivity. By contrast, the Gulf of Mexico's share of total production, which was 12% in 2007, has fallen to just 3% in recent months, and the share of production in the rest of the United States has declined from 60% to 28%. Growth in natural gas production in the Northeast has come mainly from the Marcellus and Utica shale plays in the Appalachian basin, which collectively accounted for about 29% of total production in July 2018. Recent infrastructure buildout in the region has allowed natural gas to move out of the region and has reduced the prevailing discount to the national benchmark price at Henry Hub and to regional prices. Natural gas production in the Permian Basin has also grown in recent years, largely in the form of associated gas accompanying the region’s rising crude oil production. Similar to the Appalachian Basin, natural gas in the Permian trades at lower prices relative to Henry Hub because of regional infrastructure constraints. A number of new natural gas pipelines are planned or under construction that will help move natural gas out of the region, and several of them will expand liquefied natural gas export capability. EIA projects that July 2018 production in the Permian Basin will account for about 11% of total U.S. gross production. Production in the Haynesville region has also increased. After decreasing from its peak in 2012, increasing production in the Haynesville region since 2017 has been driven by improving initial production rates and increasing rig counts. Higher rig counts are likely a result of recovering crude oil prices, which have been generally increasing since early 2016. Together, the Haynesville and the Permian regions accounted for nearly 20% of total U.S. natural gas production in 2017.
Three regions account for half of US natural gas production - Three regions are driving the growth of U.S. natural gas production as the Gulf of Mexico claims a smaller share of the total.The U.S. Energy Department reported that the Appalachian Basin in the Northeast, the Permian Basin in West Texas and the Haynesville Shale straddling Texas and Louisiana have grown to account for almost 50 percent of domestic production, up from 15 percent in 2007. The Gulf of Mexico, meanwhile, accounts for 3 percent of U.S. natural gas production, down from 12 percent in 2007. Producers have shown greater interest in offshore projects in recent months but new wells remain pricier to drill than those onshore. U.S. natural gas production has surged during the last decade alongside crude oil production, which topped 11 million barrels a day last month for the first time. Tapping gas-rich shale rock with hydraulic fracturing, or fracking, has unleashed a cheap and steady supply of natural gas that has fed a petrochemical boom along the Gulf Coast and boosted domestic exports to Mexico and overseas.U.S. natural gas production in the last several months has approached 100 billion cubic feet a day, roughly 10 percent higher than the same period last year. The Appalachian Basin, which includes the Utica and Marcellus shale basins in Pennsylvania and Ohio, accounted for 29 percent of total production last month. The Permian, meanwhile, accounted for an estimated 11 percent.
Shale boom zaps volatility in US natural gas market - When US natural gas futures passed a milestone this month, they did so quietly: volatility fell to the lowest levels since the market’s debut nearly 30 years ago. The event seemed improbable. Volatility usually fades when commodity stocks are ample. Yet US gas stocks are 19.5 per cent below average. When the winter starts they are set to be at their lowest in more than a decade. This situation is the latest example of how the world’s largest gas market has been transformed by shale drilling. While demand for gas is galloping, it has been met by waves of supply that show no sign of abating. Conditions that put traders on edge a decade ago get shrugs. Like much of the northern hemisphere, the US this year is experiencing extremely hot weather. Cooling degree days — a measure of air-conditioning demand — are expected to top 1,000 by the end of the season, ranking the summer of 2018 among the top five for heat, according to Commodity Weather Group. That has required more generation from electric power plants that increasingly run on gas. Natural gas “power burn” surged to a record 37.7bn cubic feet per day during July, according to S&P Global Platts. Exports have also fed demand. The US is now a net exporter of gas to the tune of 2bn cu ft/d, the Energy Information Administration estimates. The volumes flow through new pipelines to Mexico and liquefied natural gas export terminals recently opened on the coasts of Louisiana and Maryland. The strong summer use of gas follows a winter when heating demand left gas stocks depleted. While producers will bank additional supplies over the summer and autumn, EIA forecasts that stocks at the end of the “injection season” in October will amount to just 3.3tn cu ft — the lowest for that month since 2005. “It does create some concern that under the right conditions we could see some fireworks for prices,” said Rich Redash, head of North American gas and power research at S&P Global. For now, though, gas prices have been a damp squib. Nymex September gas futures on Monday settled at $2.930 per million British thermal units, inside its range of $2.50-$3.50 over the past year.
Natural gas production up 10 percent in 2018 - Natural gas production in the United States is up 10 percent so far in 2018 compared to the previous year, according to the U.S. Energy Information Administration (EIA). The growth has been primarily driven by higher production in the Appalachian Basin in the Northeast, the Permian Basin in western Texas and New Mexico, and the Haynesville Shale in Texas and Louisiana. In 2007, these three regions accounted for less than 15 percent of total U.S. natural gas production, but now they account for nearly 50 percent of total production. New drilling and completion techniques, including longer well laterals, have increased well productivity in these regions. In stark contrast, the Gulf of Mexico’s share of natural gas production was 12 percent in 2007, but now it is down to just 3 percent. Additionally, the share of production in the rest of the United States has declined from 60 percent in 20017 to 28 percent today. The Marcellus and Utica shale areas in the Appalachian basin accounted for about 29 percent of total production in July 2018. In the Permian Basin, several new natural gas pipelines are planned or under construction that will help move more natural gas out of the region. EIA projects that production in the Permian Basin will account for about 11 percent of total U.S. gross production in July 2018. Increasing production in the Haynesville region has been fueled by improving initial production rates and increasing rig counts. Combined, the Haynesville and the Permian regions accounted for nearly 20 percent of total U.S. natural gas production in 2017.
Natural Gas Pipelines 'Weak Link' in U.S. Energy Infrastructure, Says IECA -- The North American Electric Reliability Corp. (NERC) has set mandatory standards that are enforced to secure the reliability of the nation's electric grid, but security requirements under the Transportation Security Administration (TSA) are voluntary, not mandatory, making natural gas pipelines "the weak link in U.S. national energy infrastructure," according to the Industrial Energy Consumers of America (IECA). In letters sent Wednesday to the chairmen of both the Senate Committee on Energy and Natural Resources and the House Committee on Energy and Commerce, IECA called for oversight hearings and "appropriate action to ensure that Congress has done all that is reasonable and cost-effective to ensure the security of natural gas pipelines." IECA said it supports an enforceable nationwide pipeline security standard with accountability resting "on the pipeline companies.” However, it does not support creating an organization like the North American Electric Reliability Corp. (NERC) only for natural gas pipelines. “One could make the argument that NERC's responsibilities could be changed to include natural gas pipelines, given their in-house knowledge and the importance of the gas/electricity interface issues." In June, FERC Commissioners Neil Chatterjee and Richard Glick said regulation of natural gas pipeline security should be shifted from TSA to the Department of Energy (DOE). Electricity grid operators are required to comply with Federal Energy Regulatory Commission security standards, but there are no comparable standards for the nation's network of natural gas pipelines, they said. DOE established a cybersecurity office in February.
Natural Gas Inventories “Dangerously Low" - Futures markets are suggesting the currently benign level of natural gas price volatility may not remain through the winter months. According to the Financial Times, market volatility this year has been the lowest on record despite inventory levels falling 19.5 percent below average and by the time winter starts are set to be at their lowest in more than a decade. The Financial Times puts this down to investors being lulled into complacency by a seemingly unstoppable wave of new supply from the shale market rising inexorably to meet rising demand. The government last week forecast 81.1 billion cubic feet per day in dry gas production for 2018 — a record high — and up by 7.5 billion cu ft/d from 2017, the Financial Times reports. But is the market safe to assume shale gas will supply regardless of demand? Natural gas producers are systematically hedging their sales throughout next year, often a sign they plan to continue an aggressive policy of drilling and expansion. That activity has contributed to a dipping of forward prices, as there are more sellers in the futures market than buyers. But inventory levels are low — some would suggest dangerously low — after a high summer demand due to hot weather increasing demand for air conditioning. Natural gas “power burn” surged to a record 37.7 billion cubic feet per day during July, the Financial Times reports. Such strong demand comes after a cold winter depleting stocks to unusually low levels. Inventory levels were low at the end of the summer and have not managed to be replaced during the normally slacker summer months. High demand is not helped by exports of natural gas and distillates running at record levels, aided by strong international demand and low U.S. domestic prices relative to global markets. Forward market spreads suggest there is already competition between companies buying gas for anticipated stronger winter-month demand are meeting power companies also trying to hedge their requirements.Volatility is traditionally lower in the slacker summer months and rises as demand ramps up in the winter. If inventory levels are high, investors are less prone to panic, rightly seeing ample supply. But when inventory levels are low, volatility is placing complete faith in the shale producers to meet rising demand — a faith that may yet prove misplaced.
EIA Shocks With 70 Bcf Injection; Natural Gas Futures Too Stunned to React - The Energy Information Administration (EIA) reported a 70 Bcf injection into storage inventories for the week ending Aug. 24, well above market consensus of a mid-60 Bcf build.The Nymex October gas futures contract, which took over the prompt-month position on Thursday, had a fairly muted reaction to the surprisingly bearish injection, slipping only nine-tenths of a cent to $2.854 just after the EIA print hit the screen. By 11 a.m. ET, the prompt month had moved back up to $2.863, flat with Wednesday’s settle. The rest of the futures curve through the March 2019 contract had a similar response to the inventory report.The net of the last two weeks yields a better reading of balance, according to Bespoke Weather Services, which had projected a 66 Bcf build. Given the miss, however, this indicates “weekly noise” in EIA data may be playing a role in these misses.“This print confirms much of the demand-side loosening we observed last week that appears to have carried into this week, and also reflects the recent surge in production,” Bespoke chief meteorologist Jacob Meisel said.The 70 Bcf build was significantly larger than both last year’s 32 Bcf build for the week, and the five-year average injection of 59 Bcf. Traders scoured the EIA data to find the missing link that caused the discrepancy between the estimated storage injection and the actual print. The Midwest region appeared to be culprit as mild temperatures and low humidity led to a 6 Bcf increase in injections week/week. Broken down by region, the EIA reported a build of 35 Bcf in the Midwest, 27 Bcf in the East, 4 Bcf in the Mountain, and 2 Bcf each in the Pacific and South Central regions. Inventories as of Aug. 24 stood at 2,505 Bcf, 646 Bcf below last year and 588 Bcf below the five-year average. Looking ahead to next week’s EIA report (for the week ending Friday), Meisel said that power burns tightened slightly, but Canadian imports returned as well, indicating another loose print is likely.
Another Appalachian NGL Storage Project Selects EPC Contractor -- Appalachia Development Group LLC (ADG), which was formed last year to build underground natural gas liquids (NGL) storage facilities in West Virginia, has selected California-based Parsons Corp. to oversee engineering, procurement and construction (EPC). ADG said Parsons would focus on the $3.4 billion NGL hubs’ front-end engineering and design, including project management and execution planning.“Identifying and selecting an EPC partner is a significant milestone in our progress to develop the hub,” ADG CEO Steven Hedrick said. Hedrick told NGI earlier this year that the company wants to build a series of underground NGL storage facilities and related pipeline infrastructure in West Virginia’s Ohio and Kanawha river valleys. He said at the time the hub could eventually be expanded in Kentucky, Ohio and Pennsylvania to serve production from the Marcellus, Utica and Rogersville shales, but he stopped short of offering further details about specific sites as detailed engineering needed to be completed.The project cleared a hurdle in January, when the U.S. Department of Energy (DOE) invited ADG to submit a Part II application for a $1.9 billion loan guarantee that, if approved, would help support the project. The loan guarantee would hedge a lender's risk by ensuring that the federal government pays back the money if ADG or another company defaults. ADG said in making the EPC announcement that work is ongoing to secure another $1.4 billion equity investment. The company added that it is working closely with the DOE on Part II of the loan guarantee application process.
FERC Approves 49% Increase in Mountaineer XPress Pipeline Rates - With the cost of construction skyrocketing, FERC has approved a request from Columbia Gas Transmission (CGT) to increase the initial monthly incremental recourse reservation rate on the Mountaineer XPress Project by 49% from the $9.827/Dth originally authorized.The $14.663/Dth approved by the Federal Energy Regulatory Commission is meant to cover increased costs for the pipeline, which would increase natural gas pipeline capacity out of the Appalachian Basin by expanding the TransCanada Corp. affiliate's system in West Virginia [CP16-357].Estimated cost of construction has increased from $2.06 billion to $3.03 billion since the filing of the original application in April 2016, CGT said in its FERC filing."Columbia states the primary reason for the increase in costs is related to contractor labor costs, inspection costs, and outside services costs that substantially exceeded the contingency established for such charges," FERC said. "According to Columbia, the recent surge of pipeline construction activity in the Marcellus and Utica Shale regions caused costs associated with land acquisition and contractor services for the Mountaineer XPress Project to increase.“Columbia also reports that unexpected permitting delays further increased the cost of constructing the project in accordance with shippers' requested in-service dates."
MVP Gets Another Win as Fourth Circuit Lifts Stay of Water Permit; Obstacles Still Ahead - The U.S. Court of Appeals for the Fourth Circuit on Wednesday lifted a stay of Mountain Valley Pipeline LLC’s (MVP) water crossing permit in West Virginia, providing further good news for sponsors recently beset by unfavorable decisions handed down by the court.The Fourth Circuit granted a motion filed by the U.S. Army Corps of Engineers to lift a stay of the Nationwide Permit 12 (NWP 12) it issued. The Army Corps issues the NWP 12, which allows contractors to trench through streams and rivers, under Section 404 of the Clean Water Act.In June, the Fourth Circuit granted a motion to stay MVP’s NWP 12 pending a ruling on a legal challenge brought by the Sierra Club and other groups. The environmental groups had challenged the validity of MVP’s NWP 12, arguing that the project could not meet a special condition in West Virginia requiring all stream crossings be constructed within 72 hours.After voluntarily suspending and then reinstating the NWP 12 with modifications relating to four river crossings, the Army Corps told the Fourth Circuit in a July 11 motion that it had addressed the permit’s deficiencies and asked for the stay to be lifted.“Upon consideration of submissions relative to the government’s motion to lift the stay, the court grants the motion,” the Fourth Circuit ruled Wednesday.The order comes as FERC has effectively lifted a sweeping stop work order imposed on the 303-mile, 2 Bcf/d project that attempted to address the Fourth Circuit’s decision to vacate separate federal approvals from the U.S. Forest Service and Bureau of Land Management (BLM) covering a proposed crossing of the Jefferson National Forest along the Virginia/West Virginia border. With the orders issued by the Federal Energy Regulatory Commission and the circuit court, “MVP is now able to return approximately 1,000 workers who have been suspended from their duties on the project,” the operator said Thursday. “As we continue with safe and responsible construction activities along the vast majority of the route, we will coordinate with the agencies to address the court's concerns with the federal land permits. We appreciate the collaborative and concerted efforts by all state and federal agencies and look forward to the in-service of this important infrastructure project.”
US FERC allows Mountain Valley Pipeline to resume construction on most of gas pipeline's route — The US Federal Energy Regulatory Commission on Wednesday lifted a stop-work order affecting most of the route of the 2 Bcf/day Mountain Valley Pipeline. The commission in early August placed much of the work on the 300-mile project on hold, following an appeals court ruling that vacated federal permissions to cross national forest land. The project would move West Virginia production to downstream markets in Transcontinental Gas Pipe Line's Zone 5 near the Virginia-North Carolina border. In a letter order Wednesday, FERC said a new determination by the US Bureau of Land Management ended questions about whether a route change would be needed to allow an alternative crossing of the federal land. BLM found that greater use of existing rights-of-way across federal lands would be impractical. The FERC letter order kept on hold work in two areas where permits are still needed: a crossing of the Weston and Gauley Bridge Turnpike on lands owned by the US Army Corps of Engineers in Braxton County, West Virginia, and a 25-mile stretch including two watersheds and containing the Jefferson National Forest crossing, in Monroe County, West Virginia, and Giles County, Virginia. EQT, a lead sponsor of the project, said in a statement it was pleased by the determination and "will soon be able to bring back a significant amount of workers who were temporarily suspended from their duties on the project."
Atlantic Coast Water Crossing Permit Holds Up as Court Denies Enviro Challenge - A federal appeals court has shut down an effort by environmental groups to stall Atlantic Coast Pipeline LLC’s (ACP) construction plans over a condition in its West Virginia water crossing permit, a tactic that had more success against the Mountain Valley Pipeline (MVP).The U.S. Court of Appeals for the Fourth Circuit, which has handed down its fair share of unfavorable rulings to ACP and MVP in recent months, last Thursday denied without prejudice a motion filed by the Sierra Club and other groups to stay ACP’s Nationwide Permit (NWP) 12. The NWP 12 covers waterbody crossings and is issued by the U.S. Army Corps of Engineers under Section 404 of the U.S. Clean Water Act.The Fourth Circuit had previously granted a stay of the similarly routed MVP’s NWP 12, determining that the project could not meet a condition in its permit in West Virginia that stipulated all stream crossings be constructed within 72 hours.Environmental groups quickly adopted the same tactic in challenging ACP, but their argument that ACP couldn’t complete a planned crossing of the Greenbrier River in 72 hours did not persuade the court. “The record lacks clear evidence that ACP is unable to comply with the 72-hour condition,” the court concluded. In addition, the Huntington District of the Army Corps “has voluntarily suspended all NWP 12 verifications for ACP in West Virginia pending ACP’s provision of additional information to ensure its compliance with all NWP 12 conditions.”
Fourth Circuit Blocks Enviros, Denies Stay of Atlantic Coast Water Crossing Permit - A federal appeals court has shut down an effort by environmental groups to stall Atlantic Coast Pipeline LLC’s (ACP) construction plans over a condition in its West Virginia water crossing permit, a tactic that had more success against the Mountain Valley Pipeline (MVP).The U.S. Court of Appeals for the Fourth Circuit, which has handed down its fair share of unfavorable rulings to ACP and MVP in recent months, last Thursday denied without prejudice a motion filed by the Sierra Club and other groups to stay ACP’s Nationwide Permit (NWP) 12. The NWP 12 covers waterbody crossings and is issued by the U.S. Army Corps of Engineers under Section 404 of the U.S. Clean Water Act.The Fourth Circuit had previously granted a stay of the similarly routed MVP’s NWP 12, determining that the project could not meet a condition in its permit in West Virginia that stipulated all stream crossings be constructed within 72 hours.Environmental groups quickly adopted the same tactic in challenging ACP, but their argument that ACP couldn’t complete a planned crossing of the Greenbrier River in 72 hours did not persuade the court.“The record lacks clear evidence that ACP is unable to comply with the 72-hour condition,” the court concluded. In addition, the Huntington District of the Army Corps “has voluntarily suspended all NWP 12 verifications for ACP in West Virginia pending ACP’s provision of additional information to ensure its compliance with all NWP 12 conditions.” The court also cited a commitment from ACP to provide written notice to the petitioners in advance of resuming any work authorized under the NWP 12.
All-volunteer groups patrol construction of gas pipeline projects in Virginia, North Carolina - After the Mountain Valley Pipeline (MVP) and Atlantic Coast Pipeline (ACP) projects were proposed almost five years ago, residents in rural western Virginia fought hard to persuade state and federal regulators to reject the companies’ requests to build the pipelines through their communities.When regulators gave the two massive construction projects green lights to proceed almost a year ago, the residents didn’t concede defeat. They grew even more determined to stop the pipeline construction in its tracks.After the MVP was approved in October 2017, “we decided that we weren’t going to sit by idly and let them run over us with their construction equipment,” Kirk Bowers, pipeline program coordinator for the Sierra Club of Virginia told ThinkProgress. Bowers is one of the leaders of Mountain Valley Watch, a group created to monitor construction of the pipeline. Residents have signed up to serve as volunteer monitors and scouts for what have essentially become citizen regulatory agencies. Mountain Valley Watch was formed earlier this year as was the Pipeline Compliance Surveillance Initiative (Pipeline CSI), which is keeping a close eye on the the ACP. The dual monitoring efforts involve hundreds of volunteer observers and collaboration with environmental organizations and citizen groups — such asFriends of Nelson County and Augusta County Alliance — formed years ago to protect the property rights, rural heritage, and environment of the region.In some cases, these volunteer monitoring groups have g athered more information on the pipelines’ impact on the environment and private lands than the regulators that are paid to monitor the projects.
Environmental groups sue US Coast Guard over Great Lakes oil spill response plans - Two environmental groups are suing the U.S. Coast Guard for its admitted inability to respond adequately to a Great Lakes oil spill and, by extension, the lawsuit seeks to invalidate the response plans for facilities such as Enbridge, which operates Line 5 beneath the Straits of Mackinac. The lawsuit filed Wednesday in Detroit federal district court stems from comments former Coast Guard Commandant Adm. Paul Zukunft made during a November congressional committee hearing, when he told lawmakers the agency is not prepared for a major pipeline oil spill in the Great Lakes. His comments, the lawsuit said, belie and invalidate the Coast Guard-approved Northern Michigan Area Contingency Plan and violate the Oil Pollution Act of 1990, according to a statement from the National Wildlife Federation and the Environmental Law & Policy Center. The current plan leaves the Coast Guard unprepared to address a worst-case spill from Enbridge's Line 5, which could affect more than 400 miles of shoreline and 60,000 acres of wildlife habitat, said Oday Salim, a staff attorney for the National Wildlife Federation. “Until we decommission this aging, risky pipeline, we need the best-possible spill response plan to protect our Great Lakes, our communities, our wildlife and our economy,” Salim said in a statement. The Oil Pollution Act of 1990 was created after the Exxon Valdez oil spill in Alaska and requires oil spill contingency plans in areas where oil is transported through waterways, said Margrethe Kearney, senior attorney for Chicago-based Environmental Law and Policy Center. The U.S. Coast Guard signed off on the North Michigan Area Contingency Plan in June 2017, certifying the agency could respond to a worst-case discharge. In November, however, Zukunft told Congress the Coast Guard is "not semper paratus for a major pipeline oil spill in the Great Lakes,” referring the agency's Latin motto, "always ready." "It was unlawful for them to approve it when in fact they’re not able to remove the discharge from a worst case oil spill," Kearney said. The lawsuit asks the judge to declare the approval of the Northern Michigan contingency plan a violation of the Oil Pollution Act and invalidate sections of the plan that relate to open waters and any facility-specific response plans created in coordination with the plan, including Enbridge's facility response plan.
Trump's trade war puts energy jobs at risk - This summer, China and the United States launched the opening salvos in a trade war that has been brewing for months. America imposed a 25 percent tariff on $34 billion of Chinese goods. In response, China slapped tariffs on U.S. products and agricultural goods such as soybeans and pork. President Trump escalated things by announcing another $200 billion in tariffs on Chinese goods. Chinese officials, who had previously proposed to increase natural gas purchases in an effort to reduce the U.S. trade deficit, have already vowed to retaliate with a similarly sized tariff on U.S. exports, including crude oil and natural gas. If the administration doesn't defuse this conflict, China's retaliatory tariffs could hammer America's booming energy industry. They could wipe out thousands of current or future oil and gas jobs, and prevent the United States from achieving energy independence. America's energy renaissance has made the United States less reliant on rivals such as Russia and Saudi Arabia. American imports of Russian crude oil in April 2018 was a third of what it was in April 2010. The United States is nearing complete energy independence — a feat thought impossible just a few years ago. American firms have been spending heavily to build the infrastructure necessary to sustain these exports. Until recently, only one terminal to export liquefied natural gas existed in the United States. But several new terminals are currently under construction, which will create even more export opportunities. And just last year, Trump approved two major pipelines—the Dakota Access Pipeline and the Keystone XL Pipeline—to transport oil to refineries. This infrastructure spending — all of it with private, not taxpayer, dollars — could come to a screeching halt if China shuns our energy exports. China is the largest net buyer of U.S. crude oil in the world—one fifth of all U.S. crude oil exports in 2017. China also imported more than $1 billion of American liquefied natural gas in 2017, and that figure is projected to increase nine-fold by 2021, according to a Morgan Stanley estimate.
Shipments to gas stations before certain holidays affect gasoline product supplied - EIA - U.S. holiday weekends associated with increased driving, such as Labor Day and Memorial Day, often result in large swings or changes in gasoline product supplied. EIA uses product supplied as a proxy for U.S. gasoline consumption. Some of the largest weekly decreases in gasoline product supplied often occur during the weeks of these holidays, reflecting the timing of shipments to retail gasoline stations. EIA’s estimate of product supplied published in the Weekly Petroleum Status Report measures the volume of petroleum products from the primary supply chain. Although these products are ultimately consumed, EIA’s product supplied series measures their volumes further up the supply chain and not at the point of consumption. For example, gasoline inventories at large bulk terminals are included in EIA’s measure of gasoline product supplied, but inventories at retail gasoline stations are not surveyed or included in this measure. For motor gasoline, the primary supply chain includes refineries, bulk terminals and blenders, importers, exporters, and pipelines. All of these primary supply chain components handle large volumes of gasoline on a daily basis. Retail stations are defined as secondary storage—the portion of the overall distribution network that falls between producers and end users. Product supplied captures the transfer of supplies from the primary supply chain to these secondary storage facilities. The existence of significant amounts of secondary storage means that these transfers between the primary and secondary supply chains can result in large week-to-week swings in product supplied that do not reflect actual consumption patterns. Because EIA’s survey measures the status of product in the primary supply chain as of Friday morning each week, many of the transfers from the primary supply chain (in particular, from bulk terminals to retail stations) occur before these holiday weekends, when stations prepare to serve the expected increase in drivers filling up their vehicles, and not in the week of the holiday itself. Other variables such as the timing and scale of imports or exports can lead to large weekly changes in product supplied that do not necessarily reflect actual gasoline sales volumes at retail stations in any given week. Because of these dynamics, EIA uses a four-week rolling average of product supplied, which can smooth out short-term fluctuations and highlight longer-term trends in gasoline consumption. Furthermore, gasoline consumption patterns should be considered within the context of other factors that can influence motor gasoline demand, such as retail gasoline prices, macroeconomic changes, and weather.
Cheniere prepares for flowing feedgas to fifth train at Louisiana LNG export terminal — Cheniere Energy wants permission from the US Federal Energy Regulatory Commission by next week to begin flowing feedgas to its fifth liquefaction train at its Sabine Pass LNG export terminal, as it prepares to begin production on that unit and the first at its Corpus Christi, Texas, facility before the end of the year. The company is eager to stay ahead of schedule on its construction plans and maintain its growth trajectory as several other US developers are expected to start up their terminals in the months ahead and into 2019. Cheniere is targeting first production at Sabine Pass Train 5 and Corpus Christi Train 1 for the fourth quarter, a similar timeframe for when Kinder Morgan expects initial in-service at its Elba Island export terminal in Georgia. Sempra Energy said earlier this month that it remains on track for all three trains at its Cameron LNG facility in Louisiana to produce LNG in 2019. Freeport LNG in Texas also is expecting to see service in 2019. (Infographic: US LNG exports expected to ramp up sharply through 2019) In a filing Monday afternoon, Cheniere asked FERC for feedgas and refrigerants authorization for the Sabine Pass unit by September 6. It was recently granted feedgas authorization for the Corpus Christi unit. A company spokesman declined Tuesday to provide a more precise update to timing of initial production from the two units. Deliveries to Corpus Christi have averaged 4 MMcf/d since the beginning of August and have yet to go over 11 MMcf/d, suggesting that the facility is still flowing just fuel gas, S&P Global Platts Analytics data shows. Platts Analytics is forecasting Sabine Pass Train 5's first substantial feedgas delivery in November. For comparison, Cheniere received authorization to begin flowing feedgas to Sabine Pass Train 1 on November 19, 2015. The first time over 100 MMcf/d of feedegas was delivered to the facility occurred on December 22, 2015, just days before the unit registered its first production. As for cargoes, Platts Analytics assumes that initial feedgas deliveries begin four months before exports begin, and subsequent trains receive feedgas deliveries three months before exports begin. Cheniere exported its first cargo from Sabine Pass in February 2016, three months after feedgas approval for Train 1.
Permian oil, gas and NGLs target export markets. - It seems like everyone wants production out of the Permian these days — at least everyone who works for a pipeline company. The addition of five major greenfield crude oil pipes plus a host of expansion projects could bring Permian takeaway capacity up to 8.0 MMb/d from only 3.3 MMb/d today, with almost all of the incremental barrels destined for export markets. It’s a similar story for natural gas, with seven new pipes in the works to bring 2.0 Bcf/d each to Corpus Christi, Houston, or Louisiana, again with most of the molecules targeting exports. Not to be left behind, at least 27 new Permian gas processing plants are in development, and five new pipeline projects could bring 1.6 MMb/d of y-grade NGLs to the Gulf Coast. It’s a darned good thing that everyone in the global energy markets wants all that Permian production, right? What will this mean for the Permian and, for that matter, for the rest of the U.S. and the world? The only way to answer that question is to get the major players together under one roof and figure it out. That’s the plan for PermiCon 2018. Warning! Today’s blog is a not-so-subliminal advertorial for our upcoming conference. The Permian isn’t just a basin. It’s a phenomenon. Over the past five years, the increase in Permian crude oil production has been more than three times the rate of all the rest of the U.S. put together, and the Permian will continue to dominate U.S. production growth. Figure 1 shows that essentially all of the growth in U.S. crude oil production since 2014 (between red dashed and blue dashed vertical lines) has come from the five big shale basins — Eagle Ford, Anadarko (STACK/SCOOP), Niobrara, Bakken and Permian — but that the Permian (orange layer) dwarfs them all. (The area from the top of the Permian to the red line is the sum of all other basins, including the Offshore Gulf of Mexico.) It’s a similar story going forward in RBN’s “Mid-Curve” scenario (shown in area to right of dashed blue vertical line), which assumes a price outlook similar to today’s forward curve. By 2023, Permian production will exceed volumes from all four of the other big shale basins combined.
New pipelines to boost U.S. natural gas exports to Mexico - U.S. natural gas exports to Mexico by pipeline are expected to jump in the coming months as several long-awaited projects are placed into service to feed growing demand across the border and potentially ease bottlenecks in the Permian Basin in West Texas. The U.S. Energy Department reported that four major pipelines are scheduled to begin commercial operations by the end of the year to supply Mexico's power generation and industrial sectors. The country has emerged as one of the largest customers of U.S. natural gas after overhauling its energy policies five years ago. The pipelines, which include Enbridge's Nueces-Brownsville project in the Rio Grande Valley and three projects in Mexico, are expected to start up in October and November. They'll help bring gas from West Texas, where there is a pipeline shortage, and elsewhere in the state to central and western Mexico. Already, exports have ramped up in recent months. Natural gas shipments to Mexico by pipeline exceeded 5 billion cubic feet per day for the first time last month, up from an average of 4.2 billion cubic feet per day in 2017. U.S. natural gas exports to Mexico surged after 2013 and 2014, when Mexico opened its energy market to foreign investment and intensified its focus on using cleaner-burning fuel sources such as natural gas. It sought to buy gas from the U.S., where the shale boom in West Texas and elsewhere had unleashed a cheap and plentiful supply, and pushed to expand its pipeline network as its own oil and gas production declined.
Big oil calls proposed NAFTA agreement with Mexico encouraging | TheHill: One of the leading oil lobbyists said it is "encouraged" by news that the Trump administration has reached an agreement with Mexico to update the North American Free Trade Agreement (NAFTA). The American Petroleum Institute (API) said Monday that the industry relies on open trade and modernized relationship with Mexico."We are encouraged that negotiators have reached a preliminary agreement to modernize our trade relationships,” said API President and CEO Mike Sommers in a statement. “America’s natural gas and oil industry depends on trade to continue to grow U.S. jobs and our economy, and deliver for consumers.” Mexico in 2017 was the leading importer of American oil and petroleum products, according to the U.S. Energy Information Administration. President Trump said Monday the U.S. has reached an agreement with Mexico amid contentious talks on revamping NAFTA "It’s a big day for trade. It’s a big day for our country," the president told reporters in the Oval Office, who were summoned to watch Trump speak by phone with outgoing Mexican President Enrique Peña Nieto. The president said he plans to "terminate" the existing NAFTA agreement, which currently includes Canada.
Texas Oil, Natural Gas Output Takes U-Turn in June, Lowest Reported Since February 2017 - The Lone Star State’s oil and natural gas output in June retreated from a year ago and month/month, with production at the lowest level in 16 months, according to preliminary data by Texas regulators.The Railroad Commission of Texas (RRC) production report for June, issued late Thursday, said combined crude oil and condensate output fell to 98.8 million bbl from 101.32 million bbl in June 2017 and from May 2018’s total of 106.48 million bbl.Combined, natural gas well and casinghead gas also fell from a year ago to 615.21 MMcf from 661.54 MMcf, and output declined from 663.88 MMcf reported in May.Crude oil/condensate production in June was the lowest reported since February 2017, when output totaled almost 92.01 million bbl. Gas well/casinghead gas also hit a low not seen since February 2017, when production was 603.97 MMcf.State officials did not speculate on why output fell. However, the Permian Basin for the last few months has seen increasing signs of tightening pipeline capacity for gas and for oil, and prices have been squeezed.The RRC said production in June flowed from 181,669 oil wells and 91,665 gas wells. In addition, the RRC reported that the percent of produced gas exported from Texas increased 34% from June 2017, likely the result of increasing pipeline exports to Mexico.Regulatory officials cautioned that the June production data was preliminary, and said “significant changes” could occur because of late filings or corrected reports. According to the initial data, crude oil production alone declined in June year/year (y/y) to 88.86 million bbl from 90.09 million bbl and from 95.57 million bbl in May. Condensate production was down from a year ago to 10.06 million bbl from 11.22 million bbl and off from 10.91 million bbl in May. Gas well production in June was off y/y at 391.15 MMcf from 442.03 MMcf and from almost 423.20 MMcf in May. Casinghead gas, aka oil well gas, was the only category that climbed y/y to 224.06 MMcf from 219.51 MMcf, but it was down from 240.69 MMcf reported in May. Between July 2017 and June, total crude oil production in Texas was estimated at 1.146 billion bbl. Crude oil production reported by the RRC is limited to oil produced from oil leases and does not include condensate, which is reported separately. Total natural gas output between July 2017 and June was estimated at 8 Tcf, according to the data.
The Permian Could Soon Have Too Much Pipeline Capacity - The Permian could soon have too much pipeline capacity, a glut that will present problems for midstream companies. You could be forgiven for doing a double take on that sentence. There has been a lot of attention paid to the pipeline woes in West Texas, but because of the unfolding shortage, not a surplus. The flood of supply over the past few years suddenly ran up against a wall of fixed takeaway capacity in 2018. The result has been maxed out pipes, painful discounts for crude in Midland and concerns about a production slowdown sweeping over the basin. Now there is a rush to build more pipelines to load up all of that crude coming out of the ground. But with several projects in the works and set to come online essentially at the same time – late 2019 and early 2020 – the Permian could see a massive increase in pipeline capacity, hitting the market in lump-sum fashion at the same time. The Permian has around 3.1 million barrels per day (mb/d) of takeaway and local refining capacity, plus some 300,000 bpd of local refining capacity. The Permian is producing just around 3.4 mb/d, which means the pipelines are nearly full or already at capacity. Production is expected to continue to rise over the next year, although pipeline constraints could curtail output by around 200,000 to 300,000 bpd, Barclays said a few weeks ago. Still, the EIA sees the region adding around 600,000 bpd in 2019, which will be difficult for the midstream sector to digest. But over the next two years, a series of new pipelines will come online, with in-service dates scheduled close together. According to S&P Global Platts, an estimated 2.6 mb/d of pipeline capacity will come online by 2020, with a further 1 mb/d on the drawing board but lacking a timeline. With benchmark WTI trading in the upper-$60s, Permian producers that have not secured pipeline space or hedged their production are selling oil in the mid- to low-$50s. That discount should worsen over the next year until new pipelines come online. But when the wave of takeaway capacity does hit the market, the discount should narrow considerably. For that reason, most analysts still see robust production growth in the Permian
Report: Fracking Stresses Texas Water Supplies – The oil and gas industry’s thirst for water – a critical component of hydraulic fracturing – has skyrocketed, according to a Duke University report. Industry use increased by more than 700 percent between 2011 and 2016. If current trends continue, Avner Vengosh, the report’s co-author, says there could be clashes in the not-so-distant future over finite water supplies that communities rely on for drinking water, crops and livestock. Vengosh says the situation in the eastern U.S., where water is more abundant, is markedly different than western states experiencing prolonged drought. “It’s a totally different ballgame if you go to western Texas, where water is so important for the livelihood,” he points out. “And the idea that the oil and gas industry would continue to take fresh water, it could be problematic.” Vengosh says early research suggested that fracking did not require more water than other energy development. But he explains that since the production at fracked wells drops dramatically after a few months, the most economical way to extract oil and gas is to drill more wells, which requires more water. . Most of the water used for fracking is captured deep within the earth, which means it’s lost for any other use. Vengosh notes that wastewater released through the fracking process still needs to be disposed of, and the primary way to do that – through deep well injections – has been shown to cause earthquakes. “The water that you put in is not the water that’s coming out after hydraulic fracturing,” he explains. “It’s water that would be highly saline with a lot of chemicals. Some of them are toxic chemicals, some of them are radioactive.” Salts and toxic elements in the flowback water also pose contamination risks to local ecosystems from spills. While energy production currently is responsible for 15 percent of water use globally, the study notes water supplies also are diminishing at a rapid rate across the planet because of climate change and population growth.
Drowning in Dirty Water, Permian Needs $22B to Stay Afloat - -- In the dry, dusty plains of West Texas, home to America’s most prolific oil play, the problem isn’t too little water, it’s too much of it. Just ask Will Hickey, the 31-year-old chief executive officer of Colgate Energy. Standing on a 26-foot high rig platform in Texas’s Reeves County, Hickey watches as contractors maneuver drilling pipe almost 10,000 feet underground in search of oil. Just a half-mile away, another rig is equally hard at work. But this one, operated by WaterBridge Resources LLC, isn’t seeking oil. It’s making a hole to dispose of the vast amount of water generated from local wells. ‘‘If we don’t have a water solution we can’t produce the well, it’s as simple as that,’’ Hickey said in an interview. “It used to be that each operator handled water themselves. But the sheer volume of what’s now being produced has created an opportunity for specialized water companies to step in.” With fracking, explorers blast water, sand and chemicals down wells to crack open the oil-bearing shale below. As oil is pumped up, so is the water, combined with salt-laden water from underground reservoirs to create a toxic mix that would devastate farmland if released on the surface. With as many as four barrels of water produced for every barrel of oil, it’s a disposal nightmare that could add as much as $6 a barrel to company break-evens by 2025, according to a recent Wood Mackenzie study. Overall, the region will pull up enough water this year alone to cover all of Rhode Island nearly a foot deep. Wall Street is well aware of the threats posed by the Permian Basin’s pipeline and labor shortages, key side effects from the region’s rapid buildup. But investors “aren’t as well apprised of some of the other risks and challenges that could be just as material, if not more so,” said Gabriel Collins, a fellow in energy and the environment at Rice University. “I’d put water right at the top of that list," he said How material? Spending on water management in the Permian Basin is likely to nearly double to more than $22 billion in just five years, according to industry consultant IHS Markit. The reason is twofold. The rig count is rising, and many of the "workhorse" disposal formations used for decades are starting to fill up, said Laura Capper, an industry consultant. That means explorers have to move water further to find a home for it. It’s a problem "that’s just going to get bigger and bigger," said Wood Mackenzie analyst Ryan Duman, "Operators are victims of their own success."
Injecting wastewater underground can cause earthquakes up to 10 kilometers away - Earthquakes in the central and eastern United States have increased dramatically in the last decade as a result of human activities. Enhanced oil recovery techniques, including dewatering and hydraulic fracturing, or fracking, have made accessible large quantities of oil and gas previously trapped underground, but often result in a glut of contaminated wastewater as a byproduct. Energy companies frequently inject wastewater deep underground to avoid polluting drinking water sources. This process is responsible for a surge of earthquakes in Oklahoma and other regions. The timing of these earthquakes makes it clear that they are linked with deep wastewater injection. But earthquake scientists like me want to anticipate how far from injection sites these quakes may occur. We examined injection wells around the world to determine how the number of earthquakes changed with the distance from injection. We found that in some cases wells could trigger earthquakes up to 10 kilometers (6 miles) away. We also found that, contradictory to conventional wisdom, injecting fluids into sedimentary rock rather than the harder underlying rock often generates larger and more distant earthquakes.Assessing how far from a well earthquakes might occur has practical consequences for regulation and management. At first glance, one might expect that the most likely place for wastewater disposal to trigger an earthquake is at the site of the injection well, but this is not necessarily true. Since the 1970s, scientists and engineers have understood that injecting water directly into faults can jack the faults open, making it easier for them to slide in an earthquake. More recently it has become clear that water injection can also cause earthquakes in other ways. For example, water injected underground can create pressure that deforms the surrounding rock and pushes faults toward slipping in earthquakes. This effect is called poroelasticity. Because water does not need to be injected directly into the fault to generate earthquakes via poroelasticity, it can trigger them far away from the injection well. Deep disposal wells are typically less than a foot in diameter, so the chance of any individual well intersecting a fault that is ready to have an earthquake is quite small. But at greater distances from the well, the number of faults that are affected rises, increasing the chance of encountering a fault that can be triggered.
How energy companies set off earthquakes away from their waste dumps - Washington Post - Each day across the United States, 2 billion gallons of fossil-fuel-industry wastewater flies through thousands of underground tubes. The injection wells descend into porous rock, filling gaps with brine and chemicals that are the result of extracting oil and gas from the ground. The goal of the wells is for the wastewater to be out of sight, out of drinking water and out of harm’s way.Except the wells can cause earthquakes. In some cases, the quakes begin as far as 15 miles from the wells. In a new study in the journal Science, scientists describe for the first time how earthquakes can be triggered so far away from the wells. An efficient practice by the oil and gas industry is creating a ripple effect far beyond its drilling locations. Geologists have linked injection wells to quakes, with findings based on years of observation. Human-made earthquakes, though most are moderate in size, put 1 in 50 people in the United States at risk, according to a recent U.S. Geological Survey analysis. Wastewater injection wells are concentrated in Oklahoma, Texas, California and Kansas, according to the Environmental Protection Agency. “Induced earthquakes are becoming more and more of an issue in central and the eastern U.S.,” said University of California at Santa Cruz seismologist Thomas Goebel. In 2011, an injection well in Oklahoma was responsible for a magnitude-5.6 earthquake that damaged a highway, shook buildings and generated a dozen aftershocks. To figure out how there could be such a distance between well and earthquake, Goebel, along with fellow UC-Santa Cruz earthquake expert Emily Brodsky, sifted through quakes triggered by dozens of waste injection sites in several states as well as in Australia and Europe. (There are so many wells in Oklahoma they could not link an individual well to the surrounding earthquakes.) The study authors were able to identify two types of earthquakes triggered by wastewater wells, having everything to do with what kind of rock the water is being injected into.One kind of earthquake formed close to the injection well but stopped abruptly at about a half-mile from the site, Goebel said. If a well dumped its wastewater into rigid bedrock, earthquakes occurred within a close distance. There, pressure from water that spilled into a fault triggered the earthquake.The other kind had a “very long-distance tail” — the quakes could appear far from the well, with the triggers petering out only after several miles. This occurred if a well dumped its wastewater into softer sedimentary rock. This was a result of what the researchers called "poro-elasticity."
In the rural West: more oil, more gas, more ozone - “It was like flying back into Los Angeles on the worst days of the L.A. smog,” Nelson said. “There was brown haze everywhere.” A cold air inversion had trapped polluted air in the Grand Valley that encompasses the city. The 2013-2014 inversion was the worst the area had seen in recent years, but the resident activists are fearful that a growing population, a seemingly endless wildfire season, and the Trump administration’s push to expand oil and gas drilling could make those smoggy days a regular occurrence. According to data compiled by the left-leaning Frontier Group, part of the larger Public Interest Network of advocacy organizations, Grand Junction had 86 days in 2016 in which the air quality index for ozone or particulate matter registered “moderate” or higher, a designation that the air could be unhealthy for people with some respiratory conditions. That was the fourth highest in the state, and only 12 fewer such days than the much bigger city of Denver experienced the same year. But it’s not just Grand Junction: In 2013, an ozone monitor in Rangely, Colorado (population 2,400) spiked to more than 100 parts per billion (ppb), on par with levels measured in Los Angeles the same year. Over the past decade, monitors in the Upper Green River Basin in Wyoming and the Uinta Basin in Utah have registered pollution levels above the Environmental Protection Agency’s health standards, and swaths of rural Texas have seen high ozone levels. Rural monitors have also reported increases in southwestern Colorado and along the New Mexico-Texas border. Ozone doesn’t come from any one source. Rather, it’s a mix of three ingredients: nitrogen oxide pollution from motor vehicles, power plants, and industrial operations; volatile organic compounds (VOCs) from household products and other anthropogenic sources, as well as plants; and sunlight. Rural areas in the Far West have historically had fewer emission sources, and yet they have been seeing high ozone readings in the winter, when the air should be cooler and cleaner.
Colorado to vote in November on proposal to toughen oil drilling rules (Reuters) - A Colorado ballot initiative that would sharply increase the required distance between new oil wells and populated areas will go before voters in November, Colorado officials said on Wednesday. The proposal, opposed as anti-fracking by oil and gas producers, would require new projects to be at least 2,500 feet (762 m) from buildings, parks and certain wildlife areas. The state currently requires as little as 500 feet (152 m) of separation. A 2,500-foot setback would render about 85 percent of all new oil and gas development on non-federal lands in the state off-limits to drilling, according to a 2016 study by the state’s oil and gas conservation commission. Colorado Rising submitted 123,195 verified signatures to get the initiative on the ballot, above the 98,492 required, state officials said on Wednesday. A similar initiative failed to get on the 2016 ballot. The following April, two men were killed in an explosion caused by gas from an abandoned well about 170 feet (52 m) from a Firestone, Colorado, home. Supporters of the initiative say there have been 13 explosions and fires since then. “The climate in regards to oil and gas has really shifted quite a bit since the Firestone explosion,” Anne Lee Foster, a volunteer with Colorado Rising, said on Wednesday. Opponents argue the proposal would cost Colorado’s economy between $169 billion and $217 billion over the next 12 years, and reduce state and local tax revenues by between $7 billion and $9 billion. It would also affect an estimated 147,800 jobs, a July 2018 report by free-enterprise group Common Sense Policy Roundtable said. “The impact of the measure would ripple through the whole economy,” said Karen Crummy, a spokeswoman for Protect Colorado, a group backed by the oil and gas industry. “It’s just hard to conceive that the intent of this is anything other than to get rid of oil and gas development,” Crummy said.
Colorado Measure Would Make Most of State Off Limits to Drillers - Colorado voters in November will consider banning oil and gas drilling within 2,500 feet of homes, businesses and many green spaces, a move that would effectively prohibit it in most of the U.S.’s seventh largest oil-producing state. The Colorado Secretary of State’s office said Wednesday that antifracking activists had collected enough valid signatures from state voters to put the issue on the fall ballot. That sets the stage for a heated political battle in a fast-growing state where suburban development and oil and gas production have been steadily encroaching on one another, exacerbating tensions. Colorado requires oil and gas wells to be located at least 500 feet from buildings and 350 feet from recreation areas like playgrounds. The ballot initiative would increase those setbacks to 2,500 feet, or nearly a half mile. That would ban drilling on 85% of the state’s nonfederal land, according to an analysis by state regulators. “This is a ban. It’s to drive you out of the state,” Chip Rimer, a senior vice president at Noble Energy Inc., NBL -0.57% said at an industry conference in Denver this month where companies sought to underscore the measure’s possible economic impacts. If the measure passes, it would reduce state and local tax revenue by $201 million to $258 million in the first year, and result in 33,500 to 43,000 lost jobs, according to a study by the REMI Partnership, a public policy research group. Activists have campaigned for years for such limitations in Colorado, where wells commonly abut densely populated areas. Similar statewide initiatives failed to make the ballot in 2014 and 2016. Since then, however, crude production has increased 44% in Colorado, federal data show, as oil’s rebound to nearly $70 a barrel made it more economical to drill in the state. That production surge coincided with rapid population growth in the suburban communities north of Denver where drilling is most prevalent. Recent deadly explosions also have brought increased attention to the safety of oil and gas operations.
Industry Gears Up For Fight As 2,500-Foot Oil And Gas Setback OK’d For 2018 Ballot - Coloradans will now get a front row seat for one of the most contentious ballot issue battles in recent memory. On one side are environmentalists who believe the state should have more space between oil wells and homes. The other is an industry with seemingly limitless financial resources, seeking to protect the status quo. Initiative 97 — which will appear as Proposition 112 on the ballot — would increase setbacks between new wells and homes, offices, rivers and playgrounds to 2,500 feet. Current oil and gas setbacks range between 500 feet for homes and 1,000 feet for higher occupancy buildings.“We’re really looking to protect the health and safety of Coloradans from toxic benzene exposure, from explosions, from contamination of our water, from a highly dangerous industrial fracking industry,” said Anne Lee Foster with the environmental group Colorado Rising.Up until this point, it had been a difficult road for Colorado Rising. First, paid protesters harassed Colorado Rising signature gatherers and then boxes of signatures disappeared in a dispute with their canvasser. The proposal also faced opposition from Democratic Gov. John Hickenlooper and both candidates for governor, Walker Stapleton and Jared Polis. The initiative is supported by some local governments like the Boulder County Commissioners, local control groups like Broomfield Clear Air and Water and environmental groups like the Sierra Club.
Interior Adviser to Join BP After Pushing to Open National Monuments to Fossil Fuel Development -- A Department of the Interior (DOI) official who played an important role in opening public lands to fossil fuel interests has left the federal government to accept a job at BP, The Washington Post reported Monday. Former DOI Deputy Chief of Staff Downey Magallanes led the review that resulted in Secretary of the InteriorRyan Zinke's plan to shrink the Bears Ears and Grand Staircase-Escalante National Monuments in Utah by 85 and 46 percent respectively, Think Progress pointed out. "Her prior work on behalf of oil, gas and coal, her family's ties to the coal industry, and the fact that she is headed to BP all point in one direction: that she came to Interior with an agenda to promote fossil fuel development over the interest of the American public," Southern Utah Wilderness Alliance legal director Stephen Bloch told The Washington Post in an email.Documents made public in March and June confirmed that allowing access to coal, oil and gas reserves was a large part of the decision to reduce the monuments' size, as was enabling mining, Think Progress reported.Magallanes also worked on regulatory reform and offshore oil drilling, according to The Washington Post. Her father worked as a lobbyist for Peabody Energy Corp. for 14 years, according to The Hill. Magallanes met three times with BP officials between Jan. 30 and Aug. 31, 2017 while working for DOI, according to an official calendar obtained using the Freedom of Information Act. The Trump administration's ethics pledge bans former employees from lobbying either their former agencies or anyone in the executive branch for five years after departure, but anonymous sources told The Washington Post that Magallanes will work with Congress. BP has confirmed she will be part of its government affairs team.
Utah asks agency to resume permitting for pipeline project (AP) — The state of Utah wants the federal government to resume its work permitting the Lake Powell Pipeline project. Utah water officials in January asked to halt the project, worried over jurisdictional questions about whether the Federal Energy Regulatory Commission would continue to act as the permitting agency, The Spectrum reported .The state still hasn't received any answers, and attorneys for the Utah Board of Water Resources and the Washington County Water Conservancy District filed a letter Wednesday with the commission asking it to proceed."Because it is extremely important that the licensing of this critical infrastructure project for the State of Utah move forward expeditiously, UBWR and WCWCD desire to now have the procedural schedule reinstated," according to the letter.State water officials have spent more than $30 million over the past decade readying its proposals for the pipeline, which would carry water some 140 miles (225 kilometers) out of Lake Powell and across parts of Utah and Arizona to communities in Washington and Kane counties. State officials applied for the project through the Federal Energy Regulatory Commission because of proposed hydroelectric facilities that would be built along the pipeline. The water would be pumped out of Lake Powell to a high point within the Grand Staircase-Escalante National Monument area, then flow downhill toward St. George, passing through a series of hydroelectric turbines along the way. Local water managers say the pipeline is needed to keep up with growing demands for water in the fast-growing St. George area, where the population is forecast to balloon from about 165,000 today to more than 500,000 over the next 50 years. The pipeline has been the target of controversy among conservationists. It is one of a series of projects states have proposed to pull more water from the Colorado River system despite evidence that the river's supplies are overdrawn and that climate change is likely to dry the region further in the future.
Feature: Powder River Basin seems poised for an oil and gas comeback despite some drawbacks — Wyoming's Powder River Basin appears on the verge of a comeback as companies unveil plans to use horizontal drilling to further develop the play's oil and gas resources. Even as some of industry's biggest operators have shown interest in the basin recently, some of its key financial metrics appear lower on average than other areas, and experts project only a modest rise in oil production over the next five years. So what is the draw for some of industry's biggest independent producers? For one thing, the PRB offers "optionality" at a time when the giant Permian Basin in West Texas and New Mexico is struggling to provide enough output takeaway capacity, S&P Global Platts Analytics analyst Matt Andre said. "While some of the other major plays are dealing with constraints and rising differentials, the [PRB] has benefited from favorable well economics along with the promise of expanding infrastructure (in the future)," Andre said. "It's not quite the Permian, but you don't run into the oil price differential issues and land costs of the Permian, either," he said. Also, the PRB has a high oil production mix, with companies citing 60%-80%, strong initial well production rates and low acreage costs, he added. For example, Anadarko Petroleum recently said it has established a core PRB position of 300,000 gross acres at $2,500/acre. In addition, some producers "actually compare the [PRB's] economics to the Permian" which are at or near the top of US plays, Andre said. "Realistically that is probably only the top wells, but it is still interesting."
Geologists study ND sand for use in fracking | Grand Forks Herald: — North Dakota geologists are re-evaluating whether local sources of sand could be used for hydraulic fracturing as oil industry demand increases. Oil companies now use greater volumes of sand for fracking, averaging about 2,500 to 5,000 tons per well, according to the Department of Mineral Resources. Operators are interested in finding a North Dakota source of sand to save on transportation costs rather than importing it by rail, said Ron Ness, president of the North Dakota Petroleum Council. "This would be absolutely another game-changer for the Bakken," Ness said.Fred Anderson, geologist with the North Dakota Geological Survey, authored a study in 2011 that said North Dakota sand sources approach oil industry standards for use in fracking but are lower in overall quality than other U.S. sources. There's a renewed interest in that research, however, as demand for sand increases and companies experiment with lower-cost options. "They're accepting sands that we probably never would have accepted 10 to 15 years ago," said Monte Besler, owner of FRACN8R Consulting in Williston. Now the Geological Survey is conducting a second phase of research, with a focus this summer and fall on collecting sandstone samples from Billings and McKenzie counties in western North Dakota. Previously, the Geological Survey collected samples from wind-blown sands in north-central and eastern North Dakota.
"Green" California Is More Reliant On Foreign Oil Than Ever Before - There’s a growing call for California Gov. Jerry Brown to stop issuing oil and natural gas leases in the state, with some even arguing that all state fossil fuel production should be shuttered.Yet continuing the current trend of dwindling in-state crude production wouldn’t mean California stops using oil. The state, ranked as one of the “greenest” in the country, would still use lots of oil, it would just come from other countries.In fact, more than 56 percent of the crude oil received by California refineries were extracted in foreign countries, according to California Energy Commission data. California, once the third-largest oil state, is now more reliant than ever on foreign oil.The biggest share of California’s oil imports come from Saudi Arabia, which makes up 29 percent of foreign crude flowing into the state. More than 70 percent of foreign oil imports to the state come from OPEC members, including Iraq, Kuwait and Ecuador.California’s share of oil coming from foreign sources has ballooned since the late 1990s. Decades of state policies restricting drilling played a role, as did declining production in Alaska.The state legislature also completely banned new offshore drilling leases in 1994, decades after the massive Santa Barbara oil spill. Geological factors also make it expensive to pump out crude compared to other states.While environmentalists have chastised California for its oil production, the state’s eschewing of crude extraction has contributed to its increased reliance on foreign oil. California’s oil production has fallen 56 percent since 1985, according to state data. Much of that is being replaced by oil imports from countries without the same level of environmental and public health protections that U.S. agencies require.
What If There Isn't Enough Energy Going Forward? - Currently the media is breathlessly cheering the record amounts of US oil production. Stories like this one get top billing on major news websites:Texas Gulf Coast exports more oil than it imports for the first time (CNN) It's a big achievement that highlights a surge in US oil exports, and that shows how the shale boom can make America less reliant on foreign oil. Texas is the epicenter of the shale revolution, with soaring production in the oil-rich Permian Basin leading the United States to record output. Texas is now on track to produce more oil than either Iran or Iraq. That would make Texas No. 3 in the world if it were a country. Sounds pretty wonderful, right? Technology advances in the fracking process have enabled the "shale miracle", resulting in the US producing over 10 million barrels per day for the first time since the 1970s. Think of all the incremental GDP growth that excess oil will power! If these trends continue, CNN goes on to tell us, the US will become an net energy exporter soon: The gap between oil imports and exports shrank to a 24-year low of 6.8 million barrels per day in 2017, according to the EIA. Even though the economy is stronger, US oil imports fell to 7.8 million barrels per day in May. That's down from more than 9 million barrels per day as recently as mid-2012. OK, let's take a moment to conduct a little reality-check of the hype. First off, notice how the CNN article above mentions that the US is still importing 7.8 million barrels per day. That's not much less that the record levels we're currently extracting from our own soil. So domestic oil production would have to nearly double from here to turn the US into a net oil exporter. Translation: we're not weaning ourselves off of foreign oil anytime soon, under the best of conditions.Next, a key assumption the shale cheerleaders are making is that current output trends will continue. That shale basins like the Permian will yield increasing volumes of crude from here well into the future.As petroleum geologist Art Berman has explained to us in numerous podcasts, shale oil (called "tight oil") wells deplete very differently than conventional oil wells. Oil extraction from a conventional well over time follows a bell curve (left), where it takes roughly as many years as it did to the hit the apex of production as it does for the well to peter out. Shale wells on the other hand, deplete on a hyberbolic curve (right). Roughly 80% of a shale well's total output is exausted by the end of Year 2(!):
Canada could use oil as a weapon in a trade war: Expert – CNBC interview- John Kilduff of Again Capital discusses the impact of trade uncertainty with Canada on oil markets.
Mega-Fracking Brings Big Jump in Industry Water Use - The water used by North America’s controversial fracking industry has dramatically increased since 2011 as the industry “supersizes” its oil and gas wells. A new study in the journal Science Advances found water use per well has jumped by 14 to 770 per cent. This has “serious implications” for communities which will face increasing water demands from the industry, researchers warned. The production of highly saline wastewater has also increased significantly, according to the study, which looked at water use in six different shale basins in the U.S., including the Permian and the Marcellus. The Permian Basin, which sprawls over the deserts of west Texas and New Mexico, reported the largest increase in water use, from 4,900 cubic metres per well in 2011 up to 42,500 cubic metres per well. The current consumption for fracking one well is the equivalent of the water used in a year by more than 425 Greater Vancouver residents. Canadian fracking operations can use between 10,000 and 80,000 cubic metres in the Montney and Duvernay formations in Alberta and northeastern B.C. — among the most water intensive shale formations in the world. One frack job in Canada triggered a 4.6 earthquake in British Columbia by injecting more than 160,000 cubic meters of fluid into a well in 2014. To accommodate growing water demands in northeastern B.C. the industry built as many as 92 unauthorized dams to impound water for use in fracking. The BC Oil and Gas Commission didn’t regulate the activity until Ben Parfitt reported on the dams. Only a small fraction of the fresh water injected into a fracked shale formation ever comes back to the surface. Most of the water that returns to surface is highly saline and can contain radioactive material. It is expensive to treat and often disposed in deep injection wells. There are 200 such wells in northeastern B.C., for example.Accurate and complete figures for the industry’s wastewater production in Canada aren’t readily available.
Court Quashes Canadian Approval Of Trans Mountain Oil Pipeline (Reuters) - A Canadian court on Thursday overturned approval of the Trans Mountain oil pipeline expansion, ruling that Ottawa failed to adequately consider aboriginal concerns, putting the future of the C$7.4 billion ($5.71 billion) project in jeopardy. The decision is a blow to Prime Minister Justin Trudeau's government, which agreed in May to buy the pipeline from Kinder Morgan Canada for C$4.5 billion, and to the country's oil sector. Oil producers say the expanded pipeline is needed to address bottlenecks that have sharply reduced prices for their heavy crude. The Federal Court of Appeal ruled that the National Energy Board (NEB) regulator wrongly narrowed its review of the project to exclude related tanker traffic. Since that is a major concern of some aboriginal people, the federal government therefore was not seen to have adequately consulted First Nations, as required by law, said Andrew Leach, associate professor of business economics at University of Alberta. "The big takeaway is the duty to consult (indigenous people) is still the most important step in any major project," Leach said. Trudeau has portrayed himself as a friend to aboriginal people and tried to build national support for a carbon emissions reduction plan, even while backing Trans Mountain to support the oil industry. “Thankfully, the court has stepped in where Canada has failed to protect and respect our rights and our water," Coldwater Indian Band Chief Lee Spahan said in a statement. "Our members will be hugely relieved.” Trudeau's Finance Minister, Bill Morneau, said he would speak about the decision on Thursday afternoon. Canada has the option to appeal the ruling to the Supreme Court. The court's ruling is likely to amplify sentiments expressed by oil producers, such as Suncor Energy Inc, that they would hold off on further major investments in Canada's oil patch until regulatory challenges abated.
Stunning Victory for Indigenous Nations as Canada Halts Trans Mountain Pipeline Expansion - A Canadian court "quashed" approval of the Trans Mountain pipeline expansion on Thursday, a major setback for Prime Minister Justin Trudeau, whose government agreed to purchase the controversial project from Kinder Morgan for $4.5 billion Canadian dollars (U.S. $3.5 billion) in May.It's a stunning victory for Indigenous groups and environmentalists opposed to the project, which is designed to nearly triple the amount of tar sands transported from Alberta to the coast of British Columbia.The Federal Court of Appeal ruled that the National Energy Board's review—as explained by the Canadian Press—"was so flawed that the federal government could not rely on it as a basis for its decision to approve the expansion."The project has been at the center of widespread protests from environmental groups and First Nations ever since November 2016, when Trudeau approved a $7.4 billion expansion of the existing Trans Mountain pipeline that would increase the transport of Alberta tar sands oil from the current 300,000 barrels per day to 890,000 barrels per day and increase tanker traffic nearly seven-fold through the Burrard Inlet.Specifically, the court said it was an "unjustifiable failure" that the National Energy Board did not consider the environmental impacts of the increased tanker traffic.The court additionally concluded that the government "fell well short" with properly consulting with the Indigenous groups involved in the case, including the Tsleil-Waututh and Squamish on British Columbia's south coast.The ruling will force the National Energy Board to redo its review of the pipeline and the government to restart consultations with the Indigenous groups. It also means that the construction that has already began in central Alberta must cease.In effect, the court has halted the 1,150-kilometer project indefinitely and it will remain in "legal limbo until the energy regulator and the government reassess their approvals to satisfy the court's demands," CBC wrote about today's decision.
Five things about the Trans Mountain pipeline ruling - The Federal Court of Appeal on Thursday released its long-anticipated decision on the Kinder Morgan Trans Canada pipeline. The ruling pleased environmentalists and other anti-pipeline protesters, and shocked proponents of the project such as business and trade organizations. Here are five key details: The Federal Court of Appeal quashed approval of the $9.3-billion Trans Mountain oil pipeline expansion on two grounds. First, the court found Canada had inadequate consultation with First Nations at the final stage, concluding Ottawa “failed to engage dialogue meaningfully and grapple with the real concerns of the Indigenous applicants so as to explore possible accommodation of those concerns.” Second, the scope of the review “unjustifiably” did not include project-related tanker traffic, even though the National Energy Board was “legally obligated” to consider environmental effects. “The unjustified exclusion of project-related marine shipping from the definition of the project rendered the board’s report impermissibly flawed,” the court ruled. The pipeline is owned by U.S. and Canada-based Kinder Morgan Ltd., but the federal Liberal government announced in the spring it’s plans to buy Trans Mountain and Kinder Morgan Canada’s core assets for $4.5 billion to ensure the oilsands pipeline expansion gets built. Also on Thursday, Kinder Morgan’s shareholders voted more than 99 per cent in favour of the sale to Ottawa. The court decision was clear that Ottawa must re-do its consultations with First Nations before the project can be considered for approval again. Morneau said his government will review the court’s decision and will “respond promptly,” but added it was too soon to comment on whether Ottawa would appeal. Premier John Horgan said Thursday that the ruling vindicates the criticisms that the National Energy Board approval process was flawed because, in part, marine traffic was not adequately considered. He said it was a good day for the Tsleil-Waututh and other First Nations who mounted this fight. When asked if the pipeline project is dead, he said it will no longer be “top of mind for British Columbians.” Alberta Premier Rachel Notley, with whom Horgan has vehemently disagreed about this pipeline, waited until Thursday evening to make a live broadcast to her constituents. Political analysts in Alberta predicted the ruling will be disastrous for Notley’s NDP, and could have a major impact on the provincial election less than a year away. The Union of B.C. Indian Chiefs applauded the ruling, and demanded the pipeline be shutdown immediately, even though some First Nations were supporters of the project. Environmental groups celebrated the decision because it requires new consultations with First Nations and new environmental assessments. The cities of Burnaby and Vancouver both oppose the pipeline, and Vancouver Mayor Gregor Robertson on Thursday hailed the court’s conclusion because the project “put our coast at huge risk of oil spills.”
Alberta pulling out of federal climate change plan until pipeline construction resumes --In the wake of the Federal Court's bombshell decision to quash cabinet approval of the Trans Mountain expansion project, Alberta Premier Rachel Notley is pulling her province out of the national climate change plan. Citing inadequate consultations with Indigenous peoples, Justice Eleanor Dawson nullified licensing for the $7.4 billion project Thursday, halting construction only days after shovels hit the ground on the 1,150-km project.Notley said until construction restarts, Alberta will not be party to the pan-Canadian climate framework negotiated by Prime Minister Justin Trudeau and the provinces.The court ruling was a major victory for some B.C. Indigenous peoples and environmentalists — who have long opposed twinning the pipeline — and a nightmare scenario for Alberta's oil patch, which was counting on a new line to tidewater to help fetch world prices for Canadian crude."As important as climate action is to our province's future, I have also always said that taking the next step, in signing on to the federal climate plan, can't happen without the Trans Mountain pipeline," Notley told reporters Thursday. "So today I am announcing that with the Trans Mountain halted, and the work on it halted, until the federal government gets its act together; Alberta is pulling out of the federal climate plan," she added. "And let's be clear, without Alberta that plan isn't worth the paper it's written on."
Is This North America's Next PetChem Hub? - Alberta is poised to find a booming market supplying petrochemical companies from its natural gas shale fields -- and cost-competitive enough to potentially take away some of the U.S. oil and gas market's share. . Alberta sees real potential in mov-ing beyond the primary use of its extracted oil and gas -- such as motor fuels, heating, and power genera-tion -- into petrochemicals used in plastics, fertilizer, fuel, and other products. That's been the case in the U.S., especially in the south. Since 2010, U.S. Gulf Coast shale fields have gen-erated $194 billion in capital investments to build or expand chemical plants. As for Alberta, a real competitive advantage will be charging prices that are about one-third the cost in the U.S. In land-locked Alberta, the province expects that its low prices will attract investors willing to spend billions to expand the Canadian petrochemical market and reach buyers around the world. The province has been supporting diversifying its oil-based economy for the past two years. In 2016, Alberta initiated incentives supporting petrochemical plants. Two projects have been approved to share C$500 million in royalty credits. One of them, Inter Pipeline Ltd, is investing C3.5 billion ($2.7 billion) to build a petrochemical plant near Edmonton. In June, Alberta solicited bids in a second subsidy round for petrochemical plants. Alberta's Athabasca oil sands (or tar sands) have become a major supplier of petroleum and natural gas to global markets such as the U.S. Canadian oil has become vital to the U.S. reducing imports from OPEC. Canada supplied 40 percent of U.S. oil imports in 2017, reports the U.S. Energy Information Administration. A partnership between the two countries to expand Canada's oil and gas reserves in Alberta has been slowed down again. Efforts over the past decade to build the Keystone XL pipeline to refine tar sands by shipping them through the pipelines between Alberta and U.S. facilities has hit another legal snag. It could delay pipeline construction yet again.
Mexican Pemex's oil output falls 145,000 b/d on year in July amid declines at aging fields — Mexican state oil company Pemex said Monday its oil production dipped 5,400 b/d month on month to 1.840 million b/d in July, and was down 145,000 b/d year on year, due to a decrease in production at mature fields in southern Mexico. Pemex's production has been in constant decline since peaking at 3.4 million b/d in 2004. The company is still mainly responsible for Mexico's oil and gas output as no significant production has been added by private companies since the country ended its state monopoly over the energy sector in December 2013. Production at shallow water fields offshore Tabasco in southern Mexico was down 53,800 b/d year on year at 304,200 b/d in July. Xanab is Pemex's largest field in this region; output there fell 41,900 b/d on year to 120,500 b/d in July. Xanab began production in 2010 and peaked at 175,100 b/d in May 2017. The field still has over 236 million barrels of 2P reserves, according to Mexico's National Oil Commission, and Pemex awarded contracts in the first half of the year to install a new pipeline sand platform in the field. Pemex has said it expects to increase production towards year end to 1.95 million b/d by fast-tracking the development of heavy oilfield complexes Ek-Balam and Ayatsil-Tekel-Utsil in H2. Both groups of shallow water fields are located in Campeche Bay along with the giant Ku-Maloob-Zaap or KMZ and Cantarell complexes. KMZ is Mexico's largest producing asset, responsible for almost half of the country's output. Its production remained stable on month at 876,700 b/d in July, and was up 6,000 b/d on year. The complex is expected to begin terminal decline next year. Pemex plans to reopen a closed well and enhance oil recovery techniques such as water injection at onshore fields like San Ramon and Blasillo in a bid to boost output. Its onshore oil output in southern Mexico fell 42,200 b/d to 227,400 b/d in July. The company's most substantial decrease was for light crude, which fell 148,165 b/d on year to 563,600 b/d in July, impacting the utilization rate at its simple configuration refineries in Mexico.
Mexico’s New Government May Halt Oil Auctions Indefinitely -Mexico’s incoming government is considering indefinitely suspending auctions for oil and gas projects, and giving state-owned Pemex authority to pick its own joint-venture partners rather than holding competitive tenders, according to policy guidelines seen by Reuters. The document, drafted by energy advisers to leftist President-elect Andres Manuel Lopez Obrador, also recommends forging closer ties with leading oil producer cartel OPEC while withdrawing from the International Energy Agency (IEA), which represents the interest of oil-consuming countries. Lopez Obrador aims to boost Mexico’s oil production by a third to 2.5 million barrels per day as well as increase very low refinery processing rates and build at least one new refinery.
Mexico’s Dramatic Energy Reform - Mexico is considering a dramatic policy shift, inserting the state into the energy sector in a major way while also flirting with the idea of moving closer to OPEC.A document seen by Reuters, drafted by advisors to incoming Mexican president Andres Manuel Lopez Obrador (AMLO), proposes withdrawing Mexico from the International Energy Agency (IEA) and moving closer to OPEC.The proposal also calls for scrapping future oil and gas auctions, which would close off Mexico’s oil and gas reserves to international companies beyond what was already awarded. Unlike previous reports, which suggested that AMLO’s government might suspend auctions for two years, the document seen by Reuters calls for an indefinite suspension of new auctions.The move would be a nearly 180-degree turn from the current government of President Enrique Pena Nieto, whose legacy will be defined at least in part by the reforms and partial privatization of Mexico’s energy sector, while stopping short of complete reversal, which would require constitutional changes. Over 100 contracts were inked with international oil and gas companies, and Pena Nieto’s government has said those will pave the way for tens of billions of dollars’ worth of investment.Instead of greater in volvement from oil and gas multinationals, Pemex would return to its former role as the central pillar in Mexico’s energy industry. The state-owned oil company held a monopoly over the country’s oil and gas reserves for seven decades, but has been bogged down under a massive pile of debt. AMLO wants to inject new life into the company and elevate it back into a powerful position, acting somewhat as a gatekeeper for the country’s energy sector by having the ability to make its own decisions about joint venture partners.
Mexico's New President To Deal Blow To Oil Industry --- Mexico will likely halt oil auctions for at least two years, dealing a blow to its oil industry. Mexico’s president-elect Andres Manuel Lopez Obrador (AMLO) will reportedly suspend oil auctions for at least two years, according to the Wall Street Journal, with some experts believing that his administration won’t hold any new oil auctions at all during his six-year term. He has also vowed to review the 107 contracts already awarded to companies through auctions over the last few years to check for corruption, although he has said he would not try to invalidate them so long as they check out.Also, AMLO wants to revise some of the energy laws that govern the oil and gas sector, which could dramatically alter the landscape for foreign oil and gas companies. He long opposed the historic reforms that ended seven decades of state control over the energy sector, although he moderated his position during this year’s presidential campaign. Rolling back the reforms would be exceedingly difficult, requiring a change to the country’s constitution.Instead, AMLO wants more modest, though still significant, legislative changes. The WSJ reports that he will pursue legislative tweaks that bolster the power of state-owned Pemex, while weakening the regulatory body that has pursued a technocratic approach and presided over the oil auctions over the last three years.AMLO’s desired changes include allowing Pemex to choose its own private-sector partners, without needing the approval from regulators. Current rules require Pemex to partner with the highest bidder for blocks put up for a farm-out. He wants the government to be able to award Pemex with oil blocks directly. And he wants to make Pemex the sole marketer of oil produced by private firms, the WSJ reports.These changes would amount to a partial rollback of the energy reforms, re-empowering Pemex and government control over the oil sector. Moreover, as president, AMLO chooses the head of Pemex, granting him a lot of leverage over the company.
Venezuela's main oil port partially operating after tanker hits dock - (Reuters) - Venezuela’s main oil port of Jose is operating partially after a tanker collided with a dock at the weekend, curtailing state-run PDVSA’s ability to export upgraded crude and receive imported diluents, three sources with knowledge of the incident said on Tuesday. PDVSA has been struggling this year to deliver exports on time to most customers because of falling oil output, legal actions by creditors aimed at seizing overseas assets and U.S. sanctions. In July, Venezuela’s crude production fell to its lowest level in over 60 years. Crude exports from Jose were running earlier this year at about 900,000 barrels per day (bpd), according to Thomson Reuters data. Some 60,000 bpd of naphtha imports, which is used to dilute Venezuela’s extraheavy crude for export, also are received at the terminal. The collision shut the South dock, one of Jose Offshore Platform’s three oil berths, East, West and South, used to ship crude from the Orinoco Belt, Venezuela’s main producing region, and to discharge imported diluents, the sources said. Jose also has two monobuoy systems, which continue operating normally. The South dock was refurbished in 2016. The Greek-flagged tanker Meganisi was bringing imported heavy naphtha from the United States when it struck the dock, one of the sources said. PDVSA did not immediately reply to a request for comment. It was unclear how long it will take to repair the damage.
In Brazil, Equinor Aims To Repeat Norway's Oil Boom (Reuters) - Norway's Equinor will invest up to $15 billion in Brazil over the next 12 years to develop oil, gas and renewable energy sources, the company said on Wednesday. Coinciding with an expected drop in output from many ageing oilfields off the cost of Norway, Brazil is expected to become a core region for Equinor as the firm takes advantage of the country's opening in recent years to more foreign investment. The company plans to raise its Brazilian output to between 300,000 and 500,000 barrels of oil equivalent per day (boepd) by 2030, from 90,000 boepd today by developing new fields, including the giant Carcara discovery. "Brazil is a perfect match for Equinor with our operational, technical competence that we have built over decades on the Norwegian continental shelf," said Anders Opedal, Equinor's head of operations in the South American country. The Norwegian oil and gas company has already invested around $10 billion in Brazil since 2001, acquiring stakes in a variety of discoveries and fields. Carcara, estimated to hold similar volumes of oil as Norway's 2.2 billion-3.2 billion barrels Johan Sverdrup discovery, is expected to start production in 2023-24, making it the first time a foreign firm operates a so-called pre-salt field. "We call Carcara our new Johan Sverdrup ... Our portfolio in Brazil will have high value, we see very good break-evens," Opedal said, referring to the oil price levels at which Equinor expects to earn a profit. The Equinor-operated Peregrino II development is on track to start production at the end of 2020, with its break-even price reduced to below $40 a barrel versus the original estimate of $70, he added. Equinor last year took a 25 percent stake in the Roncador field, aiming to boost output by around 500 million barrels over the lifetime of production, equivalent to the size of Equinor's Johan Castberg field in the Barents Sea. The Norwegian company now plans a multi-year drilling campaign to firm up its Brazilian resources, exploration chief Tim Dodson told Reuters on the sidelines of an energy conference.
Fall of the 'Frack Master': apostle who briefed parliament lands in jail - The self-appointed evangelist of the Texas fracking boom launched into a jargon-laced monologue, prompting the chairman of the UK parliament’s Welsh affairs committee to request he speak in plain English. “We’re not technical animals here, most of us,” said David TC Davies, Conservative MP for Monmouth. “So you may need to imagine you’re explaining it to somebody who doesn’t have a scientific oil background.” Chris Faulkner, an intense, balding, bearded figure in a charcoal suit and blue tie, leaned forward and continued. He spent 40 minutes educating MPs about his state’s embrace of hydraulic fracturing, including the marvel of horizontal drilling in urban areas. “We’ve drilled … underneath downtown Fort Worth, underneath hospitals, schools,” he said. In the autumn and winter of 2013, the so-called “Frack Master” was one of 16 witnesses who appeared before the committee, which was considering the economic and environmental impact of drilling potentially thousands of shale gas wells. “Thank you for your answers and general enthusiasm,” Davies told him. In June 2014, the MPs issued a cautiously supportive report that cited Faulkner five times.But Faulkner was not in fact much of a “technical animal” with a “scientific oil background”. According to the US government, he is a fraudster who ran an investment scam worth between $60m and $80m. Hosting websites for oil and gas companies was Faulkner’s only experience with the energy sector before 2009, federal authorities claim. In the mid-2000s, he was an internet entrepreneur listed as the president of a website that sold adult movies and a company called Porn Toys Corp. In June this year, Faulkner was arrested by federal agents as he attempted to board a flight from Los Angeles to London. Charged with securities fraud, mail fraud and illegal monetary transactions, he could face decades behind bars. Deemed a flight risk, he is currently detained in a Texas prison.
Russian gas supplies to Europe up in August, prices remain competitive— Russian gas supplies to Europe and Turkey rebounded in August, according to data released Thursday by gas giant Gazprom, after a dip the previous month during the planned outage of the main Nord Stream gas pipeline to Germany. According to preliminary data cited by Gazprom CEO Alexei Miller, Gazprom's sales in the "Far Abroad" -- Europe plus Turkey but not the countries of the former Soviet Union -- are set to amount to 133.3 Bcm in the first eight months of 2018. Miller, cited by news agency Prime, said supplies in the January-August period were set to rise 5.6% -- or 7 Bcm -- from the same period of 2017. According to S&P Global Platts calculations, this means August supplies are expected at 16.2 Bcm, or an average of 523 million cu m/d. This is the highest monthly average since April, meaning Gazprom gas remains in high demand for power generation and for storage injection in Europe. Gazprom's sales in Europe and Turkey in July averaged 513 million cu m/d, according to Platts' calculations, as the gas giant made up for the two-week Nord Stream outage by selling gas from its European storage facilities and increasing flows via Ukraine. Gazprom supply data classify volumes sold to customers, including from storage, not just physical export volumes. Gazprom's supplies to the Far Abroad hit a new record high of 194.4 Bcm last year, and are on track to break through the 200 Bcm level if current supply rates are maintained. Miller said last month supplies to Europe and Turkey were set to reach the maximum foreseen in all of its contracts combined this year and that total sales could reach "205 Bcm or more." OIL-INDEXED GAS VS But pricing will likely be the most significant factor in determining how much Russian gas is sold in Europe and Turkey over the remainder of 2018. Prices on the main European gas hubs have risen sharply in recent weeks, with the Dutch TTF day-ahead and Q4 prices moving above Eur26/MWh. This means Russian gas with oil indexation -- which still plays an important role in many long-term European gas supply agreements with Gazprom -- remains competitive versus the hubs despite rising sharply itself, according to Platts estimates and the current forward curve.
The Bullish Case For Gas In Europe - European natural gas pricing is amongst the highest seen in recent years, as unseasonably high demand and the long-term ramifications of the pan-European cold snap are priced into the European market.Whilst analysts and traders alike anticipate a strong demand ahead of the coming heating season (Bloomberg), this article is primarily concerned with the overall tightness of the European natural gas market.In contrast to previous years, the Day Ahead price across European hubs has remained strong throughout the summer months, largely due to the previous uncharacteristically cold winter. The past European heating season was amongst the coldest in recent history, with European domestic gas demand responding accordingly, draining natural gas storage facilities throughout Europe. When temperatures eventually recovered, natural gas demand remained robust throughout Europe in order to replenish the storage which had been depleted throughout the cold weather, providing an unseasonably bullish sentiment across the European market. Following this, a pan-European heatwave exacerbated demand throughout July and August, although European LNG still traded at a substantial discount to Asian LNG pricing. The determination of wholesale market prices of natural gas within Europe has historically been driven by two factors; European LNG imports and flexible oil-indexed pipeline gas from Russia and Norway above take or pay levels. Whether LNG imports or Russian gas acts as a price setter within Europe is typically dependent on Asian hub prices. As a rule of thumb, as Asian and European hub pricing diverges, LNG cargoes are drawn away from Europe by arbitrageurs, leaving Russian and Norwegian pipeline gas, indexed to oil or oil products, to act as the price setter. Conversely, weakness in Asian hub pricing pushes LNG cargoes into Europe, displacing pipeline gas as the price setter for marginal supplies in Europe.
Equinor considers constructing a floating wind farm to power North Sea oilfields -- Norwegian energy powerhouse Equinor is investigating the possibility of building a floating offshore wind farm to power oilfields in the North Sea. In a statement Tuesday, the business — formerly known as Statoil — said the project could cut carbon dioxide emissions by over 200,000 tons each year. Equinor said that preliminary capital and development expenditures on the project amounted to around 5 billion Norwegian krone ($602.2 million).
The idea being explored is the creation of an 11-turbine wind farm modeled on Hywind, Equinor's floating offshore wind concept. The world's first floating wind farm, Hywind Scotland, started to send electricity to the Scottish grid last October.The new concept, called Hywind Tampen, would have a combined capacity of 88 megawatts. It's estimated it would meet around 35 percent of the yearly power demand at the Gullfaks and Snorre oilfields."Reducing the use of gas turbines by supplying platforms with power from floating offshore wind is a challenging and innovative project," Pal Eitrheim, executive vice president for New Energy Solutions at Equinor, said. The Gullfaks oilfield is owned by Equinor, OMV and Norway's state-owned Petoro, according to Reuters. The Snorre field is owned by Equinor, Petoro, ExxonMobil, Idemitsu, DEA and Point Resources.
Iran Urges EU To Provide More Oil Purchase Guarantees - Iran’s Foreign Minister has reminded the European Union that Iran is still waiting to receive guarantees that the EU will continue to buy Iranian oil even after U.S. sanctions kick in on November 4, Reuters reports, citing the Iranian Students’ News Agency.Mohammad Javad Zarif said, “We are still waiting for Europe to take action on the sale of Iranian oil and the preservation of banking channels,” highlighting once again the tough choice the European Union is facing. Some, such as President Trump’s national security adviser John Bolton, have put it bluntly: the EU must choose between Iran and the United States. Yet the EU seems loath to make such a crude choice and is trying to maneuver between the two.After triggering legislation known as the blocking statute, which effectively prohibits European companies from complying with third-party sanctions, the EU last week approved an aid package of about US$21 million (18 million euro) for Iran to mitigate the effect of the U.S. sanctions. The package is part of a bigger one to the tune of US$58 million (50 million euro) in a bid to stop Iran from dropping the nuclear deal.Zarif, however, rejected any suggestion that the aid package had anything to do with the nuclear deal: “This is a package that will help both sides have communication with each other and it doesn’t have anything to do with the nuclear agreement and other hype,” he said.Keeping its oil export channel to Europe open is almost as important for Iran as keeping exports to China and India. The matter is quickly becoming urgent as Iraq and Saudi Arabia eye Iran’s market share in Europe and taking over it. An earlier Reuters report this month cited shipping data, which revealed that Iranian oil shipments to Europe had fallen by 35 percent since the start of the year, to 415,000 bpd, while Saudi exports to the EU had doubled and Iraqi shipments had added 30 percent.
Can The U.S. Bring Iranian Oil Exports To Zero? - The U.S. wants Iran’s oil exports to drop to zero, according to a recent statement by National Security Advisor John Bolton. The question is: can the U.S. pull it off?The pressure has been on Iran’s customers since May, to cut their purchases of Iranian oil and freeze out the oil producer, OPEC’s third largest, from the world oil market. The U.S. is re-imposing sanctions on Iran following the U.S. withdrawal from the 2015 nuclear deal, and has threatened secondary sanctions on any country that continues to buy oil from Iran.The campaign has proven effective thus far. In the first half of August, Iran’s oil exports fell by 600,000 bpd, plunging from 2.32 million bpd to 1.68 million bpd. Iran’s exports have been falling all year, and reached their lowest level in four months by July, before taking a real plunge in August.Major customers, including South Korea, have suspended imports. China, despite some defiant posturing in the face of U.S. challenges, scaled back its purchases. While China has given no sign that it will comply with the U.S. directive, reports indicate that it is willing to at least halt any increase in Iranian purchases after sanctions are re-imposed on November 4. But the big cuts were by India, Iran’s second-largest importer, which reduced its purchases from Iran from 706,452 bpd to 203,938 bpd during the August 1-16 period. India has been trying to keep a middle-ground between the U.S. and Iran, as it navigates the new sanctions regime while still preserving access to cheap Iranian oil and gas imports. India imports 80 percent of its energy and Iran is its third-largest supplier. Trade links between Tehran and New Delhi have strengthened in the last several years, but now India faces considerable pressure to cut its ties with Iran as the U.S. seeks to reduce Iranian oil exports to zero. Iran has offered cargo insurance and freedom to use Iranian tankers to India as a way of enticing it to keep buying. If India were to comply with U.S. sanctions, Iran’s oil exports would fall to around 1.5 million bpd. Reports indicate India doesn’t want to cut its purchases completely, and that like China it will continue buying Iranian oil. But India may pivot towards new sources of supply, including American crude, to make up the difference.
Iran says it has full control of Gulf and U.S. navy does not belong there - (Reuters) - Iran has full control of the Gulf, and the U.S. Navy does not belong there, the head of the navy of Iran's Revolutionary Guards, General Alireza Tangsiri, said on Monday, according to the Tasnim news agency. The remarks come at a time when Tehran has suggested that it could take military action in the Gulf to block oil exports of other regional countries in retaliation for U.S. sanctions intended to halt its oil sales. Washington maintains a fleet in the Gulf which protects oil shipping routes.Tangsiri said Iran had full control of both the Gulf itself and the Strait of Hormuz that leads into it. Closing off the strait would be the most direct way of blocking shipping."We can ensure the security of the Persian Gulf and there is no need for the presence of aliens like the U.S. and the countries whose home is not in here," he said in the quote, which appeared in English translation on Tasnim.Tension between Iran and the United States has escalated since President Donald Trump pulled out of a 2015 nuclear deal between Iran and world powers in May and reimposed sanctions.Senior U.S. officials have said they aim to reduce Iran's oil exports to zero.Iran's Supreme Leader Ayatollah Ali Khamenei, the most senior authority in the Islamic Republic, said last month that he supports the idea that if Iran is not allowed to export oil then no country should export oil from the Gulf.
Confusion Looms As Iran Claims Control Over Key Oil Waterway - A Reuters headline early Monday sparked fears that Iran could be in control of the Strait of Hormuz, a key narrow waterway in the Persian Gulf through which about one-third of the global supply of oil passes. Reuters reported in its story headline, Iran says it has full control of Gulf and U.S. navy does not belong there, while citing the head of the navy of Iran's Revolutionary Guards (IRGC), General Alireza Tangsiri.According to the report, "Tangsiri said Iran had full control of both the Gulf itself and the Strait of Hormuz that leads into it," and further cited the general as saying, "Closing off the strait would be the most direct way of blocking shipping". "We can ensure the security of the Persian Gulf and there is no need for the presence of aliens like the U.S. and the countries whose home is not in here," General Alireza Tangsiri said in the quote, which appeared in English translation via Iranian state media. This sparked subsequent reporting that Iran had effectively blocked the strait; however, a FOX story noted, "A check of conditions on MaritimeTraffic.com on Monday showed that conditions appeared to be normal, with heavy maritime traffic through the strait." Secretary of State Mike Pompeo responded Monday night: "The Islamic Republic of Iran does not control the Strait of Hormuz. The Strait is an international waterway. The United States will continue to work with our partners to ensure freedom of navigation and free flow of commerce in international waterways."But the elite IRGC naval commander's words are likely to raise tensions with Washington further, after prior remarks from both President Rouhani as well as other IRGC generals in early July suggesting that should White House sanctions seek to devastate Iranian oil exports, then no oil at all should pass through the area. The Monday statement from General Tangsiri appears to be a reaffirmation Iran's prior position of possessing sole "rights" over the strait. The United States for its part, has maintained a fleet in the Gulf seeking to protect oil shipping lanes even as Iran has ratcheted up military "show of force" exercises of late.
OPEC to discuss compensating for Iranian supply drop after U.S. sanctions (Reuters) - OPEC will discuss in December whether producers can compensate for a sudden drop in Iranian oil supply after U.S sanctions against Tehran start in November, the head of Iraq’s state-oil marketer SOMO, Alaa al-Yasiri, told Reuters on Wednesday. Yasiri said a sudden drop in Iran oil exports will have a negative impact on prices and market fundamentals. “A sudden drop in Iranian crude shipments from the market will cause big shortages and a negative impact on oil prices,” he said, referring to a possible increase in prices. “It’s very difficult to predict what’s going to happen in next OPEC meeting but producers must find ways to make up for Iranian crude that the market will lose.” “The major issue during next OPEC meeting will be are producers really ready to pump more oil to compensate Iran’s share,” he added. Iraq has resumed crude shipments to Iran from its Kirkuk oil fields following a few days stoppage due to logistical issues, he said, adding that so far Iraq had only shipped 500,000 barrels and hopes to ship a total of 1 million before the November U.S. sanctions against Iran kick in. SOMO is studying a request from Jordan to resume crude supplies of 10,000 to 15,000 barrels per day via trucks, Yasiri said, and the Jordanian energy minister is expected to visit Baghdad to finalize the deal. Iraq’s August crude oil exports are nearing 3.595 million barrels per day, the SOMO chief said. Saudi Arabia and Russia have recently increased crude supplies, but it hasn’t affected the market because customers needed the extra barrels, he said. Analysts have been uncertain about Iraq’s ability to raise production quickly, amid investment constraints and hold-ups that have seen Royal Dutch Shell Plc exit one of the country’s biggest oil projects.
OPEC, non-OPEC seek to formalize oil policy coordination: draft charter (Reuters) - OPEC and non-OPEC oil producers will aim to formalize their long-term cooperation later this year by approving a charter that will make possible further joint action on output, according to a draft charter seen by Reuters. Russia and several other non-OPEC countries have joined OPEC producers in reducing oil output since 2017 in a move that has helped raise oil prices to $80 per barrel from less than $30. Moscow and Riyadh have said they want to maintain a close level of cooperation even after the oil market stabilizes and the current output reduction deal expires. The draft charter, to be discussed by OPEC and non-OPEC minister later this year, said its fundamental objective is to coordinate policies aimed at stabilizing oil markets in the interest of producers, consumers, investors and the global economy. The charter also aims to promote better understanding of oil market fundamentals among participants as well as to promote oil and gas in the global energy mix for the long term. It said ministers of participating countries shall meet once a year while experts should meet twice a year. The ministers shall propose actions including possible summits by heads of state. The charter’s secretariat will be hosted by the OPEC secretariat in Vienna but will be independent.
Iraq ready to boost oil exports once OPEC gives green light = Iraq sees a need to increase crude exports and says it’s ready to ship more as soon as OPEC agrees how members will share a collective supply boost, according to the acting director-general of the state-run Oil Marketing Co. Exports will be close to 3.595 million barrels a day this month, Alaa Al-Yasiri said Wednesday in an interview in Baghdad. That would be a record, he said, up from 3.54 million barrels a day in July. OPEC and allies agreed two months ago to increase oil production, with Saudi Arabia and Russia saying about 1 million barrels a day will be added to the market. But they didn’t detail how the production increase would be split between OPEC and non-OPEC nations. A committee of OPEC and allies is scheduled to meet in Algeria next month to discuss allocations.
Rival Libyan militias vying for control of Tripoli reach truce -- A truce has been reached between rival militias in Tripoli after a deadly face off saw five killed and over 30 wounded on Monday. Clashes broke out early on Monday in Libya’s capital city as competing authorities continue to vie for power in the country. Rival militias linked to the UN-backed Government of National Accord (GNA) in Tripoli exchanged gunfire in the south of the city. The fighting pitted the Seventh Brigade from the town of Tarhuna - to the southeast of Tripoli - against a coalition of armed brigades working under the interior ministry, including Misrata’s 301 Brigade, and the Ghnewa Brigade. The capital is an important target for warring sides in the region, offering control over strategic assets such as the Libyan Central Bank, the air and sea ports in the city, as well as all other institutions. Guma el-Gamaty, a Libyan academic and analyst, told Middle East Eye on Tuesday: “Tripoli is important because it is where key institutions concerned with budgets and money are located.” The Seventh Brigade has been stationed in the southeastern Gasir Benghashir district of Tripoli for over year, operating under the GNA’s defence ministry. “Some militias are flexing and using their military power to exploit such institutions for financial gains,” Gamaty said, adding that fighting between militias for Tripoli should be seen with this in mind as they are looking to access “easy money.” The GNA has relied on local militias to enforce law and order in the capital, as the UN-backed government has been unable to find a solution to the widespread arms in the country. Armed militias are in control of the airport. The GNA, as well as other transitional authorities, has tried and failed to integrate the armed forces into a regular army, relying on militias to ensure the capital’s security.
JKM Weekly: October LNG prices strong on supply outage, strong crude, NBP — Asian spot benchmark Platts JKM prices ended the week August 24 at $11.484/MMBtu for October deliveries, up 25.9 cents/MMBtu week on week, on strong crude oil and NBP prices, as well as supply outages. Stronger crude and NBP prices across the week hoisted price expectations. Dated Brent crude prices rose $4.435/b across the week to end the week at $75.06/b. This significantly softened oil-slope equivalent levels from the high-15% at the start of the week to the low-15%. Across the week, oil-slope equivalent levels softened and came in slightly below the top end of the seasonal average range. However, oil-slope levels in the low-15% start the week August 27 at the top end of the seasonal average range. NBP month-ahead and two-month ahead prices both rose approximately 38 cents/MMBtu, narrowing the arbitrage gap to Northeast Asia to slightly below $3/MMBtu. Supply side issues were significantly supportive across the week. In Russia, Sakhalin LNG experienced a one-train production outage, project operator Sakhalin Energy confirmed. Market participants had earlier in the day Thursday, reported a possible one-train outage at Train 1 on August 20, with potential scheduling delays as well as potential production losses.Market participants had also reflected that possibly one to three cargoes might have been secured on the prompt by an equity holder as well as an offtaker but details remained scarce.In the Atlantic, market participants reported potential production issues at Sabine Pass LNG and Cove Point LNG, but were however, unsure of the extent of the impact on the market. All eyes in the Pacific remain set on forward winter price expectations. Vitol Asia issued the first firm December bid on August 21, seeking a December 1-5 delivery into Japan or South Korea at $12.10/MMBtu. The trader subsequently submitted a firm bid on August 24 for December 1-5 delivery into Japan, South Korea, China or Taiwan at $12.70/MMBtu.
Thailand's exports of most oil products rise in Jul; heavy fuel oil exports dip — Thailand exported more automotive diesel, naphtha and jet fuel in July, but reduced shipments of heavy fuel oil, the Customs Department's latest data showed. During the month, the country exported 88,906 b/d of automotive diesel, up 54.7% year on year, mainly to Vietnam, Cambodia and Laos. It exported 55,427 b/d of naphtha, more than 3.5 times higher than a year ago; and 21,335 b/d of jet fuel, up 71.3% year on year. Thailand exported 61,290 b/d of heavy fuel oil in July, down 1.4% year on year, mostly to Singapore and Cambodia. Thailand's shipments of automotive diesel, jet fuel, heavy fuel oil and naphtha all rose in the first seven months compared with a year ago. According to data from the Energy Policy and Planning Office released on August 12, the country's domestic consumption of oil products in the first half of 2018 climbed 2.7% year on year to 1.16 million b/d. Currently, Thailand has a total refining capacity of 1.234 million b/d, unchanged from 2017, the data showed.
India is set to overtake China as the top driver of global oil demand growth - India is set to overtake China as the biggest source of growth for oil demand by 2024, according to a forecast announced Monday by research and consultancy group Wood Mackenzie. The country's oil demand is set to increase by 3.5 billion barrels per day from 2017 to 2035, which will account for a third of global oil demand growth. India's expanding middle class will be a key factor, as well as its growing need for mobility, according to Wood Mackenzie. On the other hand, China — currently the second-largest oil consumer in the world — may soon need less oil. In 2017, it overtook the U.S. as the biggest importer of crude oil, but it's set to see a decline in oil demand growth from 2024 to 2035, Wood Mackenzie Research Director Sushant Gupta told CNBC. That's due to two trends: Alternative energy sources such as electricity and natural gas are displacing the need for gasoline and diesel. And, a more efficient freight system and truck fleet will also result in sluggish road diesel demand, Gupta said. For India, as demand grows, an oil shortage is already imminent. The country is only expected to add 400,000 barrels per day in firm refinery capacity out to 2023 — paling in comparison to demand growth — warned Wood Mackenzie. "We think the most likely situation is that India would need between (3.2 million and 4.7 million barrels per day) of new capacity out to 2035 to remain self-sufficient in transport fuels. So we are talking about a future capacity which is 1.7 to 2.0 times the current. This is clearly an uphill task, unless domestic refiners can commit to their planned capacity additions," Gupta said in a Wood Mackenzie release accompanying the India demand projection.
India expects clarity on Iran oil cut after U.S. meeting: source (Reuters) - India will not completely halt Iranian oil imports and will finalize its strategy on crude purchases from Tehran after a meeting with top U.S. officials next week, a senior government official said. U.S. Secretary of State Mike Pompeo and Defense Secretary Jim Mattis will hold high-level talks with India’s Foreign Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman on Sept. 6, in what is known as a 2+2 dialogue. “Definitely we are not going to zero” (purchases), said the official, who has direct knowledge of India’s oil purchase policy and did not wish to be identified. When asked if more clarity on India’s Iranian oil purchases would emerge after the dialogue, the official said “yes, that is the highest level of meeting we will have with the U.S.” The United States is pushing all countries to halt oil imports from Iran after President Donald Trump withdrew from a 2015 deal between Iran and six world powers and ordered a re-imposition of sanctions on Tehran. India, Iran’s top oil buyer after China, has so far not decided on the size of any cut to Iranian imports and continues to seek a waiver from the United States. Trump has threatened that anyone trading with Iran will not do business with America. U.S. sanctions on Iran’s energy sector are set to be re-imposed after a 180-day “wind-down period” ending on Nov. 4. Several countries that were involved in the 2015 nuclear deal had attempted to lessen the blow of fresh sanctions on Iran, and urged their firms not to pull out. But that has proven difficult: several European companies have cut ties with Iran, arguing they cannot risk losing their U.S. business as the sanctions deadline approaches. India has already asked its refiners to prepare for a drastic reduction in imports of crude from Tehran from November, sources told Reuters in June. New Delhi has so far not committed to complying fully with the new U.S. sanctions, but is prepared to cut Iran oil imports to protect its wider exposure to the U.S. financial system. During the previous round of sanctions, India was one of the few countries that continued to buy Iranian oil, although it had to reduce imports as shipping, insurance and banking channels were choked off due to the European and U.S. sanctions.
Top US, India officials to discuss Iran sanctions waiver next week in New Delhi — High-level talks between the US and Indian governments next week in New Delhi will likely include discussion of India's request to continue importing some Iranian crude oil after US sanctions resume in November. As one of Tehran's top oil customers, India's post-sanctions import plans will play a major role in how much Iranian exports drop in the coming months. India recently signed its first term contract for US crude exports to lock in low prices, a topic that might also come up during the meeting between the US and Indian defense and foreign ministers. "We have been discussing regularly with India issues related to both Iran and [US sanctions against Russia] and are looking, as with other partners, to identify ways to cooperate to support our policy goals with regard to both those issues," a senior State Department official said Thursday during a background briefing, on condition of anonymity. Iran is already seeing its oil exports fall ahead of the November 5 resumption of US secondary sanctions as a result of President Donald Trump pulling the US out of the Iran nuclear deal in May. S&P Global Platts Analytics estimates Iranian crude and condensate exports will fall to 1.47 million b/d in November, a cut of 1.44 million b/d from April levels and a cut of 874,000 b/d from July. US Secretary Mike Pompeo and Defense Secretary Jim Mattis will meet their Indian counterparts External Affairs Minister Sushma Swaraj and Defense Minister Nirmala Sitharaman during the "2+2 ministerial dialogue" on September 6. The State Department would not say if India has formally requested a waiver to the Iran sanctions in exchange for making significant cuts to its Iranian imports, but one of the senior officials said the two countries have engaged frequently on the issue in recent weeks.
Japan remains firm on seeking US exemption for Iran oil imports: top official — Japan remains firmly committed to seeking US exemption for Iranian oil imports as it sees the supplies as important for the country's energy security and businesses, a top government official told S&P Global Platts on Thursday. "Japan's position remains firm even after the second round of talks [with the US government]," Ryo Minami, the director-general of oil, gas and mineral resources at the Ministry of Economy, Trade and Industry said in an interview. "Our basic principle is to seek an exemption [from the US]," Minami said. Asked whether Japan was also looking to reduce its Iranian oil imports in order to secure US sanction waivers, Minami declined to comment. Japan and the US held a second round of talks on the US' Iran sanctions in Washington over August 1-2, when the two sides agreed to continue bilateral discussions. "During the second round of talks Japan clearly explained its position to continue [Iranian oil] imports to the US in an effort to gain their understanding," Minami said. "Looking forward, we will inevitably have to hold talks with the US government solidly to obtain their understanding," he said. "From the Japanese perspective, we see the import of Iranian crude oil as necessary to continue Japan's energy security, as well as considering the impact on Japanese companies."
More than 30% of global maritime crude oil trade moves through the South China Sea – EIA - The South China Sea is a major trade route for crude oil, and in 2016, more than 30% of global maritime crude oil trade, or about 15 million barrels per day (b/d), passed through the South China Sea. More than 90% of crude oil volumes flowing through the South China Sea in 2016 transited the Strait of Malacca, the shortest sea route between suppliers in Africa and the Persian Gulf and markets in Asia, making it one of the world’s primary oil transit chokepoints. In addition, a significant amount of crude oil (about 1.4 million b/d) passes through the strait on its way to Singapore and the west coast of Peninsular Malaysia, where it is refined before transiting the South China Sea in the form of petroleum products. The South China Sea is a major trade route for the Middle East, which accounted for more than 70% of total South China Sea crude oil shipments in 2016. Saudi Arabia is the largest source of crude oil, making up almost one-fourth of crude oil volumes traversing the South China Sea. More than half of Saudi Arabia’s global crude oil shipments traveled through the South China Sea in 2016. Before the lifting of United Nations sanctions on Iran’s crude oil exports in January 2016, Iran relied heavily on Asian markets for most of its exports. After the sanctions were lifted, Iran could once again export crude oil to Europe. However, the South China Sea route still accounted for 52% of Iran’s crude oil exports in 2016. In addition to Middle Eastern and North African volumes, some regional countries bordering the South China Sea contribute to the overall shipments of crude oil through the region. Indonesia and Malaysia together accounted for 5% of crude oil loadings that passed through the South China Sea in 2016 and 2% of crude oil receipts. Most of the crude oil from these countries that passes through the South China Sea is exported to other countries. However, some intra-country trade also crosses the southern portion of the South China Sea as cargoes move between eastern and western ports within each country. The three crude oil importers with the largest volumes passing through the South China Sea—China, Japan, and South Korea—collectively accounted for 80% of total crude oil volumes transiting the South China Sea in 2016. About 90% of China’s 2016 maritime crude oil shipments were transported through the South China Sea. China’s crude oil imports have increased substantially over the past few years as a result of the country’s robust energy demand growth and stagnant crude oil production, and the country recently surpassed the United States as the world’s largest crude oil importer.
China's Falling US Crude Imports May Have More To Do With Money (Reuters) - One of the side effects of President Donald Trump's escalating trade dispute with China is that U.S. exports of crude oil to the world's biggest importer are now viewed through the prism of politics. However, this ignores that buyers and sellers of crude are generally more motivated by profit margins and getting the right grades of oil to maximise the productivity of their plants. While it's true they can't disregard politics, and this is especially the case for the state-controlled Chinese majors, it's worth looking at the economics of the U.S.-China crude trade as well. U.S. crude exports to China appear set to slow dramatically in September, with vessel-tracking data compiled by Thomson Reuters Oil Research and Forecasts showing about 6.12 million barrels, or about 204,000 barrels per day (bpd), scheduled for arrival. This would be down from around 363,000 bpd in August, and would also be the weakest month since March this year. The slowdown in China's imports of U.S. crude has coincided with the imposition of tit-for-tat trade tariffs and speculation that Beijing would add crude to its list of U.S. products to be hit with import taxes. That hasn't happened yet, although it would have been understandable for Chinese refiners to be wary of buying from the United States in recent weeks. However, the pricing of the various grades of crude oil also offers an explanation as to why China stocked up on U.S. crude in August, and appears to have shied away in September, and probably October as well. Chinese traders would have been keen to buy West Texas Intermediate (WTI) types of U.S. crude for August delivery, given these cargoes would have been arranged in late May and early June. The discount of front-month WTI crude oil futures to Brent futures widened to $11.39 a barrel on June 6, and traded close to level for around a three-week period from late May to mid-June. This means that Chinese refiners could buy WTI at a substantial discount to Brent in the paper market, which would encourage them to take physical cargoes from the U.S. Gulf.
China's July oil product consumption rises 7% on year: NDRC — China's consumption of oil products rose 7.2% year on year to 27.54 million mt in July, data released Tuesday by the National Development and Reform Commission showed. The growth was mainly led by gasoline demand, which rose 14.1% year on year, while gasoil consumption was only up 1.4% year on year, NDRC said, without providing a breakdown of volumes for the two grades. July oil product consumption was also up 7.6% from June, according to S&P Global Platts calculations based on the NDRC data. Gasoline consumption rose in July as higher temperatures boosted demand for car air conditioning, market sources said. Meanwhile, gasoil consumption was still lackluster last month as outdoor projects and transportation was affected by the hot and wet summer season, sources noted. The country processed 48.65 million mt of crude oil in July, up 7.6% year on year, NDRC data showed. As a result of the higher crude throughput in July, the country's oil product output rose 9.7% year on year to 30.43 million mt in the month, according to NDRC. Meanwhile, China produced 15.57 million mt of crude oil in July, down 4.4% year on year, it added. Over January-July, China processed 342.53 million mt of crude, up 6.8% year on year, while its oil product output rose 8.8% at 213.76 million mt, NDRC's data showed. China's oil product consumption was up 5.8% year on year at 185.49 million mt over the same period, of which gasoline consumption rose 6% year on year while gasoil increased 4.7% on the year, NDRC said, without providing a breakdown of volumes for the two grades. The growth of oil product consumption was slower than that of oil product output in the past seven years, which implies more oil product was exported or went into storage, according to market sources.
Water pollution lays waste to Iraq's oil-rich south - Sitting in an emergency ward in Basra, along with patients on drips suffering from severe diarrhoea, Younes Selim said he had no choice but to drink from the tap despite knowing the risk."We only give mineral water to our three children, but my wife and I often have to drink tap water," he told AFP, waiting for one of the hospital's overwhelmed doctors to treat him.Since August 12, "more than 17,000 patients have been admitted for diarrhoea, stomach pains and vomiting," said Ryad Abdel Amir, head of Basra's health department He said that in his 11 years in the job he has never before seen such a crisis, which has been exacerbated by a lack of public services and rising prices. Umm Haydar said she also struggles to provide drinking water for her family of 30."A thousand litres cost 20,000 dinars ($17) and once we have all drunk and washed the children, in half an hour there's nothing left," the grandmother said.Until recently, the same amount of water cost 5,000 dinars. While Iraq's water shortages are not just confined to Basra, the region suffers from a toxic mix of polluted and salty water, dismal public services, power cuts and open sewers.The province has abundant energy resources and Iraq's only stretch of coastline, but it is also heavily populated and has creaking infrastructure. It has been shaken by weeks of protests over the lack of basic services, despite government pledges to pump billions of dollars into the neglected south.
OPEC And Allies Further Eased Oil Production Cuts In July - OPEC and its Russia-led non-OPEC partners in the production cut deal reduced their total oil production in July by 9 percent more than what they had agreed upon, Reuters reported on Monday, citing two sources familiar with the findings of an OPEC/non-OPEC monitoring committee on compliance.The committee—consisting of representatives from the two leaders of the OPEC and non-OPEC groups, Saudi Arabia and Russia, respectively, as well as from Kuwait, the UAE, Algeria, Venezuela, and Oman—found on Monday that total production was just 9 percent above the agreed upon compliance of 100 percent, and compares with a compliance rate of 120 percent in June and an overzealous 147 percent in May, so the parties to the pact have been raising production, according to Reuters.In June, OPEC and its non-OPEC partners agreed to work toward an overall conformity level of 100 percent as of July 1, 2018, compared to the 147-percent compliance rate in May. OPEC-only production in July rose by 40,700 bpd from June, to 32.323 million bpd, according to secondary sources in the cartel’s Monthly Oil Market Report. While falling production in Libya and Iran was not so surprising, Saudi Arabia’s production dropped in July by 52,800 bpd from June to average 10.387 million bpd last month, according to OPEC’s secondary sources. Some analysts attributed the lower Saudi production to a lower than previously expected demand for Saudi crude. While OPEC and allies report on their overall compliance levels, the two archrivals in the Middle East and major oil producers within the cartel—Saudi Arabia and Iran—have quite different views on what the vague June agreement actually means. The Saudis say that it implies a redistribution of quotas with individual caps on production, along with a collective 100-percent compliance rate. Iran, however, insists that no country can compensate for others. Last week, Iran warned OPEC that “no country can overtake the production and export quotas of other member states under any circumstances,” while Iran’s Oil Minister Bijan Zanganeh was quoted as saying that “Some members are interpreting the latest OPEC decision on oil output differently ... and are acting in accordance with the policies of the U.S.”
Bullish hedge fund managers continue to pull oil positions (Reuters) - Hedge fund managers continued to liquidate their bullish positions in crude and fuels, amid negative sentiment towards petroleum, before prices rallied sharply in the second half of last week. Hedge funds and other money managers cut their combined net long position in the six most important petroleum futures and options contracts by another 49 million barrels in the week to Aug. 20. Fund managers have reduced their net long position in 13 of the last 18 weeks, by a total of 508 million barrels (36 percent), according to an analysis of records published by regulators and exchanges. Total long positions have been slashed by 494 million barrels, while short positions have increased by 14 million barrels, since April 17 (https://tmsnrt.rs/2LyoJY3 ). As a result, portfolio managers' combined net long position in petroleum has been cut to just 903 million barrels, the lowest for almost a year. And the ratio of long to short positions has fallen from almost 14:1 to just over 8:1, leaving the market looking much less lopsided than before. The most recent week saw continued liquidation of net length in Brent (-12 million barrels), NYMEX and ICE WTI (-16 million), U.S. gasoline (-10 million), U.S. heating oil (-6 million) and European gasoil (-5 million). As in previous weeks, most of the changes came from the long side of the market, with fund managers trimming old bullish long positions rather than adding new bearish short ones. But there was a notable increase of 15 million barrels in short WTI positions on NYMEX, the largest one-week rise for 10 months.
Crude Oil Prices Settle Higher, but Rising Production Limits Gains - - WTI crude oil prices settled higher Monday, but gains were kept in check by rising oil output from major producers as market participants awaited updates on supply this week. On the New York Mercantile Exchange crude futures for October delivery gained 15 cents to settle at $68.87 a barrel, while on London's Intercontinental Exchange, Brent rose 0.45% to trade at $76.47 a barrel. Members of an OPEC and non-OPEC monitoring committee revealed producers, part of the production-cut agreement, reduced their oil output cuts in July. Opec and non-OPEC members achieved a 109% compliance rate with the production-cut agreement, below the 120% rate seen June, when OPEC and non-OPEC members agreed to return to 100% compliance with oil output cuts that began in January 2017. OPEC's efforts to return to agreed production limits have been stifled by production disruptions in Libya and Venezuela. The pledge to return to agreed production limits was brought on by fears that U.S. sanctions against Iran's oil exports would pressure already low global spare capacity, which would likely fuel an oil price increase, hurting demand. President Donald Trump pulled the United States out of the Iran nuclear agreement in May, allowing sanctions against Iran to snap back into place. The first wave of sanctions went into effect last month and a second set of sanctions on Iran's crude exports are slated for early November. The outlook on oil demand has also been rattled amid investor fears a further deterioration in U.S.-China trade relations could spark a full-blown trade war. This could force China, the world's largest oil importer, to cut crude purchases as its economy would likely face further pressure. U.S. oil prices added to gains from last week when they ended a string of weekly declines on lower U.S. oil inventories and a decline in the Baker Hughes weekly oil rig count, pointing to tightening U.S. output. Baker Hughes reported on Friday that the number of U.S. oil drilling rigs in operation fell by 9 to 860. Analysts continued to tout a bullish outlook on oil, citing the U.S. oil price's ability to remain above $65 a barrel during declines earlier this month. "Crude oil prices have successfully held the $65-dollar range (WTI) and are now poised to test the higher end of the trading range," Spartan Capital said. "We look for prices to move back to the low $70 range with Brent spiking towards the $80 range."
Oil prices rise on expectations of market tightening -- The oil price rose towards its highest since early July on Tuesday, thanks to evidence of still-modest increases in output from OPEC and improving Chinese refining demand.Brent crude oil futures were at $76.65 a barrel by 0913 GMT, up 44 cents from their last close and at their highest since July 11, while U.S. crude futures were up 17 cents at $69.04 a barrel.The monitoring committee of the Organization of the Petroleum Exporting Countries (OPEC) found that oil producers participating in a supply-reduction agreement, which includes non-OPEC member Russia, cut output in July by 9 percent more than called for.Investors are now more confident that supply is likely to fall short of demand in the coming months, as reflected by a narrowing in the discount, or spread, between the October and November Brent futures contracts to around 26 cents a barrel, half of what it was a month ago."We were of the view earlier that we are expecting prices to edge a bit lower over the rest of this year, but I struggle to see that. I see the market remaining well supported, with potential shocks to the upside, depending on what we get from Iran," ING commodities strategist Warren Patterson said."Looking at the spreads, it is starting to appear that the market (balance) is somewhat tightening."When the price of a prompt contract is at a premium to the price of a longer-dated contract this indicates a belief that oil demand will outpace supply. The findings of the OPEC monitoring committee for last month compare with a compliance level of 120 percent for June and 147 percent for May, meaning participants have been steadily increasing production, but at a more modest pace than some had expected.
Oil Prices Edge Lower Despite Reports of Supply Disruptions - Oil prices edged lower on Tuesday despite the International Energy Agency (IEA) warning of further supply disruptions. Brent Oil Futures for November delivery went down 0.03% to $76.48 at 12:42AM ET, while Crude Oil WTI Futures for October delivery also slipped 0.04% to $68.84. On Monday, the IEA warned an economic crisis in Venezuela has cut deep into the OPEC-member's oil output. Venezuelan crude oil exports have halved in the previous two years to just 1 million bpd by mid-2018, according to trade flow data. "We can expect a further fall," the IEA's Executive Director Fatih Birol told Reuters in Norway on Monday. Birol also warned that African OPEC-members Libya and Nigeria "seem both still fragile countries" despite some recent improvements. However, Birol said it was too early to assess any potential impact of the U.S. sanctions that will target Iran from November. “The weaker U.S.-dollar helped commodities in general," Traders also await further developments in the China-U.S. trade relations. The two-day trade talks between China and the U.S. ended last week with no major breakthroughs. "We concluded two days of discussions with counterparts from China and exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship," White House spokeswoman Lindsay Walters said in a brief statement. Meanwhile, a new round of U.S. tariffs on $16 billion worth of imports from China kicked in last week, followed immediately by reciprocal tariffs from China.
Oil dips on profit-taking, trade deal limits decline (Reuters) - Oil prices fell on Tuesday as some investors took profits on recent strong gains, but losses were limited the day after a U.S.-Mexico trade agreement eased worries about tensions between the two countries. Brent crude LCOc1 futures fell 26 cents to settle at $75.95 a barrel. The global benchmark touched $76.97 early in the session, the highest since July 11. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 34 cents to settle at $68.53 a barrel. Last week Brent marked a 5.6 percent gain, while WTI increased 4.3 percent. “The market was due for a correction,” said Phillip Streible, senior market strategist at RJO Futures. Oil prices extended losses slightly in post-settlement trade after industry group the American Petroleum Institute said that U.S. crude inventories rose unexpectedly by 38,000 barrels last week to 405.7 million. Analysts had expected a decrease of 686,000 barrels. Official weekly stock data is due at 10:30 a.m. EDT (1430 GMT). News that workers at Total’s North Sea oil platforms no longer plan to strike on Sept. 3 also weighed on the market. Limiting losses, however, was Monday’s news that the United States and Mexico agreed to overhaul the North American Free Trade Agreement (NAFTA). “It paves the way for the energy industry in both countries to coexist rather freely, and that should be good for demand,”
WTI Dips After Surprise Inventory Builds Across-The-Board - WTI closed lower on the day as the USD ticked up ahead of API inventory data that showed inventory builds across the board, sending prices marginally lower.API
- Crude +38k (-1.49mm exp)
- Cushing +130k (+50k exp)
- Gasoline +21k
- Distillates +982k
The flip-flopping crude draw/build continued last week with an unexpected build. In fact we saw builds across the board... WTI dipped on the unexpected builds across the board...“The market is shaking off some of the excitement of the Mexico free trade deal,” said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago.Also, “there is a concern that maybe we’ll see an increase in inventories today as opposed to the expectation of a slight draw. People are all over the board on this inventory report.”
Crude futures trend higher, unaffected by API stock build - — The crude complex was trending higher on Wednesday morning in early European trading, despite US crude inventory data showing a build in stocks, with the market likely more focused on tightened market fundamentals, analysts said. At 1110 GMT, ICE October Brent crude futures were up 24 cents/b from Tuesday's settle at $76.19/b, while the NYMEX October light sweet crude contract showed an increase of 34 cents/b to $68.87/b.Oil prices were initially lower on Tuesday and during Asian trading hours, following the release of American Petroleum Institute weekly numbers, which showed a small but unexpected build of 38,000 barrels versus the previous week. However, the dip was shortlived, with levels rising from the beginning of European trading hours. The more definitive numbers from the US Energy Information Administration will be published later Wednesday.According to a survey conducted by S&P Global Platts Monday, analysts were divided on crude inventory levels, with some expecting a drawdown of 3 million barrels or more for the week to August 24, while other expected a slight build.On average, however, analysts were expecting a 1 million barrel crude draw in US inventories."That data doesn't seem to have done much but we'll see more official figures later -- after last week's massive drawdown, it will be interesting to see what happens," said Geordie Wilkes, commodity analyst at Sucden Financial in London.On the supply side, the approaching deadline for Iranian oil sanctions continues to provide a floor for the market, said analysts."The Iranian wildcard continued to keep selling pressures in check. A general consensus is emerging that Iran's oil shipments are losing momentum at a faster-than-expected clip ahead of November's deadline," said Stephen Brennock, in the PVM Fundamental report on Wednesday, adding that further declines are "pencilled in."
Oil Prices Hold Firm Ahead Of US Inventory Report – RTTNews - Oil markets held steady on Wednesday as signs of falling supplies from Iran ahead of U.S. sanctions were offset by rising non-OPEC oil production. Benchmark Brent crude oil futures were up 16 cents at $76.45 per barrel while U.S. West Texas Intermediate (WTI) crude futures were up 25 cents at $68.78 a barrel. With U.S. sanctions against Iran set to begin in November, market participants expect Iranian oil exports to drop at a faster-than-expected pace. Imports by its key customers have all dropped in August as many crude buyers reduced orders, fearing Washington's penalties. Political instability in Venezuela has also triggered expectations of a tightening global oil market. Meanwhile, according to Bank of America Merrill Lynch, supply outages from non-OPEC countries are expected to be resolved soon with Canada's Syncrude facility bringing production back online. A new agreement between Sudan and South Sudan on a peace deal as well as production increases expected in Canada, Brazil and the U.S. will add new supply in the second half of 2018, BofAML wrote in a note. After the American Petroleum Institute (API) reported a surprise oil inventory build for the week ending August 25, the official data on U.S. inventory levels is due for release by the Energy Information Administration (EIA) later in the day.
Oil prices stabilize on Iran sanctions and rising global supply - Oil prices rose on Wednesday, supported by news of a fall in Iranian crude supplies as U.S. sanctions deter buyers, but gains were limited by evidence of a rise in U.S. inventories. Benchmark Brent crude oil rose 36 cents to $76.31 a barrel by 10:20 a.m. ET (1420 GMT). U.S. light crude was 52 cents higher at $69.05 a barrel.Iran's crude oil and condensate exports in August are set to drop below 70 million barrels for the first time since April 2017, well ahead of the Nov. 4 start date for a second round of U.S. economic sanctions, preliminary trade flows data on Thomson Reuters Eikon show.Bowing to pressure from Washington, many crude buyers have already reduced orders from Iran, OPEC's third-biggest producer.Although Tehran is offering steep discounts, Iran's August crude oil and condensate loadings are estimated at 2.06 million bpd, versus a peak of 3.09 million bpd in April."U.S. sanctions towards Iran are now increasingly kicking in which will help to dry up the physical crude oil market," said SEB Markets commodities analyst Bjarne Schieldrop.U.S. crude inventories rose by 38,000 barrels to 405.7 million barrels in the week to Aug. 24, the American Petroleum Institute said on Tuesday. Official U.S. fuel inventory and crude production data will be published later on Wednesday by the Energy Information Administration (EIA).
WTI Spikes On Surprise Crude Draw As Gasoline Demand Hits Record High - WTI rallied overnight, in the face of dollar gains, as Iran supply fears reignited, dominating API inventory builds across the board, and spiked notably after DOE reported a bigger-than-expected 2.566mm crude draw.But bear in mind that seasonal refinery maintenance is about to start, which will “begin to affect the crude stocks and refined product output,” Kyle Cooper, a consultant at ION Energy, says . DOE
- Crude -2.566mm (-1.49mm exp)
- Cushing +58k (+50k exp)
- Gasoline -1.554mm
- Distillates -837k
Crude inventories fell for the 2nd week in a row... Crude production was unchanged last week (remember, the data only moves in 100k increments now, so unless a decent shift, then no change occurs).East Coast weekly crude imports dropped to their lowest since 2015.And Gasoline Demand hit a record high...
Crude Oil Prices Settle at 3-Week Highs as Supplies Sink, Iran Exports Ease - - WTI crude oil prices settled at three-week highs Wednesday on a government inventory report showing U.S. crude supplies fell sharply last week, and signs U.S. sanctions on Iran were starting to hurt the Islamic Republic's crude exports. On the New York Mercantile Exchange crude futures for October delivery rose 1.4% to settle at $69.51 a barrel, while on London's Intercontinental Exchange, Brent rose 0.98% to trade at $77.04 barrel. Inventories of U.S. crude fell by 2.566 million barrels for the week ended Aug. 24, greater than expectations for a draw of just 0.686 million barrels, according to data from the Energy Information Administration (EIA). The large draw in crude supplies comes as imports fell by about 0.657 million bpd, while exports rose by 0.624 million bpd, data from EIA showed. Production was unchanged at 11.0 million barrels a day (bpd), which also supported the draw in crude supplies, after rising for two-straight weeks. Gasoline inventories fell by 1.554 million barrels, confounding expectations for a build of 0.370 million barrels, while supplies of distillate -- the class of fuels that includes diesel and heating oil -- fell by 0.837 million barrels, against expectations for a build of 1.592 million barrels. The draw in products came as refinery activity fell to 96.3% of their capacity last week from 98.1% the prior week, with inputs averaging about 17.57 million barrels per day during, down 0.326 million barrels from the prior week, the EIA said. The bullish inventory report helped oil prices add to their earlier gains, which followed data showing a drop in Iranian crude exports as U.S. sanctions forced buyers to seek alternatives. Iran’s crude oil and condensate exports in August are set to drop below 70 million barrels for the first time since April 2017, well ahead of the Nov. 4 start date for a second round of U.S. economic sanctions, preliminary trade flows data on Thomson Reuters Eikon show.
Oil prices nod up as US fuel supply falls and sanctions on Iran loom -- Oil prices rose on Thursday, extending gains on growing evidence of disruptions to crude supply from Iran and Venezuela and after a fall in U.S. crude inventories. Brent has risen by almost 10 percent over the past two weeks on widespread perceptions that the global oil market is tightening and could run short in the next few months as U.S. sanctions restrict crude exports from Iran. Benchmark Brent crude oil was up 56 cents a barrel at $77.70 by 2:29 p.m. ET. U.S. light crude ended Thursday's session up 74 cents, or 1.1 percent, at $70.25, the highest closing price in six weeks. "The oil market is once again tightening," . "Iranian oil export declines are already visible well in advance of U.S. oil-related sanctions, which enter into force in November." Iranian crude exports will likely drop to just over 2 million barrels per day (bpd) in August, versus a peak of 3.1 million bpd in April, as importers bow to American pressure to cut orders. The Organization of the Petroleum Exporting Countries, in which Iran is the third-biggest producer, will discuss in December whether it can compensate for a sudden drop in Iranian supply after sanctions start in November, the head of Iraq's state oil marketer SOMO, Alaa al-Yasiri, said on Wednesday. Crude exports from crisis-struck OPEC member Venezuela have also fallen sharply, halving in recent years to around 1 million bpd.
Oil prices dip on concerns Sino-US trade conflict could escalate -- Oil prices slipped but remained near $70 a barrel on Friday as impending U.S. sanctions on Iran and falling Venezuelan output offset concerns over the impact of a global trade war. Benchmark Brent crude oil was down 33 cents a barrel at $77.44 by 8:29 a.m. ET (1229 GMT). U.S. light crude was 24 cents lower at $70.01.Despite Friday's losses, both Brent and U.S. light crude have jumped about 2 percent this week after strong gains in the last two sessions. Brent is on track for a rise of more than 4 percent in August with U.S. light crude gaining nearly 2 percent this month.Many analysts say the uptrend in crude prices will continue."Brent prices will exceed $80 per barrel before the end of the year," U.S. bank Jefferies forecast on Friday.Oil markets are tightening with a recent surplus draining, trade figures show. The volume of unsold crude stored in the Atlantic basin has dwindled from around 30 cargoes to just a handful in recent weeks, a Reuters analysis showed."The contracts are in a strong up-trend," said Robin Bieber, who watches price charts for brokerage PVM Oil Associates.Investors are worried that, with Venezuelan supply falling sharply, Iranian crude supply will be cut sharply ahead of the imposition on U.S. sanctions on Tehran in November."The November deadline to comply with the U.S. demands for an Iran oil embargo is moving closer, and in anticipation, buyers seemingly have begun reducing their purchases," said Norbert Ruecker, commodity analyst at Swiss bank Julius Baer. "Venezuela remains equally concerning," he added.
Analysts Forecast Average Price of Brent Crude in 2019 - The average price of Brent Crude will be between $70 and $80 per barrel in 2019, according to a new Rigzone poll on social media site Twitter. Forty-percent of the 231 poll respondents said the average price would fall within this range next year, with 23 percent stating that the average price would be between $80 and $90 per barrel. An identical percentage thought the average price would be below $70 per barrel and the remaining 14 percent of voters said the average price of Brent Crude would be above $90 per barrel in 2019.Fitch Solutions Macro Research is forecasting the average price of Brent Crude to be $82 per barrel next year, according to a report from the company dated August 14, which was sent to Rigzone.The report highlighted that the Bloomberg Consensus forecasted an average Brent Crude price of $69.50 per barrel in 2019.Looking further ahead, Fitch Solutions Macro Research forecast that the average price of Brent will be $85 per barrel in 2020, $89 per barrel in 2021 and $91 per barrel in 2022.“In the short term, prices will struggle for direction, as uncertainty around both the impact on supply from the Iranian sanctions and escalating trade tensions between the U.S. and China persists,” oil and gas analysts at Fitch Solutions Macro Research said in the report. “Returning OPEC+ barrels and strong U.S. onshore production will offset output losses in Iran, Venezuela and Angola. However, global spare capacity will shrink substantially as a result,” the analysts added.
Bouncing Back, BHGE U.S. Rig Count Climbs by Four - Drilling activity in the United States rebounded on Friday modestly from a steep drop one week earlier, picking up four rigs to finish at 1,048, according to data from Baker Hughes, a GE Company (BHGE).After adding two gas-directed rigs and two oil-directed rigs for the week, the United States is outpacing its year-ago tally by a little more than 100 units.Three directional rigs and three vertical rigs returned to action for the week, while two horizontal units packed up. Three rigs were added on land, along with one in inland waters. The Gulf of Mexico finished flat for the week at 16 rigs, according to BHGE.Canada saw a net loss of one rig for the week as two oil units departed, offsetting the addition of one gas-directed. Canada finished the week at 228 rigs, up from 201 a year ago. The combined North American rig count finished at 1,276, versus 1,144 at this time last year.Among plays, the Cana Woodford posted the largest net gain for the week at two, finishing at 67, just ahead of its year-ago tally of 65. A more detailed breakdown of BHGE data by NGI’s Shale Daily indicates the two rigs added went to work in the STACK (aka, the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties), with the the SCOOP (South Central Oklahoma Oil Province) finishing flat week/week.Meanwhile, the Marcellus Shale and Permian Basin each picked up one rig for the week to end at 53 and 486 active units, respectively. The Granite Wash saw two rigs pack up shop, while one exited the Eagle Ford Shale.Among states, Louisiana and Pennsylvania each added one rig for the week, while New Mexico and Oklahoma each saw a net decrease of one rig. Kansas saw one rig go to work, the only active rig in the state as of Friday, according to BHGE. The Lone Star State, home to a large portion of the U.S. onshore’s most active play, the Permian, saw its oil and natural gas output in June retreat from a year ago and month/month, with production at the lowest level in 16 months, according to preliminary data by Texas regulators.
Crude Oil Prices Settle Lower, but Post Monthly Gain - WTI crude oil prices settled lower Friday, on signs of expanding U.S. output and fears over lower oil-demand growth amid rising global trade tensions. On the New York Mercantile Exchange, crude futures for October delivery fell 45 cents to settle at $69.80 a barrel, while on London's Intercontinental Exchange, Brent fell 0.55% to trade at $77.59 a barrel. Oilfield services firm Baker Hughes reported on Friday that the number of U.S. oil drilling rigs in operation rose by 2 to 862. The rise in rig counts, pointing to signs of expanding output, comes as data, released earlier this week, showed rising U.S. output steadied at 11.0 million barrels a day, unchanged from the prior week. Renewed concerns over an escalation in the U.S.-China trade war stoked fears of lower oil demand growth, adding to downside momentum in oil prices. China, the world's largest commodity importer, has seen economic growth dwindle since the trade war with the U.S. kicked off, and a further escalation could dent growth, forcing Beijing to rein in crude imports. Oil prices ended the month nearly 2% higher amid renewed bets on a global supply shortage as U.S. sanctions on Iran's crude exports are expected to reduce crude from market, underpinning higher crude prices. "Press reports indicate that Iranian crude oil and condensate exports in August are poised to drop below 2.25 million barrels a day – marking three straight monthly declines, a 600,000bpd drop versus April and helping crystallize the risk that US sanctions squeeze global oil supply placing upward pressure on international prices," Bank of American Merrill Lynch said in note to clients. Both WTI and Brent crude are expected gain on a potential slump in Iranian exports, although gains in WTI prices will be limited as the refinery maintenance season is set to get underway. "An active maintenance season in the US Mid-Continent may prevent the WTI benchmark increasing," according to Bank of American Merrill Lynch. Maintenance season tends to halt refinery activity, slowing demand for crude stockpiles used as inputs in the production of product inventories like gasoline. Oil prices were also helped earlier in the week by an EIA report showing crude oil stockpiles fell much more than expected.
Saudi crude oil output in August rises to 10.424 million b/d: OPEC source— Saudi Arabia will report August crude oil production of 10.424 million b/d, an OPEC source told S&P Global Platts on Friday. The figure represents a 136,000 b/d increase from July, when Saudi Arabia, OPEC's largest producer and the world's largest crude exporter, self-reported production of 10.288 million b/d. The kingdom supplied to market 10.467 million b/d in August, the source added on condition of anonymity. That means the sum of crude exported to customers, consumed by Saudi refineries and burned by domestic power plants, slightly exceeded the amount of crude that was pumped out of the ground in the month, indicating a draw of barrels held in storage. The August figures reflect Saudi customer demand, the source said. July production had been down partly because of a July 25 attack on two VLCCs in the Red Sea owned by state oil company Saudi Aramco, the source said. The attack prompted the company to suspend shipments through the Bab al-Mandab strait until August 4. OPEC on June 23 agreed with 10 non-OPEC partners to end overcompliance with their production cuts and boost output by a collective 1 million b/d to replace barrels expected to be shut in by the reimplementation of US sanctions on Iran and Venezuela's economic freefall. Saudi Arabia's quota under the deal was 10.06 million b/d. The market has been closely watching Saudi production, as it holds the bulk of global spare capacity and has indicated its willingness to serve as the world's primary swing producer. OPEC is set to reveal its August production figures in its monthly oil market report September 12.
No Saudi Aramco IPO? No problem, potentially, for Saudi Arabia’s investment dreams - The world's largest initial public offering is on hiatus. The spending it was to enable may not be. Saudi Arabia planned to take its giant oil company, Saudi Aramco, to the public markets. It was to be the linchpin of a grand economic vision, generating billions of dollars to pay for future-proofing the kingdom's economy, including huge investments in technology. It is now postponed, leaving a large funding shortfall. But Saudi Arabia is pursuing alternative transactions that could ensure its dreams aren't dashed:
- • Saudi Aramco is in discussions to buy a large stake in Sabic, a publicly traded chemical company. Sabic's controlling shareholder is Saudi Arabia's sovereign wealth fund, the Public Investment Fund. While the size of that potential acquisition is unclear, media reports say it could be as big as $70 billion.
- • The Public Investment Fund is in talks to raise $11 billion in bank loans from international lenders, according to The Financial Times. It would be the first time the sovereign wealth fund borrowed money.
- • Saudi Aramco could still sell a stake in itself. Big companies in China and Russia reportedly expressed interest in an investment in the past. It isn't clear how much a sale would raise, but it would almost certainly run to billions of dollars.
Exclusive: Saudi king tipped the scale against Aramco IPO plans (Reuters) - The king spoke, and a $2 trillion dream went up in smoke. For the past two years, Saudi Arabia has prepared to place up to 5 percent of its national oil company on the stock market. Officials talked up the Saudi Aramco initial public offering (IPO) with international exchanges, global banks and U.S. President Donald Trump. The planned listing was to be the cornerstone of the kingdom’s promised economic overhaul and, at a targeted $100 billion, the biggest IPO ever. It was the brainchild of 32-year-old Crown Prince Mohammed bin Salman, heir apparent of the world’s largest oil exporter. But after months of setbacks, the international and domestic legs of the IPO were pulled. The reason: the prince’s father King Salman stepped in to shelve it, three sources with ties to government insiders told Reuters. The decision came after the king met with family members, bankers, and senior oil executives, including a former Aramco CEO, said one of the sources, who requested anonymity. Those consultations took place during Ramadan, which ended in the middle of June. The king’s interlocutors told him that the IPO, far from helping the kingdom, would undermine it. Their main concern was that an IPO would bring full public disclosure of Aramco’s financial details, the sources said. In late June, the king sent a message to his diwan, or administrative office, demanding that the IPO be called off, the three sources said. The king’s decision is final, a second source said. “Whenever he says ‘no’, there is no budging,” the source said. After Reuters reported last week that the deal had been shelved, Energy Minister Khalid al-Falih said the government was committed to conducting the IPO at an unspecified date in the future. A senior Saudi official referred Reuters to that statement and repeated that the government, Aramco’s shareholder, was working toward an IPO when conditions were right. “We are surprised that despite this statement, that the Government continues actively to plan for the IPO, Reuters persists in asking questions alleging that plans are halted.” “Aramco’s shareholder is the Government of Saudi Arabia. His majesty, King Salman, has delegated management of the IPO to His Royal Highness the Crown Prince, and a Committee which includes the Ministers for Energy, Finance and Economy. Therefore, decisions around the nature and timing of the IPO, will be decided by the Committee for the Government’s approval,” the official said.
Saudi King Shelved Aramco IPO To Teach Son, Prince Bin Salman A Lesson - Less than a year after Saudi Arabia's unprecedented monetary shakedown of wealthy princes and other Saudi oligarchs in November 2017, which among others ensnared Prince Alwaleed bin Talal who was an involuntary "guest" at the Riyadh Ritz-Carlton for months - until he emerged a free man after an undisclosed settlement - and also eliminated potential threats to the ruling family including close family members, Reuters is out with a fascinating report according to which new splinters may be appearing inside Saudi society, in this case involving a schism between the Saudi King Salman, and his 32 year old son and de facto ruler, Crown Prince Mohammed bin Salman.As was first reported in early 2016, for the past two years Saudi Arabia had been preparing to place up to 5% of its national oil company, Saudi Aramco, on the stock market. Officials talked up the Aramco initial public offering with international exchanges, global banks and President Donald Trump.The planned listing was supposed to be the cornerstone of the kingdom’s promised economic overhaul and, at a targeted $100 billion, the biggest IPO ever. More importantly, it was the brainchild of 32-year-old Crown Prince Mohammed bin Salman, heir apparent of the world's largest oil exporter and the effective head of OPEC.However, after months of setbacks, the deal came to a crashing halt after the international and domestic legs of the IPO were pulled earlier this month.The reason, according to Reuters: King Salman - the prince's father - stepped in to shelve it.The decision came after the king met with family members, bankers, and senior oil executives, including a former Aramco CEO, said one of the sources, who requested anonymity. Those consultations took place during Ramadan, which ended in the middle of June.Having been seemingly asleep for the prior two years, The king's interlocutors told him that the IPO, far from helping the kingdom, would undermine it. Their main concern was that an IPO would bring full public disclosure of Aramco's financial details, something we knew from prior reports on why the IPO was problematic.Then, in late June, the king sent a message to his administrative office, demanding that the IPO be called off: the king's decision is final, a Reuters source said."Whenever he says 'no', there is no budging,"
Mohammed Bin Salman Of Saudi Arabia In Trouble? -- Barkley Rosser - This is what Juan Cole reports today from several sources. Supposedly, as I reported here earlier, even though it was supposedly denied, the Saudi ARAMCO IPO deal is off. The new reports have it that the final decision on this came from King Salman of Saudi Arabia, the father of the power hungry Crown Prince, Mohammed bin Salman (MbS), who has been the main advocate of the IPO as part of his Vision 2030 plan. The king has up until now pretty much let MbS have his way on many matters, from economics, to foreign policy, to social policies (some of this good, e.g. letting women drive and putting the religious police in a book), and to dissent, including jailing lots of leading Saudi figures as well as womens’ rights advocates, including havint a 29 years female Shia activist beheaded.In terms of the IPO, supposedly Salman was unhappy about the required transparency on financial and oil reserves issues. There are rumbles that he is unhappy about some of the other matters, with indeed MbS making major messes of a number of things, such as the disastrous war in Yemen and the failed embargo against Qatar, still stupidly in place. He is also probably not happy about some of those arrests last year, although much of this is murky. However, the most important bit in these rumors is that King Salman iis reportedly so unhappy that he is contemplating replacing MbS with somebody else as Crown Prince. Indeed, MbS is in trouble.Now probably this last part is just wishful thinking by some in Saudi Arabia, leaking such rumors. Very likely the family link will dominate, unless Salman were to replace MbS with one of his full brothers. But it is believable that MbS may be facing some reining in, especially if indeed Salman was responsible for the ultimate cancellation of the ARAMCO IPO deal.
Aramco To Lose 'Forever-Right' To Saudi Oil Resources - In what could be a power struggle between Saudi Aramco and the Saudi government, the Kingdom has altered the concession contract with the oil giant to 40 years with an option for renewal from a previous deal for oil and gas rights ‘in perpetuity’, the Financial Times reported on Monday, quoting three people briefed on the issue.The changes were reportedly made as Saudi Arabia was making procedural, tax, and governance changes in preparation of the initial public offering (IPO) of Saudi Aramco, which now, it seems, is indefinitely postponed, or even called off.Last Wednesday, reports emerged that Saudi Arabia had called off its highly anticipated, US$100-billion IPO, Reuters sources said, with even plans to list the state-run oil company on its domestic bourse, Tadawul, being scrapped. The listing was expected to be the world’s largest IPO, and the Saudis pegged a large part of the Vision 2030 economic agenda on proceeds from the IPO.Saudi Arabia immediately denied the reports that the listing was canceled, with Energy Minister Khalid al-Falih saying in a statement carried by the Saudi Press Agency: “The Government remains committed to the IPO of Saudi Aramco at a time of its own choosing when conditions are optimum. This timing will depend on multiple factors, including favorable market conditions, and a downstream acquisition which the Company will pursue in the next few months, as directed by its Board of Directors.” In that same statement, al-Falih said that in order to prepare for Aramco’s listing, the Saudi government had taken several steps in that direction, including “reissuing a long-term exclusive concession,” without specifying details.
Will Saudi Arabia’s Geopolitical Strategy Backfire? --Russian Deputy Foreign Minister Mikhail Bogdanov said on Friday that Vladimir Putin is preparing to visit Saudi Arabia. The statement comes after the Russian president received an invitation from Saudi King Salman at an unspecified time, according to reports. Bogdanov added that the visit is pending on Putin’s schedule. King Salman became the first Saudi monarch to visit Russia last October, meeting Putin in the Kremlin. The disclosure on Friday also comes just months after Saudi Crown Prince Mohammed bin Salmon visited Moscow to attend the opening of the 2018 World Cup. He also meets with Putin during this visit. While Bogdanov declined to disclose what the talks would be about, it’s apparent that global oil markets will be on the top of the agenda as will developments in Syria (where Moscow and Riyadh are on opposing sides in the ongoing Syrian Civil War), as well as talk about fresh U.S. sanctions on Iran that could remove, according to many estimates, up to 1 million barrels per day of oil from global markets. It was Russia that came to the aid of Saudi Arabia after the kingdom had for all practical purposes lost its decades long ability to play global oil markets swing producer as U.S. shale oil production revolutionized markets.Earlier this year, there was talk about a more permanent, 10 or even 20-year, Saudi-Russian oil production agreement, bin Salman told Reuters news agency. What remains to be seen however, in spite of the successful recent Saudi-Russian agreement to take back control of global oil markets, is whether or not a permanent so-called expanded OPEC, non-OPEC cartel would even work long term. While both countries seem to be putting aside stark differences over Syria (where Russia supports the country’s embattled president Bashar al-Assad, while Saudi Arabia, along with Qatar and Turkey, support the Syrian rebels) it has nonetheless strained relations. Russia and Saudi Arabia also have differences over how to handle Iran’s nuclear power development ambitions.
US-backed Saudi regime set to behead female activist and four others -- State prosecutors in Saudi Arabia have called for the execution by beheading of 29-year-old political activist Israa al-Ghomgham, her husband, Moussa al-Hashem, and three others for the “crimes” of peacefully demonstrating against the country’s monarchical dictatorship, chanting slogans against the regime and posting videos of their protests on social media. The death sentences, including the first for a Saudi woman based on alleged political offenses, are emblematic of a criminal regime that counts as Washington’s closest ally in the Arab world.The protests that led to the charges took place in the port city of Qatif in the Saudi kingdom’s oil-rich Eastern Province, home to the bulk of the country’s Shia minority population. Beginning in 2011 and continuing since, the protests have challenged the systematic discrimination against and oppression of the Shia population by a monarchy that is bound up with the official, state-sponsored religious doctrine of Wahhabism, an ultra-conservative Sunni sect.The demonstrations, demanding equality, improved social conditions in a region that remains deeply impoverished despite its oil wealth, freedom of expression and the release of political prisoners, have been answered with a police state crackdown that has seen entire communities subjected to military siege.Israa al-Ghomgham and her husband were arrested on December 6, 2015 when security forces staged a night raid on their home. They have been imprisoned ever since, held for 32 months, most of that time without access to a lawyer and without being presented with any formal charges against them. From a working class background, Ghomgham’s family did not have the money to pay for a lawyer. It was only after her father began a public attempt to raise funds that an attorney volunteered to defend her. She and her co-defendants were tried in the Saudi regime’s Specialized Criminal Court, set up in 2008, ostensibly to try terrorism cases. The court’s proceedings, in which the rights of defendants are virtually non-existent, amount to a show trial, with the verdict as well as the sentence determined in advance by the monarchy.
U.N. Report Flags Possible War Crimes in Yemen Conflict – WSJ - Members of a Saudi-led coalition and allied forces fighting Houthi rebels in Yemen may be guilty of torture, using child soldiers and attacks on civilians that amount to war crimes, a United Nations report said Tuesday, adding to international criticism of the group.The U.N. report also found that Houthis could be guilty of war crimes due to their blockage of goods into civilian areas, and cited evidence that the rebels tortured detainees and recruited child soldiers.The Saudi-led coalition referred the U.N. report for review by its legal team, and would take a position following that process, according to a Saudi state television report. A Houthi representative also said the issue had been sent to the rebels’ legal office for review, but declined further comment. The report, by a panel of three experts, focused in part on the U.S.-backed coalition’s airstrikes, which have killed hundreds of civilians. The U.S. supplies many of the precision weapons used in Saudi coalition airstrikes, and provides other limited support, including aerial refueling for coalition jets.In Washington, Defense Secretary Jim Mattis said the U.S. hadn’t seen any “callous disregard” by the Saudis toward civilians in Yemen. “Our goal is to reduce this tragedy, and to get it to the U.N.-brokered table as quickly as possible,” Mr. Mattis said.The coalition—which includes Saudi Arabia, the United Arab Emirates and Yemeni allies—has waged a war against the Houthis since 2015, using a combination of airstrikes and ground forces in a bid to oust the Iran-allied rebels from the Yemeni capital of San’a and restore the internationally recognized government of President Abed Rabbo Mansour Hadi. While the coalition has taken over swaths of Yemeni territory, the Houthis remain in control of San’a and other areas in the north and west. At least 6,660 civilians have been killed in the conflict, according to the U.N., many allegedly from the coalition air campaign. Other allegations in the report included accusations of sexual violence and severe restrictions on the flow of commercial goods and people through ports and airports. The report, for example, alleged the coalition’s effective closure of the airport in San’a led to the death of the founder of Yemen’s Red Crescent Society last year because he wasn’t able to travel abroad for lifesaving treatment.
Furious Saudi Arabia Condemns UN Report On Yemen War Crimes A Tuesday report released by the UN confirmed in considerable detail misdeeds by the Saudi-led coalition in Yemen, killing thousands of civilians in Yemen, raping and torturing detainees, and using child soldiers. The report warned these may amount to war crimes.While they didn’t specifically dispute any of this, Saudi Arabia was predictably furious about the report, angrily condemning it as having “misconstrued the facts of the conflict… ignoring the true reasons for the conflict,” while saying that it was an Iranian coup against the “legitimate government in Yemen.” While previous UN resolutions more or less accepted the Saudi narrative that the war is meo reinstall the Hadi government, that massive death toll and the many, many war crimes committed have fueled a lot of international consternation.Still, UN reports detailing war crimes by the Saudi coalition have been met by Saudi condemnation, and in the past that, combined with US support for the war, has been enough to keep the UN from doing anything in particular about the situation. The UN General Assembly has repeatedly acquiesced to demands that the Saudis be allowed to investigate themselves on the war, which has meant probes are rare, and never come up with anything meaningful.
Why Americans Can't Understand The Middle East - A recent editorial in the Washington Post, written by columnist David Ignatius, offers a shining example of the United States’ difficulty in understanding today’s world and, most of all, the Arab world. The journalist expresses uneasiness about the fact that “American power and values won’t matter the way they once did”. His position is steeped in the typical intellectual milieu of American exceptionalism, a position based on the hardwired assumption that the condition for an ideal existence and a stable world order are ensured only when American power and values are strong and shared. The article emphasises that, at the moment, there would be “…no constituency in the US for…doing more in the Middle East”. Quoting the same Arab source, Ignatius affirms that US disengagement could imply that Arab nations will need to do things on their own. So far nothing wrong, except that, for Ignatius and his source, Arab nations going it alone has only one meaning: “closer relations with Russia and China”. Another depressing and frustrating example of Western binary thinking. It could be argued that the columnist’s conclusion is neo-colonial, orientalist, or too patronising; but what appears incontrovertible is that it does not put an inch of trust in Arab will and capabilities to find their own way in managing their own foreign policy in their own region and in the rest of the world.The American columnist adds:“Maybe I’m a foreign policy dinosaur. But I still want a modernizing Middle East that shares America’s value, and I regret our loss of influence – and even more, the way that decent people and ideas suffer when the umbrella of US hegemony is withdrawn and discarded…. I’ve seen new examples of bad decisions when leaders decide that Uncle Sam doesn’t matter.” This set of statements is so absurd that it deserves to be analysed, sentence by sentence: “Maybe I’m a foreign policy dinosaur.” At least, Ignatius seems assaulted by some doubt. This is probably the most truthful sentence in his whole article. Losing influence is part of an historical cycle that has occurred to every great nation. This process could be accelerated when this influence is badly and unwisely used, as appear to be have been the case for the United States in the last 25 years.
UAE Buys World's Largest Rocket Launcher "Jobaria" From Turkey - One of the leading firms in the Turkish defense industry, Roketsan, set a record with world’s largest rocket artillery, capable of launching hundreds of rockets in 2 minutes from a single military vehicle, the company announced on Saturday. Jobaria, a Multiple Cradle Launcher (MCL), was developed by Roketsan for the United Arab Emirates (UAE), has achieved legend status with Guinness World Records for the world’s largest rocket artillery in terms of the number of barrels, the company said in a statement sent to journalists. The UAE requested the large rocket artillery battery on one vehicle since its military is phasing out the older, BM-21 Grads, a Soviet truck-mounted 122 mm multiple rocket launcher. The MCL has a significant advantage over the BM-21 Grads; it replaces the use of six launcher vehicles which require a team of over 30 troops, whereas the MCL only needs a group of three to operate and launch the same number of rockets (240). The system has four rocket launchers attached to the trailer each carrying sixty 122mm rockets. It can fire 240 Roketsan 122mm T-122 Sakarya rockets fitted with a high-explosive warhead at targets with a maximum range of around 37 kilometers (23 miles). All missiles can be fired in under two minutes, making the rate of fire two rounds per second. After launching the rockets, a support team can reload the missile system in about 30 minutes. While it is still unclear why the UAE would need the world’s most massive rocket launcher, perhaps, the missile system may find a new home in the Saudi-led alliance against Yemen. There is also another possibility the country is gearing up for conflict in the Strait of Hormuz, as Washington and Tehran bicker over who controls the strait between the Persian Gulf and the Gulf of Oman. In any case, war is coming, and the world’s largest rocket launcher will be used.
Pushing Beirut And Baghdad To Comply With Iran Sanctions Is Risky Business - President Donald Trump has reimposed an old set of American sanctions on Iran, as well as new ones following his abandonment of the Joint Comprehensive Plan of Action (JCPOA) last May. For regional neighbours Lebanon and Iraq, these sanctions could not have come at a worse time. Both are in the throes of political crises that threaten their fragile democracies. Both need to avoid the complications arising out of a poorly-thought-out Trump decision. In fact, if the Trump administration wants to help its friends in the Arab world, it would do well to try to blunt the impact of these sanctions on these two countries. On August 6, the US reimposed sanctions on the use of dollar bank notes in Iran’s trade transactions, which had been permitted when the Islamic Republic signed the JCPOA, or Iran nuclear deal, in July 2015.Another oil-related batch of sanctions will be imposed on November 5 and are likely to reduce Iran’s exports by about 500,000 barrels per day, thus disrupting international energy markets and causing a price increase of about $20 per barrel.In fact, aside from the domestic impact in Iran, these measures are likely to cause global financial and commodity disruptions that will be felt by large and small economies. Given their economic relationship with the United States and the American currency, Lebanon and Iraq have no recourse but to abide by what Washington wants. But, unfortunately for the two countries, the devil is in the details of their political realities. Both currently have caretaker governments that prevent them from making firm decisions on compliance with sanctions.Both have pro-Iranian political forces that oppose the sanctions – seeing them as a foreign tool to effect regime change in Tehran – and consider it their duty to help defend current regime.
Iran Continues to Comply With Nuclear Deal, U.N. Atomic Agency Says —Iran continues to fulfil the key requirements of the 2015 nuclear deal, the United Nations atomic agency said Thursday, despite the U.S. withdrawal from the agreement. The report comes as tensions between Iran and the West have sharpened, amidst rising U.S. economic pressure on Tehran and allegations that Tehran was involved in a terror plot in Europe. In a confidential quarterly report sent to member states, seen by The Wall Street Journal, the International Atomic Energy Agency reported that Iran was honoring its pledges to limit stockpiles of key nuclear materials and maintain IAEA inspectors’ access to sites. It signaled no other breach of the accord’s requirements by Tehran. Iran’s stockpile of enriched uranium rose to 139 kilograms from 124 kilograms in May, but remained well within the 202-kilogram limit. A kilogram is 2.2 pounds.
Exclusive: Iran moves missiles to Iraq in warning to enemies (Reuters) - Iran has given ballistic missiles to Shi’ite proxies in Iraq and is developing the capacity to build more there to deter attacks on its interests in the Middle East and to give it the means to hit regional foes, Iranian, Iraqi and Western sources said. Any sign that Iran is preparing a more aggressive missile policy in Iraq will exacerbate tensions between Tehran and Washington, already heightened by U.S. President Donald Trump’s decision to pull out of a 2015 nuclear deal with world powers. It would also embarrass France, Germany and the United Kingdom, the three European signatories to the nuclear deal, as they have been trying to salvage the agreement despite new U.S. sanctions against Tehran. According to three Iranian officials, two Iraqi intelligence sources and two Western intelligence sources, Iran has transferred short-range ballistic missiles to allies in Iraq over the last few months. Five of the officials said it was helping those groups to start making their own. “The logic was to have a backup plan if Iran was attacked,” one senior Iranian official told Reuters. “The number of missiles is not high, just a couple of dozen, but it can be increased if necessary.”
Iran Stuns Enemies By Moving Ballistic Missiles To Iraq - Within Easy Striking Distance of Tel Aviv - In what is sure to be a realization of one of Netanyahu's worst nightmares, and deeply awkward for US advisers to Baghdad, Iran has transferred ballistic missiles to Shia proxy forces in Iraq, according to Western and Iraqi intelligence sources cited in a new Reuters report. The revelation comes as tensions between Washington and Tehran are already at their highest point in years as aggressive sanctions continue crippling Iran's economy, and after threats and counter-threats over Tehran laying claim to the vital Strait of Hormuz oil waterway over the past weeks, through which some one-third of the world's oil passes. The Reuters report cites multiple officials and intelligence sources, including Iranian officials who seem willing to inform the world of the provocative move:According to three Iranian officials, two Iraqi intelligence sources and two Western intelligence sources, Iran has transferred short-range ballistic missiles to allies in Iraq over the last few months. Five of the officials said it was helping those groups to start making their own.“The logic was to have a backup plan if Iran was attacked,” one senior Iranian official told Reuters. “The number of missiles is not high, just a couple of dozen, but it can be increased if necessary.”The news is sure to cause a stir for European signatories to the 2015 nuclear deal (JCPOA) like Germany, the UK, and France, who are still trying to salvage it, as it is a clear sign that the deal which the Trump White House pulled out of is in tatters. Reuters identifies the Zelzal, Fateh-110 and Zolfaqar missile systems as among those transferred — with ranges of between 200 and 700km, which puts "Saudi Arabia’s capital Riyadh or the Israeli city of Tel Aviv within striking distance if the weapons were deployed in southern or western Iraq".And notably the elite Islamic Revolutionary Guard Corps (IRGC) Quds force head, Gen. Qassem Soleimani, is overseeing the missile transfers and their operation in what regional foes Saudi Arabia and Israel are sure to interpret as the most provocative and escalatory move by its archenemy in recent years.
Israel renews threat to attack Iran targets in Syria -- Israel on Wednesday renewed its threat to attack Iranian military targets in Syria, after the two Muslim allies signed an accord on security cooperation. “The IDF (Israel Defence Forces) will continue to take strong and determined action against Iran’s attempts to station forces and advanced weapons systems in Syria,” Prime Minister Benjamin Netanyahu said. “No agreement between Syria and Iran will deter us; neither will any threat deter us,” he said at a ceremony naming Israel’s nuclear facilities after late president Shimon Peres. Iran’s military attache to Damascus said on Tuesday that his country’s military advisers would remain in Syria under the defence agreement signed the previous day. “Support for Syria’s territorial integrity and the independence of Syrian sovereignty were also emphasised in the agreement,” Brigadier-General Abolghasem Alinejad said. Tehran has provided steady political, financial and military backing to Assad as he has fought back against a seven-year uprising.
Israeli Reports Claim New Images Confirm Iranian Surface-to-Surface Missile Facility In Syria - At the end of a week where tensions with Iran and Syria have reached a high point of late, and as the final showdown between the Syrian Army and al-Qaeda insurgents in Idlib looms, multiple Israeli media reports claim Iran is constructing new surface-to-surface ballistic missile factories in Syria.What's more, the reports claim, Iran's military is taking advantage of Russia's sophisticated antiaircraft defense missile systems in Syria to build the sites within range of the their protective defense umbrella. The Jerusalem Post, for example, echoing other Israeli outlets, relies on the open-source satellite image analysis site ImageSat to claim Iran is taking advantage of Russian defenses to avoid Israeli retaliation. According to the Jerusalem Post report:According to ImageSat, both the facility in Masyaf and the one in Wadi Jahannam are located within the operational range of a Russian S-400 deployment, showing that Iran is “utilizing or exploiting the defense abilities of Russia.”Russia deployed the advanced mobile S-300 and S-400 anti-aircraft batteries to Syria in October 2017. The batteries are capable of engaging multiple aircraft and ballisti c missiles at a distance of up to 380 kilometers, covering virtually all of Syria as well as significant parts of Israel and neighboring countries such as Turkey and Jordan.
Syria Spurns US Offer to Pull Out Troops as Trade for Iran Withdrawal – Report - Syria turned down an offer from the US to withdraw their forces from Al Tanf, a US base in the southeast and the East Euphrates zone in exchange for three concessions from the Assad government, according to a report from Lebanese daily Al Akhbar. Officials of "several US intelligence and security agencies" reportedly landed in a private UAE plane at Damascus International Airport in late June. They then took off in a convoy towards the center of Damascus for a meeting with the head of Syria's national security office, Major General Ali Mamlouk. The meeting reportedly lasted for four hours. The sides discussed multiple aspects of the seven-year war in the country before the Americans made their offer: a withdrawal of its troops from Al Tanf and the East Euphrates on three conditions, including a complete Iranian withdrawal, a share in Syria's oil spoils, and intelligence on terrorists. The first condition was that Iran also withdraw fully from the country. Unlike the United States, Iran was invited by the Syrian government to help it fight Islamist insurrectionists and foreign proxies. As a second concession for an Al Tanf withdrawal, Al Akkbar said that the Americans also demanded a share in the oil sector of eastern Syria, which until recently was occupied by Daesh militants with a stronghold in Deir ez-Zor. Third, the US officials also reportedly sought Syrian intelligence on terrorists who could present threats to Western countries in the future.
Is Washington on the brink of a major attack on Syria? --The US and its allies are systematically putting into place all the elements needed to justify and carry out a major new act of aggression against Syria, according to reports from Moscow and the Middle East.The charges that Washington is preparing an unprovoked attack followed warnings made by US National Security Adviser John Bolton, as well as by British and French officials, that their governments would retaliate sharply against any use of chemical weapons by the government of President Bashar Assad in the northern Syrian province of Idlib.Recent bombing and shelling by the Syrian military, as well as the reported transfer of the Syrian army regiment based in the city of Homs to the southern border of Idlib, have raised speculation that Damascus is on the verge of launching an offensive to retake one of the last territories still under the control of Al Qaeda-linked Islamist militias. These forces were armed and funded by Washington, Turkey, Saudi Arabia and Qatar to wage a seven-year-long proxy war for regime change aimed at installing a more pliant pro-imperialist regime in Damascus.The Assad government has denied employing chemical weapons in its campaign to reassert control over areas of the country seized by the Western-backed “rebels.” It has accused the Al Qaeda-linked forces of staging chemical weapons incidents with the aim of provoking US military attacks on the regime, like the ones carried out last April and in 2017. Speaking at a press conference in Jerusalem last Wednesday, Bolton declared: “We are obviously concerned about the possibility that Assad may use chemical weapons again. Just so there’s no confusion here, if the Syrian regime uses chemical weapons we will respond very strongly and they really ought to think about this a long time.”
Russian Official Shocks By Urging Tactical Nuke Deployment In Syria After Bolton Warning - The long-running US and Russian proxy war in Syria has been largely forgotten of late, but suddenly snapped back into international headlines with John Bolton's warning Assad and Russia this week that Washington will respond with "greater military force" should claims of a Syrian government chemical attack emerge in Idlib. In response, Russia subsequently warned of a staged "chemical provocation" coming and it appears a war of words is yet again ratcheting up over Syria, which has the very real potential of turning into an actual war.It fits a familiar pattern on Syria since Russian intervention at the invitation of President Bashar al-Assad in 2015: just when it appears the jihadists are on the brink of final defeat, and as stability is returning after seven years of grinding war, something happens to bring things right back to the brink of global crisis and escalation. And now, a senior Russian lawmaker in the Federal Assembly (Duma) has called on his government to draw its own "red lines" while suggesting the use of tactical nuclear weapons against United States forces in Syria. The Russian official news agency TASS reports Vladimir Gutenev's shocking words spoken on Friday. Gutenev is the first deputy head of the economic policy committee of the State Duma, the lower chamber of the Russian parliament.Gutenev said, “I believe that now Russia has to draw its own ‘red lines.’ The time has come to ponder on variants of asymmetric response to the US, which are now being suggested by experts and are intended not only to offset their sanctions but also to do some retaliatory damage.” Among such measures, the official named the deployment of tactical nukes, saying that Russia should "follow the US example and start deploying our tactical nuclear weapons in foreign countries." While it's unclear what Gutenav meant by his citing "the US example", on a few occasions unverified accusations have emerged alleging the US and its allies like Israel have used small nuclear devices in places like Syria and Yemen, echoed also among pro-Russian sources.
Russia Sends Largest Naval Armada Of Syrian War Amidst New Chemical Attack Warnings - We observed previously after John Bolton's threat late this week of "greater military force" should chemical weapons allegations emerge against Damascus, that a familiar pattern has long been in play on Syria: just when it appears the jihadists are on the brink of final defeat, and as stability is returning after seven years of grinding war, something happens to bring things right back to the brink of global crisis and escalation. Russia has built up its forces around the Mediterranean Sea in response to reports that the U.S., France, and Great Britain could be preparing to attack Syria after US National Security Advisor John Bolton informed Russia that America is prepared to respond with greater military force than it has used against Assad’s regime in the past, according to Bloomberg. According to Yoruk Isik of the Bosphorus Observer, the Russian Navy has sent another armada of ships towards Syria’s territorial waters in order to increase the strength of their forces around the country. Isik said that the powerful Russian warships, Admiral Grigorovich and Admiral Essen class frigate, were spotted transiting the Bosphorus Strait en route to the Port of Tartous.This latest move by the Russian Navy comes just 24 hours after they sent three ships en route to the Port of Tartous in western Syria. New & powerful: Armed with Kalibr SS-N-27 missiles, #ВМФ #ЧФ second Admiral Grigorovich class frigate AdmIral Essen redeployed to Mediterranean after 58 days & transits Bosphorus en route to #Tartus #Syria pic.twitter.com/lnflQbZJzx — Yörük Işık (@YorukIsik) August 25, 2018 The Turkish coast guard monitored the frigates as they passed through the Bosporus toward the Mediterranean, reportedly en route to Russia's only major deep-water port in the region along the Syrian coast.
Russia’s fleet to counter US moves ahead of Syrian offensive -- Russia has beefed up its naval presence in the Mediterranean amid claims by Moscow that the United States is poised to launch a strike at Syrian forces preparing for a major offensive in Idlib.Up to 11 Russian warships have crossed the Bosphorus as tensions between the US and Syria continue to rise.“It included at least 10 vessels and two submarines – with more on the way,” the Russian daily newspaper Izvestia stated, adding that most of the flotilla is carrying Kalibr cruise missiles. If the reports are correct, this would be the biggest task force sent by President Vladimir Putin’s government since Russia’s intervention in the Syrian conflict in 2015. It also comes at a time when Moscow’s ally, Syrian President Bashar al-Assad, is believed to be on the brink of launching an assault on the last big rebel-held enclave of Idlib in the north of the country.Russia has already accused the Washington administration of President Donald Trump of building up its own forces in the Middle East in preparation for a possible strike on Syrian government forces if they use chemical weapons. On Aug. 25, the USS Ross entered the Mediterranean, according to the Russian Ministry of Defense. The guided-missile destroyer is armed with 28 Tomahawk cruise missiles capable of hitting any target in Syria.
Russia sent a massive naval armada to Syria — and looks to be readying to fight the US - Russia has positioned a considerable naval armada in the Mediterranean near Syria after accusing the US of plotting a false-flag chemical-weapons attack in rebel-held areas — and it looks as if it's preparing for war with the US. A Russian Defense Ministry spokesman, Maj. Gen. Igor Konashenkov, recently said the US had built up its naval forces in the Mediterranean and accused it of "once again preparing major provocations in Syria using poisonous substances to severely destabilize the situation and disrupt the steady dynamics of the ongoing peace process." But the Pentagon on Tuesday denied any such buildup, calling Russia's claims "nothing more than propaganda" and warning that the US military was not "unprepared to respond should the president direct such an action," CNN's Ryan Browne reported. Business Insider reviewed monitors of Mediterranean maritime traffic and found only one US Navy destroyer reported in the area. The same naval monitors suggest Russia may have up to 13 ships in the region, with submarines on the way. This time, Russia looks as if it's up to more than simply conducting a public-relations battle with the US. Russia's navy buildup around Syria represents the biggest since Moscow kicked off its intervention in Syria with its sole aircraft carrier in 2015.But even with its massive naval presence, Moscow doesn't stand a chance of stopping any US attack in Syria, Omar Lamrani, a military analyst at the geopolitical-consulting firm Stratfor, told Business Insider."Physically, the Russians really can't do anything to stop that strike," Lamrani said. "If the US comes in and launches cruise missiles" — as it has in past strikes — "the Russians have to be ideally positioned to defend against them, still won't shoot down all of them, and will risk being seen as engaging the US," which might cause US ships to attack them.
Caught On Video- Syrian Convoy Heads For Idlib Final Battle -- As speculation mounts that the Syrian army is preparing for a Russia-backed "anti-terror operation" in Idlib, dubbed by one army officer as "the final battle," video has emerged of a convoy of Syrian Army troops heading towards the frontline. As they passed through Maar Shahour village in Hama Governorate, soldiers rode on top of lorries carrying tanks, artillery and armored personnel carriers. One army officer said his troops were ready for the "final battle" against militants in Idlib province.This clip comes as Russian foreign minister Sergei Lavrov warned/asked the West not to intervene: "I hope our Western partners will not give in to (rebel) provocations and will not obstruct an anti-terror operation" in Idlib, foreign minister Sergei Lavrov said at a press conference with his Saudi counterpart Adel al-Jubeir in Moscow.Lavrov also said that there is "full political understanding" between Russia and Turkey, who support opposing sides of the Syrian civil war but are currently in intense negotiations to ensure Idlib does not become a breaking point in their alliance."It is necessary to disassociate the so-called moderate opposition from terrorists and at the same time prepare an operation against them while minimising risks for the civilian population," Lavrov said."This abscess needs to be liquidated."Lavrov went on to accuse the West of "actively heating up" the idea of a "so-called planned chemical attack by the (Syrian) government."As we detailed previously, over the last week, Moscow has accused Syrian rebels of planning to stage a chemical attack in the northwestern province that would "provoke" Western strikes on its ally Damascus. This month Syrian and Russian air attacks and shelling began targeting al-Qaeda held Idlib in what is likely a prelude to a full-scale ground offensive.
Russia Attached 12 Flamethrowers To A Battle Bot And Set It Loose In Syria - Russia has created a 12-ton "battle bot" which has been equipped with 12 Shmel-M man-portable rocket launchers classified as Rocket-propelled Infantry Flamethrower by their maker. Those can be fitted with destructive thermobaric and incendiary warheads. The flamethrowers are fitted on top of the vehicle’s turret into two, presumably revolving, assemblies and appear to be a permanent add-on to the robot’s firepower, reports state-owned news agency Tass. The "Uran-9" battle bot can also be configured with the standard armament of four "Ataka" anti-tank missiles, as well as 7.62mm and 30-millimeter guns. As RT adds, the 12-tonne vehicle has also retained its main armament, allowing it to take on tanks and light fortifications. Uran-9 has a 30mm 2A72 automatic gun, a 7.62mm PKTM machine gun, as well as four Ataka anti-tank guided missiles. The robot can be also fitted with Igla MANPADs, boosting the anti-aircraft capabilities of the unit it’s deployed with.While Russia says it has tested the bot in Syria and it "showed itself well," according to Defense Blog - citing a presentation at a February Russian security conference, the battle bot performed poorly. In addition to losing contact with ground control stations, the Uran-9 reportedly suffered from an unreliable gun and suspension system, and had difficulty targeting while in motion.
In Rare Meeting, Russia Delivers Intel To US Officials Showing "Planned Chemical Provocation" In Syria -- Russia says that its diplomats in Washington formally reached out to US officials and have briefed them on an impending plan by al-Qaeda insurgents in Idlib to stage a false flag chemical attack in order to provoke a Western military strike on Damascus. This week Moscow has claimed to be in possession of firm intelligence that it says shows armed groups in Idlib are transporting chemicals to area sites, in preparation for the coming major Syrian Army and Russian offensive on the contested province in northwest Syria. According to RT News, it appears that the State Department previously confirmed that the rare meeting did take place: Anatoly Antonov, the Russian ambassador in Washington, confirmed to the media on Wednesday that he had met with the US special representative to Syria, James Jeffrey, and David M. Satterfield, acting assistant secretary of state for near eastern affairs. The attendees of the rare meeting and the fact that it had taken place earlier this week was revealed by US State Department spokesperson Heather Nauert during a daily briefing. The meeting was reportedly held this past Monday, according to Russian Ambassador Antonov, who told RT it was "constructive and professional". We noted previously that Pentagon and US officials have continued pushing the gambit on Syria, with multiple statements last week and this week which appear to be setting the stage to play the "Assad is gassing his own people" card should so much as an inkling of an allegation emerge. With the dominant al-Qaeda group in control of Idlib, Hay'at Tahrir al-Sham (HTS), facing imminent defeat in what is likely to be a lengthy, grinding final showdown, they have every incentive to claim Syrian government forces are using sarin or another internationally banned substance. But it appears Monday's meeting constitutes a back-channel attempt to calm the fast intensifying situation.
Russia's "Nuclear Combat" War Games Largest In Nearly 40 Years --Russia's upcoming joint military exercise with China and Mongolia, set for September 11 - 15, will be the largest Russian drill in nearly 40 years according to Russian Defense Minister Sergei Shoigu, who said they will be larger than the Soviet military's 1981 Zapad-81 (West-81) exercises. "In some ways they will repeat aspects of Zapad-81, but in other ways the scale will be bigger," Shoigu told reporters from the Russian region of Khakassia. The exercise, Vostok-2018 (East-2018), will occur in central and eastern Russian military districts, and will involve nearly 300,000 troops, over 1,000 military aircraft, two of Russia's naval fleets, and their entire airborne forces, Shoigu said in a Tuesday statement. "Imagine 36,000 armored vehicles — tanks, armored personnel carriers and armored infantry vehicles — moving and working simultaneously, and that all this, naturally, is being tested in conditions as close as possible to military ones," said Shoigu. Also included in the drills, as we mentioned Friday, will be the inclusion of simulated nuclear weapons attacks. And according to the South China Morning Post (SCMP) the People's Liberation Army (PLA) will participate by sending about 3,200 elite forces troops, along with 30 fix-wing aircraft and helicopters to the Russian-hosted exercises. Japanese Prime Minister Shinzo Abe is scheduled to attend a forum in the Russian city of Vladivostok during the exercises, according to Reuters, while a Japanese Foreign Minister official said on Tuesday that Tokyo is monitoring developments between Beijing and Moscow. The war games, which will take place from Sept. 11-15, are likely to worry Japan, which has already complained about a Russian military build-up in the Far East, something Moscow has linked to Tokyo’s roll-out of the Aegis U.S. missile system. –Reuters The SCMP cites one Beijing based military expert, Zhou Chenming, to explain that the PLA is seeking to gain greater military experience as its last major combat theater stretches all the way back to the Vietnam War.
China's steel, iron ore sectors may be passing the peak: Russell (Reuters) - It’s been a long time coming but Chinese steel prices are finally showing signs of running out of steam, with futures having dropped for six straight sessions. The Shanghai Futures Exchange benchmark rebar contract closed at 4,160 yuan ($605) a tonne on Wednesday, having retreated from the seven-year high of 4,418 yuan a tonne, reached on Aug. 22. The recent declines point to an increasing tug-of-war between still robust margins for steel makers and the likelihood of slowing demand growth in China, which produces about half of the world’s steel. Steel futures gained about 29 percent from the end of last year to their recent peak, as Chinese mills enjoyed some of the strongest profits in years. Output curbs related to efforts to control pollution and the cutting of older, less efficient capacity, has boosted the industry’s fortunes. Improving profits have allowed steel mills to boost production by employing higher grade iron ore as a feedstock, which has the added benefit of requiring less coking coal per unit of steel produced. The result has been record output, with China producing a fourth straight monthly high in July of 81.24 million tonnes, according to official statistics. Year-to-date output to end-July grew 6.3 percent compared with the previous year to 532.85 million tonnes, as profit margins reached around 1,100 yuan a tonne, according to analysts from Huatai Futures. While it’s logical to expect steel mills to maximise production when profit margins are elevated, there is some concern as to where all the steel is going. The key construction sectors appear to still be enjoying strong activity, but perhaps not enough to justify a 6.3 percent increase in output. Other steel-consuming sectors, such as appliance and goods manufacturing and car making are in a similar position. Exports of steel products have been trending lower this year, with shipments of products in the first seven months of the year slipping 13.6 percent to 41.3 million tonnes. The escalating trade dispute with the United States, and imposition of duties by other countries on Chinese steel means exports are unlikely to return to growth any time soon.
Trade war: China suffers three-month export downturn as Donald Trump’s tariffs bite - The powerful export machine of China is quickly losing steam amid threats of a full-blown trade war with the United States, an index compiled by Beijing suggests. The “new export order” subindex in China’s official purchasing manager index – the first available indicator to gauge China’s export sector’s health every month – fell sharply in August even when only a small portion of Washington’s threatened additional tariffs on Chinese products kicked in, according to the National Bureau of Statistics. The subindex dropped by 0.4 points to 49.4 in August, the lowest since the China-US trade tension escalated in March, according to data released by the statistics agency. It was also the third month that the export order subindex had been below 50 – under 50 means a contraction – marking the first time China has had a three-month export downturn in two years. Small and medium-sized exporters were hit particularly hard, with readings of 47.4 and 48 respectively, while large firms had an index reading of 50.2, according to the China Federation of Logistics and Purchasing, the agency that compiled the purchasing manager index (PMI) together with the statistics agency. At the same time, the import subindex fell to 49.1 in August from 49.6 in July.
Modernized Chinese Navy Could Surpass US, Prompting Fears It's Game Over For US In Pacific - The NYT report sounds the alarm that while US naval firepower remains superior if not spread a bit thinner than China's expanding fleet, American ships can no longer maintain global dominance of Pacific seas with ease: "That means a growing section of the Pacific Ocean — where the United States has operated unchallenged since the naval battles of World War II — is once again contested territory, with Chinese warships and aircraft regularly bumping up against those of the U.S. and its allies."This is a trend also recently acknowledged by the new commander of the U.S. Indo-Pacific Command; “China is now capable of controlling the South China Sea in all scenarios short of war with the United States,” Adm. Philip S. Davidson stated as part of his Senate confirmation process in March.Adm. Davidson explained in written statements submitted to Congress at the time that China is developing “asymmetrical capabilities,” in areas of sophisticated anti-ship missiles and submarine warfare. “There is no guarantee that the United States would win a future conflict with China,” he concluded.This comes as more detailed reports have surfaced over the past year confirming that China is fast militarizing its rapidly expanding set of man-made islands in the South China sea while using such a "land presence" to lay claim to both international waters and airspace. Beijing's so called "nine-dash line" encircles as much as 90 percent of the contested waters in the South China Sea and runs up to 2,000 kilometers from the Chinese mainland and within a few hundred kilometers of Malaysia, Vietnam, and the Philippines — all within this vaguely defined zone Beijing claims as within its "historical maritime rights".
What Does a Chinese Superpower Look Like? Nothing Like the U.S --For the first time in its long history, China has in President Xi Jinping a leader with a truly global vision. So, inevitably, Beijing looks to the U.S., the sole superpower, for a yardstick as to what that requires—be it a blue water navy or more research stations in Antarctica.Yet Communist Party leaders also recoil at being seen as the next global hegemon and are reluctant to shoulder the expense that goes with it. They studiously avoid the word “superpower” and see the American version of it as ideologically unacceptable and spent. Whether China does become a superpower and whether it could sustain the costs involved are questions that will impact the world for decades. They will shape terms of trade, a changing global order, and issues of war and peace. “We don’t know,” Wang said over dinner a few floors below his institute, when asked what Chinese great power will look like. “Anything but America” Yet to misquote Leon Trotsky, even if China isn’t interested in becoming a superpower, superpower may be interested in it. The U.S., too, began its journey on the world stage determined not to replicate earlier colonial empires. Today, 11 carrier groups and a network of military bases span the globe to protect its interests. China may be heading down a similar path. An aircraft carrier construction program is underway. Its first overseas military base opened last year, in Djibouti on the Horn of Africa. Spending for diplomatic service is up sharply. Xi’s “Made in China 2025” economic project aims to displace the U.S. as the world’s technological power, while another plan calls for dominance in Artificial Intelligence by 2030. The country raised defense spending from $21 billion in 1990 to $228 billion last year, according to the Stockholm International Peace Research Institute, more than three times Russia’s budget. The ease with which it did so—the military’s share of overall government spending actually fell—suggests China can be any kind of power it wants.
The UN is calling on China to ‘immediately release’ one million Muslim Uighurs who may be held in detention centers - The United Nations has called on China to end the detention of what it has cited as "tens of thousands to upwards of a million Uighurs" in the far western Xinjiang province.The UN Committee on the Elimination of Racial Discrimination on Thursday urged China to "halt the practice of detaining individuals who have not been lawfully charged, tried, and convicted for a criminal offense in any extra-legal detention center."The committee also called out China's practice of racial and ethnic profiling and heavy-handed restrictions that disproportionately target the Uighur community.China has not denied the existence of the detention centers. It says the centers are part of a broader counter-terrorism and does not target a specific group.US lawmakers on Wednesday also renewed calls for China to end its repression of minority groups in the Xinjiang region, which has become one of the most intrusive police states in the world.Authorities use an expansive network of 40,000 facial-recognition cameras to monitor Uighur activity, and recently began collecting DNA samples, fingerprints, iris scans, and blood types from most Xinjiang residents.Recent reports indicate the Chinese government's surveillance efforts extend beyond its borders. Beijing allegedly maintains a global registry of the Uighur Muslim citizens who live outside the country.
US-led UN Command stops South Korean train entering North | Asia Times: In a highly unusual development, it has been reported in South Korea that the US-led United Nations Command prevented a South Korean train from crossing the Demilitarized Zone into North Korea earlier this month. The passage of an official South Korean train into North Korea is highly unusual and the incident raises questions over coordination between South Korea and the United States. It could also provide substantial propaganda fodder for North Korea.In what may or may not be a related development on Friday, the presidential Blue House announced that South Korean President Moon Jae-in would be sending a special envoy to North Korean next week. The North and South have agreed to hold a summit in September, but dates have yet to be set.The train incident happened on August 22, according to South Korean media. The train was reportedly carrying South Korean government officials on a trip designed to check North Korean rail conditions between the DMZ and Shinuiju, the North Korean city on the southern bank of the Yalu River, which forms the northern border with China. However, the train was refused permission to cross the border by the UN Command, the military organization which led free-world forces in the Korean War and which today coordinates with the states which fought in the war, while overseeing the 1953 armistice. A number of questions hang over the issue. Related US officials could not be reached by Asia Times for comment: Friday was a holiday for US Force Korea personnel. The South Korean government has also remained silent.The leading left-wing newspaper in South Korea, the Hankyoreh, headlined its story on the issue “Joint railway effort halted by excessive enforcement of sanctions.” The newspaper noted how unusual it was for the UN Command to prevent South Koreans transiting the border. “In reality, the UN Command’s approval authority has been a formality, and the practice has been to substitute it with notification from the South Korean military,” the newspaper said, citing a source familiar with cross-border procedures.Regarding the railway project, and the halting of the South Korean train, the source told the Hankyoreh. “The only conclusion you can reach is that the US government … wants to stop this project from going ahead.”
Rupiah Plunges To 1998 Asian Financial Crisis Low Amid Emerging Market Liquidation - Despite four rate hikes by the Bank of Indonesia since May, the Indonesia’s rupiah slid to a two-decade low, falling to 14,750 per dollar, a level last hit during the Asian Financial Crisis of 1998, and just shy of an all time low, spurring yet another intervention from the central bank as the contagion from the collapse in Argentina and Turkey has turned the market's attention on emerging markets with current account deficits. Indonesia's benchmark bond yields rose 10 basis points to the highest level since 2016, while the Jakarta Composite Index slipped as much as 1.3%.The plunge took place despite a notice from the central bank that it was intervening in the foreign exchange and bond markets, according to Nanang Hendarsah, executive director for monetary management.As a reminder, after Argentina and Turkey, Indonesia is next to be hit on this chart from JPM we first showed at the start of June, which plotted countries with a current account deficit and rising external debt.
Philippine President Duterte scoffs at US offer to buy ‘utterly useless’ F-16 jets - Philippine President Rodrigo Duterte has rejected an offer by the US defence chief and other top American officials to buy F-16 fighter jets, saying such an acquisition would be “utterly useless” because his country needs lighter combat aircraft to fight insurgents. Duterte scoffed at the offer on Thursday, saying it had been floated in a letter by Defence Secretary James Mattis, Secretary of State Mike Pompeo and Commerce Secretary Wilbur Ross. The offer came after he was slammed by the US for his deadly crackdown on illegal drugs, he said. During a televised speech in a military ceremony, Duterte read what he said was the letter to him by the US officials. He said the Philippines did not need the F-16s “and yet they dangled (them) before us after they humiliated us”. Duterte’s disclosure followed advice last week from a visiting Pentagon official, Randall Schriver, against buying Russian weapon systems and platforms. Philippine Defence Secretary Delfin Lorenzana was expected to meet his Russian counterpart this week about the possibility of buying Russian arms, local media reported. The US government’s letter said the “special relationship” between the two countries “will only grow stronger by increasing our dialogue and cooperation especially on security”. The letter noted Manila’s recent decision to procure Bell combat utility helicopters and Cessna utility aircraft. Bell and Cessna are both part of Textron Inc. “We hope to partner in all the significant defence procurement,” the US officials were quoted as saying in the letter. With ratings plummeting, how long can Duterte last? God knows Duterte said what he needed were attack helicopters and small planes for counter-insurgency operations.
Myanmar's Military Leaders Should Be Tried For Genocide, U.N. Investigators Say -The mass killings of Rohingya in Myanmar's Rakhine State constitute genocide and top military commanders should face prosecution for crimes against humanity, a team of United Nations investigators has concluded. After an eruption of intense violence last August, hundreds of thousands of Rohingya, members of a Muslim minority group, fled Buddhist-majority Myanmar to escape horrific massacres, mass rapes and the torching of their villages. The U.S. and U.N. have denounced the attacks on the Rohingya as ethnic cleansing. Now, the U.N. investigators are describing it as genocide and calling for accountability. It's not known how many Rohingya have died as the result of the attacks, but the U.N. team says an estimate of 10,000 deaths is "conservative." The crimes are "shocking for their horrifying nature and ubiquity" and "for the level of denial, normalcy and impunity that is attached to them," the U.N. researchers concluded. "Many of these violations undoubtedly amount to the gravest crimes under international law." Their report names six military officials, including the country's commander-in-chief, as "priority subjects" for prosecution on charges of genocide, crimes against humanity and war crimes. Investigators have prepared a longer list of names that has not yet been released. The report also indicates that civilian leadership, including de facto leader Aung San Suu Kyi, did not directly participate in the genocide, but "contributed" to the crimes through inaction, denial, destruction of evidence and interference with outside investigation. The findings "come as no surprise to those who've listened to the victims' stories or seen the evidence left behind,"
Rising oil prices could take a bite out of India's economy- The Indian economy is in for a rough ride, with rising oil prices set to continue weighing on its already-weakened currency, widen its deficit, and affect its growth outlook. Rebounding oil prices — and India's unrelenting demand for it — will push up oil imports and widen its current account deficit, which measures the flow of goods, services and investments into and out of the country, economists say. That widening deficit will result in a weakening rupee, they say, as more imports mean India has to buy more foreign currencies to meet its needs. "The INR (Indian rupee) is expected to continue to face depreciation pressures during the remainder of 2018, reflecting several factors including further US Fed rate hikes, India's widening current account deficit, and negative global investor sentiment towards emerging markets currencies and assets," IHS Markit Asia-Pacific Chief Economist Rajiv Biswas, said in an email to CNBC. Biswas predicted that the rupee will depreciate further, falling to 72 rupees against the dollar by the end of 2018 and reaching 74 rupees by August 2019. The rupee was last at 70.16 against the dollar at the close of Monday — representing a 9.96 percent decline since the beginning of this year. The rupee, along with the Indonesian rupiah and Philippine peso, will continue to be the most vulnerable in Asia, said a ANZ Research note. India's foreign reserves have been affected by these developments. "A challenging global environment has compelled the Reserve Bank of India (RBI) to intervene aggressively this year to contain rupee depreciation … the drawdown in foreign reserves has been significant," DBS analysts said in a recent note.
Head of Islamic State in Afghanistan killed, government says (Reuters) - The head of Islamic State in Afghanistan, Abu Saad Erhabi, was killed in a strike on the group’s hideouts in Nangarhar province on Saturday night, authorities said on Sunday. Ten other members of the militant group were also killed in a joint ground and air operation by Afghan and foreign forces, the National Directorate of Security in Kabul said in a statement. A large amount of heavy and light weapons and ammunition were destroyed during raids on two Islamic State hideouts. The jihadist group’s Amaq’s news agency carried no comment on the issue. Lieutenant-Colonel Martin O’Donnell, a spokesman for U.S. forces in Afghanistan, said the United States carried out a strike in Afghanistan on Saturday against a “senior leader of a designated terrorist organization.” The provincial governor of Nangarhar said Erhabi was the fourth Islamic State leader in Afghanistan to be killed since July 2017. The group has developed a stronghold in Nangarhar, on Afghanistan’s porous eastern border with Pakistan, and become one of the country’s most dangerous militant groups. The local affiliate of Islamic State, sometimes known as Islamic State Khorasan (ISIS-K) after an old name for the region that includes Afghanistan, has been active since 2015, fighting the Taliban as well as Afghan and U.S. forces. Former ISIS-K leader Abu Sayed was killed in a strike in the eastern province of Nangarhar and Sayed’s predecessors were killed in joint U.S. and Afghan operations. The exact number of Islamic State fighters in Afghanistan is difficult to calculate because they frequently switch allegiances, but the U.S. military estimates there are about 2,000.
"Land Reform" In Ramaphosa's South Africa - Here is how taking land legally currently works, in South Africa, a place the US State Department has only just lauded as “a strong democracy with resilient institutions…,” a country merely “grappling with the difficult issue of land reform.” “Land reform,” of course, is a euphemism for land distribution in the Robert Mugabe mold.The process currently in place typically begins with a “tribe” or group of individuals who band together to claim vast tracts of private property.If these loosely and conveniently conjoined groups know anything, it’s this: South Africa’s adapted, indigenized law allows coveted land, owned and occupied by another, to be obtained with relative ease.See, the country no longer enjoys the impressive Western system of Roman-Dutch law it once enjoyed. Lax law and poorly protected property rights signal a free-for-all on the lives of white owners and their livestock. No sooner does this newly constituted “tribe” (or band of bandits, really) launch a claim with the South African Department of Rural Development and Land Reform, than related squatters—sometimes in the thousands—move to colonize the land. They defile its grounds and groundwater by using these as one vast toilet, and terrorize, sometimes kill, its occupants and their animals in the hope of “nudging” them off the land.
South Africa Exempts Zulu Lands From Confiscation Scheme - While headlines were initially confusing, South Africa's controversial land confiscation reform, in which some white-owned land could be expropriated without compensation, is still going ahead through its constitutional change but authorities have confirmed that Zulu lands will not be impacted.The following Bloomberg headline triggered buying in the rand... South Africa Expropriation Bill Withdrawn Amid Constitution Review While the market's kneejerk response has been positive, with the rand jumping on the news... ...but as details came out, this should be seen as a head-fake, as it is merely exempting Zulu land from the government's confiscation plan.As Bloomberg reports, plans to expropriate land without compensation won’t transgress on communal areas, Magashule told reporters Tuesday in Johannesburg a day after after party executives met with traditional leaders.The government is considering legislation to repeal a trust that holds all the land that belongs to the Zulu nation and of which King Goodwill Zwelithini is the sole trustee. “We affirmed our view that the kings and chiefs are the rightful custodians of communal land for and on behalf of the people and communities in the traditional areas,” Magashule said. “The ANC will never be part of any attempt that seeks to tamper with authority of traditional leadership over the land of their ancestors including traditional communities.” This decision comes after King Goodwill Zwelithini sounded a warning in July about potential clashes if the government dissolves the Ingonyama Trust, which accounts for a large part of the KwaZulu-Natal province, a region larger than Hungary. The parliamentary committee tasked with land reform on Section 25 of the constitution is not expected to decide until September 27. Furthermore, recall that as we reported yesterday, South Africa's "Black Hitler", Julius Malema said that he is prepared to die if it means South Africa will achieve land expropriation without compensation.
South Africa farm SEIZURE- Land reform plans SCRAPPED – - but NEW bill is on way INSTEAD -- The African National Congress (ANC) said that the bill which would have the power to take land away from white farmers to rebalance racial disparities needed to have further consideration. The bill has been going through parliament for the last two years. Nonceba Mhlauli, a spokeswoman for the ANC’s chief whip, said: “The bill in its current form would need to be re-considered in light of the process of reviewing Section 25 of the constitution for the expropriation of land without compensation. “Were the bill to be re-introduced, it would contain a clause or clauses reflecting expropriation of land without compensation if that is the way that South Africans have chosen to go.” The government is trying to change the status quo where the white community who only make up eight percent of the populations own 72 percent of the farms. Many fear the change with do nothing to change concerns from white farmers. Humphrey Mmemezi, committee chairperson of the Portfolio Committee on Public Works who resolved to withdraw the bill, said: “The committee has observed that the work of the Joint Constitutional Review Committee is now approaching a conclusion and the recommendations are soon to be made available. “Once concluded, before the end of September, [this] will lead to new parliamentary processes, including legislative processes, and new directions should become clearer before the end of 2018.
IMF backs South African land reform – with conditions - The International Monetary Fund (IMF) gave its full backing to South Africa’s land reform plan on Thursday – so long as the highly contentious process is transparent and based on the Constitution.Speaking to Reuters, the IMF’s senior resident representative in South Africa, Montfort Mlachila, said that the reform must not damage farm output to ensure South Africans continue to have reliable food supplies.“We are in full support of the need to undertake land reforms to address the issues of inequality.”Speaking at his office in Pretoria, Mlachila said the IMF was not an expert on land reform. However, he said that there is a need to have a transparent, rules-based, and constitutional process that leads to desirable outcomes.“It is particularly important not to undermine agricultural production and food security.”Commenting on the South African economy, Mlachila said the IMF was unlikely to revise its growth forecast upwards. Last month the Fund kept its prediction of 2018 growth at 1.5%.“Given the weaknesses in growth indicators in the second quarter of 2018, I don’t see us revising upwards,” he said, although he added that it was too early to say for definite.” Mlachila’s comments are similar to those made by British prime minister Theresa May, who was in the country on Tuesday (28 August) as part of a working-visit.“The UK has for some time now supported land reform. Land reform that is legal, that is transparent, that is generated through a democratic process,” May told reporters.
Trust me, Donald Trump, white South Africans are doing fine - I live in South Africa, and days after President Donald Trump’s tweet last week about the dangers, including “large-scale killing,” faced by white South Africans, I got an email from a friend back home in America. It was a forward written by someone else, and it began: “Here’s a bit of unfortunate news that has serious implications for world order.” The writer alleged that all South Africans knew that when Mandela died—he passed away in 2013—“the nation will fall apart,” and “now that appears to be happening.” The writer spoke of 400,000 whites “living in tent camps” because “jobs are largely given to blacks”; of secret black “hit squads” invading white farms; and of “whites preparing for war with huge vans which contain trays of vegetable gardens illuminated by ‘growlights.’” “International news organizations,” he said—liberal ones—“didn’t want to report” these truths because they would “ruin the ‘miracle’ of independence.” My friend was concerned. He urgently wanted to speak to me. Not only, I got the sense, out of concern for me—a white person living in this purported media black hole—but because the secrets the writer laid out in the message seemed somehow, for him, critical to know, some kind of essential learning for a critical thinker, for an adult, like the truth that Santa Claus isn’t real.I didn’t know what to say because it was all so far from the truth that it beggared belief. Some lies are so fantastical they cannot be countered without vaguely soiling the arguer. They make her say or do ridiculous things, I did that, and it made my neighbors laugh at me. My neighbors said the notion was bonkers. But when I suggested there was a role for white South Africans to speak up and challenge Trump’s notion that whites were being persecuted in South Africa, they demurred. “Why should I even counter something so crazy?” one of them wrote. Crazy is as crazy does, and when countering a lie requires you to speak sentences such as “No, we are not yet being made to wear identifying garments, like the Jews wore in 1938,” you just don’t even go there.
Canadian troops deploy to Mali to prop up pro-Western puppet government -- The Canadian Armed Forces’ (CAF) contingent of the United Nations Multidimensional Integrated Stabilization Mission in Mali (UNMISMA) announced that it had achieved full operational readiness on August 15, just one day before the publication of the results of Mali’s presidential election. In recent years Canada has provided logistical support to French military operations in Mali and the Sahel region of Northern Africa. But this is the first time that it has committed hundreds of troops on a long-term basis to upholding “stability,” i.e., imperialist domination, of a region ravaged by nearly a century-and-a half of colonial and neo-colonial domination, where levels of human misery remain among the highest in the world. The Canadian troops in Mali are part of a “peace-keeping mission,” under the UNMISMA banner, comprising 12,000 troops and 2,000 police from 56 countries. The mission ostensibly expresses the will of the “international community,” but is in reality under the effective control of the western imperialist powers, with France, the traditional colonial power, playing the leading role. Presented as an act of humanitarian charity, the CAF operation is part of Canada's efforts to advance its global economic and strategic interests in the context of growing inter-imperialist rivalries, and in particular to secure its claim to a share of the mineral resources of the Sahel region. Canadian companies have long been active in exploiting Mali’s gold resources.
‘I feel very betrayed’: Basic-income recipients react to one of the world’s largest experiments suddenly being canceled -- Anger and outrage, shock and betrayal: Those were some of the raw emotions after one of the world's largest basic-income experiments was suddenly canceled.Earlier this week, Doug Ford, the conservative new premier of Ontario, Canada, pulled the rug out from under the experiment, which provided 4,000 people living at or near the poverty line with a stipend.Ford's government hasn't publicly said much about its reasoning for canceling the program, other than claiming it disincentivizes recipients from finding work. Business Insider contacted several people who were receiving income under what was supposed to be a three-year pilot project put in place by Ontario's previous government. It lasted only one year, despite Ford's campaign promise to keep the pilot project funded."I feel I have been stabbed in the back by my own government," Alana Baltzer, 29, told Business Insider in an interview. "I honestly have no idea what's happening next because there has been no communication whatsoever."
Sex Doll Brothel Craze Hits Toronto At $80 A Whack - Canadian men who would prefer the non-alcoholic beer of whore houses will be able to dip their wicks at North America's first sex-doll brothel in North America, so they claim. Aura Dolls will open in a Toronto strip mall next month, advertising the "world's most beautiful silicone ladies" which can help you explore "any fantasy or fetish you desire without judgment or shame bringing the ultimate sexual experience*." Will you choose Anna - their "Busty, Romantic and Spontaneous" doll, Erika - who's "Young, Gorgeous and Sweet," or Scarlett - the "Absolute American Dream"? And don't worry, it's not cheating if it's an inanimate polymer-wrapped metal frame that'll let you do "that thing" you've always wanted to try. And for those concerned about sharing dick-space with thousands of other doll-johns, fear not - these girls are sanitized (though condoms are still recommended, possibly at the request of "housekeeping"). Our dolls are thoroughly sanitized to meet our high expectations. We take our clients health and safety extremely serious and each sanitation staff has been trained excessively through our industry developed routine to ensure the maximum wellbeing of our clients. The use of condoms are still highly recommend. A 30-minute romp with the "girl" of your choice will set you back $80 Canadian, or $62 USD. Aura Dolls even offers two dolls for up to four hours for the low cost of $960.00 ($742 USD). Imagine that.
Global Car Sales Tumble Amid Slowing Demand, Trade Wars - Global auto sales are in the midst of the first sustained slowdown since the 2008 financial crisis, according to new figures published by the WSJ. This complicates an already precarious situation for automakers, who have also been negatively affected by volatile global trade policy, rising commodity prices, declining demand and tariffs.China and Europe are two key global markets that are recording the largest slowdown, while the United States continues to try and hammer out new trade agreements. The auto market in China - where new-car sales fell 5.3% to 1.59 million in July - compared with the year-earlier period has also slowed due to worsening trade tensions. For the full year, sales are forecast to grow 1.2% over last year, according to LMC Automotive, down from a 13% growth rate in 2016 and 2.1% in 2017.At the same time, demand for American vehicles, which generally has acted as a universal global catalyst, has also topped out, largely due to higher prices and higher loan rates, but perhaps also due to rising nationalistic sentiment amid a "don't buy American" media wave. Demand is also starting to wane in Europe, sliding to "prerecession" levels. Many American car companies had already struggled to maintain profitability in Europe where the slowdown in demand is exacerbating the bottom line.
Central banks' balance sheets start to shrink -- Central banks that have engaged in a mass programme of bond-buying in a bid to stimulate the global economy have seen the size of their balance sheets begin to fall for the first time in a decade, as their withdrawal from the market begins to take effect. The assets on leading central banks’ balance sheets now equate to 31 per cent of their governments’ debt, marginally down from 32 per cent last year, according to analysis by the Financial Times. The Bank of Japan’s holdings are proportionately the largest, amounting to 35 per cent of outstanding Japanese government debt; the European Central Bank’s assets equate to a quarter of outstanding eurozone government bonds, while the US Federal Reserve holds assets equivalent to 10 per cent of the country’s debt. FT research shows that the world’s biggest central banks now hold $15.3tn of assets, of which about two-thirds comprises government bonds — one dollar in every five of the $49tn outstanding debt owed by their governments. The Fed started to pare back its asset holdings last September; its holdings of Treasuries have fallen by $150bn year on year. Other central banks, however, are still buying. The ECB’s holdings of eurozone governments’ bonds increased by $900bn in the same period, and the BoJ saw its holdings of Japanese government debt rise by $276bn. The ECB scaled back its purchases at the start of 2018 and plans to stop buying bonds at the end of the year, while the BoJ has not specified a timescale for its withdrawal from the bond market. The tightening has repercussions in particular for emerging markets, credit rating agency Moody’s warned. “The near-term global outlook for most advanced economies is broadly resilient,” said Madhavi Bokil, senior analyst at Moody’s. “[But] EM countries remain inherently vulnerable to the risk of capital outflows associated with tightening global liquidity as advanced-economy central banks reverse their quantitative easing measures.”
Europe Is Working On Alternative To SWIFT For "Financial Independence" From The US - In the aftermath of a report that Germany was working on a global payment system that is independent of the US and SWIFT, on Monday Germany and France said they’re working on financing solutions to sidestep U.S. sanctions against countries such as Iran, including a possible role for central banks, Bloomberg reported."With Germany, we are determined to work on an independent European or Franco-German financing tool which would allow us to avoid being the collateral victims of U.S. extra-territorial sanctions," French Finance Minister Bruno Le Maire said Monday during a meeting with press association AJEF. “I want Europe to be a sovereign continent not a vassal, and that means having totally independent financing instruments that do not today exist.” The discussions, which also involve the U.K., are a signal that European powers are trying to get serious about demonstrating a greater level of independence from the U.S. as President Donald Trump pursues his “America First” agenda. After the US reimposed sanctions on Iran, making funding to Iran projects virtually impossible, European companies including Daimler and Total halted activity or backtracked on investment plans to avoid U.S. punishment, but France and Germany and their European Union partners want business with the Islamic Republic to continue. Le Maire said using the European Investment Bank, which has exposure to the U.S., as a “financial channel” would be “very complicated” and that the French and German governments are talking to their respective central banks about their involvement. “If we want to build a truly independent instrument we must open up all the options,” he said. Separately, Germany's Foreign Minister Heiko Maas again weighed in on the topic of European financial independence on Monday, saying the EU is working to protect economic ties with Iran and keep payment channels open. Maas said Europe has started work on creating a system for money transfers that will be autonomous from the currently prevailing Society for Worldwide Interbank Financial Telecommunication (SWIFT).
Putin Condemns Zakharchenko's Assassination- Dangerous Choice In Favor Of Destabilization -- According to breaking reports a targeted blast has killed Ukraine's most prominent separatist leader in what appears a high level assassination under mysterious circumstances. The head of the self-proclaimed Donetsk People’s Republic, Aleksandr Zakharchenko, was reportedly at a cafe in central Donetsk city in eastern Ukraine when an explosion of as yet unknown origin went off, killing Zakharchenko and injuring several other top separatist officials. Local reports say that Zakharchenko was still alive at the scene, but died of his severe injuries after arriving an an area hospital. Per Reuters: "Russia’s state investigative committee said on Friday it was treating the killing of Alexander Zakharchenko, leader of Russian-backed separatists in the Donetsk region of eastern Ukraine, as an act of international terrorism.""A criminal investigation into the killing has been opened, the committee said in its statement."Meanwhile local reports say Zkharchenko's personal body guard is being searched for after fleeing the scene: Bodyguard may have been involved in DPR leader's murder, he disappeared after blast, he is being searched for - Source: IFX And further, Russian President Vladimir Putin has reportedly issued a statement: "Those responsible for Zakharchenko's assassination made a dangerous choice in favor of destabilization, and attempt to put the Donbas people on their knees, but they won't succeed."
Italy Lets Vatican Take Stranded Migrants, Salvini Under Investigation For 'Kidnapping And Illegal Arrest' - Italy on Sunday allowed all 150 migrants from a NGO rescue ship to disembark after docking for five days at a Sicilian port - ending a standoff between Rome's populist coalition government and European Union partners, reports Reuters. The migrants, mainly from Eritrea, had been stranded in the port of Catania since Monday because the government refused to let them off the boat until other EU states agreed to take some of them in.Interior Minister Matteo Salvini said Albania had offered to accept 20 of the migrants and Ireland 20-25, while the rest would be housed by Italy’s Catholic Church “at zero cost” to the Italian taxpayer. -Reuters"The church has opened its heart and opened its wallet," said Salvini at a Saturday evening rally in the Northern Italian town of Pinzolo. Salivini - who has spearheaded Italy's crackdown on illegal immigration beginning in June, also announced that he is currently under investigation by a Sicilian prosecutor for "abuse of office, kidnapping and illegal arrest." “Being investigated for defending the rights of Italians is a disgrace,” he said.The United Nations called for "reason from all sides" on Saturday following a meeting of envoys from 10 European Union member states, after the Friday meeting failed to break the deadlock. “Frightened people who may be in need of international protection should not be caught in the maelstrom of politics,” the U.N. refugee agency UNHCR said in a statement. The agency appealed to EU member states to “urgently” offer relocation places to the rescued people, in line with an agreement at an EU summit in June, and in the meantime, urged Italy to allow “the immediate disembarkation of those on board.” Rome had refused to back down, despite criticism from rights groups and the opposition, with Salvini saying he considered the attacks he received to be a “badge of honor.” –Reuters At the end of the day, Albania, Ireland and the Catholic Church agreed to take the migrants, while Italy's Foreign Ministry called Albania's offer "a signal of great solidarity and friendship that Italy greatly appreciates."
Italy’s anti-migrant stance puts EU Mediterranean mission at risk (Reuters) - Italy has threatened to bar ships of the EU naval force from bringing migrants picked up in the Mediterranean to its ports unless the bloc comes up with ways to share the burden of taking them in, officials in Brussels said. Diplomats were meeting in Brussels on Tuesday over the latest migration threat from Italy, whose new populist government has already kept several rescue ships with hundreds of migrants on board stuck at sea for days. European Union officials say Rome gave the EU until the end of August to come up with a clear relocation scheme for migrants picked from the sea by ships from the Operation Sophia joint naval force, or it will no longer allow them into its ports. Any swift agreement on hosting people from Operation Sophia ships by other EU states is unlikely. EU states have been unable to agree on migration policy since migrants and refugees from the Middle East and Africa began arriving in huge numbers. Italy, where more than 650,000 people arrived across the sea since 2014, has felt increasingly overwhelmed and left alone by its peers. Elections this year gave victory to parties campaigning on an anti-immigration platform.
Italy Vows To Veto EU Budget Over Migrant Clash --Europe's migrant deal that was announced to much fanfare in late June, is now history.At least that is the interpretation of Italy, which on Sunday announced it would start the process of opposing the EU's next budget after Deputy Prime Minister Luigi Di Maio accused European member states of failing to follow through on the deal reached in June for redistributing the flood of migrants. In a video message on his Facebook page, Di Maio said that "we will look at all measures in discussions regarding the European budget and will block what doesn’t work for us", noting that "the other states are not doing what’s not convenient for them," referring to the refusal of other countries to accept migrants who arrive in Italy by sea. Italian officials have repeatedly clashed with the EU over migration, most recently over the future of 177 migrants on a coast guard vessel, the Diciotti, which docked in Sicily’s Catania port a week ago and was unloaded only over the weekend after Albania offered to accept 20 of the migrants and Ireland 20-25, while the rest would be housed by Italy’s Catholic Church “at zero cost” to the Italian taxpayer. Italian Premier Giuseppe Conte “did well” to say on Saturday that the nation can’t follow EU budget rules as long as the issue remains unresolved, Di Maio said, quoted by Bloomberg. Migration is "just one of the battles" the government in Rome is ready to wage with the EU, he said in the video.In a Monday interview with La Stampa, Di Maio raised the stakes when he warned that Italy is ready to "veto the budget and any dossiers where it’s possible" calculating that "between 2020 and 2027 there is 1.14 trillion in the balance." Deputy Premier and Interior Minister Matteo Salvini - who was the first to attack the EU back in June during another standoff with a migrant ship - told Il Messaggero that there is no intention of leaving the EU. "“We’re there, but we want to re-discuss the costs of being there, given that services are ever more limited." As for next year’s budget, Bloomberg notes that Italy alone can’t block it, as decisions are taken by an enhanced majority of the EU’s 28 member states. If Italy withholds monthly payments for the execution of this year’s budget, that would constitute an infringement of the bloc’s laws and result into legal action by the European Commission.
"This Has To Stop": Czech PM Calls For No Illegal Immigrants In Europe - Echoing Italy's Interior Minister Matteo Salvini and Hungary's PM Viktor Orban - and to a large extent president Trump - billionaire Czech Prime Minister Andrej Babis said on Monday that a comprehensive action plan is necessary to stop illegal migration, which he will address on a visit to Italy and Malta this week."If Italy and Malta won't welcome (the migrants), then Spain will. And so we're sending the message to migrants that it's possible to come to Europe, from Morocco via Spain," Babis wrote in an opinion piece in the Czech broadsheet daily DNES."This has to stop. Otherwise we'll never stop the migrant influx," added the businessman and head of the populist ANO movement. "I plan to discuss this with EU leaders and take part in implementing a comprehensive action plan." The Czech premier's visit to Italy and Malta coincides with that of Hungarian counterpart Viktor Orban, who maintains the same hard line on illegal migration."I want to discuss the issue with my partners in Italy and Malta and of course also with German Chancellor Angela Merkel, who recently negotiated with Spain," Babis said.Underscoring the same position held by Italy, Babis said that "we need to begin cooperating in a serious way to find a solution because we needlessly lost three years to an inane debate on migrant quotas."Migration is a hot political issue in the Czech Republic, an EU and NATO member of 10.6 million people where just a handful of refugees have settled since the migrant crisis of 2015. Babis reiterated Monday that the Czech Republic would welcome "no illegal migrants" according to The Local. "It's a key move, a symbol and a message to migrants and migrant smugglers that it's pointless to take a boat destined for Europe," Babis said. Last month Babis said Italy's request that EU peers take some of 450 migrants stranded at sea was "a road to hell".
German Neo-Nazis Rally Again in Chemnitz, This Time Without Hitler Salutes or Mob Violence -- For a third night this week, far-right protesters vented their rage at the killing of a German man during a fight with immigrants from Iraq and Syria in the eastern German city of Chemnitz. On Thursday evening however, the crowd of about 900 anti-immigrant, German nationalists chanted slogans but refrained from the violent attacks on foreigners and Hitler salutes witnessed during rioting on Sunday and Monday.Allmählich füllt es sich vorm Chemnitzer Stadion. Dennoch nicht vergleichbar mit Montagabend. #c3008 #chemnitz pic.twitter.com/FU84r8tiQD— Benjamin Konietzny (@benkonietzny) August 30, 2018As German journalist Felix Huesmann reported, organizers from the far-right group Pro-Chemnitz urged the protesters not to make what they described as “nice greetings with the right arm extended towards Heaven,” so that there would be “no bad pictures” for journalists derided as “the Lying Press” to publish."Nette Grüße mit dem rechten Arm gen Himmel werden heute rigoros mit Platzverweis bestraft", kündigt ein Demo-Organisator an. So kann man Hitlergrüße natürlich auch verharmlosen. #c3008 #chemnitz pic.twitter.com/GNd9os6gHe— Felix Huesmann (@felixhuesmann) August 30, 2018Many of the Chemnitz residents who attended a nearby meeting with the leader of the regional government, Michael Kretschmer, also blamed the media for the viral images of mayhem and neo-Nazi violence in the city earlier in the week, according to Benjamin Konietzny of the German broadcaster NTV. The most alarming of those images showed marauding white supremacists chasing people with dark skin, interrupting national news broadcasts with the banned Nazi salute, and chanting neo-Nazi slogans like “Free, social, and national: National Socialism now,” and “Adolf Hitler hooligans.”
German antitrust watchdog plans action on Facebook this year (Reuters) - Germany’s antitrust watchdog expects to take first steps this year in its probe against Facebook (FB.O) after finding that the social media giant abused its market dominance to gather data on people without their knowledge or consent. The probe is being closely watched in Europe amid mounting concerns over leaks of data on tens of millions of Facebook users, as well as the extensive use of targeted ads by foreign powers seeking to influence elections in the United States. The Federal Cartel Office objects in particular to how Facebook acquires data on people from third-party apps - including its own WhatsApp and Instagram services - and its online tracking of people who aren’t even members. “We are conscious that this should, and must, go quickly,” cartel office President Andreas Mundt told a news conference on Monday, adding that he hoped to take “first steps” this year. He declined to elaborate. The German probe is not expected to end in fines for Facebook, in contrast to European Union probes into Google that have ended in multi-billion-dollar penalties, most recently over the preinstallation of its apps on Android smartphones. Sources familiar with the matter say, however, that the cartel office could require Facebook to take action to address its concerns if the company fails to do so voluntarily. Facebook responded earlier this year to the cartel office’s request for information, and the authority was reviewing whether new features - such as a “clear history” option announced by CEO Mark Zuckerberg in May - would address its concerns. “We need to establish whether this affects our investigation and addresses our concerns,” Mundt said.
Once welcoming, why Germany is wary of Chinese investment amid Trump's trade war - A wave of Chinese acquisitions of hi-tech companies in Germany has Berlin – traditionally a free trade proponent on the international stage – wary of granting market access to foreign investors.Late last month, Chancellor Angela Merkel’s cabinet for the first time moved to veto the Chinese takeover of a German firm. Yantai Taihai Group withdrew its offer for toolmaker Leifeld Metal Spinning at the last minute, after the German government signalled it would block the acquisition because of “security reasons”.Leifeld produces equipment used in the nuclear energy and aerospace industries. Days before that deal collapsed, Germany’s state-owned bank, KfW, announced it would acquire a 20 per cent stake in power grid manager 50Hertz, fending off an offer from the State Grid Corporation of China.The German government also this month announced plans to lower the minimum threshold to screen foreign investment in industries linked to defence or national security. Last year the government tightened controls on foreign investments by giving itself the power to intervene if a foreign investor obtained a 25 per cent stake in a German company. Berlin now wants to screen acquisition deals more closely, by reducing that threshold to 15 per cent.
Brexit: China looking at ‘top-notch’ trade deal with UK after EU withdrawal - China and Britain are trying to secure a “top-notch” free trade agreement after the UK leaves the European Union, China has said. Zhong Shan, the country’s commerce minister, confirmed talks with British international trade minister Liam Fox had set the stage for an agreement that would be mutually beneficial for both countries. A statement from China’s commerce ministry said that the two countries agreed to “actively explore the possibility of discussing a top-notch free trade agreement between the two sides after Brexit”. The move has the full backing of Eurosceptic MPs keen to boost investment and expand trade in services in a post-Brexit world. China is also in need of allies in its fierce trade dispute with the United States. President Trump’s administration has imposed tariffs on Chinese imports and has accused the second-largest economy in the world of stealing American intellectual property and discriminating against foreign firms. As the Brexit date of 29 March 2019 draws closer, Britain has tried to reassure Chinese companies that it is fully open for business. “As a firm supporter of trade liberalisation and a free market, the United Kingdom is China’s long-term trusted partner,” he wrote in a Chinese financial magazine at the time. “Britain is committed to promoting free and open trade, and as Britain and its European cooperation partners form a new relationship, we will deepen our relations with other regions around the world.” However, formal talks cannot begin until Britain officially leaves the EU and could take years to conclude.
Brexit: no market for implications I don't know if The Sunday Telegraph is trying to stitch-up Booker (more than it usually does), but this week it is offering a headline to his column which seems to have no bearing on its content. According to the paper, Booker is writing that: "Finally, our wishful-thinking ministers are waking up to the consequences of no-deal Brexit", which is actually not borne out his writing. He starts off by telling us that, ever since January last year, his column has had one persistent theme: When would the British people finally wake up to the potentially catastrophic consequences of the dramatic shift in Theresa May's Brexit strategy revealed in her Lancaster House speech? Until then, it had been reasonable to believe her repeated insistence that she wanted Britain, on leaving the EU, to continue enjoying "frictionless" trade "within" our largest export market. And the only practical way to do this would have been to re-join Efta and thus remain in the EEA. But, writes Booker, as soon as Mrs May slammed the door on this, it became clear that neither she nor her ministers had any real understanding of what it would mean for Britain to shut itself out entirely from the EU’s trading system, to become what it terms a "third country". They clearly had no idea of how enmeshed our economy had become with that of the EU or how complex it would be to disengage from it. All we saw instead was a government completely out of its depth, lost in one bubble of wishful thinking after another, of which Mrs May's absurd "Chequers plan" is merely the latest. Only now, after 17 months of talking ineffectually around the subject, has our government come out with the first tranche of 80-odd papers to explain how we should prepare for the consequences of leaving the EU without a deal. These tell us nothing more than what should have been obvious back in the days when Mrs May was still claiming "no deal is better than a bad deal"; and for detail and clarity they are not a patch on the 68 "Notices to Stakeholders" already issued by the European Commission to spell out the consequences of Britain choosing to become a "third country"
No-deal Brexit will break up UK, warns Van Rompuy - Crashing out of the EU without a deal would risk breaking up the United Kingdom, the former president of the European council has warned. Herman Van Rompuy, the former Belgian prime minister who was council president until 2014, told the Observer that he believed the threat of a no-deal Brexit was a new “operation fear” tactic being used by the government. But he said it would not work with the EU and warned that such an outcome would end up creating new pressures over Scottish independence. “The no-deal issue is not just a problem for the UK or Brussels,” he said. “It is also an existential threat to the UK itself. One can imagine that a no deal will have a big impact and cause concern in some of the regions. Speaking of Scotland, it could have consequences for them and others.” He added: “We could end up with a situation in which the EU27 becomes more united and a United Kingdom less united. This talk about a ‘no deal’ is the kind of nationalist rhetoric that belongs to another era.” Nicola Sturgeon, the Scottish first minister, said last week that a no-deal Brexit would be an “unmitigated disaster”. David Lidington, the Cabinet Office minister, has already attempted to calm fears that Scotland’s place in the union could be jeopardised by crashing out of the EU with no deal. Scotland voted for the UK staying in the EU by 62% to 38% and Sturgeon has pledged to outline her thinking on independence in October. But polling experts say there has been little sign of an increase in support for independence as a result of Brexit. While Sturgeon is not expected to make the case for backing a new independence referendum soon, Van Rompuy’s warning is a sign of the volatility that could be unleashed by leaving the EU without a deal, a prospect which last week saw the Conservative party descending further into civil war.
Britain Prepares For War Against Russia -- The headline in the UK newspaper the Daily Mail on August 7 encapsulated much that is paranoid in sad modern Britain. It read “Russian warships pass through English Channel as Putin's armed forces ratchet up pressure on the Royal Navy.” Certainly, the United Kingdom is in a state of crisis; but it isn’t because of any sort of military threat. The vote to leave the European Union was a major slide down the greasy pole of decline and Time magazine summed up the debacle by pointing out that:“At heart of this political saga is the fact that the politicians leading the Brexit “Leave” campaign — Boris Johnson chief among them — never actually explained to the British public what a vote for ‘Leave’ entailed. The promise of Brexit was all things to all people, which is how it managed its 52- to 48-percent victory over the ‘Remain’ side. Then prime minister David Cameron resigned, and it fell to his successor Theresa May to figure out what Brexit actually means.” The Brexit pantomime is taking place in an era in which it is recorded that “As benefits are cut and rents soar, Britain has seen a staggering rise in homelessness: the number of rough sleepers in England alone has more than doubled since 2010. Almost 1.2 million older people in Britain, as well as another one million disabled people, are living without the social care they need for basics such as eating, dressing and washing. It’s horrific: severely ill people forced to wait 14 hours to go to the toilet or wheelchair users who, with no assistant to help them cook, are now malnourished.” The strange thing about agitating to spend more money on armaments is that, apart from an indubitable terrorist menace, there is no military threat whatever to Britain. On the other hand, there is a social crisis of the most serious magnitude. As the New York Times reported in May, “the protracted campaign of budget cutting, started in 2010 by a government led by the Conservative Party, has . . . yielded a country that has grown accustomed to living with less, even as many measures of social well-being — crime rates, opioid addiction, infant mortality, childhood poverty and homelessness — point to a deteriorating quality of life.”
Theresa May says a no-deal Brexit ‘wouldn’t be the end of the world’ --Theresa May claimed that a no-deal Brexit “wouldn’t be the end of the world” as she sought to downplay a controversial warning made by Philip Hammond last week that it would cost £80bn in extra borrowing and inhibit long-term economic growth. The prime minister conceded that crashing out of the European Union without a deal “wouldn’t be a walk in the park” but went on to argue that the UK could make an economic success of the unprecedented situation if it proved impossible to negotiate a satisfactory divorce. Her comments were designed to distance herself from pessimistic Treasury forecasts highlighted by the chancellor at the end of last week, predictions that incensed the Tory right and led to renewed calls from hard Brexiters for Hammond’s dismissal. Risk of no-deal Brexit grows every day, says German industry chief Read more Speaking to reporters as she began a three-day trip to Africa, May cited and endorsed remarks about the Brexit situation made last week by Roberto Azevêdo, the director general of the World Trade Organisation, to justify a gentle rebuke of the chancellor. The prime minister said: “Look at what the director general of the World Trade Organisation has said. He has said about the no-deal situation that it will not be a walk in the park, but it wouldn’t be the end of the world. “What the government is doing is putting in place the preparation such that if we are in that situation, we can make a success of it, just as we can make a success of a good deal.” The prime minister voiced her own reservations about the Treasury forecasts, saying she believed the chancellor was talking about figures dating back to January, adding “They were a work in progress at that particular time.” She was a speaking a day after a cabinet split over the issue had appeared to open up when Dominic Raab, the Brexit secretary, said he was “chary” of economic forecasts on Brexit because previous warnings about the risks of quitting the EU have been proved wrong.
Theresa May’s Brexit problem isn’t Boris Johnson. It’s maths - Boris Johnson has written his column again: saying that Brexit is a great opportunity but that Theresa May’s Chequers proposals are a disaster. The peg this week is the condition of Greece. The reason why it matters is that every time Johnson goes over this ground, it becomes harder to see how he could plausibly vote for May’s final deal, which will essentially be Chequers plus a series of further concessions. At the risk of being a stuck record, there’s no need to worry over much about the detail of Chequers: what matters is that May has chosen between the two Brexit destinations of low regulatory freedom, high access to European markets (Norway) and low access, high freedom (Canada): she wants high access, low freedom. Labour will vote against May’s deal regardless of its content – the joy of Labour’s six tests, from an opposition perspective, is that the government can only fail them. So will the SNP, the Liberal Democrats, Plaid Cymru and Caroline Lucas, the sole Green MP. So the government only needs to lose seven MPs over the side to be in serious danger of defeat. I think it is highly unlikely that any of Labour’s pro-Leave MPs will break the whip to vote for May’s deal as if it isn’t good enough for Boris Johnson, it isn’t going to be good enough for Frank Field or Kate Hoey either. But May’s proposals aren’t going to guarantee a high enough level of access for it to be worth the political price that Labour’s pro-Europeans would have to pay to vote for it either. So the question is: how close to the danger zone of losing more than seven of her MPs is May? Johnson is obviously one, Jacob Rees-Mogg another, Andrea Jenkyns is a third, Steve Baker a fourth, Bernard Jenkin a fifth, Simon Clarke a sixth, and Conor Burns, Johnson’s loyal bag-carrier, a seventh. And that wasn’t a difficult exercise: I haven’t included anyone who has quit who is in a heavily Leave area, and there are a number of big name Eurosceptics I have left out, such as John Redwood. There are plenty more near-certain rebels out there.
France to make contingency plans for no-deal Brexit - French Prime Minister Edouard Philippe on Monday asked his ministers to prepare contingency measures in case of a no-deal Brexit. France hopes Britain will reach a deal with its European Union partners on its exit from the bloc but needs to be ready if not, Philippe’s office said in a statement. In a government meeting convened to discuss this, Philippe “tasked ministers to prepare contingency measures that would be necessary ... to mitigate the difficulties linked with this unprecedented challenge”, it said. Measures would include facilitating the stay of British citizens currently living in France and ensuring smooth border controls, the statement said. The government will ask parliament in the coming weeks to allow it to adopt them by decree. France will also need to take measures to take stock of Brexit even if there is a deal, the statement said, without giving details. President Emmanuel Macron said earlier on Monday that preserving EU unity was more important than forging a close relationship with post-Brexit Britain. Britain is due to leave the EU in March 2019.
No-deal Brexit: Plan to maintain medicine supplies ‘could cost £2bn’ The health secretary’s plan to set aside six weeks’ worth of vital medicines to avoid supply disruptions in the event of a no-deal Brexit could cost up to £2bn, campaign group Best for Britain warns today.Matt Hancock wrote to healthcare providers last week, saying the government would set in motion plans to “ensure the UK has an additional six weeks’ supply of medicines in case imports from the EU through certain routes are affected”. Data collated by thinktank the King’s Fund earlier this year suggested the total drugs bill for the NHS in 2016-17 was £17.4bn.Best for Britain suggests that could make the cost of the temporary stockpile – which would presumably then be run down over future months – £2bn.Owen Smith, the former shadow Northern Ireland secretary and a supporter of Best for Britain, said: “I don’t remember anyone warning that Brexit would mean we’d have to stockpile drugs or that this would cost the NHS and taxpayers up to £2bn. Maybe they should have slapped that on the side of the bus.“Every day it seems as though there is another hidden cost being revealed.” Hancock’s letter urged local GPs and pharmacists not to hoard medicines themselves, but to rely on the official scheme. It added that the government will also put in place “separate arrangements for the air freight of medicines with short shelf-lives, such as medical radioisotopes”.It is unclear whether the taxpayer will bear the cost of the stockpiling scheme. A Department of Health spokesman said at this stage the government was only “asking suppliers to provide specific information on their stockpiling programme to gauge how prepared the industry is before we decide the next steps”.
Why is anyone infatuated with a no-deal Brexit? Gideon Rachman -- Shortages of medicine; the garden of England turned into a lorry park; a surge in red-tape; new tariffs on cars and food; factories halted for lack of parts. Those are the grim scenarios conjured up by planning for a “ no-deal Brexit”. Who in the world would volunteer for that kind of chaos? Quite a few people, as it happens.There are hardline Brexiters who regard the British government’s current proposals for Brexit as a betrayal – and so would prefer no deal. There are ardent Remainers who hope that the spectre of no deal could provoke a political crisis that stops Brexit altogether. And there is the European Commission, which sees no deal as preferable to compromising on the basic principles of the single market.Together, these three groups could lead the UK and the EU into no-deal territory. But they are all deluded in their own way. In their refusal to compromise they risk jointly unleashing a dangerous crisis, whose endgame they can neither predict nor control. The motivations of the hardline Brexiters are, in some ways, easiest to understand. They believe that the proposal of Theresa May’s government would be the worst of all worlds: leaving Britain with the obligations of EU membership, without the supposed benefits of Brexit. But their argument that Britain should hold out for something better depends on dismissing all the warnings about no-deal as scare stories or “Project Fear”. So what are the hardliners really thinking? Perhaps they believe their own propaganda and simply do not accept or comprehend the legal and regulatory consequences that flow from no deal. Maybe their reverence for Britain’s “finest hour” in 1940 has created a certain nostalgia for rationing and the “blitz spirit”?But the Brexiters are surely mistaken if they believe that the chaos unleashed by crashing out of the EU would create national unity. It is more likely that Leavers and Remainers would round on each other with renewed fury, and that the political careers of many prominent Brexiters would come to an end.
Brussels: May’s Brexit plan would save UK business billions: EU negotiators proposed boycotting the talks if the UK presented the Chequers Brexit plan. - The U.K.’s proposal to free itself from Brussels regulations on services would save British businesses billions of pounds a year, according to a briefing for EU27 diplomats by Michel Barnier’s negotiating team.The services proposal is a key plank of Theresa May’s Brexit plan that was agreed by ministers at her Chequers country residence last month and resulted in theresignations of her foreign and Brexit secretaries. Under the plan, the U.K. would agree on an “association agreement” with the EU including a “free-trade area” for goods, but it would no longer be bound by EU regulations on services that aim to create a level playing field between businesses in different countries.The EU’s chief negotiator made clear his aversion to the U.K. proposal in an op-ed published earlier this month, arguing that it would “undermine” the EU’s single market. But in a closed briefing for EU27 diplomats in Brussels a day before the Chequers meeting and before the full plan was formally presented as a white paper, Barnier’s team laid out their objections to what they expected from the British scheme in far more detail. The Commission quoted an internal study, which estimated that if the U.K. is freed from just seven unspecified EU regulations, it would provide savings for British businesses of €6 billion a year, according to two EU officials.Although that figure is dwarfed by the turnover of the U.K. services sector — which makes up 79 percent of the country’s GDP — the savings for U.K. firms would potentially be much higher if they are released from the full spectrum of Brussels regulations on services. “Potentially there are dozens of regulations applied to services that could be affected,” said Stephen Booth, director of policy and research at the Open Europe think tank.Barnier’s team also o bserved at the meeting that the Chequers plan would achieve much of what David Cameron was seeking, but failed to achieve, in his renegotiation of Britain’s EU membership as prime minister ahead of the Brexit referendum.
Hooligan Brexiters now offer a mad, dystopian future nobody voted for - I was awakened by the bedside radio coming to life, leaving me briefly lost between a bad dream and reality. Two BBC World Service reporters were calmly discussing a nation gone raving mad. Its food needed stockpiling. Medicines were running low. Ports were jammed and motorways were turning into vast lorry parks. Foreigners were fleeing, care homes emptying of staff, fruit lying unpicked. Where was it? Then, through my slowly dawning consciousness, someone called Dominic Raab started talking about bacon, lettuce and tomato sandwiches and writing 75 “technical notices”. Meanwhile the prime minister was off to sell child pornography policing in Africa. What nightmare was this? Surely not 21st-century Britain? I later found that Raab’s ambition was to validate Theresa May’s Brexit thesis that “no deal is better than a bad deal” and to reassure the British public that their BLT would not be affected should the former emerge as the country’s fate. But if this was no deal, what could a worse deal possibly look like? After soft Brexit and hard Brexit, we now have mad Brexit, barking mad.Following the Brexit referendum, there were two plausible options, soft and hard. Under the first, the UK would withdraw from the institutions of the European Union but remain a member of its customs union, with most features of its wider single market. This would honour the desire of importers, exporters and the Irish for a “frictionless” border with Britain’s chief trading partner, the EU. This concept of an “outer ring” envisaged Britain joining Norway under the old European Free Trade Association (Efta) regime it enjoyed before joining the common market in 1973. It would leave the EU but would stay within the European Economic Area, keeping control over matters such as farming and fishing policy. Norway has no “vote”, but lobbies strongly when the EU affects it. For the UK, the steady progress towards a collective market in goods, services and labour – initiated and championed by Margaret Thatcher in 1986 – would remain in place.
TSB: Why Are So Few Customers Leaving a Bank that Trampled on Them? -- After months of self-inflicted IT chaos at mid-sized UK lender TSB, caused by botched data migration to a new IT system in April, things were supposed to have returned to some semblance of normality by now. But new problems keep cropping up. And once again, customers are feeling the brunt of the financial pain and inconvenience. Last Wednesday, TSB’s online banking system crashed again, albeit briefly. Two days later, the bank was forced to issue yet another apology to customers, this time for failing to send outdebit card replacements to about 40,000 account-holders whose cards are due to expire on August 31. TSB has been scrambling to dispatch new cards. But thousands of customers are unsure they will have a usable debit card by Friday. This week began in ominous fashion, with an announcement from TSB that it was delaying a long-planned transfer of millions of customers from Visa debit cards on to Mastercard. The “big-bang” migration was scheduled to take place later this year, but instead has been pushed back until 2019. A person close to Mastercard toldFT that the debit card delay was likely to have costs for TSB. TSB’s IT fiasco, now in its 21st week, has already costits parent bank, Spain’s Banco Sabadell, €203 million in losses, which included €40 million from fraud losses and €92 million to cover future customer claims.This is likely to be just the tip of a very large iceberg. A source close to the matter recently toldWOLF STREET that IBM, the external contractor hired by Sabadell to resolve TSB’s IT problems, had estimated that the cost of rectifying the issues and accounting errors could reach as high as £955 million ($1.16 billion). This excluded fraud-related issues as they are not regarded as being part of IBM’s remit, and are being treated as a normal banking function of fraud prevention.However much the final bill comes to for Sabadell, one thing that’s clear is that TSB customers are already paying a high price for sticking with the bank. In the immediate wake of the botched data migration, over two million customers were locked out of their online accounts. Some people lost out financially, or experienced severe stress. Business customers were unable to pay bills or make payroll and mortgage payments were missed. Over 1,300 customers have become victims of fraud attacks. When TSB sent out letters to customers apologizing for the problems it had caused, it managed to mess even that up, by enclosing correspondence intended for other customers, in the process breaking the EU’s new data protection laws.
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