week ending Sept 22

Like Detoxing From An Addiction - Update On The Fed’s QE Unwinding -- After the global market crash in 2008, the Fed needed to lower interest rates in order to stimulate the economy. However, interest rates were already close to 0% so the Fed resorted to a different form of stimulation - quantitative easing. They directly bought $trillions of bonds in order to directly lower interest rates and increase money supply.  The Fed’s QE over the last decade resuscitated the economy and helped the financial markets go on the longest bull market run in history. However, the Fed now needed to unload the massive bond portfolio on their books and in process mop up the excess money in the financial system. They began the effort to overcome this hangover a few years ago. I believe we are about a third of the way through that process and are now entering the period of the most intense pace of unwinding. The rate of unwinding should start slowing down over the next few years before we finally normalize.Below I show the portfolio of bonds that the Fed held during the peak of QE at the end of 2014. They held roughly $2.5 trillion with the vast majority in two lumps, about $2 trillion around 5 years in maturity and another $0.5 trillion around 25 years in maturity. This is because starting in 2009, the Fed began to purchase large amounts of 10 year and 30 year bonds and the portfolio aged to this profile 5 years later in 2014. By the end of 2014, the Fed largely stopped buying new bonds and began to hold this portfolio to maturity. Below I show the same breakdown of bond holdings by maturity year over year in the 4 years since then. As you can see, very few bonds were bought or sold; the Fed has simply let the portfolio age. In 2014, 5 year maturity was the peak of the $2 trillion lump of bonds. So 5 years later, about right now, we are getting close to the peak rate of bond maturing out of the Fed’s portfolio. Below I show amount of near-term bonds that are maturing in the Fed’s portfolio as of each of the last 5 years. As you can see, 2017 and 2018 are close to the maximum pace of bonds maturing. I believe after the next year, the rate of QE unwinding will begin to slow down and a few years after that, we should see our monetary system largely normalize. This is reflected in the increasing rate at which excess reserves in our banking system is being mopped up. We are now about 35% off the peak in 2014. Based on the maturity schedule of the Fed’s current bond portfolio, this is what the reserve balances of our banking system should roughly look like over the next few years all else held equal. I believe we’ll finally see a normalization of our monetary system in a few years.

Fed Interest-Rate Debate Misses the Bigger Picture  -- Tim Duy - Federal Reserve policy makers are debating whether to stop tightening monetary policy when interest rates reach a neutral level that neither stimulates nor restricts growth. At this point, there is no easy answer, but central bankers should de-emphasize the level of rates at which they would pause and instead focus on the economic conditions that justify a pause. The federal funds rate currently sits in a range of 1.75 percent to 2.0 percent. The median policy maker estimate of the neutral rate is 2.9 percent within a wide overall range of 2.25 percent to 3.5 percent. The lowest of the estimates will almost be reached with the next rate increase, widely expected to come Sept. 21.  Neutral rates present a natural time to pause the tightening process, at least in the eyes of some policy makers such as Dallas Federal Reserve President Robert Kaplan. For others, the case for a pause at neutral is much less compelling. Boston Federal Reserve President Eric Rosengren said recently that “We want to get back to a more normalized monetary policy, but there’s no reason necessarily to pause at any point until we think we’re at the appropriate place for where the economy is.”  Rosengren is correct. There is far too much uncertainty about the path of the economy to assume the Fed will pause when policy rates reach estimates of neutral, particularly the lower estimates. Hence, be cautious of reading too much into claims by central bankers that they expect a pause after three or four more rate hikes. That pause is very conditional on the state of the economy after those increases. Indeed, many central bankers appear to have fallen into the habit of excessively utilizing forward guidance based on the neutral rate despite the fact that the neutral rate is just an estimate. The Fed might hit that rate and learn that their estimates were too low or too high. We won’t know until we get there. The uncertainty surrounding such estimates was a key element of Fed Chairman Jerome Powell’s Jackson Hole speech a few weeks ago. Moreover, the typically cited measure of neutral is the longer-run rate. The short-run rate is the key for near-term policy. Fed Governor Lael Brainard emphasized this distinction in a recent speech. She anticipates the short-run neutral rate will rise above the long-run rate, which means that policy rates will exceed neutral. Brainard anticipates continued gradual rate hikes for the “next year or two.”

The Fed Isn’t Heeding the Bond Market’s Message - Rising wages have the U.S. Federal Reserve on track to raise interest rates by a quarter of a percentage point on Sept. 26. That would be the eighth increase since December 2015 and put the target for the federal funds rate in a range of 2 percent to 2.25 percent. And  the Fed may not stop there. Another 25 basis-point hike could follow on Dec. 19.  Although an acceleration in average hourly wage growth to 2.9 percent over the past year has increased pressure on the central bank to tighten monetary policy, the latest inflation data tell a different story. Reports last week showed producer prices dropping in August, consumer prices excluding volatile food and energy rising by a feeble 0.1 percent, and the import price index falling the most since January 2016. The financial markets are sending the Fed a powerful message. If the central bank continues to tighten policy despite signs of softness in inflation, it will not cause the gap in short- and long-term U.S. Treasury yields to widen as desired. Instead, it will succeed only in flattening and eventually inverting the yield curve. An inverted yield curve has been an almost surefire signal of a recession several months later. A mistake by the Fed would cause steep losses in equities as the economy goes into a recession as well as burn bond bears who have built bear-record bets against Treasuries.  The Fed may be repeating the mistakes that were a contributing factor to the financial crisis a decade ago. Even though yield curve inverted in November 2006 with yields on two-year notes rising above those of 10-year notes, the federal funds rate remained elevated at 4.25 percent in December 2007 when the Great Recession began. Subsequent rate reductions came too late to materially affect the economy’s downward trajectory, especially after the collapse of Lehman Brothers Holdings Inc. on Sept. 15, 2008, making the Fed a follower rather than a leader for markets.

Trump to Nominate Former Fed Economist Nellie Liang for Board Seat —President Trump will nominate Nellie Liang, a former Federal Reserve economist who created its first office of financial stability, to the central bank’s board of governors, the White House said Wednesday.In 2010, then-Fed Chairman Ben Bernanke tapped Ms. Liang to form the office to oversee risks in the financial system in the wake of the 2008 crisis. Today, that operation is as large as the Fed’s long-dominant division of monetary affairs.Ms. Liang joined the Fed in 1986 as a research economist and left the central bank in 2017. Since then, she has served as a senior fellow at the Brookings Institution in Washington, D.C., and as a consultant to the International Monetary Fund. Ms. Liang is a registered Democrat. In early 2009, Ms. Liang helped lead the government’s first round of bank stress tests that helped settle market fears about the resilience of the U.S.’s biggest banks.Last year, she pushed back against criticism that the Fed’s exceptionally easy money policies after the financial crisis had harmed the banking sector and made the financial system more fragile.  “The evidence indicates that extraordinary monetary policies have improved financial stability, including the resilience of banks, not undermined it,” she said in a speech at the American Enterprise Institute. Ms. Liang, 60, received her Ph.D. from the University of Maryland and her undergraduate degree in economics from the University of Notre Dame.  Mr. Trump has nominated five other individuals to the Fed’s seven-seat board. Three have been confirmed by the Senate: Chairman Jerome Powell, Vice Chairman Richard Clarida and Randal Quarles, the vice chairman for bank supervision.

Q3 GDP Forecasts -- From Merrill Lynch: We are tracking robust 3.7% qoq saar growth for 3Q and 4.4% for 2Q. [Sept 21 estimate]. And from the Altanta Fed: GDPNowThe GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2018 is 4.4 percent on September 19, unchanged from September 14. [Sept 19 estimate]From the NY Fed Nowcasting ReportThe New York Fed Staff Nowcast stands at 2.3% for 2018:Q3 and 2.7% for 2018:Q4. [Sept 21 estimate] CR Note: It looks like GDP will be  in the 3s in Q3.

And Now for Something Completely Different: the Dollar Challenged - While the country’s attention is riveted on Florence, Kavanaugh’s confirmation and Manafort’s plea deal, certain other developments around the world may in the end prove more significant. At a meeting earlier this month in Vladivostok, Russian President Vladimir Putin and Chinese leader Xi Jinping agreed to bypass the dollar and use their own currencies in commercial relations. This month, officials from France, Germany, and the UK have begun planning with China and Russia a special payments channel that would allow these countries to defy new American sanctions against any company doing business with Iran. This payment channel would bypass the American-dominated international banking system and the dollar.  Much of American economic and global power rests on the universal use of the dollar as the settlements and reserve currency of choice. It allows the United States, among other things, to run huge trade and budget deficits and to impose crippling economic sanctions on other countries. If the American dollar became overnight a exotic national currency like Turkey’s Lira, then in order to balance its accounts and pay for its deficit, the U.S. would have to raise interest rates to attract foreign currencies, even if that meant crippling business and home finance. If the dollar were to cease being a global currency, that would weaken the American economy and damage international trade. The moves by Russia, China, France, Germany, and the UK to begin to decouple themselves from the American-dominated monetary system could come to nothing but these could also lay the basis for a greater challenge down the road to American dominance. It’s happening largely in response to Trump’s Hobbesian diplomacy, which sees the U.S. engaged in a zero-sum battle against its longtime allies as well as against competitors like China and also by his fiscal policies that promise huge deficits in years ahead. My friend Taggart Murphy, who wrote the definitive study of U.S.-Japan economic relations, The Weight of the Yen, says of Trump’s effect on the global economy: Trump is doing everything he can to bring on the end of the days when the US can borrow whatever it wants in whatever amounts it wants.

Iran Sanctions Are Damaging The Dollar - Painful sanctions on Iran have demonstrated the long reach of the U.S. Treasury, forcing much of the globe to fall in line and cut oil imports from Iran despite widespread disagreement over the policy. Yet, we are only in the first few chapters of what may ultimately be a long story that ends with the erosion of the power of the U.S. dollar. The role of the greenback in the international financial system is the reason why the U.S. can prevent much of the world from buying oil from Iran. Oil is traded in dollars, and so much of international commerce is based in dollars. In fact, as much as 88 percent of all foreign exchange trades involve the greenback.Moreover, multinational companies inevitably have some commercial ties to the U.S., so when faced with the choice of business with Iran or losing access to the U.S. financial system and the American market, the choice is an easy one.That means that even if European governments, for instance, support importing oil from Iran, the dominance of the U.S.-based financial system leaves them with very few tools to do so. European policymakers have scrambled to try to maintain a relationship with Iran and have tried to convince Iran to stick with the terms of the 2015 nuclear deal – and Iran is still complying – but that doesn’t mean that European refiners, who are private companies, will run the risk of getting hit by U.S. sanctions by continuing to import oil from Iran. In fact, they began drastically cutting oil purchases from Iran months ago.The dollar is supreme, it seems. But that isn’t the end of the story. In several ways, the Trump administration is contributing to a growing threat to the dollar, even if that is hard to see right now. After all, the dollar has strengthened this year, U.S. GDP has grown faster than other industrialized economies, and the world has had to adhere to U.S. sanctions on a growing list of countries and entities, the most notable of which are Russia, Iran and Venezuela. However, the “America first” foreign policy, the trade wars and seemingly arbitrary nature of tariffs, trans-Atlantic tension and other geopolitical rivalries are all factors that could push the dollar off of its perch. But it is the extensive use of sanctions that stands out as arguably the most important factor that may ultimately undermine the dominance of the U.S. dollar, some experts say. That is especially true in the case of Iran.

Paying for Hurricanes – J.D. Alt  What you believe America can build—or rebuild—as a collective society hinges on how you answer one fundamental question: When the U.S. government issues a treasury bond, is it “borrowing” money that must be repaid with future tax-dollars—or is it “creating” money that can be spent to accomplish big and important collective goals?  Getting the right answer to this question could be existentially important. As I’m writing, for example, Hurricane Florence is unleashing historical damage to the U.S. Atlantic coast and inland areas. Over the next weeks and months, the inevitable debate will unfold over how much America can afford to “pay” to make the lives of tens of thousands of families and thousands of local communities whole and functional again. This time, perhaps, the debate will go even further: it might begin to earnestly ask the bigger questions about the future of our coastal cities and infrastructures in an unfolding era of climate change. These bigger questions will not involve billion-dollar budgets, but trillions of dollars of federal expenditures. This is why my opening question is so important. What we can allow ourselves to do—indeed, what can we pay ourselves to undertake and accomplish as a collective society—depends on the answer.

Yes, Government Creates Wealth - The January 2010 edition of The Economist was devoted to the dangers of big government. A large picture of a monster adorned the magazine’s cover.  This, of course, is hardly a novel view. Throughout the history of economic thought, government has long been seen as necessary but unproductive, a spender and regulator, rather than a value creator. But government’s ability to produce value has been seriously underestimated, an error that has in effect enabled others to have a stronger claim on their wealth creation role. It is hard to make the pitch for government, though, when the term “public value” doesn’t even currently exist in economics. There is of course the important concept of “public goods” in economics—goods whose production benefits everyone, and which hence require public provision since they are under-produced by the private sector. But the concept has also been used to hinder government activity (restricting specific areas in which it is okay for the public sector to tread) rather than help government think creatively about how it produces value in the economy. The narrative that government is inefficient and its optimum role should be “limited” to avoid disrupting the market has proven extremely powerful. But this prevailing view of government is wrong; it is more the product of ideological bias than anything else.  The national accounts—the standard measures of national output, expenditure, income, and so on—fail to capture the full amount of this government value added and have four major flawed assumptions. First of all, national accounts regard most of government value added only as costs, mainly pay to government employees; in other words, government activity lacks an operating surplus, which would increase its value added. Let’s compare it with the private sector: The share of pay in private-sector value added, on the other hand, is rarely above 70 percent. On that basis, you could say that government value added is on average only 70 percent of what it should be.

Senate passes defense and health spending bill, tries to delay border wall fight till December  - The Senate on Tuesday passed a short-term spending bill that would keep the government running through Dec. 7, aiming to avert a government shutdown and put off a fight over funding for President Trump’s border wall until after the midterm elections.  The short-term bill came attached to a massive budget package containing full-year 2019 funding for the Pentagon as well as for the Labor, Education and Health and Human Services departments. GOP leaders designed the package to combine key Republican and Democratic priorities in an attempt to garner overwhelming bipartisan support. The package also aims to satisfy Trump’s desire for more military spending.The 93-to-7 vote came less than two weeks ahead of a Sept. 30 deadline when government funding will expire unless Congress and Trump intervene.The legislation would keep the government open by funding agencies whose budgets Congress has not addressed before the shutdown deadline at current levels through Dec. 7.“This is necessary to ensure that we do not face a government shutdown in the event that we do not finish our work on the remaining bills,” said Sen. Patrick J. Leahy (D-Vt.), the top Democrat on the Senate Appropriations Committee.  The House is expected to take up the bill next week, but it remains uncertain whether Trump would sign the measure.

Who Bought the $1.47 Trillion of New US National Debt over the Past 12 Months? - China, Japan, other foreign investors, the Fed, US government funds? Nope.Foreign private-sector investors and “foreign official” investors – central banks, governments, etc. – whittled down their holdings of US Treasury Securities by $21 billion at the end of  July, compared to a year ago, to $6.25 trillion, according to the Treasury Department’s TIC data released Tuesday afternoon.Over the same period, the US gross national debt – fueled by a stupendous spending binge and big-fat tax cuts – soared, despite a booming economy, by a brain-wilting $1.468 trillion, in just 12 months. China’s holdings of marketable Treasury securities have remained roughly stable despite the arm-wresting match over trade, with its holdings at the end of July, at $1.17 trillion, up $4.7 billion from a year earlier.Japan’s holdings fell by $78 billion year-over-year to $1.035 trillion, continuing the trend since the peak at the end of 2014 ($1.24 trillion): Russia, always a smallish holder of Treasuries compared to China and Japan, has liquidated 90% of its holdings, bringing them from $153 billion in May 2013 to just $14.9 billion in July:  Of the 12 largest holders of US Treasuries, after China and Japan, seven are tax havens for foreign corporate and/or individual entities (bold). The value in parenthesis denotes the holdings in July 2017: By the end of July, the US gross national debt had reached $21.31 trillion, up $1.47 trillion from July last year – as I said above, a truly brain-wilting increase for a booming economy. Here’s who bought or shed this paper over those 12 months:

• Foreign official and private-sector holders shed $21 billion, reducing their stake to $6.23 trillion, or to 29.2% of the total US national debt.
• The US government (pension funds, Social Security, etc.) shed $44 billion, reducing “debt held internally” to $5.70 trillion, or to 26.7% of the total.
• The Federal Reserve shed $128 billion through the end of July as part of its QE Unwind, reducing its pile to $2.337 trillion by the end of July, or to 11.0% of total US national debt.
• So if everyone shed, who bought? American institutional and individual investors, directly and indirectly, through bond funds, corporate or state pension funds, and other ways, owned $7.05 trillion, or 33.1% of the total US debt at the end of July, having added $1.66 trillion to their holdings over those 12 months!

Bipartisan Bill Would Boost Infrastructure, Trim Debt  - Rep. Mike Kelly & Rep. Lacy Clay - Even in this moment of historically strong economic growth, 46 million Americans still live in poverty. They are not exclusively from one political party, racial background, or geographic region, but they do share a common experience. From inner-city streets to the rusted husks of ex-manufacturing centers to the hollows of coal country, these Americans live in areas where economic opportunity is scarce, and hope often feels like an unaffordable luxury.  As members of the Democratic and Republican parties, we disagree on most issues, but we share the common belief that more can and must be done to help lift up the most impoverished communities in our country. While many of the problems in these areas cannot be cured by government alone, Washington policymakers can take certain actions to begin directing resources to the places that need them most.  For this purpose, we (along with Rep. Ted Budd of North Carolina) introduced a bipartisan bill (HR 6104) in June known as the Generating American Income and Infrastructure Now (GAIIN) Act to help fund critical infrastructure projects in the poorest areas of the nation. It would do so without any new taxes or spending and would simultaneously help pay down our record-high national debt. Currently, federal agencies hold more than $2 trillion in debt and lease assets. The sale of a portion of these assets, if expedited, could raise a significant amount of money for infrastructure projects. Rather than languishing in Washington, we believe this money could be used for the good of our constituents and fellow citizens throughout our country.

Data continues to show little evidence that tax cuts are trickling down to typical workers, and now House Republicans want a do-over- EPI  -- In December, when Republicans passed the Tax Cuts and Jobs Act (TCJA) they chose to make tax cuts for corporations permanent, while making the individual provisions temporary to satisfy the requirements of budget reconciliation. Republicans sold these corporate tax cuts as being beneficial to everyday working people, despite the fact that previous experience gives us no reason to believe that corporate rate cuts will trickle down to anyone. Now that the tax cuts have passed and enough time has gone by to allow some data to trickle in, is there any reason for us to change this judgement? Not really. There’s still no indication in the data that the TCJA has spurred investment—the necessary but by no means sufficient precursor to wage gains. Sure, owners of corporate shares have made out like bandits. The most recent release from the Bureau of Economic Analysis (BEA) shows that domestic after-tax corporate profits remain high, 7.5 percent of GDP in the second quarter of 2018 compared to 7.4 percent in the first quarter of 2018 and up substantially from already-high levels (6.7 percent) in 2017. Revenue collected from domestic corporate taxes remains low, 1.2 percent of GDP in the second quarter of 2018 compared to 1.1 percent in the first quarter of 2018 and 1.8 percent in 2017. Finally, undistributed domestic corporate profits – corporate profits kept internal to the firm and not distributed back to shareholders as dividends—remain historically high. This is due to the windfall the TCJA contained for multinational corporations on the profits they booked offshore.  But the rapid surge in investment promised by proponents of the TCJA has still yet to materialize. Initial data for the second quarter of 2018 showed year-over-year growth in real private nonresidential fixed investment roughly unchanged from the first quarter of 2018. Revised data increased that growth rate slightly to 7.04 percent in the second quarter of 2018 from 6.74 percent in the first quarter of 2018, but the data still doesn’t show a clear boost to the trend of investment that would indicate a positive effect coming from the TCJA. The graph below shows year-over-year increases in non-residential investment since 2007—do the last two data points look like a game-changer?

Further evidence that the tax cuts have not led to widespread bonuses, wage or compensation growth - EPI - One of the leading arguments for the GOP’s Tax Cuts and Jobs Act of 2017 has been that it will raise the wages of rank-and-file workers, with congressional Republicans and members of the Trump administration promising raises of many thousands of dollars within ten years. The Trump administration’s chair of the Council of Economic Advisers argued in April that we are already seeing the positive wage impact of the tax cuts: A flurry of corporate announcements provide further evidence of tax reform’s positive impact on wages. As of April 8, nearly 500 American employers have announced bonuses or pay increases, affecting more than 5.5 million American workers. Following the bill’s passage, a number of corporations made conveniently-timed announcements that their workers would be getting raises or bonuses (some of which were in the works well before the tax cuts passed). But as Josh Bivens and Hunter Blair have shown there are many reasons to be skeptical of the claim that the TCJA, particularly corporate tax cuts, will produce significant wage gains. Newly released Bureau of Labor Statistics’ Employer Costs for Employee Compensation data allow us to examine nonproduction bonuses in the first two quarters of 2018 to assess the trends in bonuses in absolute dollars and as a share of compensation. The bottom line is that there has been very little increase in private sector compensation or W-2 wages since the end of 2017. The $0.03 per hour (inflation-adjusted) bump in bonuses between the fourth quarter of 2018 and the second quarter of 2018 is very small and not necessarily attributable to the tax cuts rather than employer efforts to recruit workers in a continued low unemployment environment.

Trump Weighs In On The Single Worst Mistake In American History - In a wide ranging interview with The Hill on Tuesday conducted in the Oval Office, President Trump was asked to give his take on the biggest mistake in American history. Considering just how open-ended a question that is, it's perhaps surprising that he merely went back less than a couple decades into the Bush presidency, though Trump's base will certainly welcome it as it hearkens back to his "America First" foreign policy vision of the campaign trail. “The worst single mistake ever made in the history of our country: going into the Middle East, by President Bush,” the president during his interview with Hill.TV. “Obama may have gotten them (U.S. soldiers) out wrong, but going in is to me the biggest single mistake made in the history of our country,” he said.Trump explained the reasoning behind this choice, and why it wasn't something like the civil war or another defining and devastating event reaching far into American History.  “Because we spent $7 trillion in the Middle East. Now if you wanna fix a window some place they say, 'oh gee, let’s not do it. Seven trillion, and millions of lives — you know, ‘cause I like to count both sides. Millions of lives,” the president explained.  “To me it's the worst single mistake made in the history of our country. Civil war you can understand. Civil war, civil war. That’s different. For us to have gone into the Middle East, and that was just, that was a bad day for this country, I will tell you.”

What America could do with European levels of military spending  -President Trump excoriated the country’s European allies over their defense budgets on Wednesday, demanding they increase their military spending to levels closer to the United States. But if the United States instead tried lowering its defense spending to mirror Europe’s, Trump could safely fund several of his key priorities — including the White House’s infrastructure plan, a border wall with Mexico and a 15 percent corporate tax rate — and still have additional money left over. In 2018, the United States spent $623 billion on national defense, which translates into about 3.5 percent of its gross domestic product, according to a report recently published by the North Atlantic Treaty Organization. (Estimates vary depending on what counts as “military spending,” and some experts put the number for the United States closer to 3 percent.) Trump has demanded NATO members ramp up their military spending levels to at least 2 percent of GDP, in line with the goal set by the organization itself. (Many European countries spend less than 2 percent on NATO, part of why Trump is demanding they pay more.) Cutting U.S. military spending from 3.5 percent of GDP to 2 percent would shave off about $300 billion from federal spending, or about $3 trillion over the next 10 years. Depending on which expert you ask, the chronic social ills the United States could go a long way toward addressing with an extra $3 trillion per decade include: homelessness, child poverty, college tuition costs, the national student debt burden, a lack of affordable child care and long-term health care for the elderly. It could also accomplish several key goals of the president, or go a long way to help balancing U.S. books. Some analysts were skeptical of the idea, arguing it would be difficult for the United States to so dramatically reduce its military spending without doing serious damage to global security and firing thousands of U.S. servicemembers.  “It’s not just a matter of buying fewer bombs: The United States spends $100,000 per troop on compensation — such as salaries, housing, health care — which also contributes to our defense budget exceeding that of countries like China.” Others disagreed. “I think it’s very doable in terms of still defending the country, though you would need a strategy to do it,”

Air Force Calls For 24% Increase In Squadrons To Prepare For War Against Major Power - Air Force Secretary Heather Wilson on Monday called for a significant increase in the service’s size, as it prepares for the possibility of war against a major nation such as China or Russia, in the next decade. Under the expansion plan outlined by Wilson, the Air Force needs to grow by 74 additional squadrons, a 25% increase, by 2030. She said the number was based on internal reports, using intelligence estimates of what the service would need as far as manpower to be victorious in the next conflict."To face the world as it is, with a rapidly innovating adversary, the Air Force we need should have about 25 percent more operational squadrons in the 2025 to 2030 time frame than the Air Force we have," Wilson told attendees at an Air Force Association conference in National Harbor, Maryland.Wilson, the Air Force's top civilian official, said the increase is essential to the service's current mission of upholding the new national defense strategy, as well as combating the evolving threats from China and Russia."The defense strategy tells us that we need to be able to defend the homeland, provide a credible nuclear deterrent and win against a major power while encountering a rogue nation, all while managing violent extremists with lower levels of effort," she said.Wilson said the service has approximately 312 operational squadrons but needs 386. "Three hundred and twelve operational squadrons is not enough. It takes all of us to get that combat power ready and able to fight. A fist is nothing without the weight of the body behind it."

The China Hype - Defense One - Last week’s New York Times offered a breathless take on China’s Navy, noting that its two-carrier fleet is now larger than the United States’ and poised to project power globally. This naval prowess, plus a new generation of accurate land-based anti-ship missiles, create a robust anti-access/area denial capability, which, the Times suggests, means China may “prevail” in a fight with the United States off its coast. The United States and its Asian allies are “only beginning to digest” the implications of this shift in the “balance of power,” according to the article. That worry fits with Washington’s emergent conventional wisdom, as delivered with varying degrees of explicitness in think tank reports, congressional hearings, and years of reporting. The idea is that China’s military gains undermine the deterrence essential to the U.S. alliance structure in East Asia, which is what ostensibly keeps its peace. China may attack a U.S. ally, gambling that a successful missile attack on aU.S. carrier or destroyer would cause a U.S. military withdrawal, or the United States might effectively abandon its allies to avoid such an attack. It follows that, to maintain stability in Asia, the United States needs to do something radical and expensive—maybe invest more heavily in submarines and long-range strike options, throw money at theater ballistic missile defense, or more. But the conventional wisdom is unduly alarmist.

Poland Offers `Fort Trump’ as Name If U.S. Builds Military Base -  President Donald Trump said the U.S. is looking “very seriously” at establishing a permanent military base in Poland -- and Polish President Andrzej Duda, eager to secure a deal, suggested it be named “Fort Trump.” Trump raised the possibility of a new U.S. base in Poland in a meeting with Duda in the Oval Office on Tuesday. He said at a news conference with the Polish leader that Duda had offered to pay more than $2 billion toward construction. “Poland is willing to make a very major contribution to the United States to come in and have a presence in Poland,” Trump said in the Oval Office. “If they’re willing to do that, it’s something we will certainly talk about.” Duda, whose country is wary of Russian aggression in neighboring Ukraine, suggested during the news conference that a base could be named after Trump. The U.S. president said he is increasingly interested in basing U.S. troops in countries willing to pay for their presence. Wealthy countries with U.S. bases, Trump said, are “only taking advantage of us.” “When a country is very wealthy and when the United States has been protecting them for many years at tremendous cost,” he said, “it’s time that they helped with burden-sharing.” He said the U.S. is “in discussions with numerous countries” about paying for American military bases, without naming any. He has complained publicly and privately about the cost of the U.S. military presence in Germany and South Korea.

Congress Members Demand Trump Seek Approval Before Military Action In Syria - A group of over 40 Congress members have sent President Trump a bipartisan letter reminding him that the US Constitution requires that the president seek Congressional approval before taking military action in Syria or elsewhere. Congressman Justin Amash (R-Mich.) announced via Twitter on Monday that the letter had been sent to the White House.Ironically Rep. Amash made the announcement just as Monday's evening's massive Israeli strike on Syria was underway, which resulted in a downed Russian surveillance plane carrying 14 troops amidst the confusion of missiles flying over the Mediterranean as it was hit by Syrian defense attempting to stave off the attack by Israel.  While the Pentagon formally denied any US role in the strikes, it was an extremely dangerous situation with yet again the potential for serious escalation between Russia and the US and its allies. The letter was signed by a handful of Republicans including Thomas Massie, Mark Sanford, and Walter Jones, as well as 42 Democrats. It begins as follows: We write to strongly urge you to consult with and obtain authorization from Congress before ordering any additional U.S. military action in Syria. We are deeply concerned by recent reports indicating that your administration is preparing again to strike Syria in the event of another chemical weapons attack.

Top U.S. Diplomat Backed Continuing Support for Saudi War in Yemen Over Objections of Staff - WSJ —Secretary of State Mike Pompeo backed continued U.S. military support for Saudi Arabia’s war in Yemen over the objections of staff members after being warned that a cutoff could jeopardize $2 billion in weapons sales to America’s Gulf allies, according to a classified memo and people familiar with the decision.  The move has fueled rising outrage in Congress, where a bipartisan group of lawmakers is trying to cut off American military aid for Saudi Arabia and the United Arab Emirates in their three-year-old war against Iran-backed fighters in Yemen. More than 16,700 civilians have been killed or injured in Yemen, according to the United Nations, which says the Gulf nation is home to the world’s worst humanitarian crisis. The U.S. is backing the Gulf allies in Yemen, where the Trump administration is working to contain Iran’s allies and al Qaeda militants. Mr. Pompeo overruled concerns from most of the State Department specialists involved in the debate who were worried about the rising civilian death toll in Yemen. Those who objected included specialists in the region and in military affairs. He sided with his legislative affairs team after they argued that suspending support could undercut plans to sell more than 120,000 precision-guided missiles to Saudi Arabia and the United Arab Emirates, according to a classified State Department memo and people familiar with the debate.State Department spokeswoman Heather Nauert said she wouldn’t comment on “the deliberative process or allegedly leaked documents.”   But she made it clear that the U.S. wants its Gulf allies to do more to address continued American concern about the protracted conflict in Yemen that has pushed millions to the brink of famine and morphed into a proxy war where Houthi fighters have used Iran-made missiles to target neighboring Saudi Arabia.“While our Saudi and Emirati partners are making progress, we are continuing discussions with them on additional steps they can take to address the humanitarian situation, advance the political track in cooperation with the U.N. Special Envoy’s efforts, and ensure that their military campaign complies with the law of armed conflict and international humanitarian law,” she said. The U.S. currently provides the Saudi-led coalition with modest military support, including weapons sales and aerial refueling of jet fighters carrying out airstrikes in Yemen.

How Washington Excuses Saudi Arabia's Potential War Crimes - Given that Saudi killings of civilians in Yemen have made headline news in the Western media over the past few weeks, this announcement from Mike Pompeo on the United States Department of State website is most interesting: In case you weren't aware, the NDAA is the National Defense Authorization Act, the most recent iteration of which can be found here under the title H.R. 5515 - John S. McCain National Defense Authorization Act for Fiscal Year 2019.  Under section 1290 of the NDAA, we find this: By law under section 1290, not later than 180 and 360 days after the enactment of the NDAA, the Secretary of State must submit to Congress a certification indicating whether the Government of Saudi Arabia and the Government of the United Arab Emirates are undertaking the following measures:

• (A) an urgent and good faith effort to support diplomatic efforts to end the civil war in Yemen;
• (B) appropriate measures to alleviate the humanitarian crisis in Yemen by increasing access for Yemenis to food, fuel, medicine, and medical evacuation, including through the appropriate use of Yemen’s Red Sea ports, including the port of Hudaydah, the airport in Sana’a, and external border crossings with Saudi Arabia; and
• (C) demonstrable actions to reduce the risk of harm to civilians and civilian infrastructure resulting from military operations of the Government of Saudi Arabia and the Government of the United Arab Emirates in Yemen, including by—
• (i) complying with applicable agreements and laws regulating defense articles purchased or transferred from the United States; and
• (ii) taking appropriate steps to avoid disproportionate harm to civilians and civilian infrastructure; and in the case of Saudi Arabia, the Government of Saudi Arabia is undertaking appropriate actions to reduce any unnecessary delays to shipments associated with secondary inspection and clearance processes other than UNVIM (the United Nations Verification and Inspection Mechanism for Yemen)." 

As you can see from the State Department announcement, Mike Pompeo believes that Saudi Arabian forces are doing the very best that they can to avoid civilian casualties.  By providing this certification, Washington is able to continue to sell arms to the Saudis and the UAE.

White House Confirms It Has Relaxed Rules on U.S. Use of Cyberweapons - The White House said Thursday it had rescinded a classified Obama-era memorandum dictating when the U.S. government can deploy cyber weaponry against its adversaries, publicly acknowledging the move for the first time. John Bolton, President Trump’s national security adviser, confirmed during a press briefing that the old rules had been replaced by new classified guidance intended to empower the Defense Department with more flexibility to launch offensive cyber strikes without first needing to vet those decisions through an elaborate interagency process.“Our presidential directive effectively reversed those restraints, effectively enabling offensive cyber operations through the relevant departments,” Mr. Bolton said. “Our hands are not tied as they were in the Obama administration.”The Wall Street Journal, citing anonymous officials, first reported last month that Mr. Trump had scrapped and replaced Obama’s directive. Mr. Bolton didn’t provide specifics about what is included in the new set of rules, which remain classified, but described them as “very different” from the Obama-era guidance, which was known as Presidential Policy Directive 20. Trump’s new directive is titled National Security Presidential Memorandum 13, according to people familiar with it. Officials have provided few details of Mr. Trump’s new cyberwar order since he signed it last month, but the issue has drawn interest from lawmakers in both parties. Gen. Paul Nakasone, the head of both U.S. Cyber Command and the National Security Agency, is expected to discuss the new rules during a closed-door briefing before the Senate Armed Services Committee next week.  Acknowledgment of the new directive came as the White House unveiled its first national cybersecurity strategy on Thursday in an attempt to establish a government wide approach to defending U.S. computer networks, including critical infrastructure like the energy grid, from hackers. The new strategy—and the greater leeway provided to the Pentagon through Mr. Trump’s classified directive—isn’t intended to promote more frequent use of offensive cyberweapons but to “create structures of deterrence” to show potential adversaries the cost of engaging operations against the U.S., Mr. Bolton said.

Kim Asks For 2nd Summit With Trump, Promises Swift Surrender Of Nuclear Arsenal - Even though North Korea has reneged on similar promises in the past, Kim Jong Un's promise to allow international observers into the isolated country to monitor the dismantling of the North's Yongbyon nuclear reactor and several missile-launching sites has apparently persuaded the US to restart negotiations to drop sanctions against the regime after they stalled out over the summer.In what may be another example of the North telling the US what it wants to hear, Kim has reportedly requested another meeting with Trump while promising to quickly surrender all of his country's nukes, according to South Korean leader Moon Jae-in, who shared the news at a press conference Thursday. Kim also wants Secretary of State Mike Pompeo to return to North Korea for another meeting (a visit that had been planned for last month was canceled by Trump as talks stalled). In a sign that negotiations are set to begin again in earnest, Pompeo has invited Ri Yong-hu, North Korea’s foreign minister, to a meeting in New York next week after the secretary of state set a goal to complete the North's denuclearization process by the time President Trump's term ends in January 2021, Reuters reports, Despite the renewed enthusiasm surrounding the talks, several anonymous US officials said they remain skeptical of the North's intentions. Specifically, they're worried the North could be deliberately attempting to drive a wedge between Washington and Seoul. While North Korea has pledged to "work toward" denuclearization", these commitments have been vague. Yet the US insists that the North must commitment to removing its arsenal if it wants easing of international sanctions and an end to the Korean war.Some U.S. officials were deeply skeptical. Speaking before Pompeo’s announcement, two senior U.S. officials involved in U.S.-North Korea policy voiced fears Kim was trying to drive a wedge between Washington and Seoul.At the summit, the two Koreas agreed on plans to resume economic cooperation, including working to reconnect rail and road links. They agreed as well to restart a joint factory park in a border city of Kaesong and tours to the North’s Mount Kumgang resort, when conditions are met.

Pompeo says ready to transform U.S.-DPRK ties immediately - (Xinhua) -- U.S. Secretary of State Mike Pompeo said on Wednesday that the United States is ready to transform its relations with the Democratic People's Republic of Korea (DPRK) immediately. In a statement regarding the outcomes of an earlier summit between leaders of South Korea and the DPRK, Pompeo said that "the United States congratulates President Moon Jae-in and Chairman Kim Jong Un on the successful outcome of their summit meeting in Pyongyang." "We welcome President Moon and Chairman Kim's reaffirmation of the Singapore joint statement of complete denuclearization of the Korean Peninsula," he said. "On the basis of these important commitments, the United States is prepared to engage immediately in negotiations to transform U.S.-DPRK relations." He added that "this morning, I invited my counterpart Foreign Minister Ri Yong Ho to meet in New York City next week where we are both already scheduled to be in attendance at the United Nations General Assembly meeting.""Likewise, we have invited North Korean representatives to meet our Special Representative for North Korea, Stephen Biegun, in Vienna, Austria at the earliest opportunity," Pompeo added. This will mark the beginning of negotiations to transform U.S.-DPRK relations through the process of denuclearization of the DPRK and to construct a lasting and stable peace regime on the Korean Peninsula, Pompeo noted. Earlier on the same day, U.S. President Donald Trump tweeted that the fruits of the summit are "very exciting." 

U.S. and China Ramp Up Trade Threats - WSJ - President Trump’s economic conflict with China is set to escalate this week, as the administration plans to unveil fresh tariffs on $200 billion in Chinese products entering the U.S. and Beijing debates new ways to retaliate against U.S. corporations doing business in China. The threats from both sides of the Pacific risk upending a fragile new diplomatic initiative—led by Treasury Secretary Steven Mnuchin and supported by top U.S. financial and business executives—to see if they can broker negotiations aimed at staving off a new round of tit-for-tat penalties. As part of that initiative, the Chinese government over the weekend was completing plans for a top economic policy official to visit Washington in the next few days to lay the groundwork for a trip by Vice Premier Liu He the following week. Mr. Liu is expected to see Mr. Mnuchin, and possibly Mr. Trump. But Chinese officials said that if Mr. Trump carries out his plans to announce the fresh tariffs early this week—as people familiar with his plans said over the weekend that he would—then those talks could get scuttled. “China is not going to negotiate with a gun pointed to its head,” said a senior official who advises the leadership on foreign-policy matters. White House spokeswoman Lindsay Walters declined to comment on the status of the tariff discussions inside the administration, referring to a Friday statement that said: “The president has been clear that he and his administration will continue to take action to address China’s unfair trade practices. We encourage China to address the longstanding concerns raised by the Unites States.” With the expected new round of U.S. tariffs, combined with earlier rounds, the Trump administration will have levied duties on roughly half of the more than $500 billion in Chinese goods that enter the U.S. each year, a considerable escalation coming amid a series of other U.S. initiatives aimed at overhauling American trade policy. Mr. Trump’s aides are locked in tense negotiations with Canada to rewrite the quarter-century-old North American Free Trade Agreement by a month-end deadline, as the president threatens to expel Ottawa from the pact that also includes Mexico. Talks between the U.S. and Canadian chief negotiators ended inconclusively last week, and, as of Sunday, there were no set plans yet to resume this week, officials said.

As Trump’s Trade War Mounts, China’s Wall Street Allies Lose Clout — When President Bill Clinton deliberated whether he should loosen trade barriers against China, Wall Street helped plead Beijing’s case. When Presidents George W. Bush and Barack Obama talked tough about labeling China as a currency manipulator, Wall Street urged restraint — and both presidents backed down.Today, China is hoping that Wall Street will once again use its political heft to soothe tempers in Washington. But as President Trump ratchets up the trade war with Beijing, Wall Street’s words are falling on deaf ears. Senior Wall Street executives met in Beijing on Sunday with current and former Chinese officials and bankers at a hastily organized session to find ways to strengthen financial ties between the United States and China. On Monday, the group — which included executives fromGoldman Sachs Group, Morgan Stanley and the Blackstone Group, the private equity firm, among others — planned to meet with Vice President Wang Qishan, the right hand man of Xi Jinping, the country’s leader.  New trade talks between the two governments are tentatively scheduled between Steven Mnuchin, the Treasury secretary, and Liu He, a Chinese vice premier, later this month in Washington. Stephen A. Schwarzman, Blackstone’s chief, has been playing a critical role in organizing them, say people familiar with the talks, who asked for anonymity because the process is sensitive.But the Chinese have indicated that they will pull out of the talks if Mr. Trump follows through on his threat to impose tariffs on another $200 billion in Chinese goods, according to a person familiar with the matter. Mr. Trump has told advisers that he wants to move ahead with the new round of tariffs and an announcement could come as early as this week, another person familiar with the discussions said.

China warns it won't just play defense in a trade war with the US -- China will not be content to only play defense in an escalating trade war with the United States, a widely read Chinese tabloid warned, as U.S. President Donald Trump was expected to announce new tariffs on $200 billion in Chinese goods as early as Monday. The United States and China have already levied duties on $50 billion worth of each other's goods in an intensifying row that has jolted global financial markets in the past few months. Last week, the U.S. Treasury Department invited senior Chinese officials, including Vice Premier Liu He, to more talks on the tariff dispute, though scepticism remained high among trade observers on both sides over the prospects of a breakthrough. China's Foreign Ministry reiterated that the escalation of the trade conflict was not in anyone's interest. "We have always maintained that the only correct means to resolve the trade dispute is through dialogue and consultation on an equal basis with mutual trust and respect," ministry spokesman Geng Shuang told a regular news briefing. A senior administration official told Reuters over the weekend that Trump was likely to announce the new tariffs as early as Monday. "It is nothing new for the U.S. to try to escalate tensions so as to exploit more gains at the negotiating table," the Global Times, which is published by the ruling Communist Party's People's Daily, wrote in an editorial. "We are looking forward to a more beautiful counter-attack and will keep increasing the pain felt by the U.S.," the Chinese-language column said. Besides retaliating with tariffs, China could also restrict export of goods, raw materials and components core to U.S. manufacturing supply chains, former finance minister Lou Jiwei told a Beijing forum on Sunday,

Trump will slap 10% tariffs on $200 billion in Chinese goods — and they will go to 25% at year-end - President Donald Trump will impose 10 percent tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25 percent at the end of the year.The action, announced by the Trump administration Monday, escalates a trade conflict between the world's two largest economies. China has already threatened to retaliate against new duties.The White House removed about 300 goods from a previously proposed list of affected products, including smart watches, some chemicals, and other products such as bicycle helmets and high chairs.Trump, in a statement, said that the tariffs would rise to 25 percent on Jan. 1, 2019, adding that "if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports." Trump has previously said that those additional duties are "ready to go on short notice if I want."The action will only ratchet up tensions between Washington and Beijing. The president seeks a new trade agreement amid complaints about alleged theft of intellectual property by Chinese companies and concerns about the U.S. trade deficit with China. The two sides have failed to reach a deal to resolve the White House's concerns with China's trade practices despite a series of talks."We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly," Trump said in the statement."But, so far, China has been unwilling to change its practices." The president has defended his tariff moves, despite mounting criticism from Republican lawmakers and potential political damage. On Monday morning, he tweeted: "Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be 'Tariffed!'"

U.S. duties spare Apple gadgets but hit cloud industry (Reuters) - The United States will spare Apple Inc’s Watch and other consumer gadgets from the latest round of tariffs on Chinese goods, according to a list of products released by the U.S. Trade Representative (USTR) on Monday. But parts for the computer servers and networking gear that power “cloud” data centers and internet-based services now face a levy, as do some of the parts for the machines used to make semiconductors. U.S. President Donald Trump escalated his trade war with China on Monday, imposing 10 percent tariffs on about $200 billion worth of Chinese imports and he warned that if China takes retaliatory action against U.S. farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.” The administration’s proposal drew protest from technology companies earlier this year, but the final list of taxed devices from the USTR avoids many big consumer brand names and products. The iPhone was not among the ‘wide range’ of products that Apple told regulators would be hit by the $200 billion round of tariffs in a Sept. 5 comment letter to trade officials. Apple feared for its Apple Watch and its wireless AirPods headphones, but both were left off the list announced on Monday. The new round of tariffs will take effect on Sept. 24 at a 10 percent level and rise to 25 percent on Jan. 1, 2019. However, if Trump expands the tariffs to an additional $267 billion worth of goods then nearly every Chinese import would be affected, including the iPhone, along with all other smart phones. Apple shares fell 0.7 percent to $216.29 after hours.

 U.S. gives rare earths reprieve in revised $200 billion China tariff list (Reuters) - The United States did not include rare earth elements, metals used in magnets, radars and consumer electronics, from its final list of tariffs on $200 billion of Chinese goods, underscoring its reliance on China for the strategic minerals. China is the world’s largest producer of rare earths and the biggest supplier to the United States, according the U.S. Geological Survey. Rare earth elements and minor metals have broad applications in U.S. industry, ranging from jet engines to mobile phones to oil and gas drilling. Most of the minerals the U.S. had originally targeted for tariffs were on a list of 35 minerals published by the U.S. Department of the Interior in May that were deemed critical to the country’s security and economic prosperity. Rare earth metals and their compounds, as well as mixtures of rare earth oxides or chlorides, were all included on a provisional list of tariffs on Chinese goods unveiled by the Office of the U.S. Trade Representative (USTR) in July. However, the final list released on Monday does not mention rare earths, a group of 15 lanthanide metallic elements plus the metals scandium and yttrium. The latest tariffs will go into effect on Sept. 24 at a rate of 10 percent. Permanent metal magnets and articles intended to become permanent magnets, which could include rare earth oxides neodymium and praseodymium, also dropped off the list. That category accounted for $191.2 million of imports in 2017, according to the USTR. The United States is aware of the strategic importance of rare earth metals as illustrated by a U.S. law passed last month that bans the purchase of rare earth magnets from China for the military in the 2019 fiscal year, said Dylan Kelly, a resources analyst at brokerage CLSA in Sydney. The law “clearly highlighted how exposed the nation was to any kind of disruption to the Chinese supply chain,” said Kelly. U.S. politicians “should be very aware of the corner they have pinned themselves into.” Whether the Chinese will retaliate and use rare earths as a bargaining chip or “strategic lever” in future talks with the United States remains to be seen, Kelly said. “But obviously that’s where a lot of investors have focused their attention.”

China says Trump forces its hand, will retaliate against new U.S. tariffs (Reuters) - China said on Tuesday that it had no choice but to retaliate against new U.S. trade tariffs, raising the risk that U.S. President Donald Trump could soon impose duties on virtually all of the Chinese goods that America buys. The Chinese commerce ministry’s statement came hours after Trump said he was imposing 10 percent tariffs on about $200 billion worth of imports from China, and threatened duties on about $267 billion more if China retaliated against the U.S. action. The brief statement gave no details on China’s plans, but Foreign Ministry spokesman Geng Shuang told a news briefing later that the U.S. steps have brought “new uncertainty” to talks between the two countries. “China has always emphasized that the only correct way to resolve the China-U.S. trade issue is via talks and consultations held on an equal, sincere and mutually respectful basis. But at this time, everything the United States does not give the impression of sincerity or goodwill,” he added. Geng said he would not comment on “hypotheticals” such as what measures Beijing might consider apart from tariffs on U.S. products, saying only that details would be released at the appropriate time. Trump warned on Monday that if China takes retaliatory action against U.S. farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.” The latest U.S. duties spared smart watches from Apple and Fitbit and other consumer products such as baby car seats. But if the administration enacts the additional tariffs it would engulf all remaining U.S. imports from China and Apple products like the iPhone and its competitors would not likely be spared.

China promises ‘retaliation’ against new US tariffs - Beijing retaliated against Donald Trump’s decision to impose duties on more than half of all Chinese imports by slapping new tariffs on $60bn of American goods and scolding the US president for a lack of “good faith” in bilateral trade negotiations. Despite the angry words from Chinese officials, the new tariffs announced by the state council — at 5 and 10 per cent — are less than Beijing had first threatened when it put forward a list in August of duties of up to 25 per cent. Mr Trump also imposed tariffs towards the lower end of expectations on Monday, announcing 10 per cent duties on about $200bn worth of Chinese imports beginning next week. He threatened to increase the rate to 25 per cent next year if no trade deal were reached with Beijing. One person briefed by Chinese officials on Tuesday said the White House decision to hold off from 25 per cent tariffs for now could still provide room for the two sides to manoeuvre. “A 10 per cent tariff is not going to be earth-shattering for the Chinese economy,” the person said, adding the Chinese authorities were “still trying to figure out” the “many different signals” from the US. Financial markets appeared relieved that both Beijing and Washington holstered the biggest guns available in their escalating trade war. Hong Kong’s Hang Seng index closed up 0.6 per cent, and the CSI 300, comprising big companies listed in Shanghai and Shenzhen, rose 2 per cent. US equities were also higher in midday trading. Beijing has struggled to gauge their response to Mr Trump’s aggressive use of tariffs, attempting at first to engage in talks with US cabinet officials, only to find those negotiations largely ignored by the White House. China unlikely to back down in Trump trade war

China May Skip Trade Talks, Cripple US Supply Chains After New Trump Tariffs -- When discussing yesterday's WSJ report that the Trump admin may slap the new, $200BN round of tariffs on Chinese imports as soon as tomorrow, we said that such an escalation would likely derail talks with top Chinese officials, currently scheduled in Washington for Sept. 27 and Sept. 28. Now, in a follow up report, the WSJ has confirmed that in light of the Trump's imminent  announcement, China is considering declining Trump’s offer of trade talks later this month as Trump's "pressure tactics" aren’t "sitting well" with Beijing, which has repeatedly said it wouldn’t negotiate under threat."There is a lot of uncertainty right now,” a Chinese official told the WSJ. "If more tariffs come out, the Chinese side could very well choose not to go."  .Underscoring China's growing anger toward Trump's negotiating tactics, Yang Weimin, a former senior economic adviser to President Xi Jinping, said on Sunday that "China never said it doesn’t want to negotiate with the U.S.... But the U.S. side has to show sincerity” toward resolving the trade dispute. Added a current senior official who advises the leadership on foreign-policy matters: "China is not going to negotiate with a gun pointed to its head."   While China's lack of desire to negotiate would hardly come as a surprise - after all there will be little to discuss if Trump does pull the trigger on even more tariffs - what may come as a shock to US businesses is how China plans to retaliate to the $200BN in new tariffs.Yesterday, we noted that Beijing could prompt respond "qualitatively" by selectively targeting US companies which have a major presence in China, such as US auto makers or Apple. It now appears that China's escalation will be even more targeted, and that some Chinese officials involved in advising the leadership are proposing to step up the trade fight a notch by restricting China’s sales of materials, equipment and other parts key to U.S. manufacturers’ supply chain.  Furthermore, as discussed yesterday, these restrictions - which risk crippling production until replacement supplies are sourced, a process that would take an lengthy period of time in today's "just in time" procurement world, could even apply to Apple’s iPhones, which are assembled in mainland China, the WSJ cited officials as saying without elaborating.

US firms in China say Trump tariffs will hurt, not tempt them home - US President Donald Trump’s decision to impose tariffs on US$200 billion worth of Chinese products will “cause suffering” for US businesses in China and fail to persuade them to relocate to the United States, the trade group representing the interests of US businesses in China has said.The group also said about half of the US firms in China were worried about a “strong negative impact” on their operations from an escalated trade war.William Zarit, chairman of the American Chamber of Commerce (AmCham) in China, said China would be able to “dig its heels in”, preventing a short-term resolution to the trade war, and “no one will emerge victorious from this counterproductive cycle”.Zarit said the Chinese government had plenty of measures to disrupt the operations of US firms in China and Trump’s hopes of bringing US businesses back home were misplaced. “This will not result in bringing more business back to American soil: just 6 per cent of our member companies say this current US-China trade dispute would make them consider relocating operations back home,” he said in the statement.US President Trump has decided to impose fresh 10 per cent tariffs, starting from next Monday, on US$200 billion worth of imports from China before increasing them to 25 per cent on January 1, marking a significant escalation of the dispute between the world’s two largest economies. China has promised to retaliate against the move by adding tariffs ranging from 5 to 25 per cent on US$60 billion of US products.

China's Grip on Rare Earths May Have Proven Too Strong for Trump - The U.S. appears to have shelved its plan to levy tariffs on a critical collection of minerals used in everything from hybrid vehicles to electronic gadgets and military hardware.Rare earths including scandium and yttrium are absent from the latest list of about $200 billion of Chinese goods on which the Trump administration plans to impost duties from next week. They were among a number of items scrubbed from the preliminary target list released in July along with car seats and Bluetooth devices. The U.S. imports most of its rare-earths needs from China.  Imports of rare-earths compounds and metals; Imports from Estonia, France, and Japan were derived from mineral concentrates produced in China and elsewhere.  Their inclusion in the first place was odd. China produced more than 80 percent of the world’s rare-earth metals and compounds in 2017, according to the U.S. Geological Survey. It has about 37 percent of global reserves and supplied 78 percent of America’s imports.Other niche but important materials were also missing from the revised list. These included graphite flakes, as well as some forms of silicon and magnesium.It’s not just the Trump administration that seems to be having second thoughts about making imports of strategically critical commodities more expensive. Beijing dropped its plan to impose levies on imports of U.S. crude oil, an increasingly important source of supply to the Asian nation. China’s grip on rare-earths supply is so strong that the U.S. joined with other nations earlier this decade in a World Trade Organization case to force the nation to export more of the materials, not less, after prices spiked amid a global shortage. The WTO ruled in favor of the America, while prices eventually slumped as manufacturers turned to alternatives.

Trump Slams China For Meddling In US Elections By Attacking Farmers & Industrial Workers - Having ordered the unleashing of the next round of tariffs (to hit next Monday) on China, President Trump has taken to Twitter to explain what he feels China is trying to do. His first shot across the bow claims that China is meddling in the US election: " China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me," adding that China has miscalculated, because "these people are great patriots and fully understand that China has been taking advantage of the United States on Trade for many years."China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me. What China does not understand is that these people are great patriots and fully understand that.....— Donald J. Trump (@realDonaldTrump) September 18, 2018Then Trump makes it clear that only he is capable of stopping the trend of the last few decades, " They also know that I am the one that knows how to stop it.".....China has been taking advantage of the United States on Trade for many years. They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!— Donald J. Trump (@realDonaldTrump) September 18, 2018Trump ended the tweets with a threat - confirming his order last night of a further hike to 25% tariffs and $267 billion more goods under tariffs - " There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted! " This could be an immediate problem since China just confirmed it will release its new tariffs on US goods (effective on Sept 24th) of between 5 and 10% on $60 billion of US goods.

The implications of US-China trade war -- In the aftermath of the global financial crisis ten years ago, the leaders of the world’s major powers pledged that never again would they go down the road of protectionism which had such disastrous consequences in the 1930s—deepening the Great Depression and contributing to the outbreak of world war in 1939.Yesterday US President Donald Trump announced tariffs on $200 billion worth of Chinese goods in what the Washington Post described as “one of the most severe economic restrictions ever imposed by a US president.”A levy of 10 percent will be imposed starting from September 24 and will be escalated to 25 percent in 2019 if the US does not receive what it considers to be a satisfactory agreement. The new tariffs, which will cover more than 1000 goods, come on top of the 25 percent tariff already imposed on $50 billion worth of industrial products. Trump has threatened further measures on the remaining Chinese exports to the US totalling more than $250 billion.China has threatened retaliatory action including tariffs and other, as yet unspecified measures, against the US, meaning that the world’s number one and number two economies are locked into a rapidly escalating trade war that will have global consequences.Announcing the decision, Trump called on China to take “swift action” to end what he called its “unfair trade practices” and expressed the hope that the trade conflict would be resolved.But there is little prospect of such an outcome because, while the US is demanding that the trade deficit with China be reduced, the conflict does not merely centre on that issue. China has made offers to increase its imports from the US, all of which have been rejected. The key US demand is that the Chinese government completely abandon its program of economic development and remain subservient to the US in high-tech economic sectors.As the position paper issued by Washington in May put it: “China will cease providing market-distorting subsidies and other types of government support that can contribute to the creation or maintenance of excess capacity in industries targeted by the Made in China 2025 industrial plan.” In other words, China must completely scrap the foundational structures of its economy so that it presents no threat to the economic dominance of US capitalism, a dominance which the US intends to maintain, if it considers necessary, by military means. This was made clear earlier this year when Washington designated China as a “strategic competitor,” that is, a potential military enemy. This is the inherent, objective, logic of the latest trade war measures.

Inside China's strategy in the soybean trade war (Reuters) - The executive from one of China’s biggest soybean crushers sat on a panel at a Kansas City agricultural exports conference, listening to an expert beside him explain why China would remain dependent on U.S. soybeans to feed its massive hog herds. When his turn to speak came, Mu Yan Kui told the international audience of soy traders that everything they just heard was wrong. Then Mu ticked off a six-part strategy to slash Chinese consumption and tap alternate supplies with little financial pain. “Many foreign business people and politicians have underestimated the determination of Chinese people to support the government in a trade war,” said Mu, vice chairman of Yihai Kerry, The comments echo a growing confidence within China’s soybean industry and government that the world’s largest pork-producing nation can wean itself off U.S. soy exports – a prospect that would decimate U.S. farmers, upend a 36-year-old trading relationship worth $12.7 billion last year, and radically remap global trade flows. Just one prong of the strategy Mu detailed - to slash soymeal content in pig feed - could obliterate Chinese demand for U.S. soybeans if broadly adopted, according to Reuters calculations. Cutting the soy ration for hogs from the typical 20 percent to 12 percent would equate to a demand reduction of up to 27 million tonnes of soybeans per year – an amount equal to 82 percent of Chinese soy imports from the United States last year. Chinese farmers could cut soymeal rations by nearly half without harming hogs’ growth, experts and academics said. Soy meal provides the protein and amino acids that pigs need to thrive, but reducing their use will be easier in China than elsewhere because farmers here have long included more soy than needed to keep their hogs healthy, according to industry experts in China and the United States. 

End The Trade War - American Farmers Beg For Mercy - While a trillion dollar + dose of fiscal stimulus continues to pass through the US economy, providing it with a fake sugar rush, the main risk looming for the US economy is protectionism. The ongoing battle over tariffs between President Trump and China have already seized up some global supply chains and triggered the start of a slowdown in the global growth momentum. The trade war is expected to deepen as President Trump is set to move forward with tariffs of $200 billion more on Chinese goods as soon as after the close today. Meanwhile, the existing cost of protectionism is already negatively affecting farmers. "The trade war is having impacts on all agricultural sectors,” Gary Schnitkey, Professor in Farm Management at the University of Illinois, told Yahoo Finance in a phone interview. The main agricultural commodities, Schnitkey explained, are soybeans and pork. Then, there are corn, fruits, and vegetables. "All of these commodity prices are linked together," he said. "If soybean prices fall, so do corn and wheat." He warned that every kind of farmer experiences a significant loss of income when deflationary price trends hit. Each region in the country specializes in its specific crops. In the Basin and Range, one of the regions being impacted the most from trade wars, it is beef and wheat. In the Heartland, soybeans and corn prices are rapidly declining.Blake Hurst, a corn and soybean farmer from Missouri, told Yahoo Finance that he has already seen a 15 to 20% collapse in spot prices."The only answer is to make progress in negotiations with China since they are the biggest soybean consumers," he said. “Not more government programs, but to make progress."In the Northern Great Plains and the Prairie Gateway, wheat is king, along with corn and soybeans. Schnitkey pointed out, the region is "experiencing drier weather than normal and production issues."Crops in the Fruitful Rim consist mainly of fruits, especially citrus, and vegetables. Cotton, soybeans, and corn are in the Mississippi Portal. In the Southern Seaboard, crops such as cotton, peanuts, rice, soybeans, and beef are all being affected. Hugh Weathers, South Carolina’s commissioner of agriculture, estimates that "the impact of tariffs on our markets to date is at $70 million." Weathers said the uncertainty surrounding the tariffs have already sparked a slowdown that is starting to hurt local farmers.

In Their Own Words- 202 Companies Explain How They Are Hurt By The US-China Trade War -- The debate over tariffs has mostly emphasized their impact on economic growth and jobs, which overlooks specific stories of suffering caused by President Donald Trump's trade war. While President Trump positions blame for trade-war-related pain in America squarely on China: " China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me, " Scott Lincicome, senior policy adviser at Republicans Fighting Tariffs via Reason.com, disagrees, Lincicome points out that this is a "Trump Tax" - businesses of all sizes have seen their input costs rise because of Trump's tariffs. To maintain already slim profit margins, many of these businesses have no choice but to raise prices.But not all businesses can offset tariff costs through price increases, because their customers are price sensitive and will simply take their business to a foreign competitor. These companies have been forced to take cost-cutting measures such as laying off employees or forgoing expansion. Then there are the countless farmers and exporters who have seen their markets dry up as trading partners impose retaliatory tariffs.

• '47 Brand Hats: The Massachusetts company, which faces higher raw material costs thanks to Trump's tariffs, cannot find domestic suppliers to produce hats. It is considering job cuts to compensate.
• 5th Avenue Energy: This small California renewable energy firm found that lighting fixtures and other Chinese imports are more expensive and harder to obtain because big contractors bought them up in anticipation of tariffs.
• (200 more)

This Is Just The Start- Goldman Expects Another Round Of Tariffs In Weeks -  After the Trump administration released the final version of the $200bn in imports from China that it plans to subject to additional tariffs, markets seem to have taken the news in stride for two reasons: i) China's response has been contained for now, and despite vowing to retaliate, China's foreign ministry said that it would announce countermeasures "at an appropriate time" without elaborating; ii) the US Tariffs will initially take effect at a rate of 10% (before rising to 25% on January 1, 2019). In its initial phase, this is a less restrictive outcome than the roughly 20-25% average tariff rate most had assumed. On the other hand, the amount of imports subject to immediate tariffs is greater than banks such as Goldman had assumed, which had expected that the Administration would revise the list and that a portion of it would be implemented in a later stage. Instead, Goldman notes that "the list is mostly unchanged and we estimate that $180-190bn of imports (2017 levels) will be subject to tariff in one round starting September 24." Some more details from Goldman's take on the Trump tariffs:

• Overall, we expect that the initial 10% tariff on this list should boost core PCE inflation by roughly 3bp (yoy), and by a cumulative 8bp if the rate steps up to 25%. We expect the effect on real GDP growth in the US to be very modest as well.
• Of the over 6000 items on the initial list, the Administration removed about 300 in full or in part, amounting to about $10bn. The removals were widely distributed across sectors, and the composition of the final list closely resembles the initial list, with the shares of intermediate (48%), capital (30%), and consumer (22%) goods remaining roughly in line with those in the initial list. A full updated list of imports subject to tariffs is in the appendix.

But the key highlight in the White House statement was that "if China takes retaliatory action" against farmers or other industries, the US "will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.” Which, in light of China’s previously announced plans to impose retaliatory tariffs on $60bn of imports from the US, prompted Goldman to predict that the US could announce plans to impose tariffs on “phase three” within the next couple of weeks. However, Goldman economist Alec Phillips adds that if the Administration follows a timeline similar to that of past tariffs, these tariffs would likely not be implemented until early next year.

New U.S.-China tariffs raise fears of an economic Cold War -  China said Tuesday it would retaliate for President Trump’s latest tariff salvo, risking further U.S. trade actions that could result in what some analysts are calling an economic Cold War.By next week, the United States and China appear likely to be on the brink of slapping tariffs on their entire goods trade, which exceeds $635 billion annually.Chinese officials in Beijing said they would meet the 10 percent tariffs that Trump announced Monday on nearly $200 billion in imports with similar measures on $60 billion in U.S. products. If that occurs, Trump has said he will “immediately” begin the process of applying tariffs to all Chinese items entering the United States. As hopes dim for an early end to the conflict, the likelihood grows that the two countries are moving toward some sort of commercial divorce. Some analysts anticipate an economic partition reminiscent of the globe-splitting divide between the United States and the Soviet Union following World War II. “We’re probably talking about a world with two centers: a China-centered economic domain . . . and another centered on the United States,” . “It’s heading toward a bifurcated global economy.” Such a fundamental reshaping of the U.S.-China commercial relationship after nearly four decades of growing interdependence would ripple through the global economy, shaking financial markets, reordering business supply chains and perhaps even raising the danger of military conflict, analysts said.

China Cancels Trade Talks With U.S. Amid Escalation in Tariff Threats - China scotched trade talks with the U.S. that were planned for the coming days, according to people briefed on the matter, further dimming prospects for resolving a trade battle between the world’s two largest economies.The decision to pull out of the talks follows the latest escalation in trade tensions. On Monday, President Trump announced new tariffs on $200 billion in Chinese imports, prompting Beijing to retaliate with levies on $60 billion in U.S. goods. Mr. Trump then vowed to further ratchet up pressure on China by kicking in tariffs on another $257 billion of Chinese products.Chinese officials have said such pressure tactics wouldn’t induce them to cooperate. By declining to participate in the talks, the people said, Beijing is following up on its pledge to avoid negotiating under threat.“Everything the U.S. does hasn’t given any impression of sincerity and goodwill,” Chinese Foreign Ministry spokesman Geng Shuang said at a press briefing Friday. “We hope that the U.S. side will take measures to correct its mistakes.”The latest exchange of tariffs, which take effect Monday, brings China and the U.S. closer to a full-blown trade war.Still, Beijing is leaving open the possibility of engaging in fresh negotiations with Washington next month, said the people familiar with the matter. Treasury Secretary Steven Mnuchin sent an invitation to Vice Premier Liu He, President Xi Jinping’s economic czar, two weeks ago asking for a fresh round of talks this month.Previous rounds of negotiations had ended without any breakthroughs. Trump officials perceived the offers from Beijing—largely involving more Chinese purchases of U.S. agricultural and other products—as inadequate in addressing the White House’s demand for a fairer playing field for American businesses in China.Originally, Vice Commerce Minister Wang Shouwen, who led China’s negotiating team in the last round, was to again lead a group for the talks in the U.S. and then Mr. Liu himself would follow up with a trip to Washington on Sept. 27 and Sept. 28. Both of those trips have now been called off, the people said.  “There are no meetings on the books right now,” a senior White House official said Friday. “”The President wants us to continue to engage to try to achieve a positive way forward, but it does take China to come to the table in a positive way.”

Trump's Early Trade-War Advantage May Be Slipping by the Day -- President Donald Trump may find it harder to claim victory over China the longer his trade war runs, even as he points to America’s ebullient economy and stock market as evidence he’s winning for now. The president this week ordered his officials to slap tariffs on $200 billion in Chinese goods on Sept. 24. In retaliation, Beijing said it would hit $60 billion in U.S. products with duties. Yet even as the conflict escalates, the Trump administration signaled it would still be open to talks as soon as next week.In confronting China, Trump is using the same strong-arm tactics he employed as a real-estate mogul, taking care to snuff out any suggestion he’s under pressure to strike a deal. But Trump’s leverage may be short-lived. The president’s political power will be curtailed if the Democrats win the House in congressional elections in November, as they are favored to do. While the U.S. economy has so far appeared resilient to the trade war, the boost from this year’s tax cuts is expected to fade. Meanwhile, China’s economy is showing some signs of cooling, but it’s still growing at a brisk pace, giving Beijing room to cushion the blow. President Xi Jinping, who cemented his hold on power in March with the repeal of term limits, has reason to be patient.Xi has sweeping authority to conduct the trade war.Meanwhile, Trump’s latest weekly approval rating is 38 percent, according to polling firm Gallup. His Republican party could lose control of the House in Nov. 6 congressional elections. Senior Democrats such as House Minority Leader Nancy Pelosi have urged Trump to keep up pressure on China, but Democrats are not guaranteed to back his tariffs.“We actually have to deal with something called elections,” said Stefan Selig, managing partner at BridgePark Advisors LLC and a former senior trade official in the Obama administration. “Culturally, they are just going to be able to withstand more pain for a longer period of time.” U.S. business opposition to the tariffs is growing. The administration says it’s trying to minimize the direct cost to consumers. Still, Trump has said he’s willing to slap duties on effectively all Chinese imports, suggesting it’s only a matter of time before mobile phones and other popular items get hit.“The idea that you’re going to punch China in the face or otherwise make China look weak is not a recipe for resolving our differences,”

Alibaba's Jack Ma Cancels Promise For 1 Million US Jobs Amid US-China Trade Dispute - Alibaba founder and Chairman Jack Ma says that the Chinese retail giant won't follow through on a promise to create 1 million jobs in the United States due to the ongoing trade dispute between Washington and Beijing, according to CNBC.  Ma made the promise during a high-profile January 2017 meeting with then-President-Elect Donald Trump. "The promise was made on the premise of friendly US-China partnership and rational trade relations," Ma told Chinese news site Xinhua on Wednesday. "That premise no longer exists today, so our promise cannot be fulfilled."Ma, who recently announced that he will step down as Alibaba chairman within a year, added that the company would "not stop working hard to contribute to the healthy development of China-US trade." -CNBCWord of the broken promise follows a new phase of the tariff war, with the United States imposing 10% tariffs on around $200 billion of imports effective September 24, and China responding with $60 billion in tariffs on US goods beginning on the same day. During a Tuesday investor conference, Ma called the trade turmoil a "mess" that could have decades-long ramifications.   Ma's promise of 1 million US jobs was already considered "ambitious" (if we're being generous) - considering that WalMart, the nation's largest private employer, has 1.5 million employees. Ma's promise would decrease the number of unemployed Americans by a 14%.   Ma's plan was to enable one million US small businesses to sell American goods to consumers throughout Asia over Alibaba's Taobao and Tmall shopping sites. Adding one million individual American brands onto the platforms would have required a 142-fold increase in sales.   Meanwhile, Tmall has been reportedly punishing major brands who refused to enter exclusive partnerships with Alibaba. Executives from five major consumer brands told the AP that after they refused to enter exclusive partnerships with Alibaba, traffic to their Tmall storefronts fell, hurting sales. Three are American companies with billions in annual sales that rely on China for growth.... executives soon learned that what Alibaba gives, it can also take away.

Jack Ma Warns US-China Trade War Could Last For 20 Years -  This is not what the market wants to hear right now. Hours after China's Foreign Ministry said it would unveil its retaliation to the impending 10% US tariffs on $200 billion of Chinese goods "at an appropriate time" - a "measured" response that, because it wasn't "the worst scenario that some analysts had expected", helped push global markets higher, China's wealthiest - and recently retired - man warned that the US-China trade spat is far from over. Alibaba founder - who surprised the market earlier this month when he announced his resignation as CEO - Jack Ma said that what we're seeing now is merely the beginning of a conflict for global economic dominance that could persist "for 20 years" even after the US administration that instigated it has been consigned to the history books, Bloomberg reports.Ma issued the "grave warning" during a speech at an Alibaba investor day conference in Hangzhou on Tuesday, where he portrayed the trade conflict as an intractable problem that won't easily be resolved now that the US has set the conflict in motion. "Short term, business communities in China, U.S., Europe will all be in trouble," Ma said, pacing a stage in an open white dress shirt and punctuating his remarks with forceful jabs. "This thing will last long. If you want a short-term solution, there is no solution." However, Ma also said the trade trauma will create unprecedented opportunities for companies that can take advantage of the situation, and that Alibaba will be forced to innovate and grow in other parts of the world and become less dependent on US markets for success, which will ultimately be a net positive for the company. And while Ma has long been viewed as a key cultural ambassador to the US business community, his remarks left little doubt that he would stand up for his own government in the face of US aggression.

The forever trade war - Historians say President Trump is a symptom of the anti-establishment turn in global politics, not its cause. Therefore, the populism that has erupted across the U.S. and Europe will go on or die — independent of what happens to him.  But what about the global trade war, which seems to be wholly Trump-driven? Experts tell Axios that it only appears that way: Protectionism, they say, is now part of the populist zeitgeist — and will outlast Trump.   In statements today, Beijing said it will immediately retaliate if Trump proceeds with a vow yesterday to impose tariffs on another $200 billion in Chinese imports, bringing the total to $250 billion. The Chinese have said that, if Trump proceeds next week as threatened, it will retaliate with tariffs on some 5,200 types of U.S. imports worth another $60 billion, for a total of $110 billion. We previously reported that the trade war with China could last a year or longer. Now experts say the war will be larger and endure for an unknown period of time.

• "My view is that Trump has accelerated and amplified latent anti-trade and anti-globalization populist forces. And I think this represents a systemic break with the past 75 years," says Gary Hufbauer of the Peterson Institute for International Economics. 
• "Trump’s successor is unlikely to go back to the postwar model of American leadership of the world economic system along liberal free trade and investment lines," says Hufbauer.
• Edward Alden of the Council on Foreign Relations agrees: "It’s clear we are never going back to the status quo pre-Trump. Congress and the administration are going to need to fundamentally rewrite their relationship on trade, not try to revive the old rules. And the WTO will either need to be refashioned or it will die."

If there’s any chance for a return to the pre-Trump system, it’s this: "[T]he polls suggest that younger American voters are generally quite pro-free trade and see the benefits of globalization," says Alden. "So I think the protectionist moment we are seeing will be shorter rather than longer. But a lot of damage could be done in that short time."

Trump Won't Back Down - Bannon Warns Trade-War Will Be Unbearably Painful For China - Steve Bannon - who claims to have helped President Trump draft the battle plan for the ongoing trade war, says that Trump's strategy is to make the conflict "unprecedentedly large" and "unbearably painful" for Beijing, according to an exclusive interview with the South China Morning Post.  The ultimate goal, says Bannon - is not just to force China to give up its "unfair trade practices," but to "re-industrialize America" since manufacturing used to be the core of the nation's power. Bannon also criticized the "Made in China 2025" plan for Beijing to catch up with the West in 10 key tech sectors - saying that Chinese firms were relying in generous government support to reduce future technological reliance on the West.Bannon, who claimed to have helped Trump draw up the trade war plan, said that in the past, tariffs had been limited to imports of between roughly US$10 billion and US$30 billion but the sheer magnitude of the more than US$500 billion in question this time had “caught Beijin g off guard”.“It’s not just any tariff. It’s tariffs on a scale and depth that is previously inconceivable in US history,” Bannon said.He said Beijing had relied on “round after round of talks” to take the momentum out of the US punitive measures, but the delaying tactics would not work.“They always want to have a strategic dialogue to tap things along. They never envisioned that somebody would actually do this.” –SCMP

"The US Will Bear Responsibility": China Furious After US Sanctions Beijing For Buying Russian Weapons - It has been barely two weeks since China joined Russia in the "Vostok" war games, the largest display of Eurasian military might since 1981 when the Soviet Union was still a global superpower, and already the US has found an opening to try and drive a wedge between China and Russia, or at least express its displeasure with their increasingly close relationship.Amid a simmering trade dispute between the US and China, the US has imposed sanctions on a branch of the Chinese military in retaliation for China's recent purchase of Russian combat aircraft and anti-air surface to air missiles. The sanctions are more of a nuisance than anything else, blocking China's Equipment Development Department from participating in the dollar-based financial system and from doing business with US businesses, while also blocking the agency and its head, Li Shangfu, from applying for US export licenses. As Reuters adds, the US State Department said it would immediately impose sanctions on China’s Equipment Development Department (EDD), the military branch responsible for weapons and equipment, and its director, Li Shangfu, for engaging in "significant transactions" with Rosoboronexport, Russia’s main arms exporter.The sanctions are related to China’s purchase of 10 SU-35 combat aircraft in 2017 and S-400 surface-to-air missile system-related equipment in 2018, the State Department said. They block the Chinese agency, and Li, from applying for export licenses and participating in the U.S. financial system.

Beijing cancels trade talks with Washington after US sanctions China for weapons purchases --In a significant escalation of global tensions, the US has imposed sanctions on a Chinese military unit and its director for purchasing military equipment from Russia’s main arms exporter Rosoboronexport, in contravention of a unilateral ban imposed by Washington in 2017.China has retaliated against the measure by cancelling trade talks and a top level visit to Washington by Vice-Premier Liu He scheduled to take place next week.Announcing the ban imposed on Thursday, the US State Department said China’s Equipment Development Department and its director Li Shangfu had made a “significant transaction” involving the purchase of Su-35 combat aircraft in 2017 and S-400 missiles in 2018.The purchases were declared by the US to be in contravention of the 2017 Countering America’s Adversaries Through Sanctions Act, legislated in response to alleged Russian interference in the 2016 US elections.State Department spokeswoman Heather Nauert said the sanctions on the Chinese military unit were invoked to “further impose costs on the Russian government in response to its malign activities.” The US would continue to urge all countries to curtail relationships with the Russian intelligence and defence sectors “both of which are linked to malign activities worldwide.”China’s foreign ministry lodged what were described as “stern complaints” with Washington over the US actions, which block the military agency from conducting transactions with the US financial system.Foreign Ministry spokesman Geng Shuang said the US actions had “violated the basic norms of international relations and seriously damaged the relations between the two countries.” Shuang told a press briefing: “China is strongly outraged by this unreasonable action by the US. We strongly urge the US to immediately correct its mistakes and revoke the so-called sanctions. Otherwise, it must take all the consequences.”

Leaked Memo Reveals Details Of Google's Censored Search Engine For Communist China - It's now confirmed that Google's long suspected assistance to the Communist government of China to censor and monitor its citizens' online activity runs deeper and is more proactive that initially thought. The Intercept published a bombshell report based on internal Google whistle-blower testimony which shows the internet giant plans to launch a search engine for China with censorship capabilities built into it, which provides a backdoor monitoring platform allowing government authorities to track users' entire search history and even their location. The search system is code-named "Dragonfly," according to a confidential memo outlining the project that circulated inside the company — the contents of which have been leaked to The Intercept by an engineer who worked on the search engine. The Google engineer said that employees were forced by Google bosses to delete the memo as it was authored and circulated among a group voicing concern and dissent over the planned search engine.  The Intercept summarizes the confidential memo's contents as follows: The memo, authored by a Google engineer who was asked to work on the project, disclosed that the search system, code-named Dragonfly, would require users to log in to perform searches, track their location — and share the resulting history with a Chinese partner who would have “unilateral access” to the data. By requiring users to log-in to perform a simple search, system administrators can immediately identify the person behind the search and their profile; and a Chinese partner would then have the capability to “selectively edit search result pages” with few limitations, according to the memo.  The "Chinese partner" — thought to be a private company working in tandem with the Chinese government — will store user information in a database on servers in Taiwan.  A Dragonfly search engine prototype is under development for use as an app on Android and iOS devices, which would require sign-in. According to the leaked memo a user's searches will be linked up with their personal phone number, and thus even their movements and IP addresses associated with the device will be stored.

 Google Employees Are Quitting Over The Company’s Secretive China Search Project - A list that names seven employees who say they quit their jobs at Google over a lack of corporate transparency is circulating within the company’s ranks. The departures follow the controversial revelation of Google’s work on Project Dragonfly, a censored search app for the China market. Employees shared the list of names on an email list dedicated to discussions of ethics and transparency issues at Google. . Google declined to comment on the list.One of the names on the list is that of former Google senior scientist Jack Poulson, who worked for the company in Toronto beforeresigning over Dragonfly last month. Like the majority of Google employees, Poulson first learned about Dragonfly from the Intercept’s story about the project, which said Google had already demonstrated Dragonfly for the Chinese government and that it could launch within six to nine months. Poulson said he was “shocked” by the news.“If it was true, I was pretty sure immediately I couldn’t continue working there,” he told BuzzFeed News. When Poulson resigned in August, he said he only planned to share his concerns about Dragonfly with those inside Google. But when Google didn’t respond to a group of human rights organizations that presented it with a letter arguing that Dragonfly is unethical and asking the company to kill the project, Poulson felt compelled to share his opinion with the public.

Facebook expands censorship to photos and videos -- A September 13 statement by Facebook Product Manager, Antonia Woodford, titled “Expanding Fact-Checking to Photos and Videos” marks a significant escalation of the company’s censorship efforts. Under the pretense of combating so-called “fake news” and “Russian interference” the social media giant has spent the last two years assembling an army of censors and established partnerships with 27 so-called fact-checker partners in 17 countries. The partners, include the Associated Press, (AP) Agence France-Presse (AFP), Pagella Politica in Italy, Animal Politico in Mexico and others, together with fact checking sites such as Factcheck.org, PolitiFact and Snopes.com. At the end of last year, Facebook announced a partnership with the right-wing The Weekly Standard prompting widespread outrage.As the WSWS reported, the role of this latest partnership was highlighted last week when The Weekly Standard flagged an article posted by ThinkProgress with the headline “Brett Kavanaugh said he would kill Roe v. Wade last week.” The article was flagged as false on the preposterous claim that the word “said” in the headline implied a direct quote, rather than the dictionary definition of “indicate,” “show,” or “communicate.” The ThinkProgress incident is only the latest indication of the political character of the censorship by Facebook.It is unknown exactly how many posts have been flagged as false by Facebook or its fact checker partners since the program began two years ago. A false flag will reduce future traffic by 80 percent, according to CEO Mark Zuckerberg. Now the program is to be expanded to photos and video—a process that was first detailed in March this year. The March statement headlined “Hard Questions: What is Facebook Doing to Protect Election Security?” by VP of Product Management, Guy Rosen, announced, “We’re fact-checking photos and videos, in addition to links. We’re starting in France with the AFP and will be scaling to more countries and partners soon.”

Marijuana Should Be Added to Nafta, Mexico’s Fox Says Cannabis should be added to the North American Free Trade Agreement just like any other form of produce, says former Mexican President Vicente Fox. Fox, who sits on the board of Vancouver-based medical marijuana producer Khiron Life Sciences Corp., said he expects Mexico’s new government to legalize recreational cannabis in 2019. The country legalized medical pot in 2017. Fox has long advocated for legal cannabis, arguing that it will help defeat the cartel violence that has plagued Mexico for years. “We can change criminals for businessmen, we can change underground, illegal non-taxpayers into an industry, a sector of the economy,” he said Thursday in an interview in Toronto, where he met with Khiron’s board. “I think it should be part of Nafta and that’s what I’m pursuing.” If that happens, Mexico could become a major exporter of legal cannabis to the U.S. and Canadian markets, Fox said. “On vegetables, on fruits, on avocados, Mexico produces and provides up to 70 percent of the U.S. and Canadian market so we are efficient in producing, we’re efficient in farming and we’re low-cost and competitive,” he said. Canada is currently locked in negotiations on revamping Nafta after the U.S. and Mexico signed a preliminary deal on Monday.

Did Trump just kill the US auto industry? Economic historians will cite July 9, 2018 as the date on which the US lost the trade war with China – before the war began. That was when Germany’s top manufacturing companies – Volkswagen, BMW, Daimler, BASF and Siemens – announced tens of billions of dollars of new investments in China as Chinese Premier Li Keqiang posed for a photo op with German Chancellor Merkel in Berlin. BMW will expand its joint venture with Brilliance Auto to produce 519,000 vehicles a year. It also set up a joint venture to produce an electric version of the Mini together with Great Wall Auto. And it agreed to buy US$4.7 billion worth of batteries from Chinese producer CATL, which just announced a new plant in southern Germany. Volkswagen earlier this year announced that it would invest US$18 billion in China by 2022 and construct six plants to build electric vehicles. BMW will move some of its SUV production out of its South Carolina plant in response to auto tariffs. Since then the prices of US automakers have tanked, and German auto stocks have rallied. The future of the auto industry lies in electric vehicles, for which China will be the world’s largest market by far. China also has the world’s most advanced battery technology as well as the most robust supply chain for battery production. China’s response to American tariffs has been to offer German and Japanese industrial companies a privileged position in joint ventures with Chinese manufacturers. China also is reportedly planning to reduce import tariffs for America’s competitors. Toyota and Honda also announced plans to expand Chinese production in July. The US administration often cites the relative performance of equity prices as a gauge of its success in the present trade confrontation with China. At the sector level, though, equity prices tell a different story.

A new approach to EU-US trade: Less is more - Brussels and Washington believe they have found a recipe for a speedy transatlantic trade deal: Think small. U.S. Trade Representative Robert Lighthizer is pushing to “finalize outcomes” with the EU by November, when America will hold critical midterm elections that will determine President Donald Trump’s ability to govern. The EU has agreed to push for this “early harvest.” It is increasingly clear that severe differences over cars and farming mean a mega deal will have to wait. Instead, any near-term deal will focus on regulatory cooperation on topics such as car blinkers, cosmetics, insurance and driverless vehicles. Still, even that mini-deal is attractive. Trump wants a success story for the impending elections, while Brussels wants to create goodwill that will stop Washington following through on threats to impose higher tariffs on the European car industry. Susan Danger, chief executive of the American Chamber of Commerce to the EU, said one school of thought for how to move forward is “to do things piecemeal and address the low-hanging fruit.” “Once you get some momentum up, people believe that things can be done, and then they’ll do more things,” she said. The “early harvest” approach should enable EU and U.S. negotiators to avoid the toxic political backlash that killed the far more wide-ranging Transatlantic Trade and Investment Partnership negotiations, which collapsed in 2016. To its vocal critics in the EU, TTIP was cast as an American Trojan horse that would undermine Europe’s food and environmental standards.

The Trump tax hikes are on their way -  President Trump’s biggest political win, so far, is the tax-cut legislation he signed into law late last year. But Trump is now taking action that is essentially a tax hike on American consumers, and will offset a portion of the tax cuts he has been crowing about for nine months. And in typical renegade fashion, Trump is dismissing political orthodoxy by daring to hit voters with new taxes just weeks before a crucial election. Trump now plans to impose 10% tariffs on $200 billion worth of Chinese imports, beginning Sept. 24. The tariff will rise to 25% by the end of the year. That’s in addition to a 25% tariff on $50 billion worth of Chinese imports Trump imposed during the summer. So by Election Day in November, Trump will have placed new tariffs on $250 billion worth of stuff Americans buy every day. A tariff is a tax collected when imported goods enter the country. It raises the cost of the good by the amount of the tariff. So a 10% tariff on a $100 product would raise its cost to $110. Producers typically try to pass the added cost onto consumers, and as the cost of certain imported goods rises, the cost of similar products not subject to tariffs can also rise, since there’s less competitive pressure pushing prices down. The new tariffs will raise the cost of thousands of everyday items, including electronics, appliances, bicycles, tires, toys, clothing and footwear. Based on last year’s level of imports, the new China tariffs amount to a tax hike of $32.5 billion per year. If the latest set of tariffs rises to 25% and stays in place for 2019, the total additional tax would be $62.5 billion next year. The Trump tax cuts, by contrast, lowered tax payments by about $130 billion per year. So by this simple math, the China tariffs would offset about one-fourth of the Trump tax cuts this year, and nearly one-half next year.

Trump administration announces record low cap on refugees allowed into the US -On Monday, the Trump administration announced it will be setting the cap on the number of refugees allowed into United States in the fiscal year 2019 at 30,000. This marks a record low for the 43-year old refugee resettlement program, following the earlier historic low in 2018 of just 45,000 refugees, already less than half of the cap of 115,000 in 2017. As of now, with less than two weeks to go before the end of the fiscal year, the United States is on track to admit less than 21,000 refugees.The US is drastically reducing its refugee intake at a time when the United Nations has reported an all-time high of more than 68 million displaced people, including 25 million refugees. A majority of refugees come from Syria, Afghanistan and South Sudan. As of this year, it is reported that nearly 5 million Syrians live as refugees in neighboring countries, such as Lebanon and Turkey. In 2018, the United States accepted just 60 Syrian refugees, and is on track to admit 744 Afghans and 12 South Sudanese.Announcing the new limit on Monday, Secretary of State Mike Pompeo defended the administration’s position, citing “America’s generosity” in providing “billions of dollars in aid” and claiming that most refugees in any case prefer to stay closer to their home countries rather than “come to America.” Pompeo also cynically declared that it was more important to end conflicts than accept new refugees.Given the role of American imperialism in destabilizing the Middle East and stoking the ongoing conflicts in Syria and Afghanistan, such statements can only be treated with absolute contempt. The callousness of reducing refugee resettlement caps at a time of increasing and acute global need has absolutely nothing to do with vague claims of “generosity” or concern for where refugees would like to be resettled. This is in fact yet another step in Trump’s racist war against immigrants that is being waged with increasing brutality. Rather than let in more people, Pompeo stated the government would focus on those who were already in the country “in consideration of both US national security interests and the urgent need to restore integrity to our overwhelmed asylum system...The ultimate goal is the best possible care and safety of these people in need, and our approach is designed to achieve this noble objective...We are and continue to be the most generous nation in the world.”

Trump's America Shutting Out Muslim Refugees -  Only 20,918 refugees have so far been admitted to the US in fiscal year 2018, despite the cap being set at 45,000. Of those admitted, Muslim refugees have been hit the hardest with their share dropping to 14.5%, the lowest since 2001. At the same time, the Christian refugees share rose to nearly 71%, the highest since 2001, according to data compiled by United Nations High Commission for Refugees (UNHCR). This data provides incontrovertible evidence of U.S. President Donald J. Trump's Islamophobia and xenophobia.  Turkey is the largest and Pakistan is the second largest host country for refugees worldwide. Turkey has nearly 3.5 million refugees mostly from Syria. Pakistan has 1.4 million refugees mainly of Afghan origin. Germany is the only western country that shows up among the top 10 host countries for refugees. Most of the rest are Muslim majority countries. The number of Muslim refugees admitted into the U.S. dropped from more than 9,000 in the 2017 fiscal year to fewer than 2,000 with less than a month left in FY 2018 — an 80% drop, according to Axios: A majority of Muslim refugees accepted into the U.S. in FY 2018 have come from Myanmar, where thousands of Muslim-majority Rohingya have been killed in an ethnic cleansing and hundreds of thousands have fled.  The number of refugees admitted from the Muslim-majority, African nation of Somalia has dropped by 96% compared to last fiscal year. For no known reasons, the White House expressed particular concern over allowing refugees from Somalia into the U.S., former chief of the refugee affairs division at USCIS Barbara Stack told Zoe Chace in the latest episode of This American Life. The year of Islamophobia began in earnest on January 20, 2017 with the inauguration of President Donald J. Trump who called for "total and complete shutdown" of  Muslims entering the United States during his successful electoral campaign. Among the first executive orders he signed was a "Muslim Ban" from seven predominantly Muslim countries. Then came an avalanche of a large number of Islamophobic tweets and retweets from Trump's twitter account. Some recent Trump retweets were of tweets from Britain First's Jayda Fransen. These tweets and retweets were swiftly denounced by top British and Dutch officials. Trump did not apologize. Trump developed a pattern of using terror attacks to tweet against Muslims while ignoring similar or worse terror attacks by others.

Justice Department Attempts to Suppress Evidence That the Border Patrol Targeted Humanitarian Volunteers - Four volunteers with a faith-based humanitarian group drove onto a remote wilderness refuge in southern Arizona last summer hoping to prevent an unnecessary loss of life. A distress call had come in, a woman reporting that two family members and a friend were without water in one of the deadliest sections of the U.S.-Mexico border. For hours, the volunteers’ messages to the Border Patrol went unanswered. With summer in the Sonoran Desert being the deadliest time of year, they set off in a pickup truck, racing to the peak where the migrants were said to be. Once on the refuge, the volunteers were tracked by federal agents, beginning a process that would lead to federal charges. Now, more than a year later, they each face a year prison, and Trump administration prosecutors are fighting to keep the communications of law enforcement officials celebrating their prosecution from becoming public. The legal wrangling began this week, when the volunteers’ attorneys filed a series of motions urging Arizona Magistrate Judge Bruce G. Macdonald to dismiss the charges against them, citing allegations of selective enforcement and violations of international law, due process, and religious freedom. Attached to the motions were several exhibits, including text messages between federal law enforcement officials. Justice Department attorneys quickly moved to have the motions sealed, but not before The Intercept downloaded them from Pacer, the public-facing repository for federal court records. The exhibits include text messages between a U.S. Fish and Wildlife Service employee and a Border Patrol agent, in which the Fish and Wildlife employee declares “Love it” in response to the prosecution of the volunteers. Described in the text messages as “bean droppers,” volunteers with the group No More Deaths and their organization are referred to by name in the communications between federal law enforcement officials, who describe, with apparent glee, the government’s “action against them.”

Department of Health and Human Services lost track of another 1,500 immigrant children -- HHS lost track of another 1,500 immigrant children For the second time this year, the Department of Health and Human Services has notified Congress that it cannot locate about 1,500 children taken into custody by immigration authorities and transferred to the jurisdiction of HHS to provide the needed care. HHS officials told Senate staffers that case managers could not locate 1,488 children when they called placement centers and foster families between April and June. The figure represents 13 percent of all unaccompanied children processed by the federal government during that period.In April, HHS revealed that it had lost track of 1,475 children in late 2017, in a scenario reminiscent of the current one. These children too were unaccompanied minors placed with foster families or foster care agencies through the United States.“The fact that HHS, which placed these unaccompanied minors with sponsors, doesn’t know the whereabouts of nearly 1,500 of them is very troubling,” Republican Senator Rob Portman of Ohio, chairman of the Senate committee overseeing HHS, said, stating the obvious. “Many of these kids are vulnerable to trafficking and abuse, and to not take responsibility for their safety is unacceptable.”An HHS spokesman claimed that most of the children had been placed with family members, and that these adult sponsors had not responded or could not be reached. Left unstated was that many of the “sponsors” are themselves undocumented immigrants, who could have been seized by Immigration and Customs Enforcement or have moved to avoid ICE persecution. An ICE official told the committee that 80 percent of the sponsors are themselves undocumented. Portman and Democratic Senator Tom Carper are cosponsoring largely cosmetic legislation that would give HHS authority and legal responsibility for the welfare of these children even after they are released from custody. Currently the HHS can wash its hands of the children once it classifies them as “lost,” which could be nothing more than a disconnected telephone.

U.S. could face prolonged era of anti-immigrant fever - Around a century ago, amid a massive surge of immigrants, Americans — themselves virtually all of foreign blood — pushed back in what turned into a more than four-decade-long uprising against newcomers. Now, the U.S. immigrant population is nearing the same proportions, and again Americans are revolting. The new wave of migration is, along with automation, one of the primary drivers behind the anti-establishment uprising roiling both the U.S. and Europe, experts say. At 13.5% last year, the population of foreign-born U.S. residents is nearing the peak of 14.8%, reached in 1890.  If history holds, the U.S. is entering a new, prolonged era of anti-immigrant fever.  And, if so, it won't be easy to tamp down: The last time, it took the legislative mastery of Lyndon Johnson to quell the hysteria, in a bill he muscled through Congress in 1965. But now there is no Johnson.  The U.S. has gone through waves of anti-immigrant fevers.

• In the 1850s, a movement began that was anti-Catholic and anti-Irish, and it turned into the Know Nothing political party.
• In the late 19th century, another wave arose against a surge of some 9 million eastern and southern Europeans.
• In 1921, Congress approved the Emergency Quota Act and then the National Origins Act, which kept allowing western and northern Europeans but all but blocked almost anyone else. Asians were effectively barred.

Then, in 1965, Johnson pushed through legislation that ended the quota system. But experts say the current fever is in large part an unforeseen byproduct of that legislation: By linking immigration to relatives of the current population, Congress thought the makeup of the U.S. population would not change much. Instead, it resulted in the surge of immigrants from Latin America and elsewhere (see chart below).

Probe of FEMA Chief Brock Long Referred to Prosecutors —An investigation targeting President Trump’s top emergency-management official has been referred to federal prosecutors to determine whether criminal charges should be pursued, according to people familiar with the probe. Brock Long, the administrator of the Federal Emergency Management Agency, and two other federal employees may have broken as many as six laws as they commuted frequently between Washington and Mr. Long’s home in Hickory, N.C., at taxpayers’ expense, said one of the people briefed on the investigation. Mr. Long has said he is cooperating with the investigation, which has been led by the Department of Homeland Security’s inspector general. Mr. Long declined to comment through a FEMA spokesman. The inspector general’s office and U.S. attorney’s office in Washington also declined to comment. A White House spokesman didn’t return a request for comment. On Monday, House Oversight Committee Chairman Trey Gowdy (R., S.C.) asked Mr. Long for documents related to each of his trips home and any communications with FEMA employees who traveled with him. During one of those trips, a federal employee was driving a government vehicle that was involved in an accident, the people familiar with the probe said. The driver didn’t properly report the accident, and is included in the inspector general’s referral to the U.S. attorney’s office, one of the people said. Richard Painter and Norman Eisen, ethics lawyers for former Presidents George W. Bush and Barack Obama, respectively, said there are strict federal laws when it comes to commuting because it has long been one of the most common ways to abuse government resources. “It’s simply too tempting to use government resources for personal commuting,” Mr. Eisen said. Top White House officials considered removing Mr. Long from his job after learning about the preliminary findings from the inspector general’s investigation, the Journal reported on Friday. Those deliberations took place as Hurricane Florence was forming in the Atlantic, and the pending storm was a key reason Mr. Long was kept in place, according to people familiar with those talks. Still, White House officials have started discussions about potential successors, a senior White House official said.

Ajit Pai calls California’s net neutrality rules “illegal” - California's attempt to enforce net neutrality rules is "illegal" and "poses a risk to the rest of the country," Federal Communications Commission Chairman Ajit Pai said in a speech on Friday. Pai's remarks drew an immediate rebuke from California Senator Scott Wiener (D-San Francisco), who authored the net neutrality bill that passed California's legislature and now awaits the signature of Governor Jerry Brown. California's net neutrality rules are "necessary and legal because Chairman Pai abdicated his responsibility to ensure an open Internet," Wiener said in a press release."Unlike Pai's FCC, California isn't run by the big telecom and cable companies," Wiener also said. "Pai can take whatever potshots at California he wants. The reality is that California is the world's innovation capital, and unlike the crony capitalism promoted by the Trump administration, California understands exactly what it takes to foster an open innovation economy with a level playing field." Pai targeted the California rules in a speech at the Maine Heritage Policy Center (transcript). Pai derided what he called "nanny-state California legislators," and said:The broader problem is that California's micromanagement poses a risk to the rest of the country. After all, broadband is an interstate service; Internet traffic doesn't recognize state lines. It follows that only the federal government can set regulatory policy in this area. For if individual states like California regulate the Internet, this will directly impact citizens in other states.Among other reasons, this is why efforts like California's are illegal. In fact, just last week, the US Court of Appeals for the Eighth Circuit reaffirmed the well-established law that state regulation of information services is preempted by federal law. Last December, the FCC made clear that broadband is just such an information service.We covered that court ruling last week. The ruling preempted Minnesota's attempt to regulate VoIP phone services offered by cable companies, but there are some key differences between the Minnesota case and the question of whether states can impose net neutrality rules.

Two Thirds of “Progressive” Democratic Congressional Candidates Completely Silent on Foreign Policy - Black Agenda Report - We’re told there’s a blue wave coming in November that may sweep a Democratic majority into the House of Representatives. How likely is that, and if it happens what will we be getting?To achieve a Democratic majority in the US House of Representatives Democrats must overcome the result of two decades of relentless Republican gerrymandering in state legislatures. Traditionally the maps from which congressional representatives were elected were only drawn once a decade based on census results, but beginning in the 1990s Republicans asserted and won the right to re-draw legislative maps pretty much whenever they feel the need. Their technique is to concentrate Democratic voters into a relatively small number of districts where Democrats reliably win by enormous margins, while spreading out the Republican vote to a greater number of districts in which Republicans reliably win with much smaller margins. This is how Republicans are able to elect dozens more congressional representatives with a million or two fewer votes than Democrats.Democrats could have fought this on the federal and the state level, in the courts, in the legislatures and the streets beginning when they still had the upper hand in the 1990s. But they did not. And so they, and we are where we are.Unlike the right to possess a gun, the right to vote is not guaranteed in the US Constitution. So any state or county city official can block or obstruct or take away your right to vote, with a new law or with an administrative decision. The omission of this right from the Constitution, the absence of any mass movement demanding voting rights, and the laziness of Democratic party honchos has allowed a veritable briar patch of laws and regulations calculated to disenfranchise Democrat leaning voters, making it harder to register, more difficult to vote, and allowing their votes under some circumstances not to be counted. Throughout the 70s, 80s and into the 90s, Democrats had many, many chances to introduce laws, to campaign, to generate street heat in support of voting rights, even to campaign to amend the Constitution and make local interference with voting rights impossible. They didn’t, and so again they, and we are where we are.

Records: Chao government flights cost $94K - Transportation Secretary Elaine Chao flew on Federal Aviation Administration planes rather than commercial flights on seven occasions between January and August 2017, newly released records show — including one flight to and around Europe that cost taxpayers an estimated $68,892 for her and five staffers. All told, Chao's flights on the FAA planes cost an estimated $93,977.84, the records show. ..She appears to have halted the practice just as one of her fellow Cabinet members, then-Health and Human Services Secretary Tom Price, was facing increasing scrutiny over his use of private and military flights. Price resigned in September 2017 after POLITICO raised questions about the flight expenses, which totaled about $1.2 million. The newly released records do not indicate that anyone has raised red flags over Chao's use of the FAA aircraft — two Cessna Citations and one Gulfstream IV business jet — which come with rules requiring government officials to justify the flights as cost-effective. But the disclosures come amid continuing questions surrounding the travel costs of senior Trump administration officials, most recently an investigation of Federal Emergency Management Agency chief Brock Long's use of official cars.

WaPo Slams NYT Over Embarrassing Nikki Haley Drape-Gate Retraction - The New York Times on Thursday wrote an incredibly ham-handed hit-piece on UN Ambassador Nikki Haley, suggesting that she had spent over $52,000 on curtains at the official ambassador's residence.  Except, she didn't. The curtains were installed during the Obama administration, while Susan Rice stayed there at a cost of approximately $135,000 per month - over twice what Haley's rent costs, according to the Daily Caller's Kyle Becker.  NYT's Haley hit job is a modern art masterpiece of grotesque storytelling. Under Obama, the U.S. Amb. to U.N. stayed at 42nd floor of Waldorf Towers. Who lived there? Susan Rice. Approx. listing? $135,000/mo. No one complained then. Odd. (Haley's rent is under half that price.) pic.twitter.com/Uqa9Y3KI8e—  The hit-piece was so egregious that the New York Times issued a paragraph-long retraction at the top of the article, which reads:  An earlier version of this article and headline created an unfair impression about who was responsible for the purchase in question. While Nikki R. Haley is the current ambassador to the United Nations, the decision on leasing the ambassador’s residence and purchasing the curtains was made during the Obama administration, according to current and former officials. The article should not have focused on Ms. Haley, nor should a picture of her have been used. The article and headline have now been edited to reflect those concerns, and the picture has been removed. Which brings us to the Washington Post's Paul Farhi - who did battle with the Times while trying to cover their egregious error.  Reached by phone on Friday, the reporter of the Times story, Gardiner Harris, hung up without comment. He did not respond to follow-up messages. Times editor Dean Baquet said in a brief interview that he preferred to let the editor’s note correcting the story do the talking. He added, “The main lesson here is, if we get it wrong, we correct it. We own up to it.” –WaPo The Post notes that while everything in the story is true; Haley lives in a 6,000 square-foot apartment on First Avenue, and enojys said curtains, "all of that distorts the actual timing and context of Drape-gate," adding "readers who merely scanned the headline and photo thinking it was another Trump administration expense-account scandal might have missed several important pieces of information in the body of the story."

Senate Passes Sweeping Bill To Combat Opioid Crisis As NYC Overdose Deaths Hit Record High - Amid reports that opioid overdose deaths in New York City have climbed over the past year to fresh record highs, the Senate has passed a sweeping suite of legislation designed to stem the flow of deadly and illicit synthetic opioids like fentanyl into the US via the US Postal Service, while also offering new tools to law enforcement and funding for addiction treatment.The bill, known as the "Synthetics Trafficking and Overdose Prevention - or STOP - Act", was passed by a 99-1 vote one month after President Trump declared that the constant flow of fentanyl into the US via illicit labs in China and Mexico was "a form of warfare." It is outrageous that Poisonous Synthetic Heroin Fentanyl comes pouring into the U.S. Postal System from China. We can, and must, END THIS NOW! The Senate should pass the STOP ACT – and firmly STOP this poison from killing our children and destroying our country. No more delay! — Donald J. Trump (@realDonaldTrump) August 20, 2018 The law requires that the US Postal Service to keep electronic records of incoming foreign shipments like their contents and the identity of the sender - records that other shippers like UPS and FedEx already provide. It also includes funding for treatment while altering laws to increase the availability of certain medications designed to fight addiction. The bill was introduced by Ohio Senator Rob Portman and will help customs agents close a prominent and widely exploited loophole for drug traffickers. Opioid deaths have soared to record highs across the US last year, with 72,000 reported by the CDC in 2017, a 10% increase from the year before.

Opioid Crisis Emerges as a Big Campaign Theme - In the past four years, the opioid crisis has grown from an afterthought in political campaigns to an important issue in some of this fall’s biggest midterm races, according to television advertising data from Kantar Media/CMAG. An analysis by The Wall Street Journal found that, so far in 2018, ads containing opioid messaging have aired in congressional and gubernatorial races more than 50,000 times across 25 states. At this point in 2014, there had been only one political TV ad touching on the topic that aired 70 times—in Kentucky’s Senate race. Opioids aren’t as widely discussed in this year’s campaign ads as some issues—ads discussing the drugs make up only 3% of total TV advertisements, lagging behind immigration and gun control. Still, the Journal’s analysis shows how ads have begun to mimic the spread of the crisis, as candidates from both parties have pushed out anti-opioid ads at an accelerated clip. The ads’ messages include promising more funds for treatment and stopping the inflow of opioids from elsewhere, among other things. The jump in ads lifts the opioid issue from near obscurity to a potent, nationwide political topic. The map of ad purchases shows the role the issue is playing in states with closely contested U.S. Senate and gubernatorial races such as Florida, Missouri, Wisconsin and West Virginia. In Ohio and Pennsylvania, House candidates have aired thousands of ads. The numbers don’t completely correspond to a map of the problem. For instance, Florida is running a lot of ads but has a lower rate of overdose deaths than many other states, using data on deaths per 100,000 people from 2016, the latest available numbers. States including Wisconsin, Missouri and Pennsylvania are also heavy on opioid ads but aren’t among the states hardest hit by the epidemic. .What accounts for the heavy play in those states? Beyond close races, the increases in overdose deaths are remarkable. Each of those states has seen a rise of more than 50% in opioid overdoses between 2012 and 2016.

Trump Administration Plans U.N. Meeting to Ramp Up the International Drug War -- The Trump administration will open a week of high-level meetings at the United Nations General Assembly in New York with a drug policy event featuring President Donald Trump. Invites to the event are being doled out only to those countries that have signed on to a controversial, nonnegotiable action plan, according to documents obtained by The Intercept — among them the countries with the world’s most draconian drug laws. The U.S.-sponsored event, called the “Global Call to Action on the World Drug Problem,” is scheduled to take place next Monday, September 24, a day before Trump will speak before the General Assembly. The U.S. Mission to the U.N. hasn’t yet released many details about the event, but The Intercept obtained a copy of the finalized text — the “Call to Action” — that was sent to member states ahead of the meeting.  While the high-level event could be a way for Trump to project international support at the U.N. — less risky than organizing member states around a hot-button issue like migration — the document circulated by the U.S. and the manner in which it was foisted on members states has raised concerns among drug policy advocates.

Senators Unveil Legislation To Protect Patients Against Surprise Medical Bills -- With frustration growing among Americans who are being charged exorbitant prices for medical treatment, a bipartisan group of senators Tuesday unveiled a plan to protect patients from surprise bills and high charges from hospitals or doctors who are not in their insurance networks. The draft legislation, which sponsors said is designed to prevent medical bankruptcies, targets three key consumer concerns:

• Treatment for an emergency by a doctor who is not part of the patient’s insurance network at a hospital that is also outside that network. The patients would be required to pay out-of-pocket the amount required by their insurance plan. The hospital or doctor could not bill the patient for the remainder of the bill, a practice known as “balance billing.” The hospital and doctor could seek additional payments from the patient’s insurer under state regulations or through a formula established in the legislation.
• Treatment by an out-of-network doctor or other provider at a hospital that is in the patient’s insurance network. Patients would pay only what is required by their plans. Again, the doctors could seek more payments from the plans based on formulas set up by state rules or through the federal formula.
• Mandated notification to emergency patients, once they are stabilized, that they could run up excess charges if they are in an out-of-network hospital. The patients would be required to sign a statement acknowledging that they had been told their insurance might not cover their expenses, and they could seek treatment elsewhere.

California professor, writer of confidential Brett Kavanaugh letter, speaks out about her allegation of sexual assault WaPo - Earlier this summer, Christine Blasey Ford wrote a confidential letter to a senior Democratic lawmaker alleging that Supreme Court nominee Brett M. Kavanaugh sexually assaulted her more than three decades ago, when they were high school students in suburban Maryland. Since Wednesday, she has watched as that bare-bones version of her story became public without her name or her consent, drawing a blanket denial from Kavanaugh and roiling a nomination that just days ago seemed all but certain to succeed. Now, Ford has decided that if her story is going to be told, she wants to be the one to tell it.Speaking publicly for the first time, Ford said that one summer in the early 1980s, Kavanaugh and a friend — both “stumbling drunk,” Ford alleges — corralled her into a bedroom during a gathering of teenagers at a house in Montgomery County.While his friend watched, she said, Kavanaugh pinned her to a bed on her back and groped her over her clothes, grinding his body against hers and clumsily attempting to pull off her one-piece bathing suit and the clothing she wore over it. When she tried to scream, she said, he put his hand over her mouth.“I thought he might inadvertently kill me,” said Ford, now a 51-year-old research psychologist in northern California. “He was trying to attack me and remove my clothing.” Ford said she was able to escape when Kavanaugh’s friend and classmate at Georgetown Preparatory School, Mark Judge, jumped on top of them, sending all three tumbling. She said she ran from the room, briefly locked herself in a bathroom and then fled the house.

Flake opposes quick vote on Kavanaugh, putting confirmation in doubt - Brett Kavanaugh's nomination to the Supreme Court hit a serious roadblock Sunday night, as GOP Senate Judiciary Committee member Jeff Flake said he is uncomfortable voting to advance Kavanaugh's nomination later this week after the nominee's sexual assault accuser went public. Sen. Bob Corker (R-Tenn.), who is not a member of the committee but whose vote is critical to Kavanaugh's confirmation, similarly said late Sunday that the committee should pause. Flake (R-Ariz.) said he needs to hear more about the allegations raised publicly by Christine Blasey Ford on Sunday in a Washington Post article, and said other Republicans share his view. Flake is one of 11 Republicans on the narrowly divided panel and without his support, the committee cannot advance his nomination. However, GOP leaders could try to bring Kavanaugh‘s nomination directly to the Senate floor. "If they push forward without any attempt with hearing what she's had to say, I'm not comfortable voting yes," Flake said. "We need to hear from her. And I don't think I'm alone in this." Asked if the committee vote should be delayed to hear out Ford, Corker replied: "I think that would be best for all involved, including the nominee. If she does want to be heard, she should do so promptly." Republicans control just 51 seats in the Senate, so the comments of the two retiring senators are highly consequential. Later Sunday, Sen. Lisa Murkowski (R-Alaska), a moderate who had yet to say how she will vote, echoed the notion that the vote might need to be delayed. “If there is real substance to this, it demands a response,” she told CNN. Flake declined to address whether Kavanaugh should withdraw his nomination: "I'm not responding to that question at all." The retiring Arizona Republican has long been a thorn in the side of President Donald Trump, refusing to support his campaign in 2016 and often critiquing his policies and rhetoric. In return, Trump has repeatedly mocked Flake.

Attorney Sent Letter to Chuck Grassley and Dianne Feinstein Claiming Federal Court Employees Willing to Speak About Brett Kavanaugh - The top Republican and Democrat on the Senate Judiciary Committee were both approached in July by an attorney claiming to have information relevant to the confirmation of Brett Kavanaugh to the Supreme Court. The attorney claimed in his letter that multiple employees of the federal judiciary would be willing to speak to investigators, but received no reply to multiple attempts to make contact, he told The Intercept. Cyrus Sanai made his first attempt to reach out to Sens. Charles Grassley, R-Iowa, and Dianne Feinstein, D-Calif., in a letter dated July 24. Sanai told the committee leadership that “there are persons who work for, or who have worked for, the federal judiciary who have important stories to tell about disgraced former Chief Judge Alex Kozinski, and his mentee, current United States Supreme Court nominee Brett Kavanaugh. I know that there are people who wish to speak out but fear retaliation because I have been contacted by more than a half-dozen such persons since Judge Kozinski resigned in disgrace.” Sanai is the California attorney who blew the whistle on Kozinski years before a series of articles in the Washington Post in December finally brought about the resignation of the former chief judge of the 9th Circuit Court over sexual harassment revelations. Sanai has long challenged the judiciary and was deemed a “vexatious litigant” by one trial court, an attempted designation that was overturned on appeal. 

Donald Trump Jr. Posts Fake Letter to Instagram Mocking Woman Allegedly Assaulted by Supreme Court Nominee Brett Kavanaugh Republicans have come up with a lot of excuses for Supreme Court nominee Brett Kavanaugh’s alleged attempted rape of a 15-year-old girl when he was 17. Some say it never actually happened. Others say he shouldn’t be held accountable for something he did as a teenager. But still others seem to think that it’s all just a big joke. The latter seems to describe Donald Trump Jr., son of the current President of the United States.Donald Trump Jr. posted a fake letter on Instagram to his 1.3 million followers yesterday titled, “Judge Kavanaugh’s sexual assault letter found by Dems.” The letter, written in crayon, is in the style of something you might see an elementary school kid send to his crush, with “will you be my girlfriend” and boxes marked “yes” and “no.”Needless to say, the letter is not real and has been posted elsewhere on social media over the past couple of days. Donald Trump Jr.’s fake letter about the incident includes a misspelling of “Feinstein,” laughing emojis, and the hashtag MAGA, which stands for Make America Great Again:

Brett Kavanaugh’s Role in Schemes to Politicize the Judiciary Should Disqualify Him - The evidence that Kavanaugh used his legal skills to promote aggressively conservative and aggressively partisan judicial activism—which I’ll discuss in a moment—is just too overwhelming. And the evidence that he perjured himself in testimony to the Senate is just too troubling. The controversy regarding Kavanaugh’s deceptive testimony has roots in his work almost two decades ago as an associate in the White House Counsel’s Office. It was there, as part of a closely knit team of partisan lawyers and political operatives, that he helped manage the judicial nominations that were advanced by President George W. Bush and, though this is still too little noted, Bush White House political czar Karl Rove.  The most senior member of the Senate Judiciary Committee, Vermont Democrat Patrick Leahy, gives us some perspective when he recalls that Between 2001 and 2003, two Republican staffers on the Senate Judiciary Committee regularly hacked into the private computer files of six Democratic senators, including me. They stole 4,670 files, and they used them to assist in getting President Bush’s most controversial judicial nominees confirmed. This became public in late 2003 when The Wall Street Journal happened to print some of the stolen materials. The ringleader behind this massive theft was a Republican Senate staffer named Manny Miranda. The scandal amounted to a digital Watergate—a theft not unlike Russia’s hacking of the DNC. During all of this, Judge Kavanaugh worked in the White House Counsel’s Office on judicial nominations. He worked hand-in-hand with Miranda to advance these same controversial nominees. Not surprisingly, Judge Kavanaugh was asked extensively about his knowledge of the theft during both his 2004 and 2006 hearings. And I mean extensively: 111 questions from six senators, both Republicans and Democrats. He testified under oath—and he testified repeatedly—that he never received any stolen materials, and that he knew nothing about it until it was public. He testified that if he had suspected anything “untoward” he would have reported it. At the time, we left it there. We didn’t have evidence to suggest otherwise.

 High School Classmate Who Remembers ‘Incident’ With Kavanaugh and Ford Says She’s Overwhelmed by Media Requests  - A high school classmate who claims to remember an “incident” involving Supreme Court Justice Brett Kavanaugh and Dr. Christine Blasey Ford said on Wednesday that she may not come forward because she has been overwhelmed by media requests.On Tuesday, a woman named Christina King said on Twitter that she was a former classmate of Kavanaugh’s and had signed a letter in support of Ford, who has claimed she was sexually assaulted in high school.The conservative website Hot Air noted later on Tuesday that Miranda’s tweet had been deleted. Twitchy, another conservative website, accused King of “throwing a hand grenade in to the Kavanaugh debate.”King explained on Twitter that she had decided not to speak out after being besieged by media requests.Hi all, deleted this because it served its purpose and I am now dealing with a slew of requests for interviews from The Wash Post, CNN, CBS News. Organizing how I want to proceed. Was not ready for that, not sure I am interested in pursuing. Thanks for reading— Cristina King Miranda (@reinabori) September 19, 2018In an alleged letter from King circulating on social media, the purported former classmate insisted that the sexual assault incident happened. “This incident did happen,” the letter said. “Many of us did hear about it in school and Christine’s recollection should be more than enough for us to truly, deeply know that the accusation is true.”

Manafort guilty plea, cooperation deal rock Trump White House -- Former Trump campaign chairman Paul Manafort pled guilty to two federal conspiracy charges Friday, agreeing to substantial asset forfeiture, estimated at $46 million, and to become a cooperating witness for the Justice Department special counsel, Robert Mueller, who is investigating charges of collusion between the Trump campaign and Russia during the 2016 election. Manafort spoke the words, “I plead guilty,” in a Washington, DC courtroom, and accepted a requirement that he answer “fully, truthfully, completely and forthrightly” questions about “any and all matters” that Mueller wants to ask about. In return for the guilty plea, prosecutors agreed to limit the total prison sentence for the 69-year-old Manafort to 10 years for all the charges against him. This includes the eight federal charges of which he was convicted last month in a jury trial in Alexandria, Virginia, the 10 additional charges on which the jury voted 11-1, failing to convict because of a lone holdout, and the two counts of conspiracy. The deal came after three days of negotiations between Manafort’s attorneys and the special prosecutor’s office, with the deal Friday coming on the eve of Manafort’s trial in Washington, which was to open Monday morning. Manafort worked for the Trump campaign from March through August, first enlisted to assist in insuring that Trump’s delegates to the Republican National Convention were not poached by any of his rivals for the nomination, and then chairing the campaign overall for nearly three months. He left the campaign after press reports emerged detailing his financial relations with ousted Ukrainian President Viktor Yanukovych, in large part because these ties were viewed as an obstacle to US efforts to consolidate a right-wing pro-US regime in Kyiv. Despite breathless round-the-clock attention by those sections of the corporate media that have been promoting the bogus claims of Russian interference in the 2016 elections, it is not clear that Manafort has anything to add in the way of evidence. He was present at the Trump Tower meeting in June 2016 in which Trump aides met with a Russian delegation allegedly peddling dirt on Hillary Clinton, but others who attended the meeting have already given testimony to Mueller, without anything explosive emerging.

Dershowitz Says Manafort Plea Big Win For Mueller; White House Should Be Alarmed - Harvard Law professor and prominent liberal Alan Dershowitz - who has been shunned by the liberal elite of late for defending President Trump - now says that the White House should be alarmed over Paul Manafort's plea deal with special counsel Robert Mueller.  MSNBC's Steve Kornacki asked Dershowitz on Friday if Manafort's plea bargain is something "the White House be alarmed about right now?" "Well of course they should be," replied Dershowitz - though he added the rather large caveat that Mueller is "not a credible witness," and would be at best be a corroborating witness against Trump. "There’s nothing he can testify to that would probably lend weight to impeachment because he didn’t have close contact with President Trump while he was president," said Dershowitz. "What they are looking for is self-corroborating information that can be used against Trump… if they can make him sing and then there’s the possibility of him composing, elaborating on the story." Dershowitz added that there is "no doubt" Mueller is trying to flip Manafort against Trump.  "Once he agrees to cooperate, he has to cooperate about everything, said Dershowitz. "There’s no such thing as partial cooperation." As for Trump pardoning Manafort? That's now "off the table," and that flipping on the President "opens up a lot of doors that probably haven't been opened before." It's a "big win" for Mueller, Dershowitz concludes.

Manafort’s pro-Ukraine lobbying campaign reached Obama, Biden -  Paul Manafort’s pro-Ukraine campaign reached the top of the White House, with one of the members of his lobbying effort meeting President Barack Obama and Vice President Joe Biden in 2013, according to new court documents released Friday. A member of the so-called Hapsburg Group, which comprised former European politicians Manafort convened as part of his lobbying effort in support of Ukraine’s then-President Viktor Yanukovych, came with a foreign prime minister on May 16, 2013, to meet with Obama and Biden, “as well as senior United States officials in the executive and legislative branches,” according to the court documents. Alan Friedman, a former journalist based in Europe who helped Manafort launch the group, told Manafort after the meeting that the member of the Hapsburg Group “delivered the message of not letting ‘Russians steal Ukraine from the West,’” prosecutors say. Manafort, President Donald Trump’s former campaign chief, pleaded guilty Friday to two criminal charges from special counsel Robert Mueller to head off a potentially dramatic trial over allegations he violated laws on foreign lobbying. The court documents released Friday say Manafort failed to register as a foreign lobbyist, as required under U.S. law, or disclose a host of meetings, including the one involving Obama and Biden. The lobbying effort that caught prosecutors’ attention tried to persuade the U.S. government to support Yanukovych, who was at the time under international fire for jailing a rival, former Prime Minister Yulia Tymoshenko. U.S. lawmakers had condemned Yanukovych’s actions, and he would later flee Ukraine for Russia after his government’s security forces beat protesters in 2013. Court documents and filings with the Justice Department previously revealed some of the members of Manafort’s Hapsburg Group and showed that they met with dozens of members of Congress, congressional staffers and Obama administration officials. But Friday brought the first indication that the campaign stretched to the top of the U.S. government. The court documents don’t name the member of the Hapsburg Group or the prime minister, but Obama met on May 16, 2013, with Turkish Prime Minister Recep Tayyip Erdoğan. The court documents also indicate that Manafort “orchestrated a scheme to have … ‘[O]bama jews’ put pressure on the administration” to persuade it to support Yanukovych.

 Avenatti in NYT op-ed makes case for indicting Trump - Attorney Michael Avenatti suggested that it's time to bring the current investigations against Donald Trump to a grand jury to determine whether there is enough evidence to indict the president."Provided there is sufficient evidence to support an indictment of President Trump — and there are many indications that there is — the special counsel, Robert Mueller, who is investigating possible Russian interference in the 2016 election, and prosecutors from the United States Attorney’s Office for the Southern District of New York, who are investigating payments to my client, Stormy Daniels, and Karen McDougal, should present their evidence to grand juries," Avenatti wrote in a New York Times op-ed published Thursday. "Those jurors, citizens of our communities, should then determine whether the evidence supports an indictment of Mr. Trump," he continued. Avenatti is a lawyer for adult film star Stormy Daniels, who has filed a lawsuit against Trump and his former personal lawyer Michael Cohen. Daniels, whose legal name is Stephanie Clifford, claims to have had an affair with Trump, which the president has denied.The Supreme Court has ruled that a sitting president does not have immunity from civil litigation in federal court from acts done before taking office and unrelated to duties as president. If the case were brought to the Supreme Court, Avenatti said that Brett Kavanaugh should recuse himself if he is confirmed. Kavanaugh, during his confirmation hearing, refused to commit to whether he would recuse himself if such a case were to advance to the Supreme Court. Avenatti argues that Kavanaugh "took this position, despite the fact that his strong views in favor of presidential immunity are outside the legal mainstream."

The Watergate ‘Road Map’ and the Coming Mueller Report - Lawfare - According to countless media accounts and President Trump’s own lawyers, Special Counsel Robert Mueller is writing some kind of report on allegations of presidential obstruction of justice. Exactly what sort of report this may be is unclear. But to the extent that Mueller is contemplating a referral to Congress of possible impeachment material, he has two historical models of such documents to draw on. One, the so-called Starr Report, is famous and publicly available. The other is a document most people have never heard of: the “Road Map” that Watergate Special Prosecutor Leon Jaworski sent to Congress in 1974 and that informed its impeachment proceedings, which were already underway.The Road Map was very different from the Starr Report. Where Starr wrote a lengthy narrative, the Road Map was reportedly spare. Where Starr evaluated the legal relevance of the evidence he referred, the Road Map apparently contained no analysis and drew no conclusions. And where the Starr Report was in bookstores worldwide and today is just a Google search away, the Road Map is largely forgotten.There’s a reason for that: The Road Map remains under seal at the National Archives. Kenneth Starr couldn’t read it. You can’t read it. And, remarkably for a document that may be the best model available for his current project, Mueller can’t read it either. The three of us filed a petition on Thursday to the U.S. District Court for the District of Columbia that seeks to rectify this problem. Represented by attorneys at Protect Democracy, we asked the court to unseal the Road Map. We did so because the document is of significant historical interest and significant contemporary interest. As we will explain in this post, which is drawn from declarations that we and others filed in the matter, the Road Map is one of the few significant pieces of Watergate history that remains unavailable to the public. The document is also keenly relevant to current discussions of how Mueller should proceed. It is possible that it is even relevant to discussions taking place within the Mueller investigation itself. It is time for Jaworski’s Road Map to see the light of day.

Monsters All the Way Down - James Howard Kunstler - Robert Mueller’s fishing crew was out trawling for Manafort, a blubbery swamp mammal valued for its lubricating oil when, by happenstance, a strange breed of porpoise called a Podesta got caught up in the net. Turns out it was a traveling companion of the Manafort. Back in 2014, the pair swam all the way to a little country called Ukraine via the Black Sea where the Podesta used some Manafort SuperLube on then-president of Ukraine, Victor Yanukovych.The objective was to grease the wheel of NATO and the EU for Ukraine to become a member. But the operation went awry when Yanukovych got a better offer from the Eurasian Customs Union, a Russian-backed trade-and-security org. And the next thing you know, the US State Department and the CIA are all over the situation and, whaddaya know, the Maidan Square in Kiev fills up with screaming neo-Nazis and Mr. Yanukovych gets the bum’s rush — and despite the major screw-up, the Manafort and the Podesta swim off with a cool few million in fees and return to the comforts of the swamp where they finally part ways. Mr. Mueller is apparently concerned about just what happened with those fees. Possibly the loot ended up getting washed and rinsed through an international banking laundromat, and somehow went unreported to the federal tax authorities. Of course, the charge raises some interesting questions, such as: were Manafort and Podesta over in Ukraine as opportunistic freelancers, or were they part of phase one of a US government effort to get Ukraine to sign up for Team West against its old Uncle Russia, the manager of Team East? Kind of seems like that was exactly what they were doing, so it will be interesting to see whether Mr. Mueller may have stepped into a big pile of dog shit on his way to the Manafort plea session in federal court. I like the theory that it suits Mr. Mueller’s purpose to land the porpoise in his net of legal entrapment. After all, Tony Podesta of the swamp influence-peddling company called the Podesta Group is brother of John Podesta, once President Bill Clinton’s Chief-of-Staff and more recently chairman of the 2016 Hillary Clinton presidential campaign. So Mr. Mueller can now brag that he is an “equal opportunity” fisherman for both Republican and Democratic species. The only problem is that the 2014 Ukraine monkey business is basically a sordid tale of the USA meddling in another country’s election affairs, one which had quite a more severe effect on Ukraine and Russia than a handful of Russian Facebook trolls managed against the USA’s 2016 election. Does anybody think that Manafort and Podesta were over in Ukraine without the knowledge of the US government? If so, we surely have the most incompetent intel community on earth.

I Don't Have An Attorney General - Trump Blasts Sessions, Says FBI Is A Cancer In Our Country - Ever since Attorney General Jeff Sessions decided to recuse himself from overseeing the DOJ's probe into alleged collusion between the Trump campaign and Russia back in the Spring of 2017 - a decision that set the stage for the appointment of Special Counsel Robert Mueller - President Trump has subjected his AG to an unceasing wave of public abuse and belittling comments, all the while suggesting that Sessions might soon be cut loose thanks to his immense disloyalty to his boss. But Trump outdid himself on Wednesday during a freewheeling interview with the Hill where he declared that "I don't have an attorney general" and added that he's "not happy" with Sessions' performance on a number of fronts beyond the Russia probe. Trump went on to speculate that Sessions' "very poor" performance during the nominating process went on to impact his performance as attorney general. Though Trump said Sessions' performance is especially disappointing in light of the senator's early support of the Trump campaign."I’m not happy at the border, I’m not happy with numerous things, not just this," he said.Trump suggested he had a personal blind spot when it came to nominating Sessions as the nation’s top law enforcement officer."I’m so sad over Jeff Sessions because he came to me. He was the first Senator that endorsed me. And he wanted to be Attorney General, and I didn’t see it," he said. "And then he went through the nominating process and he did very poorly. I mean, he was mixed up and confused, and people that worked with him for, you know, a long time in the Senate were not nice to him, but he was giving very confusing answers. Answers that should have been easily answered. And that was a rough time for him."[...]The president suggested Sessions' experience going through the nominating process in the Senate may have impacted his performance at attorney general.

Trump declassifies Russia materials in latest effort to undermine Mueller probe - President Trump just dramatically escalated his efforts to interfere with the Russia investigation. Late Monday afternoon, White House press secretary Sarah Sanders released a banal-sounding statement: that, “for reasons of transparency” and in response to requests from Congress, President Trump has directed the Justice Department to declassify a whole bunch of materials related to the Russia investigation — the ongoing inquiry into his own campaign — immediately. Those materials include a few specific things Trump wanted declassified: certain sections of the Carter Page FISA application (but, notably, not other sections of it) and FBI interviews related to Page, as well as FBI interviews with Justice Department official Bruce Ohr. The real bombshell, though, was in the second paragraph of Sanders’s statement: “President Donald J. Trump has directed the Department of Justice (including the FBI) to publicly release all text messages relating to the Russia investigation, without redaction, of James Comey, Andrew McCabe, Peter Strzok, Lisa Page, and Bruce Ohr.” In other words, the president is demanding the release of an enormous amount of internal material, without redaction, about an ongoing investigation into his campaign and his associates. Those text messages could discuss all manner of things, including, potentially, investigators’ suspicions, secret evidence, investigative methods, and information on confidential sources whose lives could be put at risk (if his instruction to release them “without redaction” truly is carried out). The timing of the release is unclear. The White House statement calls for “immediate” declassification. However, a Justice Department spokesperson told Politico that they were interpreting the order as starting “a declassification review process that is conducted by various agencies within the intelligence community, in conjunction with the White House Counsel, to seek to ensure the safety of America’s national security interests.”

Trump Declassification Order Will Expose FBI's Insurance Policy From Strzok-Page Text- Nunes -  President Trump's order to declassify a broad swath of DOJ/FBI documents related to the Russia investigation will expose the infamous "insurance policy" referred to in an August 15, 2016 text between former FBI employees Peter Strzok and Lisa Page, according to House Intelligence Committee Chairman Devin Nunes (R-CA).  "I want to believe the path you threw out for consideration in Andy’s office – that there’s no way he gets elected – but I’m afraid we can’t take the risk. It’s like an insurance policy in the unlikely event you die before you’re 40," reads the text message in question - used by many in Trump's camp to bolster claims that the Russia investigation is "rigged witch hunt." Speaking with Fox News's Laura Ingraham, Nunes said that declassification will provide exculpatory evidence, including a dozen or so 302 witness interview forms from DOJ official Bruce Ohr which may shed light on his significant relationship with former MI6 spy Christopher Steele and "many other rotten apples." "A lot of people think that the insurance policy was getting the FISA warrant on [former Trump campaign aide] Carter Page," Nunes told Ingraham, adding "We actually believe it was more explicit than that."Watch:

Lisa Page bombshell: FBI couldn’t prove Trump-Russia collusion before Mueller appointment -The Hill -To date, Lisa Page’s infamy has been driven mostly by the anti-Donald Trump text messages she exchanged with fellow FBI agent Peter Strzok as the two engaged in an affair while investigating the president for alleged election collusion with Russia.Yet, when history judges the former FBI lawyer years from now, her most consequential pronouncement may not have been typed on her bureau-issued Samsung smartphone to her colleague and lover.Rather, it might be eight simple words she uttered behind closed doors during a congressional interview a few weeks ago.“It’s a reflection of us still not knowing,” Page told Rep. John Ratcliffe (R-Texas) when questioned about texts she and Strzok exchanged in May 2017 as Robert Mueller was being named a special prosecutor to take over the Russia investigation.With that statement, Page acknowledged a momentous fact: After nine months of using some of the most awesome surveillance powers afforded to U.S. intelligence, the FBI still had not made a case connecting Trump or his campaign to Russia’s election meddling.Page opined further, acknowledging “it still existed in the scope of possibility that there would be literally nothing” to connect Trump and Russia, no matter what Mueller or the FBI did.“As far as May of 2017, we still couldn’t answer the question,” she said at another point.

Nunes- House Intel To Release 70 Transcripts From Trump-Russia Probe - The House Intelligence Committee will release transcripts and documents for approximately 70 witness interviews conducted during their investigation into Russian meddling in the 2016 US election. "We believe that the depositions that we took, I think for nearly about 70 people those need to be published, and they need to be published I think before the election," Nunes told Fox News's "Sunday Morning Futures." "By published I mean put out for the American people to review, so that they can see the work that we did and they can see all of the people that were interviewed by us, and there are answers to those questions. I think full transparency is in order here so I expect to make those available from our committee to the American public here in the next few weeks," Nunes continued. That said, around a quarter of the interviews may contain classified information and would need to be approved for release and declassified by the diretor of national intelligence, Dan Coats. Nunes says this process "would only take a matter of days."  .@DevinNunes: “I think full transparency is in order here.” #SundayFutures @MariaBartiromo pic.twitter.com/RmjFNRysWN — Fox News (@FoxNews) September 16, 2018 According to the Daily Caller, the committee conducted 73 witness interviews. Last Wednesday, Rep. Trey Gowdy (R-SC) called on the committee to release the transcripts of interviews from the investigation. Democrats on the committee have long called for releasing the transcripts, after repeatedly accusing Republicans of conducting an incomplete and misleading investigation - including claims that some witnesses weren't thoroughly probed. "Now, the Chairman is again promising to release the transcripts," said ranking committee Democrat Rep. Adam Schiff in a Sunday statement. "We hope this time he will follow through on his commitment by scheduling a business meeting immediately and allowing a new vote to release all the transcripts. A few will need classification review by the Intelligence Community, but most will not."

Time for sunshine on Trump-Russia investigation - Democrats are squawking about President Trump’s order to release the material used by the FBI and the Justice Department to initiate the investigation of his campaign. These minority committee chairs, soon likely to be in the majority, claim it’s unfair, an abuse of power, one-sided.Since when have these “Guardians of Our Republic” ever been against the release of more information from our government? Obviously, only when such release might put a dent in the Russia cloud that they have deliberately perpetuated regardless of the drip, drip, drip of evidence implicating high-ranking FBI, CIA and Justice officials in wrongdoing.This investigation of the Trump campaign, his administration, family and associates has gone on for more than two years without any serious evidence supporting the Russia-Trump collusion theory. And, increasingly, it looks like there never was any real evidence to support the launching of the largest investigation of an administration in history. It’s the only known investigation ever by an outgoing party of the incoming officials of the other party. It was whipped up byopposition-research firm Fusion GPS, former British spy Christopher Steele and partisans in the Obama administration, creating a vast echo chamber with information that was never substantiated in any material way and, on the face of it, was preposterous. (No one ever offered Trump campaign adviser Carter Page $19 billion for anything.)Now, before Americans go to vote, is precisely the time to unmask publicly this information; if it favors the current administration, then the originators of the investigation will have even more explaining to do. Information that was used to start an investigation can’t possibly be exculpatory unless, in the light of day, it appears forced, false or incomplete. After all, it was used to convince judges that crimes were being committed by Trump and his associates. Based on what we see in the prosecutions, there appears to have been three tranches of allegations behind the investigations — the “tip” from Australian diplomat Alexander Downer that George Papadopoulos had some generalized advance information about email hacking, the Christopher Steele dossier, and the then-Acting Attorney General Sally Yates investigation of Gen. Michael Flynn for potential Logan Act violations. The Mueller probe systematically pursued all of them to the prosecutorial limits, until every witness was bludgeoned into cooperation.

Nellie Ohr Refuses To Sit For Congressional Testimony After Trump Declassification Order - Spygate operative Nellie Ohr is refusing to appear in a closed-door Congressional hearing that was slated for Friday, according to Chuck Ross of the Daily Caller. Ohr, who worked for Fusion GPS, the firm behind the Steele dossier, was scheduled to appear for interviews during a joint session with the House Judiciary and House Oversight & Government Reform committees. But two congressional sources said that she is not cooperating with the requests and will have to be subpoenaed to compel her appearance. The sources also said that former FBI general counsel James Baker is not cooperating with the committees’ request for an interview.“The Committee continues to seek the testimony of Nellie Ohr and Jim Baker and will compel their testimony if necessary,” an aide to House Judiciary Committee Chairman Bob Goodlatte told TheDCNF. -Daily CallerOhr's cancellation comes on the heels of an order by President Trump to declassify Trump-Russia documents "immediately" and "without redaction," including the text messages from several key players, including Ohr's husband, twice-demoted DOJ official Bruce Ohr.  Nellie Ohr, a Russia expert who speaks fluent Russian, was set to discuss her work for opposition reserarch firm Fusion GPS - which employed her from December 2015 until right after the 2016 US election as part of their anti-Trump efforts. In 2010, she represented the CIA's "Open Source Works" expert working group, along with her husband Bruce and Fusion GPS co-founder Glenn Simpson.

FBI, DOJ To Defy Trump Order; Redactions Planned As Top 'Deep State' Dems Demand Insubordination - Despite President Trump's Monday order for the "immediate declassification" of sensitive materials related to the Russia investigation, "without redaction," the agencies involved are planning to do so anyway, according to Bloomberg, citing three people familiar with the matter.   The Justice Department, FBI and Office of the Director of National Intelligence are going through a methodical review and can’t offer a timeline for finishing, said the people, who weren’t authorized to speak publicly about the sensitive matter. -BloombergTrump ordered the DOJ to release the text messages of former FBI Director James Comey, his deputy Andrew McCabe, now-fired special agent Peter Strzok, former FBI attorney Lisa Page and twice-demoted DOJ official Bruce Ohr.Also ordered released are specific pages from the FBI's FISA surveillance warrant application on former Trump campaign aide Carter Page, as well as interviews with Ohr. The DOJ and the FBI are expected to submit proposed redactions to the Office of the Director of National Intelligence - which will prepare a package for Trump to sign off on. "When the president issues such an order, it triggers a declassification review process that is conducted by various agencies within the intelligence community, in conjunction with the White House counsel, to seek to ensure the safety of America’s national security interests," a Justice Department spokesman said in a statement. "The department and the Federal Bureau of Investigation are already working with the Director of National Intelligence to comply with the president’s order."The agencies are likely to cite national security concerns over revealing classified "sources and methods" pertaining to the Russia investigation - which will put them in direct conflict with Trump's order. Trump, as president, has the power to override the agencies and declassify material on his own. Trump's order to release the documents comes after months of requests from GOP lawmakers, while the DOJ has repeatedly denied their requests for more transparency.

NYT Admits That Its “Mountain of Evidence” For Russian Collusion Is Smaller Than A Molehill  The New York Times spends 10,000 words in some 199 paragraphs on the alleged 'Russian influence' in the U.S. election. The Plot to Subvert an Election - Unraveling the Russia Story So Far  For two years, Americans have tried to absorb the details of the 2016 attack —hacked emails, social media fraud, suspected spies — and President Trump’s claims that it’s all a hoax. The Times explores what we know and what it means.The long piece is a repetition of unproven intelligence claims, spin around a few facts and lots of innuendo. Few readers will ever digest it in full. That is why this sentence appears near the top in paragraph 5 of a total of 199 paragraphs:President Trump’s Twitter outbursts that it is all a “hoax” and a “witch hunt,” in the face of a mountain of evidence to the contrary, have taken a toll on public comprehension. One-hundred-and-seventy-eight paragraphs later, near the end of the piece, we read the opposite and learn that Trump is indeed right: Mr. Trump’s frustration with the Russian investigation is not surprising. He is right that no public evidence has emerged showing that his campaign conspired with Russia in the election interference or accepted Russian money.

Trump’s latest abuse of power is likely to blow up in his face  -- President Trump and his Republican allies in Congress are running a systematic campaign of harassment and disruption directed at legitimate law enforcement activity being conducted on behalf of the American people — with the active goal of protecting Trump and his cronies from accountability and denying the public the full truth about a hostile foreign power’s effort to corrupt our democracy.The latest example of this, like the others that preceded it, is being justified with the laughably disingenuous falsehood that the goal is “transparency.” And this one, like the others that preceded it, will likely blow up in Trump’s face in spectacular fashion.Trump has ordered the Justice Department to release numerous classified documents related to the Russia investigation. A White House statement claims this is in the interests of “transparency.” One of Trump’s most dutiful servants in Congress, Rep. Matt Gaetz of Florida, insists this release will “reveal to the American people some of the systemic corruption and bias” at “the highest levels of the DOJ and FBI.” In reality, this is an effort at obfuscation, concealment, deception, and the weaponizing of the oversight process for “partisan political ends.” If recent precedent is any guide, the release itself will broadly confirm this — even though Trump and his allies will lie uncontrollably to the contrary.

Justice Dept Likely to Slow-Walk Declassification - Don’t hold your breath. While the media is breathlessly describing yesterday’s order by President Donald Trump’s “to provide for the immediate (emphasis added) declassification” of Russia-gate materials as a “showdown,” any likely showdown is months away, if it comes at all.The word “immediate” can mean different things to different people. Had the President set a deadline, or had he given the declassification task to his own National Security Council, the word “showdown” might be closer to what to expect.The tragic-comedy now on stage in Washington is beyond bizarre. Can President Trump be unaware that those he “ordered” to do the declassification — top officials of the Justice Department, the FBI, and the intelligence agencies — have zero incentive to comply “immediately.” And they have minus-zero incentive, as the top echelons see it, to throw their former bosses, colleagues, and co-conspirators under the bus by releasing the family jewels.Most of today’s commentary by anonymous officials on declassification are transparently bogus. To suggest, for example, that “death could occur,” as one MSNBC pundit predicted this afternoon, is beyond ludicrous. Do not expect Establishment media, however, to stop its feeding frenzy at the Deep State trough.

Trump Delays Order To Declassify Russia Investigation Documents --President Trump added a major caveat to his Monday order to release all text messages related to the Russia investigation with no redactions, as well as specific pages from the FBI's FISA surveillance warrant application on former Trump campaign aide Carter Page, and interviews with the DOJ's Bruce Ohr.  In a Friday morning Tweet, Trump said: "I met with the DOJ concerning the declassification of various UNREDACTED documents. They agreed to release them but stated that so doing may have a perceived negative impact on the Russia probe. Also, key Allies’ called to ask not to release. Therefore, the Inspector General has been asked to review these documents on an expedited basis. I believe he will move quickly on this (and hopefully other things which he is looking at). In the end I can always declassify if it proves necessary. Speed is very important to me - and everyone!"

Rosenstein Proposed Secretly Recording Trump, Invoking 25th Amendment -- In a shocking report citing a bevy of anonymous DOJ officials, the NYT recounted on Friday an aborted mutiny attempt organized by Rosenstein, who allegedly tried to organize members of Trump's cabinet to invoke the 25th amendment to oust Trump from office. In an attempt to persuade the clearly reluctant members of Trump's cabinet, Rosenstein suggested that he or other officials should secretly tape Trump "to expose the chaos" he said was engulfing the West Wing. According to NYT, the sources were either briefed on Rosenstein's plans, or learned about it from the files of former FBI Deputy Director Andrew McCabe, who was fired after being disgraced by an inspector general investigation. ABC News, which also reported the story, cited sources familiar with McCabe's files. A grand jury is also weighing whether to press charges against McCabe for allegedly misleading the inspector general.  Mr. Rosenstein made the remarks about secretly recording Mr. Trump and about the 25th Amendment in meetings and conversations with other Justice Department and F.B.I. officials. Several people described the episodes, insisting on anonymity to discuss internal deliberations. The people were briefed either on the events themselves or on memos written by F.B.I. officials, including Andrew G. McCabe, then the acting bureau director, that documented Mr. Rosenstein’s actions and comments.None of Mr. Rosenstein’s proposals apparently came to fruition. It is not clear how determined he was about seeing them through, though he did tell Mr. McCabe that he might be able to persuade Attorney General Jeff Sessions and John F. Kelly, then the secretary of homeland security and now the White House chief of staff, to mount an effort to invoke the 25th Amendment. According to the NYT, this all happened during the spring of 2017, shortly after Trump cited a letter that Rosenstein had penned criticizing former FBI Director James Comey's handling of the Clinton probe as justification to fire Comey. Rosenstein reportedly felt he had been "used" by the president as an excuse to fire Comey. Rosenstein soon began telling colleagues that he would ultimately be "vindicated" for his role in Comey's firing. Around the same time, he began to express his displeasure with Trump's handling of the hiring process for Comey's replacement.

New York Times claims Deputy Attorney General discussed removing Trump -- In a report that caused shock waves throughout Washington, the New York Times published an article on its website Friday afternoon alleging that Deputy Attorney General Rod Rosenstein discussed last year urging cabinet members to invoke the 25th Amendment to remove President Donald Trump from office on the grounds of mental unfitness, and offered to secretly record conversations with the president as part of such an effort.It is a measure of the deep-going political turmoil in US ruling circles that the Times could publish such a report, based entirely on unattributed anonymous sources whom the newspaper described as “briefed either on the events themselves or on memos written by F.B.I. officials” about the events. There is no way to determine whether anything in the article is true, except to take on faith the credibility of reporters Adam Goldman and Michael S. Schmidt and their editors.The article represents another stage in an ongoing conflict within the US ruling elite, in which the Times is the mouthpiece for the Democratic Party and substantial sections of the military-intelligence apparatus, at war with Trump, who has behind him significant corporate support as well as the bulk of the Republican Party. The foreign-policy issues around which the conflict revolves center on the war in Syria and relations with Russia, as each side pursues the conflict with the methods of palace intrigue and media scandal.It is perfectly possible that the Times has published an accurate account of the discussions inside the Justice Department which took place in the spring of 2017 after Trump’s summary firing of FBI Director James Comey. The political firestorm that erupted after the Comey firing compelled Rosenstein to appoint former FBI Director Robert Mueller as a special counsel to continue the Russia investigation, which has expanded greatly over the past 16 months. It is also possible that the Times article is a political provocation, aimed at inciting Trump to fire Rosenstein, an action that would likely lead to a considerable crisis in the Trump administration and the Republican Party. Numerous Senate Republicans have warned Trump previously not to fire Rosenstein, a Republican who was a US attorney in the Bush administration, when all such officials were vetted for political loyalty by Karl Rove.Attorney General Jeff Sessions had also previously threatened to resign if Rosenstein were fired, although at this point Trump might welcome such a response, given his relations with Sessions, whom he denounces and demeans regularly. The departure of both Sessions and Rosenstein would leave Associate Attorney General Rachel Brand the senior leader of the DoJ and the day-to-day supervisor of the Mueller investigation. Brand is a religious conservative from western Michigan who worked in the Bush Justice Department.

McCabe memos say Rosenstein suggested secretly recording Trump Washington Post - Memos written by Andrew McCabe when he was the acting FBI director say that Deputy Attorney General Rod J. Rosenstein suggested he secretly record his talks with President Trump, and that Rosenstein discussed possibly trying to remove Trump from office, according to people familiar with the matter.The account, first reported by the New York Times, paints Rosenstein as so concerned in May 2017 in the wake of Trump’s firing of FBI Director James B. Comey that he contemplated secretly recording conversations with the president. He also initiated discussions about invoking the 25th Amendment, which details how the Cabinet can decide whether a president is no longer able to discharge the duties of the office, one of the McCabe memos said.The revelations immediately prompted speculation that Trump might seize on the new information to fire Rosenstein. The deputy attorney general oversees special counsel Robert S. Mueller III’s investigation into Russian interference in the 2016 election and whether any Trump associates conspired in those efforts.Speaking at a rally in Springfield, Mo., on Friday evening, Trump said, “Look at what’s being exposed at the Department of Justice and the FBI. We have great people in the Department of Justice . . . but we have some real bad ones. You see what’s happening at the FBI, they’re all gone, they’re all gone. But there’s a lingering stench and we’re going to get rid of that, too.” The saga features two of the president’s biggest targets for public criticism, McCabe and Rosenstein, both of whom he blames for an investigation he calls a “witch hunt.” In this instance, McCabe’s memos offer an extraordinary account of Rosenstein’s thinking at a difficult time in the Justice Department and could give Trump fresh ammunition to move to oust Rosenstein. McCabe was fired this year, and a grand jury is weighing possible charges against him for allegedly misleading investigators in a leak probe.

Quick Notes on the Rosenstein Revelations Lawfare - There is a lot to chew over in the blockbuster New York Times story about Deputy Attorney General Rod Rosenstein’s erratic behavior in his first few weeks on the job, just after President Trump fired FBI Director Jim Comey on May 9, 2017.The Times reports that Rosenstein suggested that “he secretly record President Trump in the White House to expose the chaos consuming the administration” and that he “discussed recruiting cabinet members to invoke the 25th Amendment to remove Mr. Trump from office for being unfit.” Rosenstein also reportedly told Acting FBI Director Andrew G. McCabe “that he might be able to persuade Attorney General Jeff Sessions and John F. Kelly, then the secretary of homeland security and now the White House chief of staff, to mount an effort to invoke the 25th Amendment.” As Drudge summarizes it, with only a tad of unfairness: “Rosenstein Wanted to Wear Wire; Plot To Remove Trump.” As the Times makes clear, “None of Mr. Rosenstein’s proposals apparently came to fruition.” Rosenstein responded to the story in a statement: “The New York Times’s story is inaccurate and factually incorrect. I will not further comment on a story based on anonymous sources who are obviously biased against the department and are advancing their own personal agenda. But let me be clear about this: Based on my personal dealings with the president, there is no basis to invoke the 25th Amendment.” But he did not deny the story’s claims that he discussed invoking the 25th Amendment and secretly recording the president. And indeed, the Justice Department issued a statement from an anonymous official who said that Rosenstein made his proposal to record the president “sarcastically.” Other anonymous officials, however, insisted that Rosenstein “was serious about the idea” and “followed up by suggesting that other F.B.I. officials who were interviewing to be the bureau’s director could also secretly record Mr. Trump.” The events the Times describes came on the heels of Rosenstein’s unfortunate participation in Comey’s firing. As the Times now reports the episode, when Trump informed Rosenstein and Attorney General Sessions of his plan to fire Comey, Rosenstein, to the surprise of White House officials, “embraced the idea, even offering to write the memo about the Clinton email inquiry.” After Trump invoked Rosenstein’s memo as the basis for firing Comey, Rosenstein “became angry at Mr. Trump” and “grew concerned that his reputation had suffered harm,” according to people who spoke with him.

Hillary Clinton On Putin's Three Dimensional Chess - They Wanted To Get Me Out Of The Way -  Remember when Huma Abedin openly wept in the streets of New York the morning after Hillary Clinton lost to Donald Trump? We learned last night from Hillary Clinton's appearance on MSNBC's Rachel Maddow that it was actually Vladimir Putin personally responsible for that scene and those tears, not a national election. This is what two years of 24/7 media 'Russiagate' hysteria and the relentless pursuit of a "narrative" have brought us. And where better for Clinton to speak of the grand Russian conspiracy that shook the very foundations of the Republic than Queen Conspiracy Theorist Rachel I-see-a-Russia-Connection-Lurking-Behind-Every-Corner Maddow? Who would have thought there was really no need for a whole book penned by Hillary over why she lost called What Happened?... Well she did just write a new Afterward wherein she questions the "legitimacy of our elections". And here it is — the peak 'Russiagate' moment for the history books... "I think I was an obstacle to [Russia's] plans to undermine and disrupt our democracy. I think I was an obstacle to impose greater authoritarian control in Russia... I think they wanted to get me out of the way," Clinton told Maddow in the Tuesday night interview. Clinton further said she believes she is a "small part of the puzzle," and that it's worth asking, "why did they want to get me out of the way?"She continued on Russia and the 2016 election.: "I do believe that we're finding it more about how they viewed me and what they wanted to do to get me out of the way, but to get me out of the way to do what, Rachel? Yes, try to elect the president which apparently they succeeded at, but it was more than that. I think they play a long game....So forget it Trump voters nationwide, this is the official Hillary and #Resistance narrative now here to stay: the Russians elected Trump. And there's more in store for what Putin has planned for America, they are playing "the long game" in Clinton's words.

Stormy Daniels Dishes On Trump's Mushroom Penis, Recounts Bizarre Call With Hillary Clinton -  Barely two weeks after former Trump lawyer Michael Cohen agreed to tear up Stormy Daniels nondisclosure agreement, the former adult film actress and alleged Trump mistress is getting ready to publish her much-hyped book, "Full Disclosure". And in keeping with what has become a tradition for authors preparing to publish critical texts involving the president, Daniels has leaked a copy of the manuscript to the Guardian, which on Tuesday published several explosive excerpts detailing Daniels' story about her brief relationship with Trump.    After greeting Trump at a Celebrity Golf Tournament in Lake Tahoe back in 2006, Daniels says his bodyguard approached her and invited her to a private dinner with Trump. After arriving at his penthouse, Trump put the moves on her. In the book, she describes Trump's penis as "below average but not freakishly small" adding that its tip was large and mushroom shaped, like the toadstool character from "Mario Kart." .""He knows he has an unusual penis," Daniels writes. "It has a huge mushroom head. Like a toadstool… "I lay there, annoyed that I was getting fucked by a guy with Yeti pubes and a dick like the mushroom character in Mario Kart..." Amazingly, Hillary Clinton makes a brief but memorable appearance in the book, as Daniels recounts a scene where she and Trump were hanging out in his hotel room back in 2007. As they were watching "Shark Week", Clinton apparently called Trump.Daniels’ alleged relationship with Trump included one moment in 2007, she writes, in which she is with Trump in a hotel room watching a Shark Week broadcast on cable television when he receives a phone call from Hillary Clinton, then running against Barack Obama for the Democratic presidential nomination."  Then, to make it crazier, Hillary Clinton called," Daniels writes. "He had a whole conversation about the race, repeatedly mentioning 'our plan'...

 Trump’s Dick Reportedly Looks Like Toad From Mario Kart - Well, we can’t say we weren’t warned. In April, Stormy Daniels’s attorney Michael Avenatti revealed that the adult-film star could “describe the president’s genitalia in great detail.” Now, in her new book Full Disclosure, Daniels apparently does vividly explain President Donald Trump’s penis after all, much to the world’s chagrin.The Guardian obtained a copy of the book, and has shared all the phallic information about the president that we’ve never wanted to know and now cannot unread. First, the book goes into detail about Daniels’s disbelief at seeing Trump winning the Republican primary (“He doesn’t even want to be president,” she recalls thinking). She also writes of her fear about having such a sensitive story about the president, and her decision to sign a $130,000 hush agreement to not discuss their alleged affair.But then, the book goes south, erm, quite literally, when Daniels describes a night she spent with Trump. Per the Guardian:She describes Trump’s penis as “smaller than average” but “not freakishly small.”“He knows he has an unusual penis,” Daniels writes. “It has a huge mushroom head. Like a toadstool … “I lay there, annoyed that I was getting fucked by a guy with Yeti pubes and a dick like the mushroom character in Mario Kart …“It may have been the least impressive sex I’d ever had, but clearly, he didn’t share that opinion.”

You’ll miss Trump one day - I'm going to miss President Trump when he's gone. If you want his presidency to end as badly as I do, you probably will, too. The day he leaves office, I will be overjoyed. The day after he leaves office, I will be bored. The post-Trump era will be less frightening but more dull. It will be an unpleasant time for Americans. Not only do we demand entertainment, but we demand it from everyone, all the time, even at the risk of economic collapse, a constitutional crisis, and a few accidental, simultaneous wars. I sometimes think the downfall of civilization is a small price to pay for the kind of entertainment Trump's presidency is giving us. It's never been so easy to make fun of a president. All you have to do is quote him. "It's tremendously big and tremendously wet," Trump said last week, referring to Hurricane Florence. On Twitter, you can correct his grammar and call him a racist. If you're a grammar Nazi who hates Nazis, this is a busy and wonderful time for you. Trump's presidency has been a tragedy for America and an ego boost for Americans. If you're an average human being, you are superior to the president — mentally, morally, and many other -lys. If you don't cheat on your wife with a porn star, you are, by comparison, a magnificent husband. If you can spell "too" and enunciate "anonymous" correctly, you have a knack for the English language. If you know that Frederick Douglass is dead and that Napoleon was the leader of France and not the guy in that movie who helped Pedro win an election, you know your history. Trump makes ordinary people seem extraordinary. When he leaves, we'll be exposed for what we really are, and that will suck.

 With Supreme Court Decision on Dark Money “We’re About to Know a Lot More About Who Is Funding Our Elections  - In a win for increased transparency and those demanding an end to the so-called "dark money" eating away at U.S. democracy, the Supreme Court on Tuesday lifted a previous stay on a lower court ruling by rejecting the argument by right-wing advocacy groups who said they should not have to reveal the identity of big-dollar donors who fund their issue-based campaign ads. Crucially, the ruling means that groups that in the past have been able to hide the source of their funding before, during, and after campaigns will have now have to make that information available before voters go to the polls—in this case, that means before the upcoming mid-term elections. Effective immediately, any group or individual making more than $250 in express advocacy ads — ads that tell viewers who to vote for or against — must now disclose the identities of all contributors who gave more than $200 in a year.  As the Huffington Post reports: The decision came about after Citizens for Responsibility and Ethics in Washington, a liberal watchdog group, fought for the past six years to get the Federal Election Commission to enforce campaign finance laws against Crossroads GPS, a conservative nonprofit group founded by Karl Rove, a senior adviser to George W. Bush when he was president. CREW finally won its battle on Tuesday. As of Sept. 18, any group that runs an independent expenditure ― election ads that expressly call for the election or defeat of a candidate ― in excess of $250 will have to disclose all political donors above $200. Norm Eisen, the chairperson of CREW, celebrated the decision on Twitter: "We are about to drive a lot of dark money donors into the light—it's gonna look like the climax of a Harry Potter movie where the creatures shrivel in the sun." Writing for the Center for Public Integrity, Dave Levinthal and Sarah Kleiner report that "secret money in politics will soon be a lot less secret."

The broken conversation about financial regulation - The last few weeks have brought with them the genuine risk of overdosing on “ten years on from the financial crisis” think-pieces. Unfortunately, we’re going to have to inflict another on you.Yesterday, Vice tweeted an article, originally published last summer, entitled “Why is No One Talking About Regulating the Banks”. The article touches on money laundering, Brexit and money creation. It does not discuss the many important regulatory changes that have affected banking since the crisis, but, in this respect, it ends up making an important point. Discussion of post-crisis regulations really only take place in extremely rarefied and specialist settings. In fact, this is one of the main reasons that attempts to engage with the topic are usually replete with omissions. This matters irrespective of your political persuasion. The Vice article, for example, suggests that “there was a moment in the aftermath of the financial crisis where there was opportunity for real reform”, but that “politicians didn't take it”. However, the major themes that emerge in the film-script version of the crisis — derivatives, securitisation, the bailing out of the banks, the rules governing mortgage lending — have all been subject to major changes. These reforms might be insufficient but, to make that point, they need to be brought into the conversation.  These measures are not inherently complicated; their complexity is usually drawn from the array of institutions that determine them. The Basel Committee, for example, draws up rules on bank capital that then inform legislative packages in different countries or regions. The regulator for banks in many countries is an independent central bank, which removes much of the discussion from public debate, and results in a conversation between expert policymakers and expert practitioners. In the EU, there is a separate body in Brussels that deals with bank failure. So there are a few people talking about regulating the banks, but the conversation is mostly inaccessible. What emerges from the lack of open discussion about actual regulation is a kind of parallel and often misleading discussion based on over-simplified assumptions. One of these is that “deregulation” straightforwardly explains the financial crisis. Some parts of this are true, but a brief history of the securitisation market — the most commonly connected market to the crisis — tells a more complicated story.

Post Crisis Measures Have Failed to Tame Derivatives Risks -- Yves Smith - One of the frustrating aspects of the orgy of “ten years after Lehman” stories is that writers and pundits, many of whom are old enough to have missed the credit excesses that were evident in 2006 and 2007, are now screeching “A crisis is nigh” without necessarily focusing on likely triggers.  However, many of these writers are presumably anticipating something more like the global financial crisis, and too often are looking in the wrong places. There is a difference between market crashes that don’t impair the financial system, like the dot-com bust, because the assets that fell in price weren’t highly leveraged. You get real economy damage but not a financial crisis. You can also have lots of loans go bad and not impair the banking system because the credit risk was either well distributed among banks and/or significantly shifted onto investors who losses aren’t leveraged back to the financial system.1 However, one of the sources of systemic risk being overlooked is derivatives. That is particularly worrisome since the crisis was a derivatives crisis, and not a housing crisis, as it is too commonly depicted. Even though the US and other housing markets were certain to suffer a nasty bust, a housing crisis alone would have resulted in something like a bigger, badder saving and loan crisis, not the financial coronary of September and October 2008.Derivatives allowed speculators to create synthetic exposures to the riskiest subprime housing debt that were 4-6 times its real economy value. Those bets wound up heavily at systemically important, highly leveraged financial institutions like Citigroup, AIG, the monolines, and Eurobanks.As derivatives expert Satyajit Das explained in a recent Bloomberg op-ed, the big post crisis solution to derivative risk, to force most derivatives to be cleared through central counterparties, hasn’t lived up to its promise. Das cites the example of how a single bad energy futures trade by a Norwegian investor recently blew through most of the NASDAQ’s mutual default fund. Even though this particular loss wasn’t consequential in financial system terms, Das argues that it illustrates how derivative risks are alive and well. The post crisis remedy settled on in 2009 was to require trades to be cleared through central counterparties who would be the ones to assume the credit risk of buyers and sellers. But as Das and others (including your humble blogger) pointed out then, all this did was to move that risk out of banks and big leveraged financial players like hedge funds, and into the counterparties, which themselves are too big to fail entities.2 And even though it is true that a central counterparty will reduce overall credit exposures, as Das has explained numerous times, there is a big gap between theory and practice.

Regulators finalize rule to modify swap requirements —Five federal agencies published a final rule Friday to consolidate two regulations that would establish uniform swap margin requirements that impose restrictions on certain qualified financial contracts. The Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Federal Housing Finance Agency and the Farm Credit Administration adopted the proposal issued in February without any changes. The changes to the swap margin rule ensure that netting agreements of firms subject to the rule are not excluded from the definition of an eligible master netting agreement based on their compliance with the QFC rules, according to the agencies.  In swap arrangements, netting is generally meant to simplify the amount two parties pay and receive in a deal. The five agencies originally issued the swap margin rule in 2015 to set minimum margin requirements for swaps and security-based swaps that are not cleared through a clearinghouse. “The margin requirements are designed to help ensure the safety and soundness of swap entities and reduce risks to the stability of the financial system associated with non-cleared swaps activity,” the agencies said in a release.

Just How Wildly Exuberant is the Junk-Credit Market? - This is considered a door-opener Leveraged Buyout (LBO): If it flies and investors buy this $13.5 billion pile of deeply junk-rated debt today, even riskier and bigger LBOs may fly.It’s the fourth largest LBO since the Financial Crisis and the ninth largest of all times in the US and Europe: Thomson Reuters Corporation is separating its largest division, the financial information, analysis, and risk businesses, now called “Refinitiv,” to sell a 55% stake to a group of investors led by private equity firm Blackstone Group.This being a “leveraged” buyout, the Blackstone consortium is making the target company, Refinitiv, borrow in total $13.5 billion to fund most of its own buyout. This consist of $9.25 billion in “leveraged loans” and $4.25 billion in secured and unsecured bonds. Some pieces are denominated in dollars, others in euros. This debt sale is being completed today.The Blackstone Consortium will infuse $3.025 billion in cash equity. Thomson Reuters will retain a 45% stake and will receive a special dividend from Refinitiv of approximately $17 billion, according to Moody’s. And there are some other details involved.  Alas, Moody’s gives Refinitiv a corporate credit rating of B3, six steps into junk, considered “highly speculative.” Moody’s also rates the loans and bonds being sold today, ranging from B2 to Caa2 for some unsecured bonds, which is eight notches into junk, and just three notches above default, considered “extremely speculative” (here’s my cheat sheet for corporate credit ratings categories).Seeing strong demand for this debt, Refinitiv on Monday increased the size of the debt sale by $1.25 billion and lowered the proposed yields on all but one piece. For investors, this means even more risks (more debt piled on the company) at even lower yields for investors. But hey, these are the good times.This deal is “reminiscent of the kind of deal I would have seen in 2006 and 2007,” Scott Roberts, head of high-yield investments at Invesco, told the Wall Street Journal. In addition to the large amount of debt being issued, “you have a covenant package that’s extremely weak.” OK, but weak covenants have become a pandemic. Companies issuing leveraged loans love weak covenants, and creditors will rue the day, but for now everything flies.

SEC: Citigroup Ran a Secret, Unregistered Stock Exchange for More than Three Years - Last Friday, the Securities and Exchange Commission issued a 372-word press release that carried the title SEC Charges Citigroup for Dark Pool Misrepresentations. Buried within that press release was a brief sentence casually mentioning that a division of Citigroup had “failed to register as a national securities exchange.”Since the thrust of the SEC’s press release was that the big travesty Citigroup had committed was to allow high frequency traders to operate within one of its Dark Pools while lying to its customers about that, this became the sole focus in multiple news articles on the matter. See here and here.The SEC also buried the information that Citigroup was running an illegal stock exchange within its cease-and-desist order and settlement document. In fact, what the SEC actually did was to dump two vastly different violations of security law – lying to customers and running an illegal stock exchange – into one enforcement announcement and impose a meaningless $12.9 million fine on Citigroup for disparate violations. (Citigroup reported profits of $4.5 billion in its most recent quarter.) Equally notable, the SEC did not force the serially-charged Citigroup to admit to its violations of law.According to the SEC’s order, “from at least December 2011 to April 30, 2015,” a unit of Citigroup called Citi Order Routing and Execution, LLC (CORE) operated as a stock exchange “by virtue of providing Citi Match as a marketplace for NMS [National Market System] stocks.” During that more than 3-year period when CORE was operating as an illegal stock exchange, without ever registering with the SEC as an exchange, Citi Match executed more than 7 billion shares of stock according to the SEC order. That’s a lot of stock to be trading without any regulatory eyes watching over you. One has good reason to wonder just how much of that stock was Citigroup’s own bank shares – a topic not even touched upon by the SEC order. (See Wall Street Banks Are Trading in their Own Company’s Stock: How Is This Legal?)   Citigroup’s CORE division was previously known as Automated Trading Desk Financial Services (ATD). The ATD name was used through at least May 16, 2016 when Citadel Securities announced that it was buying certain undisclosed assets of ATD from Citigroup for an undisclosed amount of money.

Wall Street Salaries Are 7 Times Higher Than Households Ten years ago, stunned employees of Lehman Brothers walked out onto the streets, boxes in hand, after their company collapsed. These days, Wall Street workers have something to celebrate: Compensation in the financial industry is the highest it’s been in a decade.A report from the New York State Comptroller said Monday that the average Wall Street salary rose by 13% in 2017 to $422,500, the highest compensation since 2008. Much of that boost in take-home pay came from bonuses, which rose 17% last year to $184,000 on average, which was also the highest in a decade.The financial crisis precipitated by Lehman’s collapse has reshaped the American economy. While Wall Street banks struggled for a few years after the crisis, many workers in other industries are still feeling its stifling effects. Median household income rose 1.8% in 2017 to $61,372, or about one-seventh the average salary on Wall Street.In general, workers who rely on wages for income have fared poorly in comparison to those who see most of their income from investments. Stock indexes are trading near record highs, with profits at U.S. companies rising by about 25% so far in 2018. The securities industry is sharing in those surging profits, with their pretax income reaching $24.5 billion in 2018 and another $13.7 billion in the first half of 2018.Those figures suggest that 2018 will bring even bigger bonuses and salaries to the people who work on Wall Street. And there’s more of that work to go around. After the initial layoffs, financial services firms have added 10,600 jobs in the past eight years, bringing the total workforce to 176,900.  That’s not quite as high as it was in 2007, but as long as the financial markets stay strong, Wall Street employment will soon be where it was in the months before the markets crashed.

What would DOJ have to prove in Elon Musk case - A Tesla spokesperson confirmed to Yahoo Finance on Wednesday that the Justice Department has asked the electric carmaker for “documents,” following reports that it’s facing a criminal probe over CEO Elon Musk’s statement about taking the company private.The Justice Department’s criminal probe comes after the Securities and Exchange Commission launched a civil probe last month into Musk’s Aug. 7 tweet stating: “Am considering taking Tesla private at $420. Funding secured.”  The electric carmaker’s stock shot up after the tweet, and the SEC probe is reportedly focusing on whether Musk was telling the truth when he said he’d secured funding to go private. Prior to Musk’s tweet, the SEC had also been probing Tesla’s statements about manufacturing goals and sales targets. The stakes for a criminal probe could be much higher than the SEC investigation. While Bloomberg reported that Tesla itself is facing a criminal investigation, two business-law professors told Yahoo Finance that prosecutors are also likely gathering information that could potentially be used in a criminal case against Musk. “They’ve got to be investigating him,” said Adam Pritchard, who teaches corporate and securities law at Michigan Law, noting that it was Musk himself who sent out the tweet regarding the buyout. Pritchard added in an email message that “indictment would be fatal” for Tesla because “it would be impossible to raise money if Musk is under indictment.”

Botnets increasingly prey on small banks and credit unions --Computer gremlins with zombie-like powers called botnets continue to spread through financial services systems, increasingly targeting smaller banks and credit unions, a new study says. The problem is widespread in the business world. From January to April of this year, there were roughly 3.2 billion attacks each month on all industries by botnets — malicious code that spreads through a network of devices to surreptitiously act in unison, shooting out spam or conducting massive numbers of login attempts, according to the study conducted by the digital security firm Akamai.Attacks spiked in May and June to 8.3 billion combined, the study said.  It did not specify how many of these attacks involved banking companies but said they are a common problem there.The researchers highlighted the example of a credit union that came under botnet attack earlier this year. The code worked in waves: One botnet drew quick attention, spawning 8,723 attacks per hour. A second also joined in. But there was a third botnet which only attempted 797 attacks per hour. This sneakier botnet was the real danger, said Rich Bolstridge, Akamai’s chief strategist of financial services. “While a particularly noisy botnet caught [the credit union's] attention, the discovery of a botnet that had been very slowly and methodically trying to break in created a much bigger concern,” the study said. A popular tactic is to take stolen login information and use botnets en masse to key in this information at various websites, an act called “credential stuffing.” “Credential stuffing is becoming more prevalent in the [financial] industry,” Bolstridge said. “There are sophisticated bots all around the world. Russia, Vietnam, and the U.S. are the top three countries with the largest bot traffic.”

Hackers Set Up 'Parasitic' Crypto Mining Operations Using Stolen NSA Tools - As it turns out, the case of a mysterious group of hackers installing illicit software inside the servers of Transneft, Russia's largest oil-pipeline company, wasn't an isolated incident. According to Bloomberg, detected cases of illegal crypto mining have surged 459% in 2018 compared with last year. Citing a report by the Cyber Threat Alliance, the spike is tied to the 2017 leak of Eternal Blue, the NSA hacking exploit that utilizes a flaw in Microsoft operating systems to allow hackers unprecedented access to otherwise secure cyber-infrastructure. The exploit first made headlines last summer, when it was publicly leaked by the Shadow Brokers, a mysterious group of hackers who allegedly have ties to Russia or North Korea (who can keep track?). The Shadow Brokers famously offered a subscription service to hacking groups allowing them preferential access to a trove of NSA hacking tools that the group allegedly stole from the US government. After the Eternal Blue exploit was linked to both the WannaCry and NotPetya global hacking attacks, the group's public profile diminished significantly, but continued to release tools allegedly stolen in that breach.  Though it is unclear who was behind the surge in illicit crypto mining, as of July of this year, 85% of all illicit cryptocurrency mining has targeted Monero, while bitcoin made up a paltry 8%.Hackers can "sit back and watch the money roll in," said Neil Jenkins, chief analytic officer of Cyber Threat Alliance, a group formed in 2014 by a consortium of cyber-security firms to share intelligence about cyber-threats. While the hacks are occurring across the globe, a significant portion are in the U.S., he added.  Microsoft said it has released a software update that will protect against Eternal Blue.

Fed to repeal originator licensing rules now governed by CFPB — The Federal Reserve is proposing to repeal mortgage loan originator licensing and registration requirements, as the Dodd-Frank Act transferred rulemaking authority to the Consumer Financial Protection Bureau.The Fed said the proposal is intended to eliminate duplication of rules for entities covered by the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.“The Bureau’s regulations that incorporate the S.A.F.E. Act substantially duplicate the federal registry agencies’ coordinated rules and cover the entities that were previously subject to the other agencies’ rules,” the Fed said in its proposal. “Consequently, the Board is publishing this proposal to repeal its regulations that originally incorporated the S.A.F.E. Act.”The 2008 law mandated a nationwide licensing and registration system for residential mortgage loan originators. Mortgage loan originators were required to register with the Nationwide Mortgage Licensing System and Registry, obtain a unique identifier and maintain registration.The Fed said its repeal of the regulations would not affect any entity, including small entities, since the CFPB finalized the interim final rule to incorporate the S.A.F.E. Act into its regulations in April 2016. Comments on the Fed’s proposal will be accepted 60 days after it is published in the Federal Register.

CFPB tries sweetening pot for firms testing disclosure changes -- The Consumer Financial Protection Bureau is revamping a program to encourage innovation in consumer disclosures after an earlier effort drew little industry interest. In 2013, the bureau under former CFPB Director Richard Cordray developed a safe harbor from liability for companies experimenting with product disclosure changes. But the policy, authorized by the Dodd-Frank Act, was seen as too restrictive and attracted few applicants. A company had to show that the disclosure changes increased consumer understanding. In a more industry-friendly approach under acting Director Mick Mulvaney, the bureau has proposed a “disclosure sandbox.” Rather than focusing just on consumer benefits, the proposal would grant waivers if a disclosure change resulted in one of three outcomes: better cost-effectiveness, delivery mechanism or consumer understanding. “Under the old policy, the CFPB would not approve a trial disclosure program if the only benefit was cost-effectiveness,” said Richard Horn, a founder of Garris Horn in Tucson, Ariz., and a former CFPB special counsel and special adviser. “This looks like they will just let you to test to see if it improves your business. With the new proposal, they didn’t make consumer understanding a requirement.” Dodd-Frank gave the CFPB the authority to allow trial disclosure programs with a safe harbor from private lawsuits, attorney generals’ actions and federal regulatory actions including enforcement by the agency. To encourage more companies to apply, the CFPB, which unveiled the proposal in a blog post and Federal Register notice last week, said it plans to approve or deny applications within 60 days of submission. The CFPB has proposed establishing a two-year timeframe for the testing of disclosures. It also plans to coordinate with state regulators so companies can apply through so-called state regulatory sandboxes rather than apply separately through the CFPB.

CFPB faces legal minefield in crafting rule on small-business loan data - A recent report by the Consumer Financial Protection Bureau underscores the puzzle facing regulators as they consider asking small-business lenders for data on their borrowers.On the one hand, the CFPB wants more data as it conducts fair-lending exams of small-business lenders to assess redlining risks. Yet the Equal Credit Opportunity Act's prohibition on collecting race and gender information from small businesses has made it difficult for the bureau to write rules on what data to collect.“The CFPB expects supervised entities to keep better information to determine if they are discriminating in small-business lending,” said Jeff Naimon, a partner at Buckley Sandler. “Exactly what data a financial firm is supposed to have is unclear since there isn’t a regulation allowing them to collect data.” The CFPB said in its Supervisory Highlights report earlier this month that the data limitations could impact the CFPB’s ability to monitor and regulate supervised entities.“Institutions collect and maintain (in usable form) only limited data on small business lending decisions,” the CFPB said in the report. “Limited availability of data could impede an institution’s ability to monitor and test for the risks of ECOA violations through statistical analyses.”Although the Dodd-Frank Act mandated that the CFPB write rules on data collection for small-business lenders — similar to the mortgage data collection framework under the Home Mortgage Disclosure Act — the potential conflict with ECOA has led to delays in implementing the provision. The agency has found navigating around the various statutory decrees difficult under both former CFPB Director Richard Cordray and under current acting Director Mick Mulvaney. "The fact that the previous leadership wasn't able to do it in seven years, [means] that it's difficult to accomplish what the statute wants,” Mulvaney said in a speech to the U.S. Chamber of Commerce in March. “Small business lending is different than credit cards, it's different than large commercial banking — it's hard to do.”

CFPB chief's meeting with GOP donors may be illegal, Warren says -  Sen. Elizabeth Warren, D-Mass., has raised ethical questions about a recent private meeting where acting Consumer Financial Protection Bureau Director Mick Mulvaney reportedly discussed the midterm elections with Republican donors and party officials.Warren said Mulvaney's appearance at the closed-door event in New York City on Sept. 8 could violate the Hatch Act, which prohibits executive-branch officials — with some exceptions — from engaging in certain forms of political activity.At the event, Mulvaney and Republican National Committee Chairwoman Ronna McDaniel reportedly discussed GOP challenges in the midterms, including voter antagonism toward President Trump, and mentioned the prospect of Sen, Ted Cruz, R-Texas, possibly losing his re-election bid. “The report of your meeting with top donors and campaign officials raise new questions about your behavior, and require an explanation,” Warren wrote in a two-page letter sent Wednesday to Mulvaney, who is also director of the Office of Management and Budget. “By custom, top executive branch officials and independent agency heads — financial regulators in particular — steer well clear of campaign- or donor-related activity.”   The Hatch Act states that federal officials may not use their authority to solicit political activity of anyone with business before their agency. This is not the first time Mulvaney has been accused of violating the law. In May, Senate Democrats asked the Federal Reserve's inspector general to investigate comments by Mulvaney, about his meetings with lobbyists when he was a congressman, for possible Hatch Act violations.

 As of Sep 21, “Credit Freezes” & “Unfreezes” Will Be Free for All Americans - After the uproar about the Equifax hack, Congress did do something. And credit freezes are now a lot easier to place and lift.Starting September 21, 2018, placing or lifting a “credit freeze” – aka “security freeze” – will be free for all Americans in all states. In response to the Equifax-hack uproar and the grassroots movement it triggered, after the personal data of nearly half of all adult Americans had been stolen, Congress passed a bill in May that contained a provision about credit freezes. This provision becomes effective in three days.It requires that all three major consumer credit bureaus – Equifax, Experian, and TransUnion – make credit freezes and unfreezes available for free in all states. Under most existing state laws, credit bureaus were able to charge a fee for placing and lifting a credit freeze. This could add up: for an effective credit freeze, you need to freeze your accounts at all three major credit bureaus, and pay each of them – and then pay each of them again to unfreeze those accounts if you want to apply for a credit card or loan.The new law also requires credit bureaus to fulfill consumer requests for a credit freeze within one business day if made online or by phone, and within three business days if made by snail-mail. Credit bureaus collect personal and financial data on just about all adult Americans, whether they know it or not. These dossiers are extensive. They include the Social Security number, date of birth, address history, credit-card history, loan history, bank relationships, payments history, etc.These dossiers are used to build a “credit report.” This is an extensive file (not just a credit score) that shows in detail your entire credit history – such as mortgages, other loans, credit cards, late payments, etc. These reports are sold – you’re the product – to third parties, such as lenders, credit-card promoters, and others. Credit bureaus hate credit freezes because they cut into their revenues. But years ago, state laws forced them to make credit freezes available, though credit bureaus could make the process of freezing and unfreezing the account cumbersome, time-consuming, and costly. Now, under the new federal law, it’s easier and free.

Public Service Loan Forgiveness Fail - Credit Slips - 20,521 applications rejected as ineligible. 96 borrowers approved.  Those are the early results for the Public Service Loan Forgiveness program. PSLF promised student borrowers with federal Direct Loans who worked in qualifying public service jobs that they would have their loan balances discharged after 10 years of income-based repayment. The first cohort of PSLF borrowers applied beginning in the Fall of 2017, so these results reflect the first year of borrower attempts to receive the benefits they were promised. The three eligibility requirements were to work in a qualifying public service job, make all income-based payments for 10 years, and have a federal Direct loan. The Education Department's report does not break down the rejections by failed eligiblity criteria. It has been widely reported that what U.S. Ed. considers a "public service" job has been a moving target, and servicers have misled borrowers about the program, but that surely cannot explain these dismal results. Perhaps some Congressional oversight is in order.

Regulators propose new capital treatment for higher-risk CRE exposures — Federal bank regulators on Tuesday proposed capital rule changes for certain higher-risk commercial real estate loans as required by the regulatory relief law signed by President Trump in May. Under the new regulatory relief law, agencies may only require a depository institution to assign a heightened risk weight to a "high-volatility commercial real estate" exposure if the exposure in question is an acquisition, development or construction loan. The agencies also proposed that certain types of loans be excluded from the amended HVCRE category, such as those secured by 1-4 family residential properties, and those that involve an investment in community development. The Federal Reserve Board, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. asked for public comment on the changes, which would apply to all banking organizations subject to the agencies’ capital rules. The comment period will last 60 days. The proposal and statutory provision amend regulatory capital rules that were adopted in 2013 to address “weaknesses in the regulatory framework that became apparent in the financial crisis of 2007-08,” the agencies wrote in the proposal. The regulators asked for comment on 11 questions about the proposed rule, including whether certain terms need to be clarified and if the proposed exclusions from the rule are clearly defined.

Are Wells Fargo, PNC probes a setback for affordable housing? -- The U.S. suffers from a staggering lack of apartments and homes that low-income consumers can afford.The National Low Income Housing Coalition puts the shortage of affordable units nationwide at 7.2 million, and many industry participants believe that the single-best way to tackle the problem is to expand the low-income housing tax credit (LIHTC), a federal tax credit used to encourage development of more affordable housing. Bipartisan legislation is under consideration in Congress to do just that.That’s why the news that PNC Financial Services Group, Wells Fargo and other unnamed banks are being probed for allegedly colluding with developers to win the bidding for the tax credits comes at an especially awkward time. President Trump and his secretary for Housing and Urban Development, Ben Carson, are not big fans of government programs that support affordable housing, so it can’t help housing advocates’ cause when a high-profile program like LIHTC is seen as potentially ripe for manipulation.The banks are being investigated by the U.S. Attorney’s office in Miami for allegedly conspiring with private developers to submit low-ball bids to buy the tax credits, according to media reports. PNC and Wells Fargo have said they’re cooperating with the investigation.LIHTC supporters are downplaying the allegations and don’t believe that they will have any bearing on efforts in Congress to widen the program’s reach. “You can always point to one or two bad apples, but I don’t think that would be reflective of the program overall,” said Buzz Roberts, CEO of the National Association of Affordable Housing Lenders.

CoreLogic: 2.2 million Homes still in negative equity at end of Q2 2018 - From CoreLogic: Homeowner Equity Q2 2018 CoreLogic analysis shows U.S. homeowners with mortgages (roughly 63 percent of all properties) have seen their equity increase by a total of nearly $981 billion since the second quarter 2017, an increase of 12.3 percent, year over year.
Homeowners Emerge from the Negative Equity Trap: In the second quarter 2018, the total number of mortgaged residential properties with negative equity decreased 9 percent from the first quarter 2017 to 2.2 million homes, or 4.3 percent of all mortgaged properties. Compared to the second quarter 2017, negative equity decreased 20.1 percent from 2.8 million homes, or 5.4 percent of all mortgaged properties. Negative equity peaked at 26 percent of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009. CR Note: A year ago, in Q2 2017, there were 2.8 million properties with negative equity - now there are 2.2 million.  A significant change.

Mortgage volume estimate cut, although new-home sales grow: Fannie Mae-- While new-home construction and sales should rise in the next 18 months, next year's mortgage origination volume estimate was cut slightly as the economy is expected to slow down soon, said Fannie Mae. The government-sponsored enterprise's September economic outlook for 2018 was virtually unchanged at $1.67 trillion, although 2019's was cut to $1.69 trillion from $1.7 trillion in August. In June, Fannie Mae projected volumes of $1.71 trillion for each year. Last year, mortgage origination volume totaled $1.83 trillion. "In the second quarter, we marked the ninth anniversary of the current economic expansion; however, it's also likely that we marked its high point," Fannie Mae Chief Economist Doug Duncan said in a press release. "On the whole, macroeconomic fundamentals remain strong, but signs increasingly point to a softening of third-quarter real GDP growth as trade resumes its role as a drag on GDP, and consumer and business demand growth retreat from previous highs." Origination volume "We expect full-year 2018 growth to be the best of the expansion before slowing next year as fiscal stimulus runs its course. The labor market remains solid, and with inflation continuing to straddle the Fed's 2% target, our call for two more interest rate hikes in 2018 is unchanged. We expect housing to be a drag once again this quarter," explained Duncan. Even though originations fell below prior forecasts, housing starts should strengthen throughout the rest of the year and 2019. Single-family housing starts currently project a 5.8% year-over-year increase for 2018 and 7.2% for 2019, bolstered by a focus toward cheaper homes higher in demand. "But in a welcome development, some construction material prices have softened, which should help builders to continue to build smaller or less expensive homes most in demand from potential first-time homebuyers. Additionally, the crunch on for-sale inventories of existing homes has eased slightly, hopefully setting up an improvement in the housing market next year," Duncan continued. Home sales are expected to slightly decline by 0.1% year-over-year, but should inch up on a quarterly basis from the second quarter. For 2019, sales are projected to increase 1.9% year-over-year. However, Fannie anticipates new-home sales to grow 6.1% year-over-year in 2018 and 4.8% in 2019. Subscribe Now

Mortgage Rates Head to 6%, 10-Year Yield to 4%, Yield Curve Fails to “Invert,” and Fed Keeps Hiking - There’s an interesting thing that just happened, which shows that the US Treasury 10-year yield is ready for the next leg up, and that the yield curve might not invert just yet: the 10-year yield climbed over the 3% hurdle again, and there was none of the financial-media excitement about it as there was when that happened last time. It just dabbled with 3% on Monday, climbed over 3% yesterday, and closed at 3.08% today, and it was met with shrugs. In other words, this move is now accepted.Note how the 10-year yield rose in two big surges since the historic low in June 2016, interspersed by some backtracking. This market might be setting up for the next surge:  And it’s impacting mortgage rates – which move roughly in parallel with the 10-year Treasury yield. The Mortgage Bankers Association (MBA) reported this morning that the average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) and a 20% down-payment rose to 4.88% for the week ending September 14, 2018, the highest since April 2011.And this doesn’t even include the 9-basis-point uptick of the 10-year Treasury yield since the end of the reporting week on September 14, from 2.99% to 3.08% (chart via Investing.com; red marks added):  While 5% may sound high for the average 30-year fixed rate mortgage, given the inflated home prices that must be financed at this rate, and while 6% seems impossibly high under current home price conditions, these rates are low when looking back at rates during the Great Recession and before (chart via Investing.com):

MBA: Mortgage Applications Increased in Latest Weekly Survey From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey - Mortgage applications increased 1.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 14, 2018. Last week’s results included an adjustment for the Labor Day holiday.... The Refinance Index increased 4 percent from the previous week. The seasonally adjusted Purchase Index increased 0.3 percent from one week earlier. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 4 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) increased to its highest level since April 2011, 4.88 percent, from 4.84 percent, with points decreasing to 0.44 from 0.46 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Refinance mortgage share rises for first time in 2018 - As mortgage rates remained mostly tepid throughout the summer, closed refinances had their first month of growth in August, according to Ellie Mae. The refinance share of closed loans went up to 32%, trailing August 2017's share of 35%, but up month-over-month from 29%. The increase likely signals homeowners taking advantage of the predominantly lateral mortgage rates in the past quarter. "The rise in interest rates has slowed since June, and we are seeing the percentage of refinances increase month-over-month since May," Jonathan Corr, president and CEO of Ellie Mae, said in a press release. "This may reflect consumers taking an opportunity to refinance with the corresponding increase in equity." Closing rates for all loans grew to the highest percentage of 2018 at 71.1%. That rate is down from 71.7% year-over-year, but up from July's 70.9%. The share of closed purchase mortgages dropped to 68% in August after holding steady at 71% for two consecutive months — the highest purchase share recorded by Ellie Mae since it started tracking it in 2011 — according to the latest Origination Insight report. A year ago, purchases made up 65% of closed loans in the market. Purchase share in 2017 peaked at 68% last June, a figure already met or surpassed four times this year. The lowest purchase shares seen since the start of 2017 both took place in the seasonally weak month of January. Those shares were 55% in 2018 and dropped to 53% last year. The adjustable-rate mortgage share, which tends to rise as mortgage interest rates do, stayed static at 6.6% for the second month in a row. ARMs represented 5.7% of all closed loans in August 2017. Subscribe

Average mortgage rates surge again, hit highest point since 2010 --Mortgage rates increased 5 basis points this week, up for the fourth week in a row with momentum building for further hikes, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 4.65% for the week ending Sept. 20, up from last week when it averaged 4.6%. In the past two weeks, this rate has increased 11 basis points and is at its highest level since June 2010. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.83%.“Mortgage rates are drifting upward again and represent continued affordability challenges for prospective buyers – especially first-time buyers,” Sam Khater, Freddie Mac's chief economist, said in a press release. “Borrowing costs are moving right now for three main reasons: the very strong economy, higher U.S. government debt issuances and global trade tensions.”The 15-year fixed-rate mortgage also grew 5 basis points this week, averaging 4.11%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.13%.“Amidst this four-week climb in mortgage rates, the welcoming news is that purchase applications have risen on an annual basis for five consecutive weeks. However, given the widespread damage caused by Hurricane Florence in the Carolinas, the next few months of housing activity will likely be somewhat volatile,” Khater added.The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.92%, a drop of 1 basis point from last week. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.17%. “Mortgage rates shot upward this week and are approaching their five-year peak, a surge that many analysts regard as overdue,”

NAR: Existing-Home Sales Unchanged at 5.34 million in August --From the NAR: Existing-Home Sales Remain Flat Nationally, Mixed Results RegionallyExisting-home sales remained steady in August after four straight months of decline, according to the National Association of Realtors®. Sales gains in the Northeast and Midwest canceled out downturns in the South and West. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, did not change from July and remained at a seasonally adjusted rate of 5.34 million in August. Sales are now down 1.5 percent from a year ago (5.42 million in August 2017).  Total housing inventory at the end of August also remained unchanged from July at 1.92 million existing homes available for sale, and is up from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, consistent from last month and up from 4.1 months a year ago. Properties typically stayed on the market for 29 days in August, up from 27 days in July but down from 30 days a year ago. Fifty-two percent of homes sold in August were on the market for less than a month.  This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in August (5.34 million SAAR) were unchanged from last month, and were 1.5% below the August 2017 rate. The second graph shows nationwide inventory for existing homes. According to the NAR, inventory was unchanged at 1.92 million in August from 1.92 million in July. Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory. Inventory was up 2.7% year-over-year in August compared to August 2017. Months of supply was at 4.3 months in July. Sales were at the consensus view. For existing home sales, a key number is inventory - and inventory is still low, but appears to be bottoming.

Existing Home Sales At Lowest In 30 Months, Inventories Rise First Time In 3 Years - Following continued weakness in July, analysts once again hope for a rebound in home sales in August but once again they were disappointed. August existing home sales were unchanged from July's -0.7% drop, hovering at 5.34mm SAAR - the lowest since Feb 2016.Expectations were for a 0.5% jump in August, but printed unchanged (home sales haven't seen a monthly increase since March) Both single-family and multi-family units were unchanged in August as median prices dipped for the second month in a row (up 4.6% YoY still).The West saw a 5.9% slump MoM in existing home sales as Northeast sales rose 7.6% MoM.Inventory of available properties rose 2.7% y/y to 1.92m, which was the first increase in more than three years. At the current pace, it would take 4.3 months to sell the homes on the market, compared with 4.1 months a year earlier; Realtors group considers less than five months’ supply consistent with a tight market.“While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand,” said Yun.“Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory – especially moderately priced, entry-level homes – would propel sales.”Hope is high for NAR however...“There are buyers on the sidelines” ready to re-enter the market, Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report.“The housing market can turn for the better" as long as inventory continues to rise, he said.And despite NAHB sentiment near cycle highs, homebuilder stocks and housing data continues to tumble...  Time for some rate-hikes, right?“Rising interests rates along with high home prices and lack of inventory continues to push entry-level and first time home buyers out of the market,” said Yun.“Realtors continue to report that the demand is there – that current renters want to become homeowners – but there simply are not enough properties available in their price range.”

A Few Comments on August Existing Home Sales -  Bill Mcbride - Earlier: NAR: Existing-Home Sales Unchanged at 5.34 million in August.  Two key points:
1) This is a reasonable level for existing home sales, and doesn't suggest any significant weakness in housing or the economy. The key for the housing - and the overall economy - is new home sales, single family housing starts and overall residential investment.
2) Inventory is still very low, but was up 2.7% year-over-year (YoY) in August. This was the first year-over-year increase since May 2015.  (Note: Inventory for June was initially reported as up slightly year-over-year, but inventory was revised down).
The current slight YoY increase in inventory is nothing like what happened in 2005 and 2006. In 2005 (see red arrow), inventory kept increasing all year, and that was a sign the bubble was ending. Although I expect inventory to increase YoY in 2018, I expect inventory to follow the normal seasonal pattern (not keep increasing all year). Also inventory levels remains low, and could increase significantly and still be at normal levels. No worries. Existing Home Sales NSAThe second graph shows existing home sales Not Seasonally Adjusted (NSA). Sales NSA in August (539,000, red column) were slightly above sales in August 2017 (535,000, NSA). Sales NSA through August (first eight months) are down about 1.2% from the same period in 2017. This is a small YoY decline in sales to-date - but it is possible there has been an impact from higher interest rates and / or the changes to the tax law (eliminating property taxes write-off, etc).

Merrill: "Existing Home Sales have Peaked" A few excerpts from a Merrill Lynch research note: We are calling it: existing home sales have peaked. We believe that the peak was at 5.72 million, reached in November last year. From here on, sales should trend sideways. If this is indeed the peak, it would be comparable to the rate we last saw in the early 2000s before the bubble set in. Here is the catch — while existing home sales have likely peaked, we do not think we have seen the same for new home sales. New home sales have lagged existing in this recovery and we believe there is room to run for new home sales, leaving builders to add more single family homes to the market. The peak in existing home sales can largely be explained by the decline in affordability. With housing prices hovering close to bubble highs and mortgage rates on the rise, affordability has been declining. CR Note: As I noted in July (see: Has Housing Market Activity Peaked? and Has the Housing Market Peaked? (Part 2)First, I think it is likely that existing home sales will move more sideways going forward. However it is important to remember that new home sales are more important for jobs and the economy than existing home sales. Since existing sales are existing stock, the only direct contribution to GDP is the broker's commission. There is usually some additional spending with an existing home purchase - new furniture, etc. - but overall the economic impact is small compared to a new home sale.Also I think the growth in multi-family starts is behind us, and that multi-family starts peaked in June 2015. See:For the economy, what we should be focused on are single family starts and new home sales. As I noted in Investment and Recessions "New Home Sales appears to be an excellent leading indicator, and currently new home sales (and housing starts) are up solidly year-over-year, and this suggests there is no recession in sight." If new home sales and single family starts have peaked that would be a significant warning sign.   Although housing is under pressure from policy (negative impact from tax, immigration and trade policies), I do not think housing has peaked, and I think new home sales and single family starts will increase further over the next couple of years.

Housing has at very least plateaued -- First of all, my extended take on yesterday's report on August housing permits and starts, "The most important single housing report in the last 7 years," is up at Seeking Alpha.While housing starts remain in a weak uptrend, I have downgraded housing permits overall to neutral, and single family permits to a slight negative.This morning's report on existing home sales for August just adds more confirmation that housing is at very least plateauing.While month over month sales were unchanged, they were tied for a 12 month low. Further, existing home sales have not made a new monthly high since last November, 9 months ago. The 3 month average has not made a meaningful new high since April of last year.The median price of an existing home, at $264,800, continues to outpace wage growth, up 4.6% YoY, and a slight YoY% increase from last month.(The NAR is picky about other sites posting graphs of their statistics, but if you want to see graphs of the above information, they are at this link on the NAR site.)The recent further increase in mortgage rates is also only going to put more pressure on housing.This quote from this morning's report sums up the situation pretty well:“Rising interests rates along with high home prices and lack of inventory continues to push entry-level and first time home buyers out of the market,” said [NAR spokesman Lawrence] Yun. “Realtors continue to report that the demand is there – that current renters want to become homeowners – but there simply are not enough properties available in their price range.” Unless next week's new home sales report contains an unexpected positive surprise, the rating on the overall housing market is a slight negative, meaning downward pressure on the overall economy beginning next summer.

How Millennials Are Shifting the Housing Market - Wolf Richer - Millennials are accused of killing entire industries: casual dining chains that should have been killed off by a prior generation, beer (sez Goldman Sachs), napkins, homeownership, Harley Davidson, banks, diamonds, and brick-and-mortar retailers. OK, things change. But there’s one thing the largest US generation ever is not killing off: urban centers. They’re flocking to them, in some case they’re gentrifying them – for better or worse – and they’re often paying sky-high rents. For example, in downtown Los Angeles, the two adjacent ZIP codes 90014 and 90013 (which includes Skid Row) are being rapidly gentrified with a high-rise building boom. And the millennial population has soared over a five-year period, by 91% in ZIP code 90014 and by 60% in ZIP code 90013. These two ZIP codes have the fastest-growing population of millennials among any large ZIP codes in the 30 biggest US cities, according to a report and data by Yardi’s RentCafé.The population data – based on the Census Bureau American Community Survey’s five-year population estimates – shows that ZIP codes in or near downtowns are sought out by millennials. In many of those ZIP codes, millennials are now the majority of the population.The millennial population in Lower Manhattan ZIP code 10282, which includes Battery Park, jumped by 55% over the five-year span. But with an average rent of $5,657 a month, it’s the most expensive ZIP code in the US, according to RentCafé. Wall Street pays well. The table below shows the top 20 ZIP Codes in large cities that had the biggest percentage increase in the millennial population. The table also shows average rent by ZIP code where available. None of these ZIP codes are cheap, though some of them could be deemed reasonable, by New York City or San Francisco standards.

Homeless greet Oakland’s new Tuff Sheds with hesitation, hope — Lezett Maurice Watkins, who spent the past three months living in a lean-to beneath a West Oakland overpass, is apprehensive about where his next move will take him — into an experimental, city-sanctioned community of converted sheds across the street. His new home will offer comforts his current make-shift den does not, including a cot, a locking door and a path toward permanent housing. But it comes with a list of rules and a degree of surveillance that make Watkins edgy. Residents can’t cook their own food, must sign in and out of the compound, and can’t use drugs or drink alcohol on the premises. And they must live with a roommate. “That’s hard for me,” said Watkins, who built a small wall around his lean-to with wooden pallets to keep neighbors out. “My trust level is zero.” Watkins’ concerns highlight the challenges for cities across the Bay Area that are looking for innovative approaches to a growing problem. Oakland isn’t the only city thinking outside the box as it struggles to provide shelter for the homeless — San Jose plans to build between 20 and 40 tiny homes for its growing population. Oakland officials on Monday publicly unveiled the city’s second community of Tuff Sheds— 20 forest green sheds on a fenced-in lot at Northgate Avenue and 27th Street — and said the first 10 homeless residents are scheduled to start moving in this week. The new sheds are the next phase in Oakland’s plan to tackle a crisis that has sent shantytowns sprawling across the city’s sidewalks and displaced families into parked cars and RVs that line the streets. Watkins was one of several people living in a massive encampment at Northgate and 27th who expressed reservations about moving into the sheds but said they were willing to give it a try. “I’m hopefully going to give this one a shot,” said 31-year-old Jonathan Jacobs. “But if this one doesn’t work out, I’m going to have to construct another plan.”

Housing Starts Increased to 1.282 Million Annual Rate in August - From the Census Bureau: Permits, Starts and Completions -- Privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,282,000. This is 9.2 percent above the revised July estimate of 1,174,000 and is 9.4 percent above the August 2017 rate of 1,172,000. Single-family housing starts in August were at a rate of 876,000; this is 1.9 percent above the revised July figure of 860,000. The August rate for units in buildings with five units or more was 392,000. Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,229,000. This is 5.7 percent below the revised July rate of 1,303,000 and is 5.5 percent below the August 2017 rate of 1,300,000. Single-family authorizations in August were at a rate of 820,000; this is 6.1 percent below the revised July figure of 873,000. Authorizations of units in buildings with five units or more were at a rate of 370,000 in August.The first graph shows single and multi-family housing starts for the last several years. Multi-family starts (red, 2+ units) increased sharply in August compared to July. Multi-family starts were up 38% year-over-year in August. Multi-family is volatile month-to-month, and has been mostly moving sideways the last few years. This is the middle of the range. Single-family starts (blue) increased in August, and were down slightly year-over-year. Total Housing Starts and Single Family Housing StartsThe second graph shows total and single unit starts since 1968. The second graph shows the huge collapse following the housing bubble, and then - after moving sideways for a couple of years - housing is now recovering (but still historically fairly low). Total housing starts in August were above expectations, and starts for June and July were both revised up.

U.S. Housing Starts Rise More Than Forecast While Permits Slump -- U.S. new-home construction rose more than forecast to a three-month high in August, while permits unexpectedly saw the biggest drop since February 2017, adding to signs that homebuilding is struggling to stabilize, government figures showed Wednesday. Residential starts rose 9.2% to a 1.28m annualized rate (est. 1.24m) after revised 1.17m pace in prior month. Multifamily home starts jumped 29.3%; single-family added 1.9%. Permits, a proxy for future construction of all types of homes, slumped 5.7% to 1.23m rate, the slowest pace since May 2017 (est. 1.31m) after 1.3m pace. The data show persistent crosswinds for housing. While starts recovered after two straight declines, homebuilding permits signaled weakness in coming months. The decline in authorizations was broad-based with the single-family segment dropping 6.1 percent, the most in seven years, and multifamily permits falling 4.9 percent for a fifth-consecutive decrease. As a solid job market and lower taxes aid demand, rising property values and higher mortgage rates are hurdles for potential buyers. On the construction front, builders face higher costs, including for workers and for imported steel that’s subject to tariffs. While housing starts have been slow to break out over the past year, economists expect the industry will keep expanding. A gauge of homebuilders’ confidence was unchanged in September from the prior month, matching the lowest level in a year, a National Association of Home Builders/Wells Fargo report showed Tuesday.  Other Details:

• Single-family home starts rose to a 876,000 rate from 860,000 the prior month
• Groundbreaking on multi-family homes, such as apartment buildings and condominiums, increased to an annual rate of 406,000; data on these projects can be volatile
• Three of four regions posted gains in starts, led by a 19.1 percent increase in the West; South was up 6.5 percent
• Report shows wide margin of error, with a 90 percent chance that the August figure was between a 2.2 percent drop and 20.6 percent gain

Housing: a big miss in permits with important ramifications -- Despite a smart month over month increase in starts, this morning’s report on housing permits and starts, taken as a whole, was a sharp negative. It’s true that starts, both in total and for single family units only, were higher than their readings from the last two months. This is something that I forecast one month ago, because permits had had a couple of good months, and starts tend to follow permits with about a one month lag.  But they were below every other reading but one for this entire year. Permits were another story entirely.  Last month I said that I expected them to stagnate, based on higher mortgage rates this year.  They did even worse than that. Total permits came in at a 12 month low, and are down -5.7% YoY, and down -12% from their March high.  This is recession watch territory. The less volatile single family permits came in at an 11 month low. While they are still up +2.1% YoY, they are down more than -7% from their February high. This is also enough to turn this important long leading indicator negative, as we have gone 6 months without a new high and are down over -5%.The data isn’t up on FRED yet, so here is the Census Bureau’s graph:  This, by the way, is in line with the recent weekly data on purchase mortgage applications, which has been running essentially flat YoY.Bottom line: this is big news with important ramifications

Comments on August Housing Starts by Bill Mcbride - Earlier: Housing Starts Increased to 1.282 Million Annual Rate in August - Housing starts in August were above expectations,  and starts for June and July were revised up.  Most of the increase, and upward revisions, were due to the multi-family starts that are volatile month-to-month. The housing starts report released this morning showed starts were up 9.2% in August compared to July (and August starts were revised up), and starts were up 9.4% year-over-year compared to August 2017. Multi-family starts were down 38% year-over-year, and single family starts were down slightly year-over-year. This first graph shows the month to month comparison for total starts between 2017 (blue) and 2018 (red). Starts were up 9.4% in August compared to August 2017. Through eight months, starts are up 6.9% year-to-date compared to the same period in 2017. That is a decent increase. Note that 2017 finished strong, so the year-over-year comparisons will be more difficult in Q4. Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment). Multifamily Starts and completionsThe blue line is for multifamily starts and the red line is for multifamily completions. The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession - but turned down, and has moved sideways recently. Completions (red line) had lagged behind - however completions and starts are at about the same level now (more deliveries). It is likely that both starts and completions, on rolling 12 months basis, will now move mostly sideways. As I've been noting for a few years, the significant growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR). Single family Starts and completionsThe second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions. Note the relatively low level of single family starts and completions. The "wide bottom" was what I was forecasting following the recession, and now I expect a couple more years, or more, of increasing single family starts and completions.

It Can Cost $750,000 to Build an Affordable Housing Unit in California. Here’s Why. - A single unit of housing for a low-income family can cost nearly $750,000 to build in California, according to a government report that provides new details on the cost to taxpayers of building affordable housing in states with high land prices and heavy land-use regulations. A new report from the Government Accountability Office highlights stark disparities in the cost to build affordable housing that qualifies for tax credits between states like California, which has more land-use regulations, and Texas, where it is much easier to get approval to build. A typical unit for a low-income family in San Francisco and Los Angeles costs around $400,000 to build. In Texas, where land-use regulations are much looser, the cost is about a third of that. . Median costs in Chicago and New York City were also high, at $315,000 and $282,000 respectively, the GAO found. . The investigation into the efficiency and effectiveness of the tax-credit program was conducted at the request of Chuck Grassley, chairman of the U.S. Senate’s committee on the judiciary. The program, which allows investors to take federal tax credits in exchange for providing equity for affordable housing projects, represented roughly $8.4 billion of foregone revenue in 2017. High construction costs limit the number of projects that can be built, by requiring states to allocate more tax credits to individual projects or to find other sources of funding to make projects work. Land-use regulations are creating a stark divide between places that are adding housing quickly and remaining affordable to middle-income families, and places that are not. The new government report looks at projects that are stripped of most of the bells and whistles—from pet spas to marble countertops—that can drive up the cost of luxury projects. It focuses on rent-restricted housing targeted at families earning less than 80% of the local median income that qualifies for the tax credits. The report has been anticipated among low-income housing developers and lobbyists, fearful it could tarnish a program that enjoys strong bipartisan support. In the end, the investigation revealed no single scandal but rather widespread challenges as construction and land costs soar in costly coastal markets, making it more difficult to build not only rentals that benefit from government tax credits but any moderately priced housing.

NAHB: Builder Confidence at 67 in September - The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 67 in September, unchanged from 67 in August. Any number above 50 indicates that more builders view sales conditions as good than poor. From NAHB: Builder Confidence Remains Firm in September Builder confidence in the market for newly-built single-family homes remained unchanged at a solid 67 reading in September on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).“Despite rising affordability concerns, builders continue to report firm demand for housing, especially as millennials and other newcomers enter the market,” “The recent decline in lumber prices from record-high levels earlier this summer is also welcome relief, although builders still need to manage construction costs to keep homes competitively priced.”“A growing economy and rising incomes combined with increasing household formations should boost demand for new single-family homes moving forward,” “However, housing affordability is becoming a challenge, as builders face overly burdensome regulations and rising material costs exacerbated by an escalating trade skirmish. Interest rates are also forecasted to keep rising.” ...The HMI index measuring current sales conditions rose one point to 74 and the component gauging expectations in the next six months increased two points to 74. Meanwhile, the metric charting buyer traffic held steady at 49. Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 54 and the South remained unchanged at 70. The West edged down a single point to 73 and the Midwest fell three points to 59.

AIA: "August architecture firm billings rebound"  --Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From the AIA: August architecture firm billings rebound as building investment spurt continues Architecture firm billings rebounded solidly in August, posting their eleventh consecutive month of growth, according to a report released today from The American Institute of Architects (AIA). AIA’s Architecture Billings Index (ABI) score for August was 54.2 compared to 50.7 in July(any score over 50 represents billings growth). Most of the growth continues to come from the South and the multi-family residential sector. “Billings at architecture firms in the South continue to lead the healthy increase in design activity that we’ve seen across the profession in recent months,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “Nationally, growth across all building sectors remains solidly positive.”
• Regional averages: West (54.2), Midwest (52.5), South (57.0), Northeast (46.9)
• Sector index breakdown: multi-family residential (55.6), institutional (52.3), commercial/industrial (53.6), mixed practice (51.7)

Fed's Flow of Funds: Household Net Worth increased in Q2 -- The Federal Reserve released the Q2 2018 Flow of Funds report today: Flow of Funds. According to the Fed, household net worth increased in Q2 2018 to $106.9 Trillion, for $104.7 Trillion in Q1 2018: The net worth of households and nonprofits rose to $106.9 trillion during the second quarter of 2018. The value of directly and indirectly held corporate equities increased $0.8 trillion and the value of real estate increased $0.6 trillion. The Fed estimated that the value of household real estate increased to $25.4 trillion in Q2. The value of household real estate is now above the bubble peak in early 2006 - but not adjusted for inflation, and this also includes new construction.The first graph shows Households and Nonprofit net worth as a percent of GDP.  Household net worth, as a percent of GDP, is higher than the peak in 2006 (housing bubble), and above the stock bubble peak.This includes real estate and financial assets (stocks, bonds, pension reserves, deposits, etc) net of liabilities (mostly mortgages). Note that this does NOT include public debt obligations. This graph shows homeowner percent equity since 1952. Household percent equity (as measured by the Fed) collapsed when house prices fell sharply in 2007 and 2008. In Q2 2018, household percent equity (of household real estate) was at 59.9% - up from Q1, and the highest since 2002. This was because of an increase in house prices in Q2 (the Fed uses CoreLogic). Note: about 30.3% of owner occupied households had no mortgage debt as of April 2010. So the approximately 50+ million households with mortgages have far less than 59.9% equity - and about 2.2 million homeowners still have negative equity.The third graph shows household real estate assets and mortgage debt as a percent of GDP.Mortgage debt increased by $66 billion in Q2.Mortgage debt has declined by $0.54 trillion from the peak. Studies suggest most of the decline in debt has been because of foreclosures (or short sales), but some of the decline is from homeowners paying down debt (sometimes so they can refinance at better rates). The value of real estate, as a percent of GDP, declined slightly in Q2, and is above the average of the last 30 years (excluding bubble).  However, mortgage debt as a percent of GDP, continues to decline.

Household Wealth Hits A Record $107 Trillion... There Is Just One Catch -- In the Fed's latest Flow of Funds report released at noon today, the Fed released the latest snapshot of the US "household" sector as of June 30, 2018. What it revealed (alongside major historical revisions) is that with $122.7 trillion in assets and a modest $15.7 trillion in liabilities, the net worth of US households rose to an all time high $106.9 trillion, increasing for 11 consecutive quarters and up $2.2 trillion as a result of an estimated $559 billion increase in real estate values, as well as a $1.7 trillion increase in various financial assets like corporate equities, mutual and pension funds, and deposits as the market soared to just shy of new all time highs in the second quarter, even if it needed some time in Q3 to reach a new record. Total household assets in Q2 rose $2.3 trillion to $122.7 trillion, while at the same time total liabilities, i.e., household borrowings, rose by only $132 billion from $15.6 trillion to $15.7 trillion, the bulk of which was $10.2 trillion in home mortgages.Homeowners’ real estate holdings minus the change in mortgage debt rose by $320.1 billion (a positive number means that the value of real estate is growing at a faster pace than household mortgage debt). The breakdown of the total household balance sheet as of Q2 is shown below. And the historical change of the US household balance sheet. Not that as part of the historical revisions, total net worth was revised roughly $3 trillion higher.  And while it would be great news if wealth across all of America had indeed risen as much as the chart above shows, the reality is that there is a big catch: as shown previously, virtually all of the net worth, and associated increase thereof, has only benefited a handful of the wealthiest Americans. As the following chart from Deutsche Bank shows, the wealth inequality in the US is now as bad as it just during the Great Depression, with the top 0.1% of the US population owning as many assets as the bottom 90%. In the CBO's latest, if somewhat dated, Trends in Family Wealth analysis published in 2016, the budget office showed a breakdown of the net worth chart by wealth group, which sadly shows how the "average" American wealth is anything but, and in reality most of that $100 trillion belongs to just 10% of the US population.

Mortgage Equity Withdrawal slightly positive in Q2 -- The following data is calculated from the Fed's Flow of Funds data (released yesterday) and the BEA supplement data on single family structure investment. This is an aggregate number, and is a combination of homeowners extracting equity - hence the name "MEW" - and normal principal payments and debt cancellation (modifications, short sales, and foreclosures). For Q2 2018, the Net Equity Extraction was a positive $9 billion, or a 0.2% of Disposable Personal Income (DPI) .  This graph shows the net equity extraction, or mortgage equity withdrawal (MEW), results, using the Flow of Funds (and BEA data) compared to the Kennedy-Greenspan method.Note: This data is impacted by debt cancellation and foreclosures, but much less than a few years ago.MEW has been positive for 8 of the last 11 quarters.  With a slower rate of debt cancellation, MEW will likely be mostly positive going forward.The Fed's Flow of Funds report showed that the amount of mortgage debt outstanding increased by $66 billion in Q2. The Flow of Funds report also showed that Mortgage debt has declined by $0.546 trillion since the peak. This decline is mostly because of debt cancellation per foreclosures and short sales, and some from modifications. There has also been some reduction in mortgage debt as homeowners paid down their mortgages so they could refinance.

The HELOC ATM Is Back - Over 24 Million Americans Are Using Home Equity To Get By - Americans' propensity to use their home equity to pay for routine household expenses - as if it was a credit card - has waned in the years since the financial crisis, largely because home ownership rates have also plunged to the lowest level in modern US history.But with borrowers sitting on massive amounts of untapped equity, one study by Bankrate.com suggests that millions of Americans are seriously considering tapping to pay for everyday purchases even as interest rates are pushing borrowing costs to their highest level since the financial crisis.And as anybody who remembers the crisis would remember, this can become extremely problematic when it comes time to roll those loans over at a higher rate. While HELOC borrowing declined again during Q2..  ...Mortgage debt, which helped power the aggregate debt load for American households to a record-high $13.3 trillion, climbed for the eighth consecutive quarter. As this mortgage debt gets paid down, homeowners will have even more leeway to borrow against their home equity. And according to the survey, 24 million Americans believe borrowing against their homes is an appropriate option for paying their monthly bills and other household expenses, even as most personal finance experts caution that this is absolutely not a good idea, per Bloomberg.

Amazon To Open 3,000 Cashierless Convenience Stores By 2021 --  Amazon is preparing to put their bosses out of business.  Roughly nine months after opening its first Amazon Go store in Seattle, Amazon announced on Wednesday that it is planning a massive expansion of the franchise. The company has been notoriously tight-lipped about Amazon Go since it first started offering tours of its prototype Seattle location to select journalists back in 2017. After opening its third cashierless Amazon Go location in Chicago earlier this year, and is planning to open six more locations by the end of this year, before eventually scaling up to 3,000 locations by the end of 2021. If Amazon succeeds, Go will become the largest convenience store chain in the US, per Bloomberg.  So far, most of the extant Amazon Go locations offer only a small selection comprising mostly salads, sandwiches and snacks.  An Amazon spokeswoman declined to comment. The company unveiled its first cashierless store near its headquarters in Seattle in 2016 and has since announced two additional sites in Seattle and one in Chicago. Two of the new stores offer only a limited selection of salads, sandwiches and snacks, showing that Amazon is experimenting with the concept simply as a meal-on-the-run option. Two other stores, including the original AmazonGo, also have a small selection of groceries, making it more akin to a convenience store.  But as the company ramps up the logistical back-bone necessary to support the chain, it ultimately hopes to conquer the fast-casual market in dense urban areas where wealthy professionals who might be willing to spend a little more on a salad or a sandwich typically proliferate. Ultimately, the company hopes to compete by eliminate meal-time congestion with its grab-and-go automation. The initial market reaction to the news was muted, though shareholders probably aren't thrilled about the massive capital investment that will eat away at operating profits.

Amazon Plans To Release At Least 8 New Alexa-Powered Devices, Including A Microwave, Amplifier, and In-Car Gadget Amazon is doubling down on its Alexa-powered devices, with plans to release at least 8 new voice-controlled hardware devices before the end of the year, CNBC has learned. The devices include, among others, a microwave oven, an amplifier, a receiver, a subwoofer, and an in-car gadget, people familiar with the matter said. All of the devices will be Alexa-enabled, meaning they can easily connect to the voice assistant. Some of the devices will also have Alexa built in. Amazon is expected to reveal some of these devices at an event later this month, according to an internal document describing the plans. The new devices reflect Amazon's ambition to make its Alexa voice technology ubiquitous by focusing on areas where people spend most of their time — at home and in the car. Alexa was initially considered a geeky experiment at Amazon. Now it is now one of the most popular voice assistants, leading the growth of the burgeoning smart speaker market, which is expected to be worth $30 billion by 2024, according to Global Market Insights.

GovPayNow.com Leaks 14M+ Records – KrebsOnSecurity  - Government Payment Service Inc. — a company used by thousands of U.S. state and local governments to accept online payments for everything from traffic citations and licensing fees to bail payments and court-ordered fines — has leaked more than 14 million customer records dating back at least six years, including names, addresses, phone numbers and the last four digits of the payer’s credit card. Indianapolis-based GovPayNet, doing business online as GovPayNow.com, serves approximately 2,300 government agencies in 35 states. GovPayNow.com displays an online receipt when citizens use it to settle state and local government fees and fines via the site. Until this past weekend it was possible to view millions of customer records simply by altering digits in the Web address displayed by each receipt. On Friday, Sept. 14, KrebsOnSecurity alerted GovPayNet that its site was exposing at least 14 million customer receipts dating back to 2012. Two days later, the company said it had addressed “a potential issue.” “GovPayNet has addressed a potential issue with our online system that allows users to access copies of their receipts, but did not adequately restrict access only to authorized recipients,” the company said in a statement provided to KrebsOnSecurity. The statement continues: “The company has no indication that any improperly accessed information was used to harm any customer, and receipts do not contain information that can be used to initiate a financial transaction. Additionally, most information in the receipts is a matter of public record that may be accessed through other means. Nonetheless, out of an abundance of caution and to maximize security for users, GovPayNet has updated this system to ensure that only authorized users will be able to view their individual receipts. We will continue to evaluate security and access to all systems and customer records.”

Trump’s latest tariffs are about to hit you where it really hurts - President Donald Trump's latest round of tariffs added a new dimension to the trade war with China: US consumers are going to get hit directly.The previous round of tariffs imposed by the president on $50 billion worth of Chinese goods focused almost exclusively on industrial goods and intermediate parts on final goods that are then sold to consumers.This led to an indirect hit to consumers. As businesses faced higher costs for input goods, the companies were forced to either cut back in other areas — such as laying off workers — or pass along the price increase to consumers.While the effect on consumers has trickled down previously, the latest round of tariffs on $200 billion worth of Chinese goods constitutes a direct hit.Many of the 5,745 items on the newest tariff list are consumer goods or things that Americans buy every day: fruit juice, furniture, air conditioners, and more.The consumer goods affected represents a dramatic increase form the previous round of tariffs, according to a breakdown of a previous version of the list of goods affected. (Many of those items made it to the final list.) Chad Bown, Euijin Jung, and Zhiyao Lu of the Peterson Institute for International Economics say the reason for the shift is simple: The were only so many goods left to hit."Consumer goods made up only 1% of the products of the first $50 billion of imports from China subject to his announced tariffs. The rest affected intermediate inputs and capital equipment," the economists wrote. "The explanation for this shift lies in the fact that there are fewer and fewer such supply chain elements left to target. Consumer products are much of the imports from China that were left."The sellers could choose to eat those new duties and see their margins decline. But based on price changes for goods hit with tariffs in previous rounds, it is likely that at least some of the cost increase will be handed to consumers. Many members of the Trump administration have argued that the increases will be minor and most Americans won't notice.

Walmart Warns It Will Be Forced To Raise Prices Due To Trade War - One of the reasons why the US economic response to Trump's trade war with China had been lukewarm at best, is that US consumers had not been subject to any of the inflationary consequences of the escalating tariffs between Washington and Beijing. That, however, is about to change: overnight Walmart issued a warning in a letter to U.S. Trade Representative Robert Lighthizer that it may have to raise prices due to tariffs on Chinese imports, CNN Money reported." The immediate impact will be to raise prices on consumers and tax American business and manufacturers," Walmart said, according to the CNN Money report.The letter came two weeks after Walmart asked the Trump administration to walk back its plan to put tariffs on Christmas lights, shampoo, dog food, luggage, mattresses, handbags, backpacks, vacuum cleaners, bicycles, cooking grills, cable cords and air conditioners. However, the administration was unmoved and on Monday, it pressed forward with 10% tariffs on those products and $200 billion worth of other imports from China. The tariffs, which take effect next week, will jump to 25% at the end of the year, and target far more consumer goods - some $78BN according to DB calculations - than the first phase of $50BN in tariffs, that had relatively little impact. Other retailers and consumer goods companies, including Ace Hardware and Joann fabric and craft stores, also lobbied the administration. Target said the tariffs will "hurt American consumers," and said working families will pay more for school and college essentials like notebooks, calculators, binders and desks. And while administration generally ignored the concerns, it did spare bicycle helmets, high chairs, car seats and playpens from the final list. It also left off Apple Watches and Air Pods, a reprieve for Apple. Target and Walmart will now face a tough choice: They can absorb the higher costs from tariffs by taking a hit to their profit margins, or they can pass some of the price increases on to their customers.

LA area Port Traffic in August -- Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.  The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs  (TEUs: 20-foot equivalent units or 20-foot-long cargo container).   To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average. On a rolling 12 month basis, inbound traffic was down 0.3% compared in August to the rolling 12 months ending in July. Outbound traffic was up 0.2% compared to the rolling 12 months ending in July. The 2nd graph is the monthly data (with a strong seasonal pattern for imports). Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year. In general imports have been increasing, and exports have mostly moved sideways over the last 6 or 7 years. It is still too early to tell about the impact of the tariffs.

From the NY Fed: Manufacturing "Business activity continued to grow at a solid clip in New York State" - From the NY Fed: Empire State Manufacturing Survey Business activity continued to grow at a solid clip in New York State, according to firms responding to the September 2018 Empire State Manufacturing Survey. The headline general business conditions index showed ongoing strength, but moved down seven points to 19.0, pointing to a slower pace of growth than last month. New orders and shipments grew moderately. Delivery times continued to lengthen, and inventories moved higher. Labor market indicators pointed to an increase in employment levels and longer workweeks. Price indexes were little changed and remained elevated, suggesting ongoing significant increases in both input prices and selling prices. Looking ahead, firms remained fairly optimistic about the six-month outlook.…The index for number of employees held steady at 13.3 and the average workweek index was 11.5, indicating a modest increase in both employment levels and hours worked. This was below the consensus forecast, but still a solid reading.

Philly Fed Manufacturing Survey Suggested Faster Growth in September -- From the Philly Fed: September 2018 Manufacturing Business Outlook Survey Regional manufacturing activity continued to grow in September, according to results from this month’s Manufacturing Business Outlook Survey. The survey’s broad indicators for general activity, new orders, shipments, and employment remained positive and increased from their readings in August. The survey’s respondents reported diminished price pressures this month. Expectations for the next six months remained optimistic, but most broad future indicators showed some moderation. The diffusion index for current general activity increased 11 points this month to 22.9, returning the index to near its average reading for 2018. … The firms continued to report overall higher employment. Over 26 percent of the responding firms reported increases in employment this month, up from 18 percent last month, while nearly 9 percent of the firms reported decreases in employment. The current employment index increased 3 points to 17.6. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

US Services Economy Collapses To 18-Mo Lows As Manufacturing Rebounds, Storms Blamed - Having fallen for the last 3-4 months, as ISM's surveys have rebounded, Markit's Manufacturing and Services PMIs were expected to bounce modestly in the flash September print (after Europe's composite PMI fell disappointingly). However, Markit reported a mixed picture for September with Services collapsing to the lowest since March 2017 and Manufacturing rebounding... as it seems Services is catching down to the reality of dismal 'hard data'. Markit US Manufacturing 55.6 vs 55.0 exp. Markit US Services 52.9 vs 55.0 exp. The Composite Index slipped to its weakest since April 2017... Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:“With storms hitting the east coast, it was no surprise to see some disappointing survey data in September, with the flash PMI indicating that the pace of economic growth slipped to its lowest for almost one-and-a-half years.“However, business activity remained encouragingly resilient during the month, commensurate with third quarter GDP growing at an annualised rate approaching 3%. “Growth may well pick up again as we move into the fourth quarter. With new orders growth accelerating and backlogs of work rising due to weather-related disruptions, the survey data suggest underlying demand remains robust and that there’s an accumulation of work that will roll over into stronger economic growth in coming months.“Most encouraging was an upturn in hiring. The survey’s employment gauge rose to a level indicative of non-farm payroll growth topping 200,000 in September.“On the downside, prices charged spiked higher again during the month, rising at the steepest rate seen for at least nine years, as supply shortages and rising costs, often linked to tariffs, fed through to selling prices.“The escalation of trade wars, and the accompanying rise in prices, contributed to a darkening of the outlook, with business expectations for the year ahead dropping sharply during the month. While business activity may rebound after the storms, the drop in optimism suggests the longer term outlook has deteriorated, at least in the sense that growth may have peaked.”

Weekly Initial Unemployment Claims decreased to 201,000, Lowest Since 1969 -- The DOL reported: In the week ending September 15, the advance figure for seasonally adjusted initial claims was 201,000, a decrease of 3,000 from the previous week's unrevised level of 204,000. This is the lowest level for initial claims since November 15, 1969 when it was 197,000. The 4-week moving average was 205,750, a decrease of 2,250 from the previous week's unrevised average of 208,000. This is the lowest level for this average since December 6, 1969 when it was 204,500.  The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971.

BLS: Unemployment Rates in Idaho, Oregon, South Carolina and Washington at New Lows -- From the BLS: Regional and State Employment and Unemployment Summary Unemployment rates were lower in August in 13 states, higher in 3 states, and stable in 34 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Eleven states had jobless rate decreases from a year earlier and 39 states and the District had little or no change. The national unemployment rate was unchanged from July at 3.9 percent but was 0.5 percentage point lower than in August 2017.... Hawaii had the lowest unemployment rate in August, 2.1 percent. The rates in Idaho (2.8 percent), Oregon (3.8 percent), South Carolina (3.4 percent), and Washington (4.5 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 6.7 percent.This graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 1976. At the worst of the great recession, there were 11 states with an unemployment rate at or above 11% (red). Currently only one state, Alaska, has an unemployment rate at or above 6% (dark blue).

Most Blue-Collar Workers Report Feeling 'Optimistic' And 'Happy', Study Shows - The unprecedented optimism being felt by small business owners and consumers is also lifting the spirits of blue collar workers, according to a new survey which found that American laborers are enjoying rising wages and improved job prospects, while their white-collar peers struggle with stagnant wages and growing rates of work-related dissatisfaction.Of course, anybody who has spent long hours behind a desk probably wouldn't be surprised to hear that one of the biggest factors behind the high rates of work-related dissatisfaction among white collar workers is the fact that most of them spend nearly two-thirds of their day in a sedentary position. In contrast, blue-collar workers enjoy high levels of mobility.  Our findings do suggest, however, that white-collar work remains associated with sedentary office culture. Those who deemed themselves white-collar professionals said they spent more than two-thirds of their workdays at a desk on average. Conversely, the most common industries for self-identified blue-collar workers were the wholesale and retail, manufacturing and hospitality fields—work typically performed on one's feet. With that said, blue-collar workers struggle with anxieties related to their long-term career trajectory at significantly higher rates than white collar workers. Blue-collar workers also report higher rates of feeling disrespected while at work. How does the job satisfaction of blue- and white-collar professionals compare? Whereas more than two-thirds of each cohort reported feeling happy at work, white-collar workers were slightly more likely to report as much. Likewise, blue-collar workers were more likely to express unhappiness about their professional lives. These findings resonate with global data gauging worker happiness, suggesting that individuals in labor-intensive positions experience positive emotions less frequently across the world.

 "Inactive, Disconnected, and Ailing: A Portrait of Prime-Age Men Out of the Labor Force" - Some new research on our of the labor force prime age men: Inactive, Disconnected, and Ailing: A Portrait of Prime-Age Men Out of the Labor Force: This report is intended to enrich our understanding of who these prime-age "inactive" men are. It summarizes evidence from past research and fills out our picture of these men, providing some details about their past and present social and emotional lives. We introduce an under-utilized dataset little-known to economists and sociologists, the "National Epidemiological Survey on Alcohol and Related Conditions-III," or NESARC-III.Consistent with other survey data, the NESARC-III indicates that in 2013, 11 percent of prime-age men were outside the labor force. Roughly 45 percent of them indicate that their current situation involves illness or disability. Roughly 15 percent of inactive men are in school, 5 to 10 percent are retired, and another 5 to 10 percent are homemakers or caregivers. About a quarter of prime-age inactive men do not fit any of these categories. Contrary to the common view that most of these men have "dropped out" of the labor force after becoming discouraged by the job market, few prime-age inactive men indicate this to be true, and only 12 percent of able-bodied prime-age inactive men indicate in household surveys that they want a job or are open to taking one.We confirm research by other scholars that a large number of inactive men are unambiguously and seriously sick or disabled. We provide new information, showing that many inactive men have poor physical health, poor mental health, or both. Over one-third of them (and nearly three in five disabled inactive men) are in the bottom quarter, nationally, of both physical and mental health. Inactive men have fewer skills than employed men and live in poorer homes, often relying on public safety nets to get by. Two-thirds of inactive men personally received government assistance in the preceding year. One-third of inactive men have been incarcerated (including nearly half of disabled inactive men). Along with other evidence presented here on mobility-impeding behavior, such high incarceration rates suggest employment challenges.

The Economic 'Recovery' Is Leaving More Than 50 Million Americans Behind - For more than half of American communities, the economic "recovery" that has created millions of jobs and pushed GDP growth above 4% during Q2 never happened. Indeed, while urban centers like New York City have created millions of jobs, a study recently highlighted by Axios showed that economic conditions in half of the zip codes in the US have actually worsened since the recovery began.Among other findings, the Distressed Communities Index highlighted the fact that more than 50 million Americans live in distressed communities, while more than 80 million live in prosperous communities.The 2017 DCI finds that 52.3 million Americans live in economically distressed communities—the one-fifth of zip codes that score worst on the DCI. That represents one in six Americans, or 17 percent of the U.S. population.By comparison, 84.8 million Americans live in prosperous communities—the one-fifth of zip codes that score best on the DCI. These top-performing zip codes contain 27 percent of the country’s population, a far greater share than any other tier.Underlying indicators of well-being vary drastically across the different tiers of U.S. communities.As a map of the distribution of these communities shows, they're disbursed across all regions of the US, with the greatest concentration of distressed communities in the southeastern US. Meanwhile, the northeastern US had the lowest concentration. Indeed, more than half of the US's distressed population residents in the southern US. One of the starkest differences between prosperous and distressed communities is the uneven level of economic growth. According to Labor Department data, 10 million jobs were created in the US between 2011 and 2015, with roughly 85% of these created in prosperous zip codes. Meanwhile, roughly half of American communities have seen zero jobs growth since the crisis. Only two out of every five distressed zip codes recorded growth in employment: the rest saw the number of jobs decline as companies migrated toward more populous areas.

If Jeff Bezos wants to help low-income people why not just pay them better? -- Always a pleasure to hear from rejected Paul Verhoeven villain Jeff Bezos, who this week announced an initiative designed to cast him as Earth’s first trillion-dollar sociopath. OK, I’ve paraphrased slightly. The Amazon boss has launched something called the Day One fund, which feels like the will-this-do title for the will-this-do initiative it is. Bezos has long been criticised for his glaring lack of a philanthropic arm, long after he became the richest man in modern history. A year ago Jeff seemed at such a loss as to how not to be an unmitigated arse that he was asking internet users for ideas. He seems to have ignored all the respondents who said, “Stop treating your workers like rubbish.” Off the top of my head, Jeff has already had two very clear chances to help homeless people and low-income families. The first was in Seattle, where Amazon is headquartered, and where the firm recently killed a proposed city tax on big firms to alleviate the homeless crisis by threatening to halt a building project. The second was by simply paying his own low-income workers better. As the old saying goes, charity begins in aisle 89 of the Amazon warehouse, where workers are so terrified of being docked points for nipping to the bathroom that they’re pissing in bottles. But guys like Jeff don’t want governments, or properly paid worker ants, taking credit for what is, after all, his bounty. The rule you learn on Day One of being a billionaire philanthropist is that you don’t give money via pay packets to the poor people who literally already work for you. They’d only spend it poorly. However, if they want to humbly queue up and apply for it via some thinly disguised hardship grant that you take the applause for, that’s a different matter. Dignity is something you hand out, not something that others get to earn. I missed this bit in The Wealth of Nations; I guess there’s a sealed section. And the warm glow doesn’t even end there for you. There is an entire industry of confected philanthropic awards set up to honour givers such as Jeff. The rest of us need simply wait for the first story of an Amazon worker who has to throw themselves on the mercy of Bezos’s charitable arm in order to bump themselves up to living-wage territory. Consider that the ouroboros of giving a toss. Maybe the story will appear in the Washington Post, the totemically revered newspaper Bezos owns, and which he receives a ridiculous amount of credit for simply leaving editorially alone. And maybe it won’t.

One in three U.S. households faces a challenge in meeting energy needs - Nearly one-third of U.S. households (31%) reported facing a challenge in paying energy bills or sustaining adequate heating and cooling in their homes in 2015. According to the most recent results from EIA’s Residential Energy Consumption Survey (RECS), about one in five households reported reducing or forgoing necessities such as food and medicine to pay an energy bill, and 14% reported receiving a disconnection notice for energy service. Households may also use less energy than they would prefer; 11% of households surveyed reported keeping their home at an unhealthy or unsafe temperature. The 2015 RECS asked about these and other challenges, including paying energy bills and repairing broken equipment in the home. Households experiencing these circumstances, often considered components of household energy insecurity, may be making difficult financial tradeoffs about which basic needs to fulfill. The 2015 RECS questionnaire captured both the occurrence of household energy insecurity and the severity of household energy insecurity in 2015, measured by the frequency of energy insecure events lasting anywhere from a few weeks to most of the year. Of the 25 million households that reported forgoing food and medicine to pay energy bills, 7 million faced that decision nearly every month. Of the 17 million households who reported receiving a disconnection notice, 2 million reported that they received a notice nearly every month.  Occasionally, households may lose the use of heating or air-conditioning equipment entirely. This situation can occur when equipment breaks and a household cannot afford to fix it or when a household cannot afford fuel for their equipment. Seven million households (6% of the national total) reported the inability to use heating equipment because of financial constraints at some point in 2015, and 6 million (5%) households reported the loss of air conditioning. These issues occurred during a year when the overall energy-related expenditure level was at its lowest point in more than a decade.

Evacuated Solar Observatory Set To Re-Open; Officials Offer Unbelievable Explanation -  The National Solar Observatory in Sunspot, New Mexico reopened on Monday after it was shut down September 6 following a mysterious FBI raid, according to the group which manages the facility.  And despite federal agents swooping in on a Blackhawk helicopter, and a "bunch of people around antennas and work crews on towers" before the site was completely evacuated - the official explanation has left people scratching their heads; According to officials, they had been cooperating with an existing law enforcement investigation, when "a suspect in the investigation potentially posed a threat to the safety of local staff and residents," so "moving the small number of on-site staff and residents off the mountain was the most prudent and effective action to ensure their safety." AURA has been cooperating with an on-going law enforcement investigation of criminal activity that occurred at Sacramento Peak. During this time, we became concerned that a suspect in the investigation potentially posed a threat to the safety of local staff and residents. For this reason, AURA temporarily vacated the facility and ceased science activities at this location. The decision to vacate was based on the logistical challenges associated with protecting personnel at such a remote location, and the need for expeditious response to the potential threat. AURA determined that moving the small number of on-site staff and residents off the mountain was the most prudent and effective action to ensure their safety. –AURA. No word on why the FBI was involved, or urgently needed to fly in on a loud, suspect-spooking helicopter instead of simply driving to the facility, or why they couldn't just arrest the guy and keep the place open. Also no explanation for the work crew climbing all over the towers, or why they shut down the post office.

Sunspot Solar Observatory Closed Down as Part of Investigation of Child Pornography -- A federal search warrant released Wednesday revealed a solar observatory located the mountains of New Mexico that mysteriously closed for 11 days had been shut down as part of an FBI investigation of a janitor suspected of using the facility's wireless internet service to send and receive child pornography. The Sunspot Solar Observatory re-opened Monday, with theories looming for nearly two weeks over the strange closure, CBS Albuquerque affiliate KRQE reports A federal search warrant revealed that in July, agents began searching a child protection database and found child pornography linked to an IP address at the Sunspot observatory, KRQE reports.   The search warrant states the feds then monitored all the IP addresses and found the exact time child porn was being sent out, which then matched only the janitor.   The agency said they "recognize that the lack of communications while the facility was vacated was concerning and frustrating for some. However, our desire to provide additional information had to be balanced against the risk that, if spread at the time, the news would alert the suspect and impede the law enforcement investigation. That was a risk we could not take."

Shooters are twice as deadly when a semiautomatic rifle is in the mix, study finds - Any time a shooter opens fire in a school, a church or anywhere else, the consequences can be deadly. But the danger is about double when a semiautomatic weapon is involved.In the United States, shootings that involved a semiautomatic rifle resulted in nearly twice as many deaths compared with shootings carried out with only handguns, shotguns or non-semiautomatic rifles, according to a report published Tuesday in the Journal of the American Medical Assn. Nonfatal injuries were significantly higher as well.In other words, the study authors noted, the weapons work exactly as intended.“Semiautomatic rifles are designed for easy use, can accept large magazines, and fire high-velocity bullets, enabling active shooters to wound and kill more people per incident,” they wrote.The researchers, from the Center for Surgery and Public Health and the Department of Emergency Medicine at Brigham and Women’s Hospital in Boston, cataloged every assault between 2000 and 2017 that met the Federal Bureau of Investigation’s definition of an active shooter incident. In these cases, one or more individuals are “actively engaged in killing or attempting to kill people in a populated area.” FBI data on active shootings in the U.S. include information on the city where each incident occurred and whether it took place in a school, business, government building, residence, healthcare setting, place of worship or an open space. The database also lists the number of people injured and killed in each incident and whether rifles, shotguns or handguns were present at the scene.

A Troubling Trend for Cities: Slowing Revenue But Rising Spending Growth - Despite a relatively strong economy, most U.S. cities aren’t enjoying robust revenue growth. On Thursday, the National League of Cities (NLC) released its annual survey of finance officers across the country, finding city revenues grew by an inflation-adjusted average of only 1.25 percent in fiscal year 2017 and are expected to further slow over the current fiscal year. At the same time, spending pressures aren’t subsiding, climbing at a steeper 2.16 percent last fiscal year. Historically, fluctuations in cities’ revenues have generally mirrored changes in expenditures. But the latest data from the City Fiscal Conditions report suggests spending growth is exceeding revenue growth. Annual revenue growth peaked in 2015 after declining in the aftermath of the Great Recession and has since started to decelerate, as has spending growth, but to a lesser extent. Taken together, the findings signal potentially more challenging times ahead for many localities. “City leaders and finance officers are being conservative and are being cautious,” says NLC’s Christiana McFarland, who co-authored the report. “They’re being a lot smarter about how they’re planning and the likelihood for uncertainty.”

Texas special education students face teacher shortage and budget shortfall -- As the school year gets underway in Texas, the consequences of the state’s longstanding refusal to provide special education services to as many as 250,000 students, or roughly 5 percent of the total student body, are becoming ever clearer. Despite Texas having been ordered by the federal government to increase its services for special needs students, there is a severe shortage of qualified teachers and billions of dollars are missing from the budget to fund the necessary programming.In January 2018, the US Department of Education found Texas in violation of the Individuals with Disabilities Education Act (IDEA). Instead of proactively seeking out eligible disabled children, referred to as the “Child Find” provision, the Texas Education Agency (TEA) set a “cap” of 8.5 percent on the number who would be admitted into special education programs regardless of the true level of need.The purpose of the TEA cap was to cut costs. To educate a student in special education is roughly twice the cost of educating one in general education.  Local districts employed a variety of means to block students from getting the testing necessary to determine their eligibility. In some instances, parents faced aggressive questioning from school administrators before being allowed to receive application forms. In other cases, they were told that the public schools could not provide services. In one northwest Houston suburban school district, Klein ISD, Maritza Woodard, whose daughter suffers from bipolar disorder, was given a list of local private schools that would serve her child’s special needs, denying her access to the public education system. Classroom teachers also encountered obstacles getting their students the services they needed. Educators reported that they would submit recommendations for students who, in the course of their own professional observations, they deemed deserving of eligibility testing. Administrators then attempted to undermine these recommendations. Melanie Urbis, a math teacher in West ISD, said, “They sit you down and basically interrogate you about whether this kid really needs to be evaluated for special ed services, and if you really think that, and if you’re sure.”

Unions shut down Washington teacher strikes --After weeks of strikes by educators, the teachers’ walkouts in the US state of Washington were shut down Monday. By Tuesday morning, all of Washington’s 1.1 million students and thousands of teachers and school staff will be back in the classrooms, with none of the basic issues resolved.Washington teachers carried out their struggle in the wake of the public education strike wave of last spring, when rank-and-file teachers in West Virginia, Oklahoma and Arizona rebelled against the unions and carried out statewide strikes over low pay, poor health care, and school funding. They also joined the present back-to-school battles breaking out from Pennsylvania to California.Like their counterparts across the US, Washington teachers face larger class sizes, dwindling funding for programs, poor infrastructure, and stagnant salaries and wages. They have had their pay frozen for years, even as costs of living in the region skyrocket.As in the struggles earlier this year, the central obstacle in developing a united movement of teachers has been the unions, which worked to isolate every separate struggle. The development of a state-wide strike and a broader struggle of all teachers raised and continues to raise the need for educators to take the fight into their own hands through the formation of independent, rank-and-file committees. Though Washington state typically staggers school district employee contracts to avoid simultaneous negotiations, the state legislature was forced to give out $7.3 billion in new education funding to all 295 school districts, with around $1 billion specified for teacher salary increases. This one-time infusion into district budgets came out of the 2012 State Supreme Court McCleary ruling, which argued in favor of parents who sued the state for failing to adequately fund K-12 public education, thereby violating the state’s constitution. These particular legal and political conditions meant that teachers in every district were engaged in contract negotiations at the same time. The objective groundwork was present for teachers to link up all their struggles in a common fight to defend public education.

Every Illinois adult owes $4000 for teacher health care; pensions not included — Every adult in Illinois is on the hook for $4,000 in retired teacher health care costs, according to a new study showing the state has no money saved to pay for the growing cost of its promises. The report released Tuesday by Bellwether Education Partners estimates that Illinois owes $54 billion in future health care costs that have been promised to teachers after retirement. That’s the sixth-most of any state when divvied up by each state’s adult population. This is not included in the estimated $130 billion in unfunded teacher pension liabilities. Thirty-five states offer post-employment health coverage to teachers, of which Illinois is one, according to the report. “For too long, employers were able to promote the benefits without recognizing their long-term costs,” the report said. “That reckoning is coming, and there are better and worse ways to tackle it.” Chad Aldeman, principal at Bellwether, said the growing bills from health care could edge out dollars intended for the classroom. “Less money is going to current services like schools or teachers that are in the classroom right now,” he said, adding that the costs are bound to grow as retirees live longer and health care costs increase. The growing cost will have to be paid for by either cuts to retiree benefits, tax hikes, or a combination of both, Aldeman said. Health care benefits, like pension payments, are a promise made by the state and local school districts but, unlike pensions, the benefits aren’t protected from diminishment by Illinois’ constitution. States should put qualified retirees into health care exchanges, the report said, and rescind coverage of retirees making more than a certain amount. 

Guy who says dinosaurs were on Noah’s Ark tapped to review Arizona’s evolution standards Here is a bit of instruction from a guy Superintendent Diane Douglas tapped to help review Arizona’s standards on how to teach evolution in science class:The earth is just 6,000 years old and dinosaurs were present on Noah’s Ark. But only the young ones. The adult ones were too big to fit, don’t you know."Plenty of space on the Ark for dinosaurs – no problem," Joseph Kezele explained to Phoenix New Times' Joseph Flaherty.Flaherty reports that in August, Arizona's soon-to-be ex-superintendent appointed Kezele to a working group charged with reviewing and editing the state’s proposed new state science standards on evolution. Kezele is a biology teacher at Arizona Christian University. He also is president of the Arizona Origin Science Association and, as Flaherty puts it, “a staunch believer in the idea that enough scientific evidence exists to back up the biblical story of creation.”   The Arizona Department of Education is drafting new science standards that could be considered controversial by some. The Republic | azcentral.comDouglas has been working for awhile now to bring a little Sunday school into science class. This spring she took a red pen to the proposed new science standards, striking or qualifying the word “evolution” wherever it occurred.  This, after calling for creationism to be taught along with evolution during a candidate forum last November. “Should the theory of intelligent design be taught along with the theory of evolution? Absolutely,” Douglas said at the time. “I had a discussion with my staff, because we're currently working on science standards, to make sure this issue was addressed in the standards we're working on.”

School District To Begin Randomly Drug-Testing High School Students  - A school district in Clark County, Indiana, will soon be randomly drug testing students who want to participate in extracurricular activities like sports, band, and driving to school.  “Henryville High School and Borden High School will randomly select ten students each quarter and test them for ten drugs that teenagers are most likely to use,” local ABC 13 reported.“If students test positive, they will be ineligible for one-third of scheduled extracurricular activities after the first offense.“After the third offense, the student will become ineligible for the rest of their high school career.”While some parents support the new policy and hope it will discourage students from bringing drugs to school, others, like Lance Leach, feel it is too invasive.“There has to be a reasoning, and you have to talk to a parent beforehand,” he said.“Like suspicious behavior or they got caught doing something, then maybe, but not just random drug testing.“The ACLU agrees. The civil liberties organization has long fought against drug testing in schools. In 1998, the organization attempted to challenge drug testing for afterschool activities in Indiana schools, but the Supreme Court refused to hear their arguments. The following year, they challenged an Oklahoma school district, arguing in that case, the after school activities were directly linked with coursework throughout the normal day, and that drug testing infringed on students’ “right to a public education, as well as of the Fourth Amendment protection against illegal search and seizure,” the

US schools hiring private companies to spy on students’ social media  - More than 100 school districts and public universities have hired social media monitoring companies over the past five years to spy on students’ social media accounts under the pretext of “school safety” and preventing school shootings, according to a report in the New York Times.The private companies exploit social tragedy, recruiting more institutions after every mass shooting despite little evidence that the spying programs have any effect on violence.The customers of these companies include school districts experiencing school shootings, such as the Newton Public Schools in Connecticut, as well as some of the largest school districts in the nation, including in Los Angeles and Chicago. Large universities like Michigan State and Florida State have also contracted services from the companies.The latest surge of contracts has come in the aftermath of the school shooting in Parkland, in which 17 people were killed, on February 14, 2018.Monitoring students’ social media accounts is a violation of privacy and another layer in the intimate partnership between the US government and tech companies for mass surveillance and censorship of the internet.Most of the companies offering spying services hold or have previously held contracts with police departments. In 2016, the American Civil Liberties Union (ACLU) exposed one of the companies, Media Sonar, for recommending police officers follow hashtags like #BlackLivesMatter, #DontShoot, and #ImUnarmed during the Ferguson protests. In late 2015, Media Sonar also worked with the Ferguson-Florissant School District, which asked for alerts on the terms “protest” and “walkout.” The monitoring companies maintain a high level of secrecy on every aspect of their work. Many have direct ties to the military and intelligence agencies.

We Want Black Students, Just Not You: How White Admissions Counselors Screen Black Prospective Students (PDF) American Sociological Association - Abstract Most historically and predominantly white institutions (HPWIs) now desire some number of black students on their campuses. However, recent theoretical scholarship suggests that HPWIs’ desire for and willingness to embrace black students is predicated on their racial palatability. The theory of intraracial discrimination stipulates that white gatekeepers are increasingly inclined to screen blacks to “weed out” those they perceive as too concerned with race and racism. In this study, the author assessed whether there was evidence of intraracial discrimination within the HPWI admissions regime. The data were derived through an audit of 517 white admissions counselors, employed at the same number of institutions, who received inquiry e-mails from fictitious black high school students who presented as more or less racially salient. The findings reveal that white admissions counselors are more responsive to black students who present as deracialized and racially apolitical than they are to those who evince a commitment to antiracism and racial justice. These findings provide convincing support for the theory of intraracial discrimination within the HPWI admissions regime. The author concludes with a brief discussion of the implications of these findings.

Students Don't Vote Absentee Because They Don't Know Where To Get Stamps, Study Shows -  Despite all of the "activism " taking place on college campuses (activism that is tantamount to harassment of individuals who don't agree with SJW orthodoxy), voting apparently isn't a high priority for many modern students, who are apparently too busy checking their Instagram to figure out where they can buy a stamp to send in their absentee ballots. To wit, a Fairfax County focus group conducted this summer found that many college students who have requested and received an absentee ballot have simply neglected to send it in because they don't know where to buy a stamp for the envelope, according to WTOP.Lisa Connors, who ran the focus group, said she was surprised to learn how frequently this came up.The focus group, which was sponsored by the Fairfax County Office of Public Affairs, involved college interns from across several county departments. "One thing that came up, which I had heard from my own kids but I thought they were just nerdy, was that the students will go through the process of applying for a mail-in absentee ballot, they will fill out the ballot, and then, they don’t know where to get stamps," Lisa Connors with the Fairfax County Office of Public Affairs said. "That seems to be like a hump that they can’t get across."

Debt-Laden College Students Spend More Time Working Than In Class –  The skyrocketing cost of tuition has not only resulted in a student debt bubble that is approaching $1.5 trillion, but it is also causing in 1755. Today, simple sketching and counting of sunspot numbers have given way to land-based and space-based technologies that continuously monitor the Sun. Scientists have discovered that intense activity such as sunspots and solar flares generally subside during a solar minimum. Dean Pesnell of NASA's Goddard Space Flight Center in Greenbelt, Maryland, said during a solar minimum, that does not mean the sun becomes dull.He said solar activity simply changes.For instance, Pesnell warned, "during a solar minimum, we can see the development of long-lived coronal holes."Coronal holes are large regions in the sun’s atmosphere where the sun’s magnetic field opens up and allows streams of solar particles known as coronal mass ejection (CME) to escape the sun as fast solar w ind. If the coronal hole is Earth-facing, then electrically charged particles from the Sun slam into Earth's magnetic field and cause intense electromagnetic storms around the planet. The impact of these particles on the electronic infrastructure underlying modern industrial civilization can be devastating, said the Financial Times.CMEs disrupt GPS, satellites, and astronauts currently in space. Even airline crew and passengers get a markedly higher dose of radiation during solar storms, especially during polar-crossing, trans-oceanic flights.And a repeat of the most significant solar storm on record, the 1859 Carrington Super-flare, would cost trillions of dollars in damage as power grids, communication networks, and electronic equipment worldwide would be knocked out. Some scientists believe that Earth is due for a severe space weather event that could send civilization temporarily into reverse.

Been Down So Long It Looks Like Debt to Me - Now thirty years old, I have been incapacitated by debt for a decade. The delicate balancing act my family and I perform in order to make a payment each month has become the organizing principle of our lives. To this end, I am just one of about forty-four million borrowers in the United States who owe a total of roughly $1.4 trillion in student loan debt. This number is almost incomprehensibly high, and yet it continues to increase with no sign of stopping. Reform legislation that might help families in financial hardship has failed in Congress. A bill introduced in May 2017, the Discharge Student Loans in Bankruptcy Act, which would undo changes made to the bankruptcy code in the early 2000s, stalled in committee. Despite all evidence that student loan debt is a national crisis, the majority of the U.S. government—the only party with the power to resolve the problem—refuses to acknowledge its severity. I’ve spent a great deal of time in the last decade shifting the blame for my debt. Whose fault was it? My devoted parents, for encouraging me to attend a school they couldn’t afford? The banks, which should have never lent money to people who clearly couldn’t pay it back to begin with, continuously exploiting the hope of families like mine, and quick to exploit us further once that hope disappeared? Or was it my fault for not having the foresight to realize it was a mistake to spend roughly $200,000 on a school where, in order to get my degree, I kept a journal about reading Virginia Woolf? (Sample passage, which assuredly blew my mind at the time: “We are interested in facts because we are interested in myth. We are interested in myth insofar as myth constructs facts.”) The problem, I think, runs deeper than blame. The foundational myth of an entire generation of Americans was the false promise that education was priceless—that its value was above or beyond its cost. College was not a right or a privilege but an inevitability on the way to a meaningful adulthood. What an irony that the decisions I made about college when I was seventeen have derailed such a goal.

Ending the Secrecy of the Student Debt Crisis - Gamblers and reality TV stars can claim bankruptcy protections when in financial trouble, but 44 million student loan borrowers can’t. Unemployed, underpaid, destitute, sick, or struggling borrowers simply aren’t able to start anew.With a default rate approaching 40 percent, one would expect armies of distressed borrowers marching in the streets demanding relief from a system that has singled out their financial anguish. Distressed student debtors, however, seem to be terror-struck about coming forward to a society that, they say, ostracizes them for their inability to keep up with their finances.When we spoke to several student borrowers, almost none were willing to share their names. “I can’t tell anyone how much I’m struggling,” says a 39-year-old Oregon physician who went into student loan default after his wife’s illness drained their finances. He is terrified of losing his patients and reputation if he speaks out about his financial problems.  “If I shared this with anyone they will look down upon me as some kind of fool,”   Financial shame alienates struggling borrowers. Debtors blame themselves and self-loathe when they can’t make their payments, explains Colette Simone, a Michigan psychologist. “There is so much fear of sharing the reality of their financial situation and the devastation it is causing in every facet of their lives,” she says. “The consequences of coming forward can result in social pushback and possible job–related complications, which only deepen their suffering.”Debtors are isolated, anxious, and in the worst cases have taken their own lives. Simone confirms that she has “worked with debtors who were suicidal or had psychological breakdowns requiring psychiatric hospitalization.” With an average debt of just over $37,000 per borrower for the class of 2016, and given that incomes have been flat since the 1970s, it’s not surprising that borrowers are struggling to pay. Student loans have a squeaky-clean reputation, and society tends to view them as a noble symbol of the taxpayers’ generosity to the working poor. Fear of facing society’s ostracism for failure to pay them back has left borrowers alienated and trapped in a lending system that is engulfing them in debt bondage.

Why millennials are facing the scariest financial future of any generation since the Great Depression. - Like everyone in my generation, I am finding it increasingly difficult not to be scared about the future and angry about the past. I am 35 years old—the oldest millennial, the first millennial—and for a decade now, I’ve been waiting for adulthood to kick in. My rent consumes nearly half my income, I haven’t had a steady job since Pluto was a planet and my savings are dwindling faster than the ice caps the baby boomers melted. We’ve all heard the statistics. More millennials live with their parents than with roommates. We are delaying partner-marrying and house-buying and kid-having for longer than any previous generation. And, according to The Olds, our problems are all our fault: We got the wrong degree. We spend money we don’t have on things we don’t need. We still haven’t learned to code. We killed cereal and department stores and golf and napkins and lunch. Mention “millennial” to anyone over 40 and the word “entitlement” will come back at you within seconds, our own intergenerational game of Marco Polo. This is what it feels like to be young now. Not only are we screwed, but we have to listen to lectures about our laziness and our participation trophies from the people who screwed us. But generalizations about millennials, like those about any other arbitrarily defined group of 75 million people, fall apart under the slightest scrutiny. Contrary to the cliché, the vast majority of millennials did not go to college, do not work as baristas and cannot lean on their parents for help. Every stereotype of our generation applies only to the tiniest, richest, whitest sliver of young people. And the circumstances we live in are more dire than most people realize.

Retirement Crisis - The Typical Working American Has Nothing Saved For Retirement - A startling new report issued by the non-profit National Institute on Retirement Security found that despite the "recovery" of the last decade leading to all time highs in the stock market, the savings levels of Americans who seek to retire are "deeply inadequate". In fact, the median retirement account balance among working individuals was found to be $0. The report notes that retirement savings have been, and will likely be, correlated closely with income and wealth. The study found that individuals with retirement accounts generally have more than three times the income than those without accounts.The report found that more than 100 million Americans that are of working age don’t have any retirement account assets in an employer sponsored 401(k) type plan, individual account, or pension, at all. To make matters worse, 4 out of 5 working Americans were also found to have less than one year's income in their retirement accounts. Even those that are trying to save for retirement are failing to do so effectively, according to the study. It’s stated that 77% of Americans come up short of even the most conservative retirement savings targets for their age, based on estimates that have them working until age 67.The analysis also found that "a large majority of working Americans" can’t meet a substantially reduced savings target.

NEJM doubles down on refusal to retract article Dartmouth says is plagiarized - The New England Journal of Medicine is again refusing to retract an article co-authored by one of the country’s leading health policy scholars even after the researcher resigned his position this week following a misconduct finding last month.As STAT and Retraction Watch reported Thursday, Dr. H. Gilbert Welch resigned from his faculty position at Dartmouth following an internal investigation, which found that Welch had plagiarized material from a Dartmouth colleague and a researcher at another institution for a 2016 paper published in the venerable journal. The paper was an analysis of how breast cancer screening led to the overdiagnosis of tumors and unnecessary treatments. Welch disputes Dartmouth’s conclusions.The journal’s continued refusal to retract isn’t sitting well with the aggrieved researchers. Samir Soneji, of Dartmouth, and his co-author Hiram Beltrán-Sánchez said Friday that they “are disappointed at the Journal’s decision to not retract the plagiarizing article,” and “the Journal is violating accepted practices of scientific research and eroding the scientific process.”“We believe the failure of the New England Journal of Medicine to retract creates a dangerous precedent whereby plagiarism is allowed in the most prestigious journals,” the researchers wrote in an email. “We hope the Journal will adhere to the highest ethical principles and retract the plagiarizing article.” NEJM has said the case is an authorship dispute, and left it to Soneji and Welch to work out their differences. As a result, Soneji last month asked the Committee on Publication Ethics (COPE), a membership organization for publishers and journals, to weigh in on the case. COPE’s guidelines say that journals should consider retraction if there is “clear evidence that the findings are unreliable, either as a result of misconduct (e.g. data fabrication) or honest error (e.g. miscalculation or experimental error)” or that the paper “constitutes plagiarism.”

Questions emerge following shutoff of water to Detroit schools - School Superintendent Nikolai Vitti recently conducted a series of “community water meetings” to discuss the water crisis that emerged in the Detroit public schools system after his August 26 announcement that the water in all 106 schools in the district would be shut off due to high levels of lead and copper. However, the meetings raised more questions than they answered.   Vitti, who was appointed last year, and his staff have been trying to minimize the significance of the discovery of deadly toxins in the schools’ water. He described his decision to shut off the drinking water at all 106 schools in response to the findings that 16 of 24 schools tested had high levels of lead and or copper as using an “abundance of caution.”  Starting September 10 and running through September 18, meetings were held at four different high schools around Detroit. Vitti made the case that his administration acted proactively to come up with what he called a “permanent” solution—the installation of “hydration stations” at all 106 schools. At a cost of $2 million, one station would be put in place by next school year for every 100 students, providing filtered water for drinking and filling water bottles. In the meantime, water coolers and bottled water would be supplied.Considering that the district serves some 45,000 students, turnout for the “community water meetings” was sparse. Questions that were asked by teachers, parents and residents expressed skepticism over Vitti’s glib presentation of what is certainly a catastrophic situation given the demonstrated harmful effects of lead and copper in drinking water.  Some expressed concern not just about the schools, but also about the quality of the water throughout the city. A teacher asked how could educators take responsibility for educating the children without knowledge of factors like lead poisoning. Others wanted to know how the bankruptcy proceedings in Detroit affected the safety of the drinking water. Vitti feigned empathy with the concerns expressed by parents, but asserted several times that his administration has no authority beyond the district all the while touting his own response.

EPA Is Failing to Protect School Children From Asbestos, Internal Watchdog Agency Says - That's the conclusion of a report released Monday by the EPA's Office of Inspector General (OIG), the agency's internal watchdog. The report assessed the EPA's compliance with the Asbestos Hazard Emergency Response Act (AHERA) of 1986, an amendment to the Toxic Substances Control Act (TSCA) that requires local education agencies to inspect schools for asbestos, make asbestos management plans and carry out actions to reduce or prevent asbestos exposure. "Even though the EPA was responsible for conducting AHERA compliance inspections for the majority of states, it conducted fewer inspections overall than the states responsible for their own inspections," the report found. Between 2011 and 2015, the EPA conducted only 13 percent of inspections required under AHERA, while states in charge of their own inspections conducted 87 percent. The report further found that only one EPA region had a strategy for monitoring compliance under TSCA, and five of 10 regions only inspected for asbestos when there was a complaint. "Without compliance inspections, the EPA cannot know whether schools pose an actual risk of asbestos exposure to students and personnel," the report said. The OIG recommended that the EPA mandate that regions incorporate asbestos monitoring into TSCA monitoring plans generally and tell local education agencies that they must work with regional offices to establish asbestos management plans that are maintained and to make sure the plans are being followed. Trump's EPA blamed the Obama administration for the lax enforcement, and it is true that the period highlighted by the study coincides with the Obama presidency.

Household disinfectants could be making kids overweight, study says - (CNN) Multi-surface cleaners and other commonly used household disinfectants could be making children overweight by altering the bacteria found in their guts, a new study published Monday in the Canadian Medical Association Journal suggests. Infants living in households where antimicrobial disinfectants are used at least weekly were twice as likely to have higher levels of the bacteria Lachnospiraceae at ages 3 to 4 months than children whose homes did not frequently use disinfectants, the Canadian researchers found. When those children with higher levels of Lachnospiraceae were 3 years old, their body mass index (BMI) was higher than children who do not live in homes that frequently use disinfectants, the study also showed. The bacteria Lachnospiraceae are "a normal component of our gut microbiota," Anita Kozyrskyj, senior author of the study and a University of Alberta pediatrics professor, said in a CMAJ podcast. However, she explained that it is known "from animal studies that higher levels of Lachnospiraceae have been associated with higher body fat and insulin resistance." One of the study's findings is that roughly 80% of Canadian households use disinfectant products, most often multi-surface cleaners, at least once weekly, said Kozyrskyj.While the researchers found an increase in Lachnospiraceae bacteria with more frequent cleaning with disinfectants, they did not see the same association with washing detergents without the bacteria-killing ingredients found in disinfectants or eco-friendly cleaners. "These results suggest that gut microbiota were the culprit in the association between disinfectant use and the overweight," said Kozyrskyj.

Small particulates in the air linked to dementia, ASU research finds - Researchers from Arizona State University have found another good reason to stay indoors on days when the local air pollution is high — it could help prevent dementia.A recently released working paper by three ASU economists makes the case that prolonged exposure to air pollution does not just cause respiratory problems, but also puts individuals at higher risk for dementia, including Alzheimer's disease.The researchers suggest that improving air quality has huge value due to longer and better lives that result from lower rates of dementia."One of the bottom lines is that our work shows the cost of air pollution and the benefits of regulation are higher than we knew previously," said ASU health-care economist Jonathan D. Ketcham, a co-author of the paper, which is titled, "Hazed and Confused: The Effect of Air Pollution on Dementia." The ASU researchers estimate, for example, that implementation of an Environmental Protection Agency standard on fine-particulate air pollution in 1997 through the Clean Air Act in previously unregulated counties averted approximately 140,000 people living with dementia in 2013.  "Because no medical preventions or cures exist, policy discussions have focused on investment in research and health infrastructure, and modifying behaviors related to smoking, diet and exercise," the researchers write. "Our findings reveal another level available to policy makers: regulating air pollution."The size of particulates smaller than 2.5 microns in diameter allows those particulates to remain airborne for long periods, to penetrate buildings, to be inhaled easily and to reach and accumulate within brain tissue, the researchers write. They cite other studies that show the accumulation of particulates in the brain can cause neuroinflammation, which is associated with symptoms of dementia.

Air pollution particles found in mothers' placentas - Scientists have found the first evidence that particles of air pollution travel through pregnant women’s lungs and lodge in their placentas.Toxic air is already strongly linked to harm in foetuses but how the damage is done is unknown. The new study, involving mothers living in London, UK, revealed sooty particles in the placentas of each of their babies and researchers say it is quite possible the particles entered the foetuses too. “It is a worrying problem – there is a massive association between air pollution a mother breathes in and the effect it has on the foetus,” said Dr Lisa Miyashita, at Queen Mary University of London, one of the research team. “It is always good if possible to take less polluted routes if you are pregnant – or indeed if you are not pregnant. I avoid busy roads when I walk to the station.” A series of previous studies have shown that air pollution significantly increases the risk of premature birth and of low birth weight, leading to lifelong damage to health. A large study of more than 500,000 births in London, published in December, confirmed the link and led doctors to say that the implications for many millions of women in polluted cities around the world are “something approaching a public health catastrophe”. Scientists are increasingly finding that air pollution results in health problems far beyond the lungs. In August, research revealed that air pollution causes a “huge” reduction in intelligence, while in 2016 toxic nanoparticles from air pollution were discovered in human brains.

U.S. Air Pollution Is 'Completely Outrageous' - How do you think the U.S. stacks up against other countries for protecting its citizens from the health threats of air pollution?   That's the question Christiana Figueres, one of the world's leading climate warriors, posed at last week'sGlobal Climate and Health Forum, an official side event of the Global Climate Action Summit. The answer, said Ms. Figueres, is "completely outrageous."  The U.S. is one of the richest countries in the world, has the highest per capita spending on health care, and has an effective federal clean air law. But when it comes to avoiding sicknesses and deaths due to air pollution, we are ranked #23 in the world. In 2016, the American population lost 516 years of disease- and disability-free life per 100,000 people. That's more than double the rate found in top-ranked New Zealand, and only marginally better than countries like Honduras (#26) and Nicaragua (#28).  Most air pollution-related deaths and illnesses are caused by fine particle pollution, known more formally as "fine particulate matter" or PM2.5. Fine particles can lodge deep in the lungs and get into the bloodstream. This form of pollution has been linked to a wide array of health effects, including premature deaths, asthma attacks, heart attacks, lung cancer, preterm births, autism and dementia.

The poisoning of Willowbrook - If you call up the 2014 National Air Toxins Assessment map, which estimates the risk of cancer for residents of every census tract in the United States, and type in “Chicago, IL,” you’ll see a dark patch of blue over the southwest suburb of Willowbrook: That’s the location of Sterigenics International, a company that uses ethylene oxide to sterilize medical products like surgical trays and gowns. According to the Environmental Protection Agency, exposure to the gas can “result in respiratory irritation and lung injury, headache, nausea, vomiting, diarrhea, shortness of breath, and cyanosis. Chronic exposure has been associated with the occurrence of cancer, reproductive effects, mutagenic changes, neurotoxicity, and sensitization.”Indeed, according to the NATA map, residents of Willowbrook had a cancer risk of 300 in a million, specifically as a result of exposure to ethylene oxide emitted by Sterigenics. That’s the highest score anywhere in the Chicago area, and ten times higher than the vast majority of census tracts, which ran a risk of 30 in a million. In fact, I searched the entire map of the United States, and the only place I found that exceeded Willowbrook’s cancer risk was St. John the Baptist, Louisiana, in the state’s notorious “cancer alley” of oil refineries and petrochemical processors.  The governor’s original response seems somewhat inadequate…Sterigenics is owned by a private equity firm co-founded by Gov. Bruce Rauner. Rauner left the firm in 2012 before running for governor.On Tuesday, Rauner urged people to remain calm.“I believe that company took the actions themselves, put in control equipment to reduce the emissions…So, this is, and the federal government, I wish they said it earlier, but they said it, I guess, in the last day or two, they put out a letter. This is not an emergency, this is not a public health immediate crisis, this is something we’re managing,” he said.But the mayor of Willowbrook, who can see the company outside his office window, calls the situation urgent. “It’s an emergency to me because all my citizens are concerned as well as all the employees here and I’m sure all the people who work in this area are and I am,” Frank Trilla said.

THE BLOG I NEVER WANTED TO WRITE - Andrea Thome - It’s almost midnight, and sleep won’t come. My mind is racing. You see, our community is in crisis. A real crisis.We’ve been being poisoned by a company called Sterigenics, and it’s been happening without our knowledge since the mid-1980’s. Our cancer rates are ten times higher than the national average, but only in a ten-mile radius surrounding this plant. Maybe it was more appropriate for them to be granted a permit in 1986, but we all know that this area’s population has boomed since then, and that our highly residential area is no place for them to continue to operate in present day. They burn and emit twenty-four-hours a day, seven days a week. They’ve got to go before they kill any more of us. They use a highly-toxic chemical called Ethylene Oxide to sterilize plastic medical equipment, burning off the residual toxic poison directly into the air from their twin smokestacks. They are located yards away from the shopping center that houses our Target, Dunkin Donuts, Chipotle and the brand-new Marshalls everyone is so excited about. They’re less than one mile from four schools and a day care center, where children play outside. They are less than one mile from where we’re reluctant to send our son to play his almost-daily fall baseball and flag football games, depending on which way the wind blows.And they are located about a mile from our home and less than one mile from that of my parents.  My parents moved here from Cleveland, Ohio in 2007 to be close to their grandchildren after we begged them to do so. Both of them were healthy and happy when they crossed the threshold of their Willowbrook home eleven years ago. Where are they now? My mom died in October of 2014 after an excruciating battle with liver and kidney disease. She didn’t drink. She didn’t smoke. She didn’t do drugs. She was a life-long vegetarian. She meditated daily. My dad who was an avid exerciser and walker is trying to reclaim his life after he almost lost it to a huge brain tumor that nearly robbed him of his eyesight when it rapidly overtook his brain. We spent our Christmas Eve this year at Rush Hospital, while brilliant surgeons cut his head open from one ear to the other to remove a huge mass that surrounded his pituitary. The cause of his kind of tumor is largely unknown, but pardon me if I’ve stopped believing in coincidences at this stage of the game.

Duke University Study: N.C. Residents Living Near Large Hog Farms Have Elevated Disease, Death Risks ---Residents of communities near industrial-scale hog farms in North Carolina face an increased risk of potentially deadly diseases, Duke University scientists reported in a study released this week.Researchers found that compared to communities without big hog farms, in the communities with the highest hog farm density, there were 30 percent more deaths among patients with kidney disease, 50 percent more deaths among patients with anemia, and 130 percent more deaths among patients with a blood bacterial infection, called sepsis. The communities near the heaviest concentration of large hog farms also had a greater risk of infant mortality and lower birth weight. Duke scientists analyzed 2007-2013 data for disease-specific hospital admissions, emergency room visits and deaths across North Carolina. They compared the incidence of those health indicators among North Carolinians who live one to three miles from a hog farm to residents who live six to 12 miles away. An estimated 650,000 North Carolinians live within three miles of a large hog farm, according to an EWG geospatial analysis of state data, which was not part of the Duke study. *Elevated risk of deaths, hospital admissions and emergency room visits from health problems such as anemia, kidney disease, and sepsis, increase for residents living at approximately 1, 3, and 6-mile distances from a hog farm.

Bill Gates- The Threat Of A Disease X Global Pandemic Is Very Real -  When it comes to global health policy, Bill Gates has never been known for subtlety. So it's hardly surprising that his charitable foundation's latest report on the greatest challenges facing mankind might make some readers want to lock themselves in an indefinite quarantine. Readers familiar with Gates' previous warnings about the rising risk of a global pandemic will recognize the top three risks: antibiotic resistance, governmental reluctance to fund health-care solutions and the next global contagion. The latter risk factor has become so universally feared by health professionals that the World Health Organization already has a name for it: "Disease X". The likelihood of an explosive global pandemic breaking out in the relatively near future increases along with the population in the world's poorest countries, which are presently experiencing explosive population growth even as birth rates in the developed world plummet. And if the world's wealthiest countries don't invest resources to combat these issues in Africa, South America and Asia now, it will be infinitely more expensive grappling with the consequences on the back-end, as Gates explained in an interview with the Telegraph. "We are not fully prepared for the next global pandemic," he says. "The threat of the unknown pathogen – highly-contagious, lethal, fast-moving – is real. It could be a mutated flu strain or something else entirely. The Swine Flu and 2014 Ebola outbreaks underscored the threat." The risks associated with the population boom in the poorest countries in Africa has long been treated as "the elephant in the room" by global policy makers. Even if one sets aside the risk of disease, the developing world must step up to monitor the economic impacts of rapidly increasing populations, confronting issues like political instability to ensure that the expansion will yield unbridled growth like similar periods in China and India.

US Diplomats Involved In Trafficking Of Human Blood And Pathogens For Secret Military Program - The US Embassy to Tbilisi transports frozen human blood and pathogens as diplomatic cargo for a secret US military program. Internal documents, implicating US diplomats in the transportation of and experimenting on pathogens under diplomatic cover were leaked to me by Georgian insiders. According to these documents, Pentagon scientists have been deployed to the Republic of Georgia and have been given diplomatic immunity to research deadly diseases and biting insects at the Lugar Center – the Pentagon biolaboratory in Georgia’s capital Tbilisi. This military facility is just one of the many Pentagon biolaboratories in 25 countries across the world. They are funded by the Defense Threat Reduction Agency (DTRA) under a $ 2.1 billion military program – Cooperative Biological Engagement Program (CBEP), and are located in former Soviet Union countries such as Georgia and Ukraine, the Middle East, South East Asia and Africa. The Pentagon bio-laboratory is heavily guarded. All passers-by within a radius of 100 m are filmed although the military biolaboratory is located within a residential area. The security guards warn me that if I do not comply, show my passport and leave this place, I will be arrested. My official request to the Lugar Center for access to the facility and for interviews has also been rejected. However, I go back at night when the laboratory is seemingly still working. No matter how far the distance the air is laden with the smell of chemicals. This smell coming from the Lugar Center at night is blown by the wind to the residential area. Local residents from the Alexeevka neighbourhood, where the laboratory is located, complain that dangerous chemicals are being secretly burnt at night and that hazardous waste is being emptied into the nearby river through the laboratory’s pipes. Locals complain of constant headaches, nausea, high blood pressure and dizziness when chemicals are being burnt at night in the laboratory which is just a couple of hundred meters from their homes.“There is a smoke – black, red, green at night or especially early in the morning at around 3, 4 a.m. Even the hens have died. They put a big pipe underground and connected it to the drains. This smell comes from there. It smells like rotten eggs and decaying hay. The smell is so bad and is spread in different directions by the wind”, says Eteri Gogitidze who lives in a block of flats next to the laboratory.

Autism and DDT: What one million pregnancies can — and can’t — reveal --  Mothers with high levels of the pesticide DDT in their blood during pregnancy are more likely to bear children who develop autism, according to a study of blood samples from more than one million pregnant women in Finland. The World Health Organization estimates that globally, one in 160 children has autism. Any case of autism is likely due to a number of factors, including genetics and other environmental exposures. Although the authors stress that the findings do not prove that autism is caused by DDT — whose use has been banned in many countries for decades over concerns about its effects on wildlife— it is the first such association using a direct measure of exposure to the pesticide. Researchers who investigate links between environment and disease say that further studies are needed to determine the mechanism, if any, by which DDT exposure could trigger autism. The study, published on 16 August in the American Journal of Psychiatry1, also examined mothers’ exposure to another set of chemicals known as polychlorinated biphenyls (PCBs), and found no association between these substances and autism. That finding deepens questions about whether or how DDT might be linked to autism. DDT — which is still sometimes used in Africa to control mosquito populations — lingers in soil and water for decades, accumulating in plants and the animals that consume them. PCBs, which used to be common in building materials and electronics, tend to accumulate to high concentrations in certain fish. Brown cautions that although there seems to be a link between autism and DDT exposure, the overall risk of having a child with the disorder is low — even among women with high DDT levels. His group plans to look at other organic chemicals in the Finnish database to determine whether they might affect fetuses by interacting with DDT.

Dave Murphy: Will Monsanto's Loss Result In Less Poison In Our Food? - In November 2016, a very concerning report -- Glyphosate: Unsafe On Any Plate -- was released by The Detox Project and Food Democracy Now!, raising the alarm of the high levels of glyphosate in the US food supply and the (deliberate?) low levels of awareness of its associated health risks.Soon after its release, we brought Dave Murphy, executive director of Food Democracy Now!, on the podcast to explain the explosive findings within this report on the world's most-used herbicide (more commonly known by its retail brand: Roundup). We asked: Are we being poisoned in the pursuit of profit?As happened in past decades with the alcohol and tobacco industries, the glyphosate report added compelling evidence that profits have indeed taken a priority over consumer safety in our food production system -- and as public health concerns mounted, Big Ag started circling its wagons and attacking the questioners rather than embracing open scrutiny.But last month, the tables turned. In a landmark upset ruling, Monsanto's Roundup weedkiller was ruled to be carcinogenic, and the company's attempt to hide this fact from consumers made it guilty of acting “with malice or oppression”. Monsanto's new parent company Bayer was ordered to pay the plaintiff, a former school groundskeeper now dying of non-Hodgkin's lymphoma, $289 million in damages. Will this court ruling restrict the use of glyphosate going forward? Or will it be de-fanged upon appeal? What else has been learned about the health impacts of glyphosate in our food since the 2016 report? What is the latest science telling us? To address these important questions and more, we welcome Dave Murphy back on the program.

Seed diversity is disappearing — and 3 chemical companies own more than half  - By 2018, after a frenzy of mergers and acquisitions, just three companies controlled more than half of all seed revenues, and a grow­ing percentage of the living germplasm embedded in those seeds. The primary business for all three, now fused into globe-stretching merged companies—DowDuPont, Bayer-Monsanto, and Syngenta-ChemChina—is not seeds, but agricultural chemicals. The combina­tion of chemical and seed companies is giving rise to seeds that are born addicted to chemicals for their survival—entire generations full of crack-baby seeds.  One major result has been the accelerating disappearance of seed diversity at just the time when we require a broader genetic spectrum to adapt to the volatile impacts of our changing climate. Changes in growing conditions are convulsing the planet’s food-growing lands. The changes are coming more quickly, and less predictably, than our ability to breed seeds can respond. The time by which adaptability to new conditions must occur is shortening. We can no longer wait the average five-to-ten- or even fifteen-year time span needed to breed a new variety. Not only is it getting hotter and drier, tumult in the atmosphere is delivering conditions that we can no longer predict, which means that agriculture has to respond both to the current set of conditions, and to new and more volatile conditions, which may be just a season or two ahead. Climate change is heightening the stakes in our search for seeds that can adapt to an accelerating pace of unknowns. “There’s no precedent at all for what we’re going to see,” George Frisvold, a profes­sor of Agricultural and Resource Economics at the University of Arizona, told me, when I visited him in his office on the other side of town from Native Seeds/SEARCH in Tucson. Frisvold served on Pres­ident Clinton’s Council of Economic Advisers where, in the 1990s, he began trying to gauge the impact of climate change on our food system. Now, it seems, the concerns they had at the time are coming true like a chronicle foretold. “We don’t really know how bad it’s going to get.”

Wild rice on Rainy Lake hurt by water levels, climate change, and invasive species - The American-Canadian organization in charge of managing international border waters has reported that the important food source and cultural resource wild rice, or manoomin, is suffering in historically-productive Rainy Lake.International Joint Commission writer Kevin Bunch describes how damming along the chain of lakes and rivers on the Canadian border has made it difficult for rice to grow, and human manipulation of water levels has made it easier for invasive cattails to push out wild rice. Rainy Lake is located in the middle of a water basin that runs between the state of Minnesota and the province of Ontario, with the Couchiching First Nation on the western shore of the lake. The impact has been devastating for the Anishinaabe and Ojibwe people who have harvested the grain for centuries. “One hundred years ago, the wild rice we harvested was a food staple and something that was just part of your diet, and we’d pick enough to last a year,” Allan Yerxa, lands and resources coordinator for the Couchiching First Nation, told IJC. “Nowadays it’s almost a luxury to have wild rice in your cupboard – that’s how it’s affected the First Nations people.” Invasive hybrid cattails that grow in thick mats have created monocultures where manoomin once grew. The non-native plants thrive in the same habitat as wild rice, and muskrats are one of the only natural controls for the plants. But the aquatic animals can’t survive winters when water levels are being drawn down, and the population has been “abysmal” since the rules were changed in 2000.

How a Ragtag Group of Oregon Locals Took On the Biggest Chemical Companies in World — and Won  - The people who wrote an ordinance banning the aerial spraying of pesticides in western Oregon last year aren’t professional environmental advocates. Their group, Lincoln County Community Rights, includes the owner of a small business that installs solar panels, a semi-retired Spanish translator, an organic farmer who raises llamas, and a self-described caretaker and Navajo-trained weaver. And yet this decidedly homespun group of part-time, volunteer, novice activists managed a rare feat: They didn’t just stop the spraying of pesticides that had been released from airplanes and helicopters in this rural county for decades. They also scared the hell out of the companies that make them, according to internal documents from CropLife America, the national pesticide trade group. Although some of the world’s biggest companies poured money into a stealth campaign to stop the ordinance, and even though the Lincoln activists had no experience running political campaigns, the locals still won. The Lincoln County aerial spray ban, which passed in May 2017, is just one of 155 local measures that restrict pesticides. Communities around the country — including Dubuque, Iowa; Reno, Nevada; Spokane, Washington; and Santa Fe, New Mexico — have instituted protections that go beyond the basic limits set by federal law. Some are aimed at specific pesticides, such as glyphosate, others list a few; while still others ban the chemicals altogether. In the three decades after the first local pesticide restriction was passed in 1970 in Maine, the bans came in a slow trickle. These days, they are coming in a flood, with towns and counties passing more of these measures in the past six years than they did in the 40 before that, according to data from the advocacy group Beyond Pesticides.

How Climate Change Is Increasing Global Hunger --For the third consecutive year, global hunger has gotten worse, and this year the numbers have hit their highest since 2009, with the United Nations pointing the finger at climate change as the key cause.As of this year, the number of hungry globally has reached 821 million, according to a new report by the UN’s Food and Agricultural Organization (FAO).The absolute number of people facing chronic food deprivation was 804 million people in 2016 and 784 people in 2015–levels last seen a decade ago. In other words, one in every nine people worldwide doesn’t get enough to eat. Even worse, 22.2 percent of children under five were affected by stunting in 2017 due to hunger.What is causing these scary figures?The main culprit is climate change and these figures might become even scarier if countries fail to tackle the problem and work to build up resistance to its unavoidable consequences, the report warns.Extreme weather events–including extreme heat, droughts, floods and storms–are said to be the key drivers behind rising global hunger.The number of extreme climate-related disasters has doubled since the early 1990s, with an average of 213 annually from 1990 to 2016, harming agricultural productivity and leading to increases in food prices coupled with losses in income. It’s simple math that reduces access to food.Data from the FAO study shows that the number of undernourished people tends to be higher in countries highly exposed to climate extremes.  As such, climate change is threatening to erase any gains made in the global effort to fight hunger.    “If we are to achieve a world without hunger and malnutrition in all its forms by 2030, it is imperative that we accelerate and scale up actions to strengthen the resilience and adaptive capacity of food systems and people’s livelihoods in response to climate variability and extremes,” the heads of FAO, the International Fund for Agricultural Development (IFAD), the UN Children’s Fund (UNICEF), the World Food Programme (WFP) and the World Health Organization (WHO) wrote in a joint foreword to the report.

UN report identifies where global harvests will rise and fall by 2050 - The United Nations (UN) released a report Monday identifying future winners and losers in agriculture as the planet warms from the effects of climate change.  The report titled "The State of Agricultural Commodity Markets 2018" has attempted to study the relationship between agricultural trade, climate change and food security. The Food and Agriculture Organization of the UN launched the report from Rome on Monday.  Under a section focused on the long-term impact of climate change on agricultural production and trade, the agency concluded that farmers in different parts of the world can expect yields to either rise or fall over the next three decades.  Using the year 2050 as an end point, the report stated that declines are forecast to be most obvious in West Africa and India where farming yield could fall by as much as 2.9 and 2.6 percent respectively.  Conversely, the UN researchers forecast that higher temperatures in higher latitude regions will increase harvest. Winners in this model include Canada (2.5 percent) and Russia (0.9 percent) and suggested that even parts of Finland could soon be warm enough to produce cereal.  "Whereas most tropical regions are likely to experience production losses due to rising temperatures, production in temperate regions is expected to benefit from warmer climate and longer growing seasons," the report said.

Bye bye bugs? Scientists fear non-pest insects are declining (AP) — A staple of summer — swarms of bugs — seems to be a thing of the past. And that's got scientists worried.Pesky mosquitoes, disease-carrying ticks, crop-munching aphids and cockroaches are doing just fine. But the more beneficial flying insects of summer — native bees, moths, butterflies, ladybugs, lovebugs, mayflies and fireflies — appear to be less abundant.Scientists think something is amiss, but they can't be certain: In the past, they didn't systematically count the population of flying insects, so they can't make a proper comparison to today. Nevertheless, they're pretty sure across the globe there are fewer insects that are crucial to as much as 80 percent of what we eat.Yes, some insects are pests. But they also pollinate plants, are a key link in the food chain and help decompose life."You have total ecosystem collapse if you lose your insects. How much worse can it get than that?" said University of Delaware entomologist Doug Tallamy. If they disappeared, "the world would start to rot." He noted Harvard biologist E.O. Wilson once called bugs: "The little things that run the world."  Scientists are noticing fewer flying insects that aren't really pests, like moths, fireflies and butterflies. A variety of reasons are suspected but they all lead back to what humans are doing do the environment, especially landscapes. The 89-year-old Wilson recalled that he once frolicked in a "Washington alive with insects, especially butterflies." Now, "the flying insects are virtually gone."

Microplastics can spread via flying insects, research shows - Microplastic can escape from polluted waters via flying insects, new research has revealed, contaminating new environments and threatening birds and other creatures that eat the insects.Scientists fed microplastics to mosquito larvae, which live in water, but found that the particles remained inside the animals as they transformed into flying adults. Other recent research found that half of the mayfly and caddisfly larvae in rivers in Wales contained microplastics.Concern over microplastic pollution is rising rapidly as it is discovered in ever more places, and very little research has been done on how it may harm wildlife or humans. The particles can harbour bacteria or leach toxic chemicals. Microplastics have been found in tapwater around the world, in vast numbers in the oceans and sea creatures and even in remote Swiss mountains.“It is a shocking reality that plastic is contaminating almost every corner of the environment and its ecosystems,” said Prof Amanda Callaghan, at the University of Reading, UK, who led the new research on mosquitoes. “Much recent attention has been given to the plastics polluting our oceans, but this research reveals it is also in our skies.”The new study, published in the journal Biology Letters, used Culex pipiens mosquitoes, as they are found across the world in many habitats. The researchers found the larvae readily consumed fluorescent microplastic particles that were 0.0002cm in size.“Larvae are filter feeders that waft little combs towards their mouths, so they can’t actually distinguish between a bit of plastic and a bit of food,” Callaghan said. “They eat algae, which are more or less the same size as these microplastics.” The larvae matured into a non-feeding pupa stage and then emerged as adult mosquitoes, which still had significant microplastic within them. The researchers are now studying if this damages the mosquitoes.

Mosquitoes Could Spread Microplastics, Study Suggests --Microplastics, which get gobbled up by whales, deep-sea fish and plankton, have also turned up in the bodies of mosquitoes, scientists have revealed.The research, published Wednesday in the journal Biology Letters, is the first to show that bits of plastic can be transferred between a mosquito's life stages that use different habitats.For the study, the scientists fed the larvae of Culex pipiens—the common house mosquito—different-sized fluorescent polystyrene beads. The researchers found that the tiny fragments stayed in the larvae's bodies as they matured into flying adults.Beads that were smaller than 2 micrometers in size transferred "readily" into pupae and adult stages, while larger beads that were 15 micrometers in size transferred at a "significantly reduced" rate, the paper states."Larvae are filter feeders that waft little combs towards their mouths, so they can't actually distinguish between a bit of plastic and a bit of food," lead researcher Amanda Callaghan of the University of Reading told The Guardian. "They eat algae, which are more or less the same size as these microplastics."The study suggests that plastics could enter the larger food chain if birds, bats or other creatures eat the mosquitoes."The implication is that you can have plastics at the bottom of the pond that are now going up into the air and being eaten by spiders and bats and animals that normally wouldn't have access to that plastic," Callaghan told The Independent. "You could have a dragonfly, for example, eating mosquitoes as they are emerging—so it could be eating lots of mosquitoes with plastic in them, and then a bird could be eating that and getting an even bigger dose."

How much plastic does it take to kill a turtle? Typically just 14 pieces  --We know there is a lot of plastic in the ocean, and that turtles (and other endangered species) are eating it. It is not uncommon to find stranded dead turtles with guts full of plastic. But we weren’t really sure whether plastic eaten by turtles actually kills them, or if they just happen to have plastic inside them when they die. In our research, published today in Nature Scientific Reports, we looked at nearly 1,000 turtles that had died and washed up on beaches around Australia or were found in nets. About 260 of them we examined ourselves; the others were reported to the Queensland Turtle Stranding Database. We carefully investigated why the turtles died, and for the ones we examined, we counted how many pieces of plastic they had eaten.  Some turtles died of causes that were nothing to do with plastic. They may have been killed by a boat strike, or become entangled in fishing lines or derelict nets. Turtles have even been known to die after accidentally eating a blue-ringed octopus. Others definitely died from eating plastic, with the plastic either puncturing or blocking their gut.  Some turtles that were killed by things like boat strikes or fishing nets nevertheless had large amounts of plastic in their guts, despite not having been killed by eating plastic. These turtles allow us to see how much plastic an animal can eat and still be alive and functioning.  We tested this idea using our turtle samples. We looked at the relationship between the likelihood of death due to plastic as determined by a turtle autopsy, and the number of pieces of plastic found inside the animals. Unsurprisingly, we found that the more plastic pieces a turtle had inside it, the more likely it was to have been killed by plastic. We calculated that for an average-sized turtle (about 45cm long), eating 14 plastic items equates to a 50% chance of being fatal.

The Many Hazards of Toxic Algae Outbreaks - This summer, the Environmental Working Group (EWG) is tracking outbreaks of potentially toxic algae across the U.S. We have been startled to find that these outbreaks are erupting everywhere: from the East Coast to the West Coast, from the Great Lakes to the Gulf of Mexico. Though outbreaks of algae vary in type, severity and health hazards, all toxic algae outbreaks have serious consequences.  Exposure can be caused by contact, ingestion or inhalation. Short-term health effects can range from skin irritation and numbness to fever and headaches. Long-term exposure can lead to cancer, liver failure and sperm damage. Some studies have even linked ingestion of cyanotoxins to brain inflammation. What is traditionally called blue-green algae is actually a class of microscopic organisms called cyanobacteria. Cyanobacteria can be toxic and can also produce various types of cyanotoxins that have different hazards.  With their small, developing bodies, children are especially endangered by algae exposure. The Centers for Disease Control and Prevention found that in 2009-2010, 61 people in Ohio, New York and Washington got sick from toxic algae outbreaks in lakes, and two-thirds of them were children or teenagers. Children may be at a greater risk of illness from the toxins generated by toxic algae outbreaks because they more frequently come in contact with or ingest contaminated water.  Toledo was the first major U.S. city where toxic algae outbreaks made tap water unsafe for human consumption. But it probably won't be the last, especially since the number of these outbreaks across the nation seems to be multiplying each year. Because algae outbreaks are so widespread and seem to be growing, they may be fouling tap water even in places where officials have not issued a do-not-drink warning

First Fatal Shark Attack in Massachusetts Since 1936 - A Massachusetts man died Saturday after what is believed to be the first deadly shark attack in that state since 1936, CNN reported Sunday.The death comes as the population of great white sharks off Cape Cod has increased in recent years following the rebounding of the seal population there."Overall, I don't think there's much you can do about the situation. It's their home, sharks live here and we're not really on their menu, but unfortunately when they do take a test bite and decide we're not on their menu, it just happens to be pretty devastating generally," area surfer Robert Bessler told CNN in response to the attack.The death comes a month after another Massachusetts man survived a shark attack in Truro, also on Cape Cod.The victim, 26-year-old Arthur Medici, was boogie boarding with another man 30 yards off of Cape Cod's Newcomb Hollow Beach when the attack occurred.He was given CPR and taken to Cape Cod Hospital, but died once there.Acting Deputy Chief of Cape Cod National Seashore Chris Hartsgrove said Medici's injuries looked like shark bites. Experts told The New York Times that great white sharks don't intentionally attack humans, but sometimes confuse them for seals or other large marine mammals.

Interior moves ahead with opening wildlife refuge next to contaminated nuclear site - The Trump administration is moving ahead with plans to allow public access to a wildlife refuge in Colorado that surrounds one of the country's most contaminated former nuclear sites. The Fish and Wildlife Service (FWS) on Saturday plans to make more than 5,000 acres available to the public in Colorado's Rocky Flats National Wildlife Refuge, located 12 miles northwest of Denver. Earlier Friday, that decision was briefly delayed by Interior Secretary Ryan Zinke. "Secretary Zinke has heard concerns about the opening of the Rocky Flats National Wildlife Refuge and has decided to delay the opening to gather additional information. The Secretary has asked Deputy Secretary Bernhardt to look into this matter,” an Interior spokeswoman said in a statement to The Hill. But an hour after Interior announced the delay, it said the plans would move forward. "The Deputy Secretary has reviewed the refuge and determined it will open tomorrow as scheduled," the department said. The refuge, designated by Congress in 2011, surrounds a restricted Superfund site that for decades was a manufacturing site for the plutonium used in nuclear bombs. Plutonium particles are known to cause cancer. The Environmental Protection Agency (EPA) and the Colorado health department both said the park is safe for use following tests that found only “an extremely small” increased risk for cancer in the area. .

Too Hot for Work? - With temperatures breaking records every summer, we’re already living through climate change’s fallout. But some communities are experiencing more effects than others, especially when it comes to working conditions: Dirty air strafes our lungs on our daily commutes, power plants pump smog into downwind neighborhoods, and farm laborers are getting roasted alive. In the United States, heat-related death and illness poses one of the most immediate and widespread risks linked to global-warming trends. In July alone last year, according to Public Citizen, “An average of 1.1 million agriculture and construction workers labored in extreme conditions each day.” A study on hospitalizations in Los Angeles from 2005 to 2010 found that heat-related emergency-room visits grew by about 8 percent with each percentage increase in residents working in construction, and by 11 percent for every comparable rise in the farming, forestry, and related outdoor sectors.  In a new study on occupational health in an era of climate change, researchers warn of a rising surge of work-related hazards directly tied to extreme weather events and intensifying carbon emissions.  A warming atmosphere also elevates the risk of heart, lung, and renal problems, ranging from asthma attacks to chronic heart disease. And beyond the temperature itself, workers will be more exposed to allergens like pollen, waterborne pathogens, and cancer-causing UV rays. Some populations, such as pregnant women, will be especially sensitive to hot environments. And communities must prepare for huge demographic shifts due to climate volatility, including population displacement and migration related to catastrophic weather and “climate refugees.”

UK residents ‘ten times more likely die due to a cold home than a traffic accident’ - Poor planning and a lack of national resources meant people in the UK were almost ten times more likely to die from a cold home than a road traffic accident during the cold snap last winter, a new report claims. Energy charities National Energy Action (NEA) and Energy Action Scotland said the severe weather caused a huge surge in preventable deaths among the frail and elderly, and left health and social care services “creaking at the seams”. Dr Jamie-Leigh Ruse, senior research and policy officer at NEA, said: “In England alone, between 1 January and 31 March 2018, an additional 15,544 deaths occurred. “Most days in this period saw more deaths than the corresponding day than in any of the previous five years. “They said this meant people were almost ten times more likely to die from a cold home than a road traffic accident. And even though other winters have been much milder, there are still approximately 9,700 premature deaths a year due to vulnerable people being unable to heat their homes adequately, if at all.

Florence’s SC forecast felt so unpredictable. But the NHC nailed it. Florence has been one weird storm.The massive system threatened to grow to a Category 5, which would have had winds of 156 mph or more. No storm in recorded history had ever done that so far north, so close to South Carolina. Meanwhile, its uncertain path had computer models pointing fingers in different directions trying to predict it. After landfall, it moved inland to the southwest, a direction that no hurricane expert had ever seen before.Florence — a frightening storm larger than the Carolinas combined — was nothing if not unpredictable.But National Hurricane Center forecasters nailed it. They indicated as early as six days out that the storm was most likely to strike where it did, in North Carolina near the South Carolina border, then turn south. The performance lit up social media with accolades from meteorologists. Shea Gibson, the Charleston-based forecaster for the private company WeatherFlow, called it one of the more impressive forecast verifications he had ever seen. (forecast maps video) Here’s why the storm was so unpredictable, and why the Hurricane Center staff got it right:

Hurricane Florence achieves DIRECT HIT on Brunswick nuclear power plant in Southport, NC… pray for our safety -- Hurricane Florence, which achieved landfall early Friday morning, has achieved a direct hit on the Brunswick nuclear power facility in Southport, NC. The eye of the hurricane — where the winds are the most severe — is right now swirling directly over the nuclear power containment buildings, battering them with 100+ MPH winds.As Natural News reported earlier, there are at least twelve active nuclear power plants in the direct path of Hurricane Florence. Many Americans are concerned about whether these nuclear power facilities are prepared to survive a worst-case scenario of a direct hit.Now, we know that direct hit has taken place. Thankfully, hurricane winds dropped from 140 MPH to around 100 MPH over the last 48 hours. This may be the saving grace that prevents these nuclear power plants from being severely damaged or destroyed by the storm.  As the map shows, below, the Brunswick power plant is located just South of Wilmington, North Carolina. This is precisely where the eye of the hurricane made landfall:  UPDATE: The U.S. Nuclear Regulatory Commission has now declared an emergency at the Brunswick nuclear power facility due to extreme flooding. The facility is running a “hot shutdown” sequence, and all personnel are currently blocked from accessing or entering the structure. This has been declared an emergency “hazardous event” by the NRC. See full details here.

Dams in Danger in North Carolina; Florence Death Toll Rises to 12 in the State - Some residents of Creston, North Carolina, were evacuated from their homes Sunday night when a dam appeared close to failure. Less than an hour later, another emergency was reported at a levee in Landis. Late Sunday night, rescuers were searching for a 1-year-old child who had been swept away, WSOC reported, after a car was trapped by floodwaters from Richardson Creek on Pleasant Hill Church Road in Union County. Rescuers said the child's mother was also swept from the car, a WCCB reporter tweeted. She was rescued and taken to the hospital. Shortly before 8 p.m., the Ashe County emergency manager reported the imminent failure of the Headwaters Dam in the Headwaters subdivision of Creston, the National Weather Service reported. The alert said the dam was in danger of being breached, and it said people downstream of 5010 3 Top Road were being asked to evacuate.About 9 p.m., local law enforcement officials reported that the dam was still in danger of failing, but there was no indication yet that it had breached. People were being evacuated. Creston is about 25 miles north of Boone, near the Virginia state line. At 8:45 p.m., Rowan County emergency officials reported a partial breach of the Lake Corriher levee in Landis, which is about 34 miles northeast of Charlotte. The Landis Police Department said in a Facebook post that water was about 4 feet above the emergency spillway at Lake Corriher. Water was about 3 feet above the spillway at neighboring Lake Landis. A CSX train derailment in Lilesville may have been caused after flooding washed out the tracks. In a statement, CSX officials said several railcars derailed about 6 p.m. Personnel on the train were taken to a hospital with minor injuries.

Florence: Hurricane-force rain causes catastrophic flooding, widespread power outages with more to come - live updates as rescue efforts continue, death toll rises - Florence fast facts:

• At least 23 people have died in storm-related incidents, including a man and a woman in Horry County, S.C. who died from carbon monoxide poisoning.
• Some 523,000 homes and businesses are still without power in North and South Carolina as of 5 a.m. Monday.
• As of 5 a.m. Monday, Florence was a tropical depression, NOAA's Weather Prediction Center said, with sustained winds of 30 mph.
• It was some 125 miles west-southwest of Roanoke, Va. and 145 miles west-northwest of Greensboro, N.C., moving north-northeast at 13 mph.
• Florence was still massive Monday morning. Radar showed parts of the sprawling storm over six states, with North and South Carolina in the bull's-eye.
• Some weakening is expected today before Florence re-intensifies as it transitions to an extratropical cyclone tomorrow and Wednesday.
• Swansboro, N.C. has received more than 30 inches of rain; several other places have received more than 20 inches.
• Florence is producing widespread heavy rains and causing flash flooding and major river flooding over a "significant portion" of North and South Carolina, the National Hurricane Center said.

CBS News has confirmed at least 23 deaths related to Florence. The North Carolina Department of Public Safety says there have been four additional deaths in Cleveland County, Columbus County, Onslow County and Scotland County.Authorities have recovered the body of a 1-year-old who was swept away by Florence's floodwaters in Union County, North Carolina. The county sheriff's office said a woman and her child were on their way to visit relatives when she drove past barricades on highway 218 in northern Union County. The woman later told authorities someone had pushed the barricades to the side, making her think it was alright to go through.  The woman's car was swept off the road by the floodwaters, pinning it against a group of trees. She was able to free 1-year-old Kaiden Lee-Welch from his car seat and escape. But the waters were deep, and police said the woman lost her grip and her son was swept away. Wilmington, North Carolina, has been completely cut off by floodwaters and officials are asking for additional help from state law enforcement and the National Guard.

 Two Mental-Health Patients Drowned While Chained Up in a Flooded Police Van - Two female mental-health patients in South Carolina have drowned after the transport van, where they were being held in chains flooded on Tuesday, local ABC affiliate WPDE reports. The incident is currently being investigated by the State Law Enforcement Division.The women were patients at Loris Hospital and Waccamaw Center for Mental Health in Horry County, and were being transported by two sheriff’s deputies to nearby McLeod Health. According to a statement from the Horry Country Sheriff’s Office, when the van became overcome by flood waters from Hurricane Florence, the two deputies tried to free the women — who have not been named — but were unable to because of the fast-rising waters. The deputies climbed to the top of the van where they were rescued by a high water team, while the women remained trapped and chained in the flooded van. As of 8:45 p.m. last night, flood conditions prevented officials from removing the van.“Tonight’s incident is a tragedy,” Horry County Sheriff Phillip Thompson said in a statement. “Just like you, we have questions we want answered. We are fully cooperating with the State Law Enforcement Division to support their investigation of this event.” So far, at least 37 people have died in Hurricane Florence-related incidents, according to CBS, including 27 in North Carolina, 8 in South Carolina, and 2 in Virginia. Although the storm has left the Carolinas and is making its way north, North and South Carolina continue to deal with intense flooding.

Coal Ash Landfill Collapses in North Carolina Under Florence's Catastrophic Rainfall - Florence's catastrophic rains have caused a slope to collapse at a coal ash landfill to collapse at a closed power station near the North Carolina coast, Duke Energy said Saturday night. About 2,000 cubic yards of ash were displaced at the L.V. Sutton Power Station outside of Wilmington, Duke spokeswoman Paige Sheehan said. That contaminated runoff likely flowed into the plant's cooling pond. The company is working to determine if the weir that drains the lake was open or if the contamination made it into the Cape Fear River. The displaced ash was enough to fill 180 dump trucks or about two-thirds of an Olympic-sized swimming pool. Florence slammed into the North Carolina coast as a large hurricane Friday, dumping nearly 3 feet of rain and swelling the region’s rivers. The resulting flooding forced swift-water rescues and left several people dead. The coal-fired Sutton plant was retired in 2013 and the company has been excavating millions of tons of ash from old waste pits and removing it to safer lined landfills constructed on the property. The gray ash left behind when coal is burned contains toxic heavy metals, including arsenic, lead and mercury. A file photo of the dried-up bed of an inactive coal ash pond at Duke Energy’s Sutton plant in Wilmington, North Carolina. (Mike Spencer/AP) Duke has been under intense scrutiny for the handling of its coal ash since a drainage pipe collapsed under a waste pit at an old plant in Eden in 2014, triggering a massive spill that coated 70 miles of the Dan River in gray sludge. In a subsequent settlement with federal regulators, Duke agreed to plead guilty to nine Clean Water Act violations and pay $102 million in fines and restitution for illegally discharging pollution from coal-ash dumps at five North Carolina power plants. The company is in the process of closing all of its coal ash dumps by 2029.

Storm Floods Breached Coal-Ash Pit, Isolated Duke Nuclear Plant -- Duke Energy Corp. grappled with deadly Hurricane Florence’s aftereffects as a breach in a coal-ash landfill worsened and its Brunswick nuclear plant declared a low-level emergency because of flooding. While the U.S. Nuclear Regulatory Commission declared an “unusual event” this weekend at the atomic plant on North Carolina’s soaked southern coast due to “site access issues,” it said there were no safety concerns. Roads around the plant were largely impassable and that supplies were being flown in to stranded workers, according to an engineer.About 30 miles to the north, a Duke landfill in Wilmington holding potentially toxic coal ash suffered further damage, according to the Environmental Protection Agency. Duke said about 2,000 cubic yards of coal ash flowed from its Sutton Plant near the Cape Fear river. While the EPA called it a second breach, the company said it’s all part of the same “erosion event.”   “The next few days will be long ones as flooding continues,” Record-setting, still-rising floods covering much of eastern North Carolina are preventing a comprehensive assessment of Hurricane Florence’s damage. Meanwhile, North Carolina will be dealing with the deluge for at least two weeks, said Wylie Quillian, a National Weather Service hydrologist.While a storm this size typically might cause about $12 billion in losses, Florence could cost the region about $22 billion, said Chuck Watson, a disaster modeler for Enki Research. About $2.5 billion of the losses might be covered by private insurance, according to catastrophe modeler Karen Clark & Co.

3.4 Million Chickens, 5,500 Hogs Killed in Florence's Flooding -- The North Carolina Department of Agriculture said Wednesday that the historic flooding from Florence has killed about 3.4 million chickens and turkeys and 5,500 hogs. "This was an unprecedented storm with flooding expected to exceed that from any other storms in recent memory. We know agricultural losses will be significant because the flooding has affected the top six agricultural counties in our state," said agriculture commissioner Steve Troxler in a press release. The footprint of flooding from this storm covers much of the same area hit by flooding from Hurricane Matthew in 2016, which only worsens the burden on these farmers. When Matthew hit the state, it flooded more than 140 hog and poultry barns, more than a dozen open hog waste pits and thousands of acres of manure-saturated fields, the Environmental Working Group and Waterkeeper Alliance reported. Poultry is the number one agricultural industry in North Carolina, with a statewide economic impact of $36.6 billion a year, according to the North Carolina Poultry Federation. Sanderson Farms, the third largest poultry producer in the country, issued a statement on Monday that 1.7 million of its broiler chickens "were destroyed as a result of flooding." Sixty of its 880 broiler houses in North Carolina flooded and another six broiler houses experienced damage. Four breeder houses out of a total of 92 in the state flooded. Additionally, Sanderson said about 30 Lumberton-area farms, housing approximately 211,000 chickens in each, have been isolated by flood waters. More chickens could die if the company is unable to reach those farms with feed trucks. The state is also the nation's second leading producer of hogs, with more than 2,100 farms that raise about 9 million hogs each year, according to the North Carolina Pork Council. The 5,500 hog deaths from Hurricane Florence have already exceeded the 2,800 killed during Hurricane Matthew, the industry trade group wrote in a statement Tuesday.

Pig Excrement Spills Into North Carolina Floodwater - Hurricane-wracked North Carolina faced a health and environmental crisis after at least 17 hog-waste lagoons were compromised and sewage plants across the state flooded, releasing millions of gallons of partially treated human discharge. On an aerial tour Monday of a swath of swine country -- the dozen top hog-producing counties cover an area the size of New Jersey -- many lagoons appeared intact. Roughly the size of a soccer field, they are blue-green or red, thanks to bacteria that break down the feces and urine. Several, though, were swamped with water from the torrential rains and creeks that had burst from their banks. “We don’t think it’s a good idea for people to be swimming around in poop,”   “It’s a pretty serious public-health risk that people should be concerned about.” Four days after deadly Hurricane Florence made landfall, much of the Tar Heel State’s low-lying east remained flooded and impassible. The storm, blamed for killing at least 34 people, damaged a Duke Energy Corp. coal-ash landfill and trapped workers at one of its nuclear plants near stricken Wilmington.  The disaster, forecast to cost $22 billion, was wreaking havoc in myriad ways:

• About 2,200 people and 578 animals have been rescued in North Carolina and about 10,000 people were in shelters.
• Almost 322,000 homes and businesses were without electricity in North Carolina, South Carolina and Virginia.
• Sixteen rivers reached major flooding stage, with three others expected to peak in the next two days, Governor Roy Cooper said. “Sunshine doesn’t necessarily mean safety.”
• New Hanover County and Wilmington, which are mostly cut off, opened distribution centers for meals, water and tarps to supply 60,000 people for four days.

After the storm came increasing worries that floodwater suffused with feces and the corpses of livestock could carry disease. North Carolina is home to more swine than any state besides Iowa -- 9 million of them, more hogs than New York City has humans. The farms are concentrated in its eastern counties, a world away from Charlotte’s bank towers and the Research Triangle’s universities. The sparsely populated land is regularly punctuated by low-lying barns that hold hundreds of pigs that can weigh close to 300 pounds.

 Florence's slow exit means 'catastrophic and historic river flooding will continue for days' - Even as Florence leaves the Carolinas, the floodwater and death toll keep rising.The storm once known as Hurricane Florence has already killed 20 people, trapped hundreds more and made parts of the Carolinas impassable. But forecasters say the worst flooding is yet to come.Residential streets now look like rivers. Rivers like raging torrents. And parts of freeways -- dotted with rescue boats -- have morphed into free-flowing waterways. The remnants of Florence, now a tropical depression, will likely dump another 2 to 5 inches of rain on central and southeastern North Carolina on Monday, CNN meteorologist Michael Guy said.But even when the rain lets up, don't be fooled. The big concern now is river water gushing downstream, further deluging already flooded communities. Several North Carolina rivers, including the Neuse, Trent, and Cape Fear, will remain above and near record flood stage through the end of the week, exacerbating fears of more flood damage."Catastrophic and historic river flooding will continue for days across portions of the Carolinas," the National Weather Service said.Now there are fears the death toll will keep climbing. Authorities reported two more deaths on Monday, both in North Carolina. The body of an elderly man was found by his submerged car Monday morning, the Union County Sheriff's Office said.And 1-year-old Kaiden Lee-Welch, who was swept away by rushing waters Sunday, was found dead Monday, also in Union County.The flooding is so bad in North Carolina that the state's transportation department warned people not to travel in or through the state. Some interstates, including sections of I-95 and I-40, are closed.Emergency workers have made at least 1,000 swift-water rescues in North Carolina by early Monday, the North Carolina Department of Public Safety said. But many more people need help.Those trapped in floodwater could also be without power for days. About 488,551 customers in North Carolina and 16,385 in South Carolina don't have electricity. But the number of actual people without power is far greater, since a single customer can represent an entire family.

Only 3% Of Homeowners In Parts Of Hurricane-Slammed North Carolina Have Flood Insurance - Hurricane Florence's lacerating rains have finally moved on from the Carolina's, but the flooding threat posed by multiple rivers - particularly in the hardest-hit state of North Carolina remains high, as this photo of Cape Fear River, tweeted earlier Tuesday by the Fayetteville Police Department, clearly shows: You can clearly see the water levels rising in Cape Fear River as we compare photos from Sunday to Today. #capefear #Florence #ReadyNC #ReadyFay pic.twitter.com/jiPUCVpLBP  — Fayetteville Police (@FayettevillePD) September 18, 2018  The river is projected to rise nearly 45 feet to near 62.4 feet by Tuesday, according to the NHC - what would be a record-breaking level for the region. As of Monday, Swansboro North Carolina had received nearly 31 inches of rain, which was also a record. The intense flooding has invaded power plants and caused lagoons filled with hog waste to overflow - a phenomenon that will be difficult for state authorities to undo. Aside from the structural damage, the human toll from the storm was also severe, with 35 fatalities across the Carolinas and Virginia. But as the waters recede, rattled residents will begin returning to their homes to see what, if anything, is left of their properties. And unfortunately for hundreds of thousands of them, they will be on the hook for tens of thousands of dollars in damages because, as USA Today reports, only a small fraction of them have a flood-insurance policy. In the coastal areas that were hardest hit by the storm, USA Today estimates that only between 10% and 20% of homes are insured. Further inland, where flooding is still devastating thousands of homes, rates are as low as 1%.  Only 10 percent to 20 percent of coastal homeowners in the hard-hit eastern part of North Carolina, for example, have coverage through the government’s National Flood Insurance Program (NFIP), and only 1 percent to 3 percent of homes in inland counties have flood policies, . Statewide, roughly 3 percent of the homes in North Carolina have flood coverage and 8 percent of homeowners are covered in South Carolina, Rollins said. The reason rates of the insured are so low particularly in the areas further inland has something to do with misperceptions about the government's risk assessments. The numbers of those covered are low, he said, because people think that because their home isn't in a high-risk zone designated by the government that there's "zero risk" of a flood. "But that's not true," Rollins says. Many also don't realize their basic homeowners policy doesn't cover flood damage, while others overestimate the disaster aid they will get from the government.

Drone footage shot after Florence shows a massive river in North Carolina--it used to be a highway -   The scene would make quite a bucolic backdrop for a pastoral painting. The trees were still and verdant, and the late-summer sun glinted off a river of water that flowed into the horizon.Except it was not a river. Nor was it a stream or a canal — at least, not before the storm.When Hurricane Florence hit the Carolinas last week, it brought with it more than 30 inches of rain that has since flooded rivers and roads, in many cases blurring the lines between the two.This was the case Monday with a portion of Interstate 40, one of the country’s longest highways, which stretches from California to North Carolina, where, in Pender County, it was completely submerged. A drone from the North Carolina Department of Transportation captured footage of the stunning spectacle, using the images to underscore a dire warning to the state’s residents: Stay away.There have been at least 35 water rescues in Pender County, according to local news reports.“This isn’t a river … this is Interstate 40,” the Transportation Department tweeted Monday evening. “ … This illustrates our message that travel in this area is impassable and unsafe.”This isn't a river...this is Interstate 40. @NCAviation captured this drone footage today as part of damage assessment near mile marker 387 in Pender County. This illustrates our message that travel in this area is impassable and unsafe. #FlorenceNC pic.twitter.com/28Ok6Tjpcu— NCDOT (@NCDOT) September 17, 2018Earlier Monday, James H. Trogdon III, head of the Transportation Department, posted a photograph of the same stretch of highway, with what appeared to be two people aboard a skiff, surveying the storm damage while boating above what would have been a lane of oncoming traffic just days before. One Twitter user observed that it looked “like a good fishin day on Interstate 40.”

Factbox: Big gains in Florence-impacted utility restoration; gas demand remains down - — While the remnants of Hurricane Florence continued to depress natural gas demand Sunday, power demand across the Carolinas started to show a strong rebound. Industry officials warned, however, that it could be a bumpy road to recovery. Of more than 1.3 million in outages attributed to Florence and its aftermath on Saturday, service by Sunday had been restored to more than half of Duke Energy customers, who bore the brunt of the storm's fury.  Most ports and terminals affected by the storm were reopened by Sunday, while oil and natural gas pipeline systems reported steady operations throughout.Florence's aggregate lost demand for the next four weeks across gasoline, diesel/distillate and kero-jet should be between 180,000-220,000 b/d, according to Platts Analytics.After making landfall Friday morning as a Category 1 hurricane, Florence was downgraded to a tropical depression. However, while wind speeds dropped, heavy rains and flooding have persisted across the Carolinas, bringing gas demand down with them. Here are the key takeaways across commodities:

• “The US Atlantic Coast is well supplied with gasoline, but diesel stocks are tight in comparison. USAC gasoline stocks of 66.8 million barrels for the week ended September 7 were 14% above the five-year average, according to the US Energy Information Administration. Diesel stocks on the USAC of 41.7 million barrels were 6% below the average.
• **The North Carolina ports of Wilmington and Morehead City will remain closed until Wednesday, North Carolina Ports advised in an alert Sunday, citing storm damage to warehouses at both locations and a substantial number of downed empty containers.**The ports of Charleston and Georgetown in South Carolina were reopened without restriction Saturday, according to the US Coast Guard. The port of Norfolk, Virginia, a key bunkering port, was open Saturday. In Georgia, the port of Savannah also reopened early Saturday morning.
• Power outages on Sunday continued to be a major factor for lost demand, with gas deliveries to Transco's Duke Energy Carolinas power plant in North Carolina showing the largest decline of any single facility since Friday, falling 375 MMcf/d. Its LDC facility, Piedmont Natural Gas, also fell 220 MMcf/d.**Despite the continuing onslaught of high winds and heavy rain across South Carolina, Dominion Energy Carolina Gas Transmission's 1,500-mile gas distribution system had seen little in the way of negative impacts, a company spokesman said Sunday afternoon.

Thirty-one dead as Hurricane Florence continues to ravage the Carolinas -- Across the Carolinas, a scene of utter devastation continued to unfold on Monday. Tens of thousands of people have had their homes destroyed by floodwaters caused by Hurricane Florence, now downgraded to a tropical depression. Fallen trees and flooded highways are blocking rescue attempts as stranded residents struggle to obtain food and water.Widespread power outages, landslides and tornadoes continue to imperil the lives of those in the region. Entire cities cut off from outside aid, police guarding storefronts against desperate refugees of the storm, dams threatening to burst—this apocalyptic scene is now a routine feature of American life during Hurricane season.The death toll from the storm has risen to 31, with one of the latest victims being an infant child who slipped from his mother’s grasp after their car became trapped in the floodwaters. North Carolina Governor Roy Cooper declared on Monday that “some areas have not seen the worst flooding yet. This is a monumental disaster for our state.”All of North Carolina, including the western and central parts of the state, has been impacted by flooding or has flood warnings in effect. Emergency crews have performed at least 1,000 rescues thus far. Fifteen thousand residents throughout North Carolina were said to be in shelters as of Sunday, with an additional 1,200 in South Carolina. Throughout the region, at least one million homes had lost power as of Sunday. County officials in the mountainous western part of the state have warned residents of potential landslides. The rains are expected to continue through Tuesday. State officials warned that flooding might continue until the end of the week. Various counties throughout the state have also been subject to tornado warnings, and two homes in Pikeville, North Carolina suffered damage from a suspected tornado on Sunday.

Tropical Storm Florence inundates toxic manure ponds, coal ash dumps in the Carolinas --In the several days since hurricane Florence made landfall near the border between North and South Carolina, the storm’s floodwaters have set one record after another. The storm’s official death toll now stands at 32 and is expected to rise with entire cities inundated by flood waters.The Cape Fear River in southeastern North Carolina was predicted to crest Wednesday at 62 feet in Fayetteville, several inches higher than the previous record following Hurricane Matthew in 2016. Elizabethtown, another city along the river, has seen 36 inches of rainfall from Florence, and many nearby cities have seen 30 inches.The Little River, which flows into the Cape Fear in Fayetteville, also exceeded its previous record from Matthew of 32 feet, reaching 36 feet. Most of downtown Fayetteville remains underwater as of this writing. Further west, the Lumber River is expected to crest Wednesday, also at record levels.One of the largest poultry farm operators in North Carolina, reported that 1.7 million chickens have drowned in Florence’s deluge and 6 million more are at risk of starving to death after being cut off by flood waters. An as yet unknown number of hogs have also drowned. Some thousands were killed by flooding from Hurricane Floyd in 1999. In addition to the immediate toll on human and animal life, flooding from Florence presents widespread danger to public health as hundreds of manure ponds—open-air septic tanks used in pork and poultry farming—are beginning to overflow from heavy rainfall. North Carolina is the second largest hog farming state—behind only Iowa—with over 9 million hogs and 2,300 hog farms. Hog and poultry waste pits occupy 6,848 acres of land in the state. Animal excrement spilling into rivers could contaminate drinking water with dangerous bacteria like salmonella and E. coli, both of which can be lethal. This danger is most acute in rural areas where residents draw water from private wells. In larger spills, livestock waste can fill affected waters with enough nitrate and phosphate-rich matter to cause algae blooms in swamps and rivers. This process starves aquatic life of oxygen, creating “fish kills” in rivers, estuaries and even coastal waters where seafood production could suffer for years.

A tornado swarm ripped through Richmond as Florence passed through Monday--here’s what happened -  On Monday, a mini-outbreak of tornadoes developed across the Richmond region as the remnants of Florence moved up the spine of the Appalachians. More than a dozen reports of tornado activity were conveyed to the National Weather Service. Here we examine the meteorology and compare Monday’s event with another significant tornado-producing tropical cyclone — Hurricane Ivan in 2004.It was a very active day for the National Weather Service office in Wakefield. Capital Weather Gang contributor Kathryn Prociv notes that it issued 28 separate tornado warnings for southeastern Virginia. The Weather Service office confirmed 6 tornadoes touched down in the region:

• An EF-2 tornado (on the 0 to 5 scale), which was on the ground for 7.5 miles in Chesterfield County with peak winds of 115 to 125 mph. It tore the roof off a building and destroyed a warehouse, where one person was killed.
• An EF-1 tornado, which was on the ground for 9 miles in Chesterfield County with peak winds of 90 to 100 mph. It caused structural damage in the Hampton Park Neighborhood.
• An EF-1, which was on the ground for 1 mile in Hanover County, with peak winds of 95 to 105 mph. Numerous trees were downed or snapped.
• An EF-1, which was on the ground for 3.8 miles on the west side of the city of Richmond, with peak winds of 95 to 100 mph.
• An EF-0 tornado, which was on the ground for 2 miles in Powhatan County, with peak winds of 75 to 80 mph.
• An EF-0, was on the ground for 9 miles in Boydton, Va., 80 miles southwest of Richmond, with peak winds of 80 to 85 mph. Numerous trees were downed.

The reported fatality is an unusual phenomenon with a tropical system, with the last fatality from a tropical storm coming in Debby back in 2012.

Florence May Be Costliest Storm In US History At $170 Billion In Damage -  Florence May Be Costliest Storm In US History At $170 Billion In Damage -- Hurricane Florence may become the costliest storm in US history, according to analytics firm CoreLogic, which says that damages may exceed $170 billion and affect 759,000 homes and businesses, reports CBS Chicago.  The category one storm made landfall near Wrightsville Beach, North Carolina at approximately 7:15 a.m. Friday. Despite its weakening, the storm has grown substantially in overall size - and will continue to slowly bombard coastal areas with its massive storm surge, torrential rain and high winds.  Storm surge will be a huge factor for Hurricane #Florence Check out what it might look like with @TWCErikaNavarro: pic.twitter.com/TPqTZTmiAM— The Weather Channel (@weatherchannel) September 13, 2018     AccuWeather Founder and President Dr. Joel N. Meyers has a lower estimate than CoreLogic, placing the predicted damage in the $30-60 billion range.  "For further context, we accurately estimated the total economic impact from Hurricane Irma would be $100 billion." said Meyers.

Florence is the Worst Flood in East Coast History. Here’s How Locals Describe It. - Many of the dire predictions came true. In the past few days, Hurricane Florence has become the worst rainstorm in history for North Carolina, as well as the entire East Coast.The images streaming in from the thousands of square miles of flooded cities and farmlands across the Carolinas are heartbreaking. From the washed-out beach homes of the Outer Banks to the raging mountain streams in the foothills of the Appalachians, nearly the entire region is underwater. All that rain means dozens of lives have been lost, and hundreds of thousands have been displaced. Florence’s rainfall data is astonishing. The four-day accumulation of nearly 36 inches, which was measured inElizabethtown, North Carolina, is far, far above the previous rain record for a hurricane anywhere on the East Coast. It broke the North Carolina record by nearly a foot. That much rain is more than what scientists estimate a 1,000-year level, 60-day rainstorm would drop in the region, given a stable climate: slightly more than 35 inches. Put another way, there’s a 0.1 percent chance every year that in a 60-day period the rainfall in Elizabethtown would be at least 35 inches. North Carolina took on all of that water in just four days.The region the storm hit hardest is one of the poorest parts of the state, where virtually no one has flood insurance. As bad as it is, the waters in rivers and streams statewide are still rising. Grist corresponded with 10 Carolinians who grappled with Florence. Here are their stories, edited and condensed for clarity:

Trump calls Hurricane Florence ‘one of the wettest we’ve ever seen from the standpoint of water’ -   President Trump frequently posts short videos online of him attempting to appear presidential — i.e., he is shot with professional lighting, he discusses the kinds of normal subjects presidents customarily address, he is not engaging in obstruction of justice at that very moment, etc. Unfortunately, Trump subverts the effect by declining to use any kind of script for his appearances. Even a polished, articulate speaker would struggle in such circumstances, and Trump is comically inarticulate. In his latest video, Trump comments on Hurricane Florence. “This is a tough hurricane,” he proclaims, “one of the wettest we’ve ever seen from the standpoint of water.” Whether Florence is also wet from other standpoints is a question the president did not address.   pic.twitter.com/G0BjCXEnaX — Donald J. Trump (@realDonaldTrump) September 18, 2018 Watching this video is very much like the common experience of making small talk about the weather with a stranger, except rather than ending the conversation after the normal ten seconds or so, the stranger believes his job and stature require him to elaborate with words that are not at his disposal. And so Trump adds that the hurricane “certainly is not good,” and that people have died (“That’s a tough one, it’s tough to understand”) and also that it “has been a nasty one, a big one.” In the video, Trump is using his favorite dignified scowl. (The New York Times reported last year that the president told staff he wants to look “like Churchill” when he makes this face.) Except Churchill knew more words than an average 10-year-old, and he also wrote them down before he started speaking to the entire country.

No Way In, No Way Out Of North Carolina City – WSJ - Life for Wilmington’s 118,000 people is in a holding pattern. The city has virtually no power, no gasoline and no way in or out.  “It’s been waiting for the storm to get here, then waiting for the storm to pass,” said Deborah Smith, a 65-year-old day-care center owner. “Now it’s waiting for the lights to come on so you can get cleaned up. The hardest part is the waiting.” It is rare for a U.S. city to be so cut off from the rest of the country. During big storms like Harvey in Texas and Matthew here in southeastern North Carolina, when interstates were blocked, there were still ways in and out of the city. Not this time.Authorities are urging those who evacuated before the storm hit on Friday not to return. Everyone who stayed is stuck, many with dwindling food and supplies, after preparing for a far shorter disruption to their lives.  Mobile service is spotty, and news of the world outside Wilmington is hard to come by. When Ms. Smith found a spot with a signal, she called her sister in New Jersey and had her hold the phone next to the television. The Federal Emergency Management Agency is moving supplies, such as water and tarps and other necessities, by air to Wilmington. Before Florence, Wilmington’s downtown bustled, with a promenade along the Cape Fear River typically crowded with tourists. But the bars and restaurants are largely boarded up, and the rain and overflow from the river fill many roads.Now, most businesses are closed. A Family Dollar store was looted over the weekend, with residents reporting theft of food, diapers, toilet paper and children’s clothes.

Inaccessible North Carolina Nuclear Plant Declares Unusual Event During Storm-Driven Hot Shutdown -- Duke Energy’s Brunswick nuclear plant, about 30 miles south of Wilmington, has declared a state of emergency as the 1,200-acre complex remains cut off by flood waters and and is inaccessible to outside personnel.  Just as we warned a week ago, The News & Observer reports, at this time, no one can come in and relieve the Duke Energy workers and NRC “storm riders” who have been on site for days,  NRC spokesman Joey Ledford said. And it would not be possible to evacuate the 10-mile emergency evacuation zone around the site if a higher level of emergency were declared. “None of the roads are passable,” Ledford said. “The plant is safe. The reactors are in hot stand-by mode 3 shutdown.” But as Intellihub reports, The Nuclear Regulatory Commission is being tight-lipped about an “unusual event” which occurred at the Brunswick Nuclear Plant last Saturday which forced a “hot shutdown” of both the plant’s Generation IV-type reactors 1 and 2.The NRC classified the emergency as an “unusual event” but provided little to no details on the situation.Additionally, the NRC reports that weather conditions from Tropical Storm Florence are currently preventing workers from accessing the plant.“A hazardous event has resulted in on site conditions sufficient to prohibit the plant staff from accessing the site via personal vehicles due to flooding of local roads by Tropical Storm Florence.”From the NRC regarding Event 53609:  The current rector mode is showing as “hot shutdown” and more rain is on the way.River waters in the area are expected to rise as much as 20 feet in the coming days. Not to mention, local dams in the area may be to capacity.Brunswick is equipped with emergency backup diesel generators to operate essential equipment if the facility lost off-site power from the grid. Ledford said that the reactors never lost power and the generators never had to be activated.

Duke Energy: Dam breached at North Carolina plant and coal ash may be flowing into Cape Fear River - Floodwaters on Friday breached a dam that contains a man-made lake connected to a Duke Energy power plant in North Carolina, possibly causing coal ash to flow into the nearby Cape Fear River, the company said.The floodwaters flowed from Cape Fear River into the northern side of Sutton Lake, an 1,100-acre reservoir built in 1972 to cool the L.V. Sutton Power Station. That water caused breaches in the dam on the south end of the lake, which was flowing back into the river, Duke Energy said in a press release.The 200-mile Cape Fear River flows into the Atlantic at Wilmington, North Carolina.The Sutton site in Wilmington was home to a coal-fired power plant until 2013, when Duke replaced it with a natural gas power station. Duke dismantled the coal-fired plant by 2017, but the grounds contained about 7 million tons of coal ash in waste pits at the time of its closure. There are still two coal ash basins on site. The flooding forced Duke to shut down the 625-megawatt natural gas plant, and the company is monitoring the coal ash pits.   Coal ash is a byproduct produced primarily at coal-fired power plants. It contains contaminants harmful to human health including mercury, cadmium and arsenic.  Heavy rain from Florence caused one of the coal ash landfills to partially collapse, Duke reported on Saturday. The incident likely caused coal ash to run off into Sutton Lake, a Duke spokesperson told the AP.On Friday, Duke said it believes coal ash contained in one of the basins remains in place behind a steel wall that separates Sutton Lake from a site where the waste is still being excavated. That steel wall was under water, the company said, but an earthen part of the dam setting off the basin remained 2 feet above the surface.Another type of coal combustion byproduct, cenospheres composed mostly of alumni and silica, has flowed from that basin into Sutton Lake and Cape Fear River, Duke said. The second basin, which contains most of the sites ash, is about 10 feet from the floodwater and has not been affected, Duke said.

Hurricane Helene: "Danger to life" warning for UK as major storm packing 80mph winds threatens travel chaos -- A "danger to life" wind warning has been issued for parts of the UK with the remnants of former hurricane Helene expected to slam into the country early next week. Currently a tropical storm, Helene is bringing 80mph gusts that could send debris flying, disrupt travel and cut power to thousands of homes and businesses. Download the all-new Microsoft News app – available now on iOS and Android The Met Office said: "Storm Helene is expected to push north-east towards the UK late Monday, before clearing quickly to the north of Scotland through Tuesday morning. "There remains large uncertainty in Helene's exact track, however a spell of very strong winds is expected, initially for parts of south-west England and west Wales, then later south-west Scotland and the south-east of Northern Ireland. © Credits: Metoffice A wind warning has been issued for the areas in yellow "Winds are likely to gust to 55-65 mph quite widely in the warning area, with possible gusts of 70-80 mph in exposure." It said the dangers are:

• Injuries and danger to life from flying debris are possible.
• Road, rail, air and ferry services may be affected, with longer journey times and cancellations possible.
• Some roads and bridges may close. Fallen trees may be an additional hazard.
• There is a small chance that injuries could occur from large waves and beach material being thrown onto sea fronts.
• There is a chance that power cuts may occur, with the potential to affect other services, such as mobile phone coverage.

100 mph Winds Kill Two in First Named Storm to Hit UK and Ireland This Season -- Storm Ali, the first named storm of the UK storm season, killed two and sent several to the hospital as winds of more than 100 miles per hour walloped Ireland, Scotland and Northern England Wednesday, The Guardian reported.More than 250,000 homes and businesses in Ireland lost power and 30,000 lost power in southwest Scotland.High wind also delayed flights and suspended train service in Edinburgh and Glasgow.A cruise ship in Greenock, Scotland with 500 on board broke free from its moorings and had to be rescued by tug boats, BBC News reported.The first death occurred Wednesday morning when wind blew a caravan off a cliff in western Ireland."At approximately 7:45 a.m., a report was received that a caravan had blown off the cliff at the above location. A search was carried out at the scene on the beach and after a short time the body of a female in her 50s was recovered," Irish police said in a statement reported by The Guardian.Locals identified the woman as Swiss tourist Elvira Ferraii, The Guardian reported.The second fatality occurred in Northern Ireland when a tree fell on two men working for Northern Ireland Water in Slieve Gullion Forest Park. One man, in his 20s, died and the other, in his 40s, was injured.Another woman in Cheshire County in England was seriously injured when a tree fell on her car.A 2017 study found that climate change is projected to make wind storms in the UK more damaging, The Guardian reported at the time.Even if warming is limited to 1.5 degrees Celsius above pre-industrial levels, the cost of destruction from wind storms could increase by more than a third in some parts of the UK.High winds will increase in all parts of the UK except the South and Southeast, and be especially strong in the midlands, Yorkshire and Northern Ireland as warmer temperatures cause the path of Atlantic storms to shift north.

Typhoon Mangkhut: South China battered by deadly storm – BBC - A powerful storm which killed dozens of people in the Philippines is now making its way across southern China.Typhoon Mangkhut is one of the most powerful storms to hit the region in decades. Two people have been killed in the Chinese province of Guangdong, according to state media - more than 2.5 million people have been evacuated in Guangdong and on Hainan island.In Hong Kong, the storm wrecked buildings and shut down the city. The typhoon is now moving inland, and is expected to hit the Chinese regions of Guizhou, Chongqing and Yunnan later in the day.In the Philippines, 33 miners have been confirmed dead and at least 29 are missing after a landslide hit a mining site in Itogon in Benguet province, according to local reports.Search and rescue missions are continuing, and there are fears the death toll could rise above 100, said Itogon's mayor, Victorio Palangdan.   In Hong Kong, which was hit hard over the weekend, videos on social media showed apartments swaying in the wind, scaffolding crashing to the ground and commercial buildings with windows shattered.Transport services have also been suspended, with flights cancelled, trains stopped and major roads closed.  The city managed to avoid serious casualties but now faces a difficult recovery as thousands still remain affected by flooding and travel disruptions.  Officials put the number of injured in Hong Kong at more than 200.Despite avoiding a direct hit, winds there reached more than 110mph and as water levels surged by almost 3.5m (12ft) in places.Authorities had issued their maximum alert, warning residents to stay indoors and away from windows to avoid flying debris.  Most shops and public services were shut, and about 900 flights were cancelled at Hong Kong International Airport.

Typhoon Mangkhut Leaves Trail of Destruction, Dozens Dead - Typhoon Mangkhut, the world’s most powerful storm this year, skidded into mainland China on Sunday after claiming at least 59 lives in the Philippines and pummeling Hong Kong and Macau during a devastating churn across the tropical-storm prone region. Although the region remained on alert, the storm was expected to start dissipating after its Sunday landfall. In the Philippines, rescuers searched for victims of landslides responsible for most of the deaths there. In Hong Kong, emergency workers began cutting away trees that fell in major roadways, as the city began what will be a major cleanup. Typhoon Mangkhut packed sustained winds as high as 170 miles an hour, equivalent to a Category 5 hurricane, according to the U.S. military’s joint Typhoon Warning Center. That is about twice the 90 mph winds generated by Hurricane Florence, which struck the U.S. The typhoon slowed on Sunday, its maximum sustained wind speeds falling to around 120 miles an hour—still powerful enough to threaten lives and property. Authorities downgraded it to a “severe typhoon” from Supertyphoon. Even as the death toll rose in the Philippines, the 500-mile-plus diameter storm was less destructive than previously feared, largely missing major population centers. It skimmed the northern tip of the Philippines, sparing the capital Manila, and then delivered a glancing blow to Hong Kong. Direct hits would have wrought far more devastation, experts said. Even so, Mangkhut, the Thai word for the tropical mangosteen fruit, left a trail of wreckage in its wake. The death toll in the Philippines rose to at least 59 by Sunday evening and was expected to rise further, local police said, with most casualties from mudslides caused by the heavy rains that were still threatening communities a day after the storm hit. Officials said at least 40 people, mostly gold miners, were feared trapped or killed by a landslide after a slope collapsed on their bunkhouses. It wasn’t immediately clear whether the miners were accompanied by their families when they were buried. Rescue workers at the site combed through the rocks and sludge with hand-held shovels on Sunday, pulling bodies from the debris as they went. 

Typhoon Mangkhut kills dozens in the Philippines, leaves trail of destruction in China and Hong Kong - At least 100 people are presumed dead in the Philippines after Typhoon Mangkhut, described by experts as the most severe storm of 2018, struck the country’s north on Saturday. Over the following days, the typhoon left a trail of destruction across parts of Asia, including Hong Kong and southern China.According to Philippine authorities, 64 people have been confirmed dead in the wake of the storm. Many of them were killed by landslides, flash flooding and the collapse of makeshift accommodation that stood no chance of withstanding the storm, which was the equivalent of a category five hurricane when it battered the Philippines.There are fears that the death toll will rapidly rise. Rescue teams are only beginning to arrive in the most remote rural areas, and an unknown number of people remain buried after extensive landslides. Hundreds more have suffered injuries. Dozens of villages have been effectively cut-off from the outside world, as a result of the damage to roads. It is estimated that the storm affected some 5.7 million people across the Philippines.As in previous disasters to hit the storm-prone country, the poor and sections of the workforce engaged in low-paid, precarious work have been the hardest hit. At least 43 gold miners perished in a landslide in the municipality of Itogon in the northern province of Benguet. They were among hundreds of small-scale miners prospecting at a site that had been abandoned by Benguet Corporation, a major mining entity. The workers and their families were in makeshift shelters that were inundated with mud and top soil.

Typhoon Mangkhut slammed right into Hong Kong — and the scenes were apocalyptic -- Typhoon Mangkhut has crossed into mainland China after moving through Hong Kong, where it caused chaos and extensive damage. Videos posted by residents showed the incredible power of the typhoon, which caused trucks to flip over and tore scaffolding off the sides of buildings. The scenes in Hong Kong were downright apocalyptic, as the normally bustling city was effectively shut down as the storm battered the island. Mangkhut has been downgraded to a severe typhoon, having approached the coast as a Category 5 storm — the strongest possible — with winds of up to 167 mph. Hong Kong airport, one of the most important global transit hubs, was closed with more than 500 flights canceled and some 100,000 passengers affected, according to a Bloomberg report. The airport is operating Monday, but flights across Asia are expected to be affected for some time. Casinos in the gambling center of Macau were shut down, and some 20,000 homes were left without power, the South China Morning Post reported. Authorities in Hong Kong issued a signal 10 — the city's strongest storm warning — as the storm hit the busy financial center. Videos posted by residents showed the incredible power of the typhoon as it caused buildings to sway, sucked reams of documents out of shattered office windows, tore down scaffolding, and pushed walls of water into low-lying parts of the island. Here are some of the videos.

Hurricane Maria was a manmade disaster. Hundreds of families told us what really happened --Thousands of people were killed by Hurricane Maria. But the Puerto Rican government has only publicly identified 64 victims.An investigation by Quartz, Puerto Rico’s Center for Investigative Journalism, and the Associated Press has identified 487 victims of Maria. It is the most extensive record yet of who died and why. Many families say that the real cause of death was government inaction.Explore the database of victims in English and Spanish here.One year later, are the federal and local governments any better prepared for hurricane season? “If we have another hurricane of that magnitude, we’re going to get the same level of devastation, give or take,” admitted Puerto Rico governor Ricardo Rosselló in August. “There is no doubt about that.” In our investigation, family members linked each of the deaths  to Hurricane Maria and the island’s damaged infrastructure. But Puerto Rico’s government never did—missing out on key information it might have used to prevent further deaths.

Guest Commentary: Drain Lake Powell and tear down Glen Canyon Dam to promote conservation and water supply security - Two days ago a Denver Post front page story warned of water shortages and climate change facing the Colorado River which supplies water to much of Colorado and its 5.6 million residents. Other national stories the past few weeks have focused on the “crisis” and drought facing the Colorado River due to climate change. We appreciate the attention paid to water issues, but there’s more to these stories than often gets reported.  Although the population of Colorado and other Colorado River basin states has increased, water use is declining. This “de-coupling” of population and water use has occurred because water conservation programs are working and water use is down. For nearly two decades, water supplies in the Colorado River basin have been declining because there is less water. Climate change scientists agree that a majority of the decrease in river flows is due to the effects of global warming, and the same scientists using the same models predict that the amount of water flowing in the Colorado River and its tributaries will decrease even more as climate change intensifies.Our water managers and elected leaders at all levels blindly cling to the past. They choose to ignore this science and the fact that conservation programs are working by pursing a two-pronged approach.First, they think pouring more concrete and building more storage structures will result in more water. Second, adding insult to injury, they are paying lip-service to water conservation efforts that have already demonstrated they are working.Building more dams, reservoirs, and diversions won’t address the looming shortages. There is no new water to fill these facilities and there won’t be because of the inevitable impacts of climate change.Even more absurd, our water leaders have become obsessed with the dwindling water level in Lake Powell in Arizona which serves as a water storage facility for the states of Colorado, Utah, and Wyoming. This reservoir — created by Glen Canyon Dam — was conceived and built back in the 1940s and 1950s when the law, science, and flow of water in the Colorado River was radically different. Seventy-five years ago, there were no American environmental laws to protect the Colorado River, the science of climate change did not yet exist, and the flow of water in the Colorado River was much higher.

Part of Hobble Creek Canyon under evacuation; Elk Ridge and Woodland Hills residents told to expect 2 more weeks -- Mountain fires grew to 74,757 acres as of Sunday morning, with additional evacuations put in place during the day. U.S. Highway 6, at the mouth of Spanish Fork Canyon to the north of Helper in Carbon County, briefly reopened before being closed again when the Pole Creek Fire jumped the road. Diamond Fork Canyon and Sheep Creek were consequently put under evacuation Sunday, as well as the right hand of Hobble Creek Canyon. The left hand of Hobble Creek is under pre-evacuation notice, according to Sgt. Spencer Cannon with the Utah County Sheriff’s Office. All residents living in Woodland Hills, Elk Ridge, the Covered Bridge community near the mouth of Spanish Fork Canyon and along U.S. Highway 89 in the area from Nebo Creek to Thistle Junction are under mandatory evacuation. Both Payson and Santaquin canyons are closed, and the Nebo Loop Road in Nephi Canyon is closed. Sheep Creek, Santaquin Canyon and Payson Canyon remain closed, along with Nebo Loop Road in Nephi Canyon. The Pole Creek and Bald Mountain fires joined together in two places along the Nebo Loop Road late Saturday evening, although the two wildfires are being treated as separate incidents. The Pole Creek fire has burned 61,248 acres and is 2 percent contained as of Sunday morning. The Bald Mountain fire reached 13,509 acres at 0 percent containment. Residents who decided to stay in their homes despite mandatory evacuations are creating a public safety issue, Elk Ridge city officials reported. The Elk Ridge mayor was visually agitated as he spoke about some city residents who refused to leave their homes but instead traveled to the fire lines around Elk Ridge.“We don’t have the authority to come and pull them out of their homes,” Ellis said. “They’re in the way. I don’t want anybody up there. I want them all away from that stuff.”

Wildfires make their own weather, and that matters for fire management - Wildfires are not known for their restraint. They’ll jump rivers, spew whirling dervishes of flames and double in size overnight.Take the Carr Fire — one of California’s most destructive — sparked in mid-July when the rim of a flat tire met pavement. As the blaze grew, it jumped across the Sacramento River and sparked a flaming whirlwind that trapped and killed a firefighter near Redding. By the time it was fully contained on August 30, it had burned 930 square kilometers, destroyed more than 1,000 buildings, and killed seven people.“Once these fires are spreading fast enough and intensely enough, you can’t stop them,” says Ruddy Mell, a combustion engineer with the U.S. Forest Service based in Seattle.Federal and state agencies that manage wildfires use mathematical equations — fire models — to predict how blazes will spread and decide how to commit firefighting resources or whether an evacuation is needed. But the models can’t always predict when a fire will suddenly veer in a new direction or grow exponentially. Now, scientists are developing more nuanced fire models with increasingly detailed satellite data and better understanding of how fires can create their own weather and fan their own flames. These finer-scale models take hours or days to run on a computer, so they aren’t likely to replace more quick-and-dirty field models for responding in the heat of the moment. But they can help scientists figure out what’s driving a wildfire’s behavior —  and learn how to better protect communities from fires.

China's new forests will be the size of Ireland -- (Reuters) - China will plant new forests covering an area roughly the size of Ireland this year as it aims to increase forest coverage to 23 percent of its total landmass by the end of the decade, China Daily reported on Friday. Planting trees has become a key part of China’s efforts to improve its environment and tackle climate change, and the government has pledged to raise total coverage from 21.7 percent to 23 percent over the 2016-2020 period, said the China Daily, citing the country’s top forestry official. Zhang Jianlong, head of the State Forestry Administration, said at a meeting on Thursday that China would aim to grow at least 6.66 million hectares of new forest this year. He said 33.8 million hectares of forest had been planted nationwide over the last five years, with a total investment of more than 538 billion yuan ($82.88 billion), bringing the country’s total forest area to 208 million hectares. Three new state forests with a total area of 483,000 hectares would also be built in the new Xiongan development zone in Hebei province, he said. The heavily polluted Hebei, which surrounds the capital Beijing, has also pledged to raise total forest coverage to 35 percent by the end of 2020. China, which has to feed a quarter of the global population using just 7 percent of the world’s arable land, has long struggled to strike a balance between industrial growth, maximizing food production and protecting its environment. 

Indigenous Leader Who Battled Canadian Mining Companies Is Murdered --The Human Rights National Commission (CNDH) condemned the murder of Margarito Díaz González, a champion of the and environment and the sacred sites of the Huichol people, and called on the authorities to not to omit the fact of his opposition towards the construction of a storage dam “La Maroma”, in San Luis Potosí, as a possible line of inquiry.Díaz González was murdered on September 8 at his home, but his death was announced on September 11.“The CNDH condemns any violent act, especially when it derives, like in this case, in the murder of a leader from the Wixárika community, and calls on the authorities to consider, as a line of inquiry, his opposition, as an environmental defender, he also expressed towards the construction of a storage dam “La Maroma” and the constructions that were part of that project, located in Real de Catorce, Villa de Guadalupe y Matehuala, San Luis Potosí”, said the statement.The construction of the dam, which will supply water to the states of Durango, Jalisco, and Guanajuato, according to Díaz González, would affect Wirikuta, a sacred Huichol area; nevertheless, in a previous free and informed survey directed to the Wixárika community, federal and local authorities informed the community that their ceremonial site in the Wirikuta natural reserve would be preserved, and committed to reforest the area, and to protect the environment, therefore, they agreed to the project.

To Prevent 'Major Extinction Crisis,' Scientist Call for Designating Half of Planet as Protected Areas by 2050 -- A pair of leading scientists is calling on the global community to spend the next few decades working toward formal protections for at least half of the world's oceans and lands, warning that as the human population nears its projected 10 billion by mid-century, several species will face a heightened threat of extinction.  The demand comes in the form of an editorial published in the journal Science on Friday by chief scientist of the National Geographic Society Jonathan Baillie and Chinese Academy of Sciences biologist Ya-Ping Zhang.  In their piece, Baillie and Zhang argue, "If we truly want to protect biodiversity and secure critical ecosystem benefits, the world's governments must set a much more ambitious protected area agenda and ensure it is resourced.""Given the evidence to date and the implications of an underestimate," the editorial urges policymakers "to set minimum targets of 30 percent of the oceans and land protected by 2030, with a focus on areas of high biodiversity and/or productivity, and to aim to secure 50 percent by 2050.""This will be extremely challenging, but it is possible," the editorial asserts, "and anything less will likely result in a major extinction crisis and jeopardize the health and well-being of future generations."The scientists concede that "estimating how much space is required to protect current levels of biodiversity and secure existing ecosystem benefits is challenging because of limited knowledge of the number of species on this planet, poor understanding of how ecosystems function or the benefits they provide, and growing threats such as climate change." "However, targets set too low could have major negative implications for future generations and all life. Any estimate must therefore err on the side of caution," the paper warns, noting that that current levels of protection are lacking, and much of the 3.6 percent of the oceans and 14.7 percent of land that are formally protected face "intense human pressure."

PIOMAS September 2018 - Arctic Sea Ice by Neven - Another month has passed and so here is the updated Arctic sea ice volume graph as calculated by the Pan-Arctic Ice Ocean Modeling and Assimilation System (PIOMAS) at the Polar Science Center: Just like last month, I had expected perhaps a larger drop. But whereas last month the volume loss was still above average, this month's isn't. The 2007-2017 average volume decrease for August is 2578 km3, and this year it was 2347 km3, more than 200 km3 lower. This means that 2018 is back in 6th position again, as the difference with lower years (except last year) has grown again. Here's how the differences with previous years have evolved from last month: On Wipneus' version of the PIOMAS graph we can see how the trend line made a slight drop towards the end of the month, veering away from 2013: On the PIOMAS volume anomaly graph, the anomaly trend line has crossed the linear trend line again, and it might very well stay there until next yeaAs for average thickness (crudely calculated by dividing PIOMAS volume with JAXA sea ice extent numbers), the trend line continued to flatline, as is usual for this time of year, but here too we see a small drop towards the end of the month: Not much different on the Polar Science Centre thickness graph:  Now, the main reason volume didn't drop as much as I expected (not just last month, but perhaps the entire melting season), is that the regions where PIOMAS showed thicker ice since at least the start of the melting season, on the Siberian side of the Arctic mainly, didn't melt out completely. As I wrote last month, the situation in the Eastern Siberian Sea was going to be crucial for the position this year's melting season will end at. If we compare the situation at the end of August with the same date in 2012, 2016 and 2017, for instance, we'll see that the red is where the big difference lies (red means thicker now than back then, blue the reverse): As we've seen before throughout the years, some ice will stubbornly refuse to melt out completely, no matter how fragile and vulnerable it looks:

Underwater walls could stop glaciers from melting, scientists say CNN - Building walls on the seafloor could prevent glaciers from melting and sea levels rising due to global warming, scientists say. Barriers of sand and rock positioned at the base of glaciers would stop ice sheets sliding and collapsing, and prevent warm water from eroding the ice from beneath, according to research published this week in the Cryosphere journal, from the European Geosciences Union. The audacious idea centers on the construction of "extremely simple structures, merely piles of aggregate on the ocean floor, although more advanced structures could certainly be explored in the future," said the report's authors, Michael Wolovick, a researcher at the department of geosciences at Princeton University, and John Moore, professor of climate change at the University of Lapland in Finland. "While reducing emissions remains the short-term priority for minimizing the effects of climate change, in the long run humanity may need to develop contingency plans to deal with an ice sheet collapse," they added.

California goes carbon negative -- Last week Gov. Jerry Brown signed a bill to cut California’s electricity sector emissions , which account for about 16% of the state’s total emissions, to zero by 2045. But an Executive Order he signed on the same day calls for 100% of California’s total emissions not only to go to zero in 2045, but to go negative after that. This target is so absurdly ambitious that Euan Mearns e-mailed me asking whether the Executive Order wasn’t a hoax. But it isn’t. It reflects Gov. Brown’s  determination to save the Earth from climate change whether it needs saving or not. (Inset; jubilation as Gov. Brown signs the Executive Order).The Executive Order is linked to here. It’s in a graphical format that doesn’t allow it to be downloaded as text, so all of the excerpts presented here are screenshots. The Order is divided into two sections – the “Whereases” and the “Now Therefores”. For those not familiar with English legal jargon the “Whereases” list the facts, or at least the facts as Gov. Brown sees them, and the “Now Therefores” list the actions that the Whereases call for. It’s important to note that the Executive Order is not legally binding and can be rescinded by a future governor, but as Vox points out it may not be as toothless as it appears: Executive orders are often the trigger for California climate progress. That process often begins with an executive order, as it did in 2005, when Gov. Arnold Schwarzenegger issued an order establishing carbon-reduction targets through 2050. The following year, the legislature passed a version of it as AB 32, which established the machinery of emission reductions that operates in the state to this day. In 2015, Gov. Brown issued an EO establishing a new target of 40 percent reductions by 2030. The following year, a version of it became law in SB 32. Now, via SB 100, the machinery is being deployed toward the target of zero-carbon electricity. Brown’s order is meant to get the next phase of that process, which involves moving beyond electricity to other sectors of the economy, underway.  We begin with the Whereases. The first sets the tone:

Boulder climate change lawsuit triggers legal finger-pointing -  Petroleum producers targeted by Boulder and Boulder County in a bid to hold them responsible for current and future costs associated with climate change are trying in a recent court filing to push the blame back on virtually anyone who uses fossil fuels.  In a filing dated Sept. 10, the Exxon Mobil Corporation and Suncor Energy that is labeled a defendants' designation of "non-parties at fault," the corporations deny that they bear any fault for damages cited by Boulder, Boulder County, and San Miguel County, which is also party to the suit that was filed April 17. But the filing goes further, in saying that the county governments "combust fossil fuels — the alleged root cause of their injuries." Accordingly, the plaintiff governments "are by definition 'at fault' for the alleged damages they claim to have sustained," the filing states. The companies go on to state that by pinning high greenhouse gas levels on the burning of fossil fuels, the governments "implicate not only themselves, but every single person or entity on the planet that has ever contributed to greenhouse gas emissions" through a wide range of activities. Those additional responsible parties, the Sept. 10 filing argues, include "emitters and consumers of fossil fuels, producers of electricity, governments and government entities, manufacturers and businesses" such as farms, dairy and transportation. Although the lawsuit was initially filed in Boulder District Court, the defendants quickly filed a motion to move its venue to U.S. District Court in Denver. That is where it currently resides, although the defendants are contesting that, and the final question of venue has not definitively been settled.

Why the “Green New Deal” Is a Headfake -- Pollin refers to the process by which this simultaneous massive growth of clean energy and massive contraction of fossil fuel is supposed to occur as “decoupling.” Decoupling is a synonym for what Solow called natural resource productivity. The calculation is the same — national income divided by the quantity of the resource consumed or waste emitted. But decoupling, as Pollin uses it and as it is commonly used, is a deceptive term. Economic activity is not decoupled from the consumption of fossil fuel, as Pollin claims. It is the rate of change of economic activity that is decoupled from the rate of change of fossil fuel consumption. Of the twenty-one countries claimed by the WRI to have achieved “absolute decoupling” between 2000 and 2014. Slovakia, Switzerland and Ukraine had increases in their consumption-based CO2 emissions that adjust for emissions embodied in trade. Bulgaria’s consumption-based emissions were unchanged from 2000-2014. Portugal, Romania and Ukraine had declines in aggregate employment. Denmark had no increase in employment. There was no consumption-based data for Uzbekistan and its reported employment data (ILO) does not appear credible, so it can be excluded from the analysis.[6] That leaves 13 countries with “absolute decoupling” of the rate of change of employment and the rate of change of consumption-based emissions. Of those 13, the Czech Republic had reductions in average annual hours that exceeded the increase in employment. Finland just squeaked through into absolute decoupling territory if defined by changes in aggregate working hours and consumption-based Co2 emissions.Twelve of the 21 countries touted by WRI meet the more rigorous rates of change decoupling criteria. Again, no countries decoupled employment growth from CO2 emissions. The average gap between growth in employment and decline in emissions, weighted for the size of employed work force in 2014, was a bit less than half of the gap between GDP growth and change in territorial emissions. (17.6 percent versus 37 percent). That is 12 out of the 63 countries that had emissions of at least 12 MtC/yr in 2000, as did Bulgaria. In other words, 51 other countries among the top 63 did not have absolute decoupling of employment growth and emissions decline.

Why Growth Can’t Be Green  --- Warnings about ecological breakdown have become ubiquitous. Over the past few years, major newspapers, including the Guardian and the New York Times, have carried alarming stories on soil depletion, deforestation, and the collapse of fish stocks and insect populations. These crises are being driven by global economic growth, and its accompanying consumption, which is destroying the Earth’s biosphere and blowing past key planetary boundaries that scientists say must be respected to avoid triggering collapse. Many policymakers have responded by pushing for what has come to be called “green growth.” All we need to do, they argue, is invest in more efficient technology and introduce the right incentives, and we’ll be able to keep growing while simultaneously reducing our impact on the natural world, which is already at an unsustainable level. It sounds like an elegant solution to an otherwise catastrophic problem. There’s just one hitch: New evidence suggests that green growth isn’t the panacea everyone has been hoping for. In fact, it isn’t even possible. A team of scientists led by the German researcher Monika Dittrich first raised doubts in 2012. The group ran a sophisticated computer model that predicted what would happen to global resource use if economic growth continued on its current trajectory, increasing at about 2 to 3 percent per year. It found that human consumption of natural resources (including fish, livestock, forests, metals, minerals, and fossil fuels) would rise from 70 billion metric tons per year in 2012 to 180 billion metric tons per year by 2050. The team then reran the model to see what would happen if every nation on Earth immediately adopted best practice in efficient resource use (an extremely optimistic assumption). The results improved; resource consumption would hit only 93 billion metric tons by 2050. But that is still a lot more than we’re consuming today. Burning through all those resources could hardly be described as absolute decoupling or green growth. In 2016, a second team of scientists tested a different premise: one in which the world’s nations all agreed to go above and beyond existing best practice. In their best-case scenario, the researchers assumed a tax that would raise the global price of carbon from $50 to $236 per metric ton and imagined technological innovations that would double the efficiency with which we use resources.   Bottom line: no absolute decoupling. Study after study shows the same thing. Scientists are beginning to realize that there are physical limits to how efficiently we can use resources. Sure, we might be able to produce cars and iPhones and skyscrapers more efficiently, but we can’t produce them out of thin air. We might shift the economy to services such as education and yoga, but even universities and workout studios require material inputs. Once we reach the limits of efficiency, pursuing any degree of economic growth drives resource use back up.

 Death to the Car -- Few things appeal to most people’s selfish desires more than the liberal-version climate-denier fraud of “Let’s all buy electric cars…”*, This perpetuates the Big Lie that the personal car as such is compatible with any meaningful action on the climate crisis or other ecological and social crises. The car fetish, and America’s entire centrally planned economy based upon it, is at the core of ALL the crises. All the wars of the US for at least the last fifty years have been for the sake of corporate profit and fueling the cars.[*Electric car, aka fracking car, nuke car, mountaintop removal car.] The car is violently dangerous and yet Americans have completely normalized this extreme violence to the point that they don’t even see it as violence. And for what? For something which has only destructive ecological and social effects, something destructively symbolic. Far more than gun culture, the car goes to the core of the characteristically American sickness. I’d say it’s the mental illness with regard to the car which, more than any other single cause, guarantees that Americans of every political persuasion will never do anything more than cry crocodile tears over the climate crisis until nature itself brings the malign structure down.BTW no electricity production, whether fraudulently called “renewable” or not, is intended to replace fossil fuels. All modes of industrial generation and deployment of electrical capacity are intended only to add to the destruction/consumption maw. Here too there is consensus across the US political class, the Corporate One-Party and its supporters. They’re all avowed destroyers of humanity and the Earth. Trump = Obama. Just like in everything else.

Impeach the Economic Civilization - Given the tightly limited resources available to dissidents, why should anyone invest these in seeking the impeachment of a fungible geek like a US president? Indeed, those fixated on impeachment seem never to have any rationale beyond Trump Derangement Syndrome. To replace Trump with Pence would be no improvement and likely would make things worse. Trump and Pence have shared corporate ideology and goals, but Trump’s more chaotic execution is more likely to lead to chaotic, perhaps system-destructive effects more quickly than a more disciplined execution. The same is true of any Democrat we could envision replacing Trump in 2020. That’s why it was a great thing that Trump won in 2016: He’s more likely to bring about a faster collapse of the US empire and of the globalization system in general. Not because these are his goals, but because his indiscipline adds a much-needed wild card to the deck. Needless to say, humanity and the Earth have nothing to lose, as we’re slowly but surely being exterminated once and for all regardless.  Of course, even among dissidents most are incapable of understanding this. Among their lamentations we hear the constantly reiterated chorus, action is necessary to “save civilization.”  How bizarre to see this anointed the great goal amid such hand-wringing about climate destruction and genocide. From the Fertile Crescent to the Amazon today civilization always has made a desert everywhere it can. Civilization always has been completely dependent upon slavery, genocide, ecocide, and every kind of massive extreme violence. These are inherent to civilization. This is true of modern civilization most of all. The climate crisis and all other modern ecological and socioeconomic crises are the logical results of the economic civilization. The one and only solution for humanity and the Earth is to abolish this civilization and restore the truly ecological and human way of living. The way we lived in happiness, health, and freedom for tens of thousands of years.

Energy storage grows by 200 percent in U.S. - Thanks to a thriving renewable energy sector in the U.S., energy storage — the batteries or other technologies that can store energy for at least four hours or even longer — has grown an astounding 200 percent year-over-year. Wood Mackenzie partners with the Energy Storage Association to produce a quarterly report called the U.S. Energy Storage Monitor. The latest report is just out. The report states: “156.5 megawatt-hours of energy storage were deployed in the second quarter of 2018, triple what was deployed in the second quarter of 2017. The residential segment led the way, growing tenfold year-over-year.”It's interesting that while the White House has been vigorously promoting a pro-coal strategy, the US Department of Energy has been quietly promoting wind and solar grid integration., in particular, energy storage along with smart grid technology. That includes small-scale, distributed storage as well as utility-scale, long duration storage. And while long-term energy storage may be a little ways off in the future - as of last year, the largest form of grid energy storage is dammed hydroelectricity, with both conventional hydroelectric generation as well as pumped storage - the technologies are being developed with funding from the Department of Energy and a number of national labs.

A tiny, beleaguered government agency seeks an energy holy grail: long-term energy storage - Deep within the Department of Energy is a small agency devoted to supporting cutting-edge energy research: the Advanced Research Projects Agency-Energy, or ARPA-E. It’s only about 10 years old and not widely known or appreciated by the public — but among energy geeks, it is beloved. By all accounts, ARPA-E is a rousing success. The National Academy of Sciences conducted an extensive assessment in 2017 and concluded as much. Of the roughly 500 grants the agency had given out at that point, about half had resulted in peer-reviewed research, about a quarter went on to leverage funding from the private sector, and around 13 percent resulted in new patents. And that’s with a deliberate focus on “high risk, high reward” investments. The agency — originally created in 2007 by a bipartisan group of US lawmakers, fully funded by President Barack Obama’s stimulus bill in 2009, and put on firmer footing by Congress in 2011 — was consciously designed to mimic the Defense Advanced Research Projects Agency (DARPA), created way back in 1958 to do advanced research for the Department of Defense.ARPA-E’s purpose is to identify promising advanced energy technologies and help them bridge the “valley of death” between basic research and commercialization — oh, and “to bring a freshness, excitement, and sense of mission to energy research that will attract the U.S.’s best and brightest minds.”In its modest way, it has done that. Naturally, because it is a successful agency associated with Obama, Donald Trump hates it.Both of Trump’s budgets have proposed getting rid of the agency entirely. Both times, Congress quietly ignored him and maintained ARPA-E funding. In 2017, they actuallyincreased it; in 2018, they ended up holding it steady (despite a House proposal to cut it by 8 percent). Whether it continues to survive will depend a great deal on the outcome of the 2018 midterm elections.

Why U.S. Electricity Sales Surged In 2018 - Sales of electricity in the U.S. have barely increased despite nine straight years of economic growth. It almost looks as if the conservation ethos for American consumers has finally taken hold. That restraint also applies to large commercial and industrial customers as well. And foreign consumers seemed even less interested in plugging in. A discouraging drip, drip of bad news for the electricity industry. Well, something happened. For the six months ended June, electric sales to ultimate customers in the U.S. actually rose 3.5 percent. In other industries that's not a high growth number, but for electric utilities with virtually 100 percent market penetration it constitutes unusually high levels of sales growth. Electric industry participants in recent years have gotten used to zero percent as a normal "growth" rate. What changed? Sales to residential customers rose a spectacular 7.8 percent, commercial sales rose a solid 2.0 percent and the U.S. industrial sector, assumed growth engine of the economy, purchased 0.1 percent less power. The first half of the year featured unusually cold weather and a warmer than usual June. Residential customer load is more sensitive to weather. Individuals and families often adjust their A/C on and off all summer depending on the weather. Heating and cooling accounts of 22 percent of residential electric sales. Large commercial and industrial facilities run their HVAC systems constantly, all year round. Heating and cooling, furthermore, account for only 15 percent of commercial and 7 percent of industrial electric sales. For them the incremental change in electricity usage is typically modest. So while residential electric loads are more weather sensitive, commercial and industrial electric load tends to be more economically sensitive. Temperature departures from the heating and cooling norm make a big difference for residential KWH sales. Thus, it looks as if the recent sales surge is weather induced. Consumer attitudes towards electricity usage were not likely altered. But electric utility customers did respond to temperature extremes in their respective locales in the way we would expect.

Gas Explosions Traced to Too Much Pressure in Pipes - —The series of deadly gas explosions and fires in three communities north of Boston last week occurred after too much natural gas was pumped into a section of pipe owned by Columbia Gas , causing the combustible fuel to leak into homes, authorities said Sunday. The National Transportation Safety Board “can confirm at this time that this was indeed an overpressure situation,” NTSB Chairman Robert Sumwalt said at a news briefing. State and federal authorities are investigating after at least 60 fires and explosions traced to gas lines erupted Thursday in Lawrence, Andover and North Andover, about 25 miles north of Boston, killing an 18-year-old man and injuring multiple people. The NTSB, which investigates major pipeline accidents as well as transportation incidents, believes that gas flowed into homes at “significantly greater” rates and pressure than it was supposed to, Mr. Sumwalt said. “The real question for this investigation is to answer why this occurred,” he said. Mr. Sumwalt said Columbia Gas had been in the process of replacing old cast iron pipes with new plastic ones. NTSB is looking at whether construction the company was doing in the area on Thursday afternoon played a role, he said. Mr. Sumwalt said there were indications that Columbia Gas was checking pressure on a different line and didn’t understand what was happening on the line that became overpressurized. He said the NTSB will examine “what effect, if any, did this have on the overpressure situation.” NiSource Inc., the parent company of Columbia Gas, is fully cooperating with the investigation, Joe Hamrock, NiSource’s president and chief executive officer, said. He said the company is “committed to full transparency and collaboration to get to all of the underlying causes.” Authorities gave approval Sunday for thousands of residents to return home after they had been evacuated. The Massachusetts Emergency Management Agency urged residents, many of whom remain on edge, to “be vigilant” for any signs of gas or smoke.

The Massachusetts Gas Disaster Could Spark An Energy Crisis -- An unprecedented tragedy struck a small portion of eastern Massachusetts last week when dozens of houses in the towns of Lawrence, Andover and North Andover in the Merrimack Valley began to explode, as if spontaneously combusting. One 18-year-old man was killed when a chimney flew off of an exploding house and landed on his parked car, and an additional 25 people were injured. The shocking disaster was caused by natural gas leaks that forced 8,000 people out of their homes and the governor of Massachusetts to declare a state of emergency.  It is suspected that the gas lines in the afflicted eastern Massachusetts towns were over-pressurized and outdated. In fact, Columbia Gas, a local subsidiary of Indiana-based NiSource and the company responsible for the area’s natural gas supply at the time, had announced plans to upgrade the aged infrastructure on Thursday of the same week. After the explosions, Columbia Gas was shutting down gas meters and conducting safety inspections in order to allow the 8,000 evacuated residents to return to their homes. However, according to some officials, Columbia Gas was slow to respond to the disaster, and many politicians and residents are not convinced of the company’s competence in dealing with the tragedy and its aftermath. In the words of Lawrence Mayor Dan Rivera, “Since we first got word of this incident, the least informed and last to act has been Columbia Gas.” Furthermore, this is not Columbia Gas’ first failing. In fact, it’s not even their first explosion. In 2012, an international natural gas pipeline operated by Columbia Gas Transmission exploded in Sissonville, West Virginia, destroying three homes in what was very fortunately a rural and sparsely populated area. In 2014, a Columbia Gas pipeline exploded in Springfield, Massachusetts, injuring 21 and destroying a strip club. A year later, in 2015, a Columbia Gas line leaked in Upper Arlington, Ohio, causing yet another explosion and an ensuing fire that caused nearly $10 million worth of damage. According to a USA Today analysis of federally sourced data, Columbia Gas manages 471 miles of  some of the nation’s oldest and most leak-prone gas pipelines. As widespread criticism and local outrage from officials and the public alike continued to mount on Friday, Massachusetts Gov. Charlie Baker invoked a provision of state law allowing him to take the problem out of the hand of Colombia Gas, and instead the Massachusetts Department of Public Utilities turned management of the disaster over to Eversource, an electric and gas company with a presence throughout New England.

More than 85,000 Massachusetts residents could be without gas service for months -  Massachusetts Governor Charlie Baker and Columbia Gas executives have told residents in Lawrence, Andover and North Andover that they could be without gas to heat their homes until November 19, more than two months after a series of gas explosions and fires rocked the Merrimack Valley communities. On September 13, natural gas explosions and fires destroyed or damaged more than 60 homes in the area, injuring more than 25 unsuspecting residents and killing a young man. The National Transportation Safety Board is investigating the cause of the explosions. According to a preliminary review, gas was introduced into the community's pipes at 12 times the normal pressure. At a press conference on Friday, Baker said the goal is to restore full gas service to 8,527 affected customers in the “next few weeks.” But he went on to say that the process may not be complete until November 19. In the meantime, households and small businesses will be without gas for heat, hot water and to cook. Using his authority under a state of emergency he declared in the wake of the explosions, Baker has tapped a “reconstruction czar.” Captain Joseph Albanese, a retired Navy Seabee, has been hired by Columbia gas to oversee the process of upgrading 48 miles of pipeline in the three communities. Safety experts have questioned whether this fast-track effort—after years of neglect of aging pipes—can be accomplished safely. Columbia executives said the Massachusetts National Guard was being activated to distribute 7,000 hotplates and 24,000 space heaters to affected residents beginning this weekend. Portable shower units have been set up and the local YMCA has made its showers available to area residents.

EPA Rejects States' Health Concerns Over Upwind Coal Air Pollution - The U.S. Environmental Protection Agency (EPA) published a notice Friday denying petitions by the states of Delaware and Maryland for it to recognize that upwind state pollution sources are interfering with their ability to meet ozone standards. The states had used a provision of the Clean Air Act to petition for reduced nitrogen oxide emissions from coalplants in Pennsylvania, West Virginia, Indiana, Kentucky and Ohio, but the EPA found that there wasn't enough evidence that the plants were contributing to elevated ozone levels in the downwind states,InsideClimateNews reported."The 111-page notice of denial from the agency shows that Acting EPA Administrator Andrew Wheeler, a former coal industry lobbyist, is following in the fossil fuel-friendly policy direction set by his predecessor,Scott Pruitt, while being more cautious to spell out the agency's legal reasoning," InsideClimateNews reporter Marianne Lavelle wrote.Maryland's Attorney General Brian Frosh said Monday that the state would appeal the EPA's decision, The Associated Press reported."We intend to appeal EPA's decision to the U.S. Court of Appeals for the D.C. Circuit, so that Marylanders do not have to continue suffering the consequences of other states' pollution," Frosh said.The petition was first filed in 2016 and asked the EPA to ensure 36 coal plants in Indiana, Ohio, Kentucky, Pennsylvania and West Virginia run equipment they already had to reduce nitrogen oxide emissions.Maryland voiced concern about the health of its citizens and environment.The Chesapeake Bay Foundation (CBF) said nitrogen oxide contributed to algae blooms and dead zones in the bay."This is yet another example of EPA putting big business above human health and the environment," CBF Vice President of Litigation Jon Mueller said. "The agency is making it more difficult to achieve Bay clean-up goals by failing to limit interstate air pollution."

The Inconvenient Truth Of Rising Coal Prices - Coal prices are not supposed to be rising as governments tighten environmental controls but that’s precisely what is happening. Over the past six months the price of top quality thermal coal exported from the Australian port of Newcastle has risen by 25% to $115 a ton.The increase is more dramatic when looking back two years to a time when premium thermal coal exported from Newcastle was selling for $50/t, less than half its current price. In the longer term the drive for reduced pollution from coal burning could turn out to be a factor in coal prices staying high because tough environmental protection laws in a number of countries are limiting the development of new coal mines. In effect, efforts to limit coal production has become a significant factor in lifting the coal price for companies already producing.

Fans of Coal Are Reaping the Rewards – WSJ - Global mining companies that bet on coal are enjoying the best prices in years—a sign there is money to be made from the industry even as an energy transition to gas and renewables takes place. Glencore has used rising sentiment against coal to expand its position in the market, scooping up unwanted assets. The Swiss mining and trading giant has a history of pushing into businesses where rivals are reluctant to tread. So far, Glencore’s gamble appears to be paying off. High demand from Asia helped thermal coal prices delivered from Newcastle, Australia, the world’s largest coal-export port, more than double since it bottomed in early 2016 to about $110 a metric ton. Export prices from South Africa and import prices into Europe are also at or near their highest levels in years. Glencore stock has struggled this year amid regulatory scrutiny linked to businesses in Africa and Venezuela. But its coal division was a big driver in the record earnings it recorded in the first half of 2018, generating more than a quarter of the $8.3 billion in earnings before interest, taxes, depreciation and amortization. Other miners have shied away from the market. Rio Tinto completed its exit from the coal market earlier this year. BHP has almost halved its exposure through divestments in recent years and in April quit the World Coal Association over the industry group’s position on climate change. Anglo American PLC has sold off its Australian thermal coal assets. The diverging strategies on coal show how companies are grappling with a long predicted transition in energy consumption. Recent gains in coal prices are a reminder that timing this expected switch into gas and renewables can be tricky, with miners liable to leaving money on the table from their coal assets. While renewables and gas are making inroads into Western power markets that have long depended on coal, emerging markets in Asia remain hungry for large, cheap sources of energy, increasing their coal demand.   Mark Cutifani, the chief executive of Anglo American, told The Wall Street Journal that thermal coal—the type of coal used in heating and power generation—will be strong for the next “five to seven years.”

Hurricane Florence blows hole in Trump team's case for helping coal and nuclear power, critics say -  Hurricane Florence has blown a hole in the Trump administration's argument that bolstering nuclear and coal-fired power is essential to providing reliable electricity to homes and businesses, especially during times of crisis, according to energy experts long critical of the plan.For months, the Department of Energy has considered throwing a lifeline to that sector of the power market to make the electric grid more resilient to natural and man-made disasters. The Trump administration has been preparing to use a Cold War-era law, once marshaled by President Harry S. Truman to secure U.S. steel production, to compel regional grid operators to buy electricity from nuclear and coal plants.The rationale is that only these two types of generation regularly have enough fuel on site to run for when national security is threatened. Wind turbines and solar panels only generate electricity when the weather is right while natural gas stations often have their fuel pipelined in from afar.But hours before the once powerful hurricane made landfall in North Carolina on Friday, Duke Energy shut down its two reactors at the Brunswick Nuclear Plant near Wilmington, N.C.​​​​ in anticipation of high winds. The temporary shutdown illustrates how many other factors beyond just fuel stored on site affect grid reliability. "There are so many flaws to their argument, we hardly need this to add," said David Hart, professor of public policy at George Mason University. "There are lots of better ways to get reliability than to stockpile a lot of fuel."One cause of power outages is, of course, downed power lines. According to a 2012 Congressional Research Service report, trees falling on local distribution lines cause most storm-related power outages. Damage to transmission lines, the main arteries of the electric grid, tend to cause major outages. The delivery system for electricity, rather than its source, tends to be what is most vulnerable during storms.

Six Permits Issued in Ohio's Utica    – The Ohio Department of Natural Resources issued six permits to energy companies exploring oil and gas reserves in the Utica shale play for the week ended Sept. 15, the agency reported.Four permits were issued to Ascent Resources LLC to drill horizontal wells in Jefferson County, while Utica Resources Operating LLC received two permits for wells in Guernsey County.There were 18 rigs operating in the Utica as of Sept. 15, according to ODNR.As of that date, ODNR had issued 2,890 permits for wells in the shale play, which encompasses most of eastern Ohio. Of that number, 2,414 wells have been drilled and 2,022 of those wells are in production. There were no new permits issued in the northern Utica, which encompasses Mahoning, Columbiana and Trumbull counties. Nor were there new permits issued to companies exploring the Utica in neighboring Lawrence and Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.

Academy focuses on shale jobs — Rich Wright has been named director of the Utica Shale Academy. Wright replaces Eric Sampson, who was director of the community school since its inception in 2014. The school has locations at Southern Local and Columbiana high schools in Columbiana County. It offers welding in conjunction with the New Castle School of Trades and courses involved with the gas and oil industry, and Wright has been working with the USA board of directors and sponsor Jefferson County Educational Service Center to expand the program. “We’d like to expand by increasing our student options and one of those areas includes a stronger connection with NCST,” he said. They’re also looking at a technology-based partnership with Youngstown State University.” Current student enrollment is 45 participants between the main location at Southern Local and the Columbiana branch. About 50 students have graduated from USA since it began, with the largest class in 2018 at 22 people. USA provides curricula required by the Ohio Department of Education and includes a customizable digital curriculum allowing for acceleration or remediation, along with flexible scheduling. It also offers certification courses in SafeLand, OSHA10, First Aid and CPR, hydrogen sulfide (H2S) awareness and confined space certifications.

Pro- and anti-fracking groups clash at Ashland County Commissioners meeting - Anti-fracking activists and pro-oil and gas industry representatives converged Thursday at an Ashland County Commissioners meeting. George Stark, director of internal affairs for Cabot Oil and Gas's north region, gave a brief update on the status of his company's exploratory drilling in the southern part of the county.  "You may already know, we have put three pads together in the county that are in various phases of development," Stark said. The company is looking for fossil fuels-- either oil or natural gas-- below the Utica Shale formation. Cabot plans to drill at least five exploratory wells by the end of the year. After drilling about a mile below the ground vertically and then about two miles horizontally, Cabot uses a process called hyraulic fracturing to extract the fuels. Stark said his company put together a pamphlet of information, which Cabot mailed to 5,000 landowners in the areas of the drilling sites. The pamphlet information also was placed as an advertisement in the local newspaper.  Working with county Emergency Management Agency director Mark Rafeld, Cabot set up meetings and rig tours for 10 volunteer fire departments in the area to explain operations and prepare for any possible rig fires.  "We believe we've hit all the fire departments that would either be primary or secondary," Stark said.  Later in the meeting, Elaine Tanner, an organizer with Hayesville Community on Fracked Gas, questioned the county commissioners about the county's readiness to respond to any water contamination that could result from Cabot's activity.  "I think we need to have somebody talk to people to say what happens when there's an emergency with our water. How do we find out? Who's going to be the one to come knocking on our door?" Tanner said. Tanner cited incidents of water contamination at other oil and gas drilling sites and presented a letter from an anti-fracking organizer in Susquehanna County, PA who wrote about contamination from Cabot's activities in that county.   "If our auquifer is contaminated and all these residental wells out in the county are drawing from this auquifer and there's a breech, we need to know," Tanner said.

The Private Intelligence Firm Keeping Tabs on Environmentalists -- The flyer shows a mob of balaclava-clad activists dressed in black, lobbing bottles at an undefined target. They could be protesting anything, but for attendees at a petroleum industry conference in Houston earlier this year, it was pretty clear what the violent demonstrators were targeting: the fossil fuel industry. The scary image of protesters was distributed by Welund North America, a private intelligence firm that promises to help oil and gas operators mitigate the threat posed by an increasingly sophisticated activist movement. On the back of the flyer an anonymous testimonial reads, “Since subscribing to Welund we’ve dramatically increased our ability to pre-empt and better manage activist engagements and minimize reputational damage.” Logos—presumably of Welund’s clients—listed on the flyer include a who’s who of Big Oil and Gas: Royal Dutch Shell, Kinder Morgan, Duke Energy, Dominion, and Chevron. Welund has even secured contracts with the Canadian government. Welund is part of a deeply controversial cottage industry of private intelligence firms that has flourished in recent years. According to one estimate, the global industry is now worth about $20 billion, and the agencies—sometimes with just a handful of employees—are popping up everywhere from Israel to Africa to the United States. Recent revelations have shown that Black Cube, an Israeli firm, gathered intelligence on Obama administration officials in an effort to undermine the Iran nuclear deal. Christopher Steele, the co-founder of Orbis Business Intelligence, another private firm, was responsible for the famous Trump-Russia dossier.

Marcellus Shale Research Expanding to Include Second Well Site - The Marcellus Shale Engineering and Environmental Laboratory (MSEEL) plans to conduct more extensive testing to improve unconventional natural gas recovery at a new drilling site in Monongalia County, WV, to the west of its first site where research began three years ago.MSEEL is a partnership between the U.S. Dept. of Energy (DOE), West Virginia University, Ohio State University and Northeast Natural Energy. It is considered a cornerstone of the National Energy Technology Laboratory’s unconventional oil and gas program. DOE said the new research will primarily be aimed at improving gas recovery from horizontal drilling and hydraulic fracturing throughout the Appalachian Basin.Physical Scientist Robert Vagnetti, of the NETL, said the new wells, which will be drilled near Blacksville, WV, to the west of MSEEL’s first site at an industrial park in Morgantown, WV, will advance hydraulic fracture stimulation techniques that were pioneered by the partnership years ago. WVU and Northeast Natural were able to design stimulation zones or stages that optimized perforations around natural fractures in the shale at the Morgantown site. Some of the techniques, however, were deemed cost-prohibitive and researchers plan to use and compare new ones at the Blacksville site.

How slick water and black shale in fracking combine to produce radioactive waste  --Radioactivity in fracking wastewater comes from the interaction between a chemical slurry and ancient shale during the hydraulic fracturing process, according to Dartmouth College research. The study, detailed in twin papers appearing in Chemical Geology, is the first research that characterizes the phenomenon of radium transfer in the widely-used method to extract oil and gas.   "The stuff that comes out when you frack is extremely salty and full of nasties," said Mukul Sharma, a professor of earth sciences at Dartmouth and head of the research project. "The question is how did the waste become radioactive? This study gives a detailed description of that process." During fracking, a large proportion of the so-called "slick water" that is injected into the ground returns to the surface as highly toxic waste. In seeking to discover how radium is released at fracking sites, the research team combined sequential and serial extraction experiments to leach radium isotopes from shale drill core samples. For the study, the research team focused on rocks taken from Pennsylvania and New York locations of the Marcellus Shale. The geological feature is one of the major rock formations in the U.S. where fracking is being carried out to extract natural gas. The first research paper found that radium present in the Marcellus Shale is leached into saline water in just hours to days after contact between rock and water are made. The leachable radium within the rock comes from two distinct sources, clay minerals that transfer highly radioactive radium-228, and an organic phase that serves as the source of the more abundant isotope radium-226.

Frackers are Blundering thru WV, OH, & PA, Unrestrained in Bleeding Fossil Fuels -- George Ahern’s Op-Ed of August 29 has been the source of many guffaws here in Appalachia, where it is passed around among people far from Naples, Florida. It is written as though there was no negative side on the balance sheet of fracking.The industry uses technology developed at the Morgantown Energy Center (West Virginia) for the DOE and first tried by George Mitchell with government financial assistance. It is so financially insecure both Bloomberg and the New York Times carried articles about difficulty getting funding for new projects. One of those articles says, “Some of fracking’s biggest skeptics are on Wall Street. They argue that the industry’s financial foundation is unstable: Frackers haven’t proven that they can make money.” Fracking companies are going broke on a regular basis. Another quote from the same article, “The 60 biggest exploration and production firms are not generating enough cash from their operations to cover their operating and capital expenses. In aggregate, from mid-2012 to mid-2017, they had negative free cash flow of $9 billion per quarter. This article was published in the same month as Dr. Ahern’s. Only five of the top 20 fracking companies made more money than they spent in the first quarter of 2018! Some of the reasons are quite simple. Fracking expense is tremendous and the wells decline rapidly. Conventional wells produce for decades, fracked wells don’t pay to pump beyond 6 or 7 years, and production has gone down by half in a couple of years. All the production in the first year makes a selling point to investors, and the rest, conveniently, isn’t mentioned. Several times as much water is used as oil produced in oil wells, and several times as much water returns to the surface. Five thousand tanker truckloads of water must be taken from a source and then much of it pumped back underground. This causes earthquakes. Local Chamber of Commerce people benefit from the investment, and they love it. Rural people hate it when it arrives, and anyone concerned with it’s effect on the biosphere see mostly harm. Energy Return on Energy Invested (EROEI) is quite poor.

Construction resumes for Duke Energy-backed Atlantic Coast Pipeline - Federal regulators issued a letter Monday allowing construction to resume on the $6.5 billion Atlantic Coast Pipeline, a month after halting all work due to a federal court ruling vacating two required permits.ACP spokesman Aaron Ruby welcomed the news from the Federal Energy Regulatory Commission.   “With FERC’s approval today, we are mobilizing our crews immediately to resume construction as authorized,” he says. “We are closely monitoring weather conditions across the project footprint and will of course only resume work in areas where it is safe to do so and where weather conditions permit,” he added, recognizing continued flooding and other issues in the wake of Florence, which made landfall as a Category 1 hurricane and is now a tropical depression.  The Southern Environmental Law Center, which brought forth the court cases that led the 4th Circuit Court of Appeals to invalidate environmental permits from the U.S. Fish and Wildlife Service and the National Parks Service, has raised questions now about how quickly those problems were supposedly resolved. “These two agencies (Fish and Wildlife and National Parks) got into trouble once for making rushed decisions on a political timetable,” says SELC lawyerD.J. Gerken. “The agencies turned very fast and, as far as we can tell, without much concern for whether they were done correctly.” He would not disclose if SELC plans a legal challenge to the FERC order, saying his organization is still reviewing it. But Gerken says he expects a decision to be made quickly. The FERC initially approved pipeline construction for sections in West Virginia to start in May. Construction for segments in North Carolina was approved later in the summer. The appeals court ruled this spring that environmental permits issued by the Fish and Wildlife Service — for protection of endangered species — and the National Parks Service — for construction crossing the Blue Ridge Parkway — were invalid. In August, the court ruled that construction could not continue without the permits. . On Aug. 10, the FERC ordered all construction to halt. It said allowing construction to go ahead without the permits “poses the risk of expending substantial resources and substantially disturbing the environment by constructing facilities that ultimately might have to be relocated or abandoned.”

Atlantic Coast Pipeline Work Restarts as Opponents Decry 'Rushed Decisions' - The Federal Energy Regulatory Commission (FERC) ruled Monday that work could resume on the Atlantic Coast Pipeline, which opponents call "unnecessary and a boondoggle," the Charlotte Business Journal reported.Work on the controversial pipeline halted last month after a federal appeals court vacated two permitsrequired for the project to complete its 600 mile route from West Virginia, through Virginia, to North Carolina.The pipeline is a project backed by Duke Energy, Dominion Energy and Southern Co. to carry fracked natural gas.The permits in question, from the Fish and Wildlife Service (FWS) and the National Park Service (NPS) were redone Sept. 11 and 14 respectively, the FERC said in its letter authorizing construction. "We fixed those issues and FERC lifted our stay. So our folks are back to work, starting today," Dominion Resources State Policy Manager Bob Orndorff told the West Virginia state legislature Tuesday, MetroNews reported. But pipeline opponents were skeptical of the new permits. "These two agencies got into trouble once for making rushed decisions on a political timetable," Southern Environmental Law Center (SELC) lawyer D.J. Gerken told the Charlotte Business Journal. "The agencies turned very fast and, as far as we can tell, without much concern for whether they were done correctly." SELC brought the court case that led the Fourth Circuit Court of Appeals to vacate the permits.The court found that the original NPS permit was invalid because it did not explain how the tree-cutting necessary for the pipeline's passage through the Blue Ridge Parkway would not contradict its scenic purpose. The original FWS permit, meanwhile, did not adequately address the pipeline's impact on endangered species, the court ruled.

Legislators updated on two, billion-dollar pipelines underway - — Legislators learned the latest on natural gas pipeline projects underway in the state, including the nearly $6 billion Atlantic Coast Pipeline that put its 3,100 West Virginia employees back to work Tuesday.“We had fantastic news from FERC (the Federal Energy Regulatory Commission),” Robert Orndorff, state policy manager for Dominion Resources, told lawmakers during a presentation on the Atlantic Coast Pipeline project. “We had a stay on the project that lasted about three weeks that had permitting issues. We fixed those issues.” FERC ordered a halt to construction Aug. 10 after a U.S. Fourth Circuit Court of Appeals ruling that nixed Dominion’s proposed right-of-way crossing of the Blue Ridge Parkway and vacated an Incidental Take Statement by the U.S. Fish and Wildlife Service. The pipeline developers later were granted permission to continue work on two “critical road bores” — one at Mount Carmel Road in Upshur County and one at U.S. 50 near Bridgeport — as well as certain activities at the Mockingbird Hill Compressor Station in Wetzel County.Atlantic Coast Pipeline LLC is comprised of four major U.S. energy companies: Dominion Energy, Duke Energy, Piedmont Natural Gas and Southern Company Gas. The joint-venture partners are working to construct a 600-mile underground transmission pipeline to move natural gas from West Virginia to markets in southeastern Virginia and North Carolina, according to Orndorff.He told members of the Joint Committee on Natural Gas Development the construction effort will create 17,000 jobs.

Work on pipeline in W.Va. county halted by judge — Work on the Mountain Valley Pipeline where it crosses a river in West Virginia will be halted as a judge has ordered a temporary stay. The Register-Herald reports Summers and Monroe counties circuit court Judge Robert Irons issued the stay Tuesday over construction in Summers County. It will specifically stop work on property where the pipeline will enter the Greenbrier River in Pence Springs. Ashby Berkley, the Greenbrier River Watershed Association and other petitioners brought the motion after neighbors told Berkley workers started removing trees on his land last week. Their attorney Kevin Thompson argued that a permit issued by the West Virginia Department of Environmental Protection isn’t in compliance with the Natural Streams Preservation Act. Attorney Robert McLusky represented pipeline interests arguing a stay would create a lengthy delay in construction. A hearing in the case is scheduled for October. The stay will not impact the more than 1,000 other rivers, streams and wetlands to be crossed by the pipeline in West Virginia and Virginia; the Natural Streams Preservation Act applies only to undammed waterways. The Greenbrier is the longest continuously flowing river in the Eastern United States, according to the watershed association.

East Coast refiners receiving more domestic crude oil from Gulf Coast by tanker and barge - Since mid-2017, the East Coast has been receiving as much crude oil by tanker and barge from the Gulf Coast as it has by rail from the Midwest. In April, the volume of crude oil transported by tanker and barge from the Gulf Coast to the East Coast reached the highest level since mid-2014. At the same time, crude oil shipped to the East Coast by rail from the Midwest has fallen 77% from its peak in late 2014. These changes in crude oil shipments, as well as the mix between foreign and domestic crude oil inputs to East Coast refineries, have followed price movements in crude oil markets.   Changes to U.S. crude oil transportation infrastructure in the past three years, such as expanded pipeline capacity out of the Midwest (defined as Petroleum Administration for Defense District 2) and increased availability of coastwise-compliant shipping in the Gulf Coast (PADD 3), have altered the costs of transporting crude oil domestically.  Because very limited pipeline infrastructure exists to transport domestic crude oil to the East Coast (PADD 1), East Coast refiners historically have imported crude oil from international sources. For East Coast refineries, the price difference between the international benchmark Brent and the domestic benchmark West Texas Intermediate (WTI) helps determine when the additional costs of acquiring and transporting domestic crude oil to the East Coast can be overcome.  Between 2011 and 2015, when the difference in price between domestic crude oil and foreign crude oil was significantly greater than it had been in previous years, refineries on the U.S. East Coast increased receipts of domestic crude oil, particularly by rail and domestic marine shipping.  As the Brent-WTI price spread began widening to average $5 per barrel (b) in the first six months of 2018, East Coast refineries again increased their receipts of domestic crude oil, but this time in far lower quantities than in 2015. Domestic crude oil accounted for 19% of total East Coast crude inputs for the first six months of 2018, compared with 48% in the first six months of 2015, when the Brent-WTI price spread also averaged $5/b. Going forward, the Brent-WTI price spread is expected to remain the primary factor affecting East Coast domestic crude oil receipts. In the September Short-Term Energy Outlook, EIA forecasts Brent will average about $6/b more than WTI in 2018 and in 2019.

U.S. refiners face emerging glut of fuel: Kemp (Reuters) - U.S. refiners have processed a record volume of crude in the last three months, reversing the previous shortage of distillate but leaving the country with record gasoline stocks at the end of the summer driving season. Fuel availability has been helped by the absence of a direct hurricane hit on the major refining centres located on the coasts of Texas and Louisiana, in stark contrast to the refinery closures caused by Hurricane Harvey in 2017. Refiners have carried on processing at elevated rates well after the end of the normal summer driving season and into September in order to rebuild previously depleted distillate stocks (https://tmsnrt.rs/2MKZGBz ). But the now-plentiful supply of gasoline and to a lesser extent distillate implies refiners will have to cut processing more sharply than usual over the next couple of months to avoid creating a glut of refined products. U.S. refiners processed 17.4 million barrels per day (bpd) of oil in the week to Sept. 14, up from 15.0 million bpd in 2017 (impacted by Hurricane Harvey) and 16.6 million bpd in 2016. Refiners produced a seasonal record 5.5 million bpd of distillate last week, up from 4.5 million bpd in 2017 and 5.0 million bpd in 2016, according to the U.S. Energy Information Administration. Distillate stocks have risen to 140 million barrels up from a recent low of just 114 million barrels in mid-May (“Weekly Petroleum Status Report”, EIA, Sept. 19). Distillate inventories are now just 6 million barrels below the 10-year average compared with a deficit of 25 million barrels as recently as July 20. But the consequence of heavy refining activity to produce distillate has been the emergence of a potential over-supply of gasoline. Gasoline stocks remained plentiful throughout the peak summer driving season and are now at a record for the time of year. Gasoline inventories stood at 234 million barrels at the end of last week, up from 216 million at the same point in 2017, 227 million in 2016 and a 10-year average of 215 million. 

Tougher laws on pipeline protests face test in Louisiana - After a high-profile campaign to oppose the Dakota Access Pipeline in 2016, a number of states moved to make it harder to protest oil and gas projects. Now in Louisiana, the first felony arrests of protesters could be a test case of these tougher laws as opponents vow a legal challenge. The controversy here is over the Bayou Bridge Pipeline, the last leg of the Dakota Access. If completed, it will bring crude oil from the Bakken oil fields of North Dakota, through Louisiana, where it will be exported abroad. On a recent day, deep in the Atchafalaya swamp of South Louisiana, twigs snap under the rubber boots of about 40 protesters as they march through shaded woods. Many have tied bandannas around their faces, leaving only their eyes exposed. In the distance, backhoes fling mud as construction workers clear a path for the new Bayou Bridge Pipeline. "Y'all are trespassing!" a construction worker shouts.   “Go home!" a protester yells back. After a few minutes, the construction workers shut off their equipment and the protesters celebrate. But later, things get heated after the sheriff's department shows up. A deputy pins one woman to the ground, and the two sides engage in a muddy tug of war until she tumbles free. It's incidents like this that have helped push lawmakers to take action. Earlier this year, Louisiana state Rep. Major Thibaut proposed a bill with stricter penalties for pipeline protesters. "You know that there's a right way to do things and a wrong way," Thibaut told a state legislative committee. "And if you want to protest against something ... get your permit and you go do it in a legal fashion." Trespassing in Louisiana is normally a misdemeanor offense. But the new law deems oil and gas pipelines to be "critical infrastructure," a classification that includes places like nuclear plants, oil refineries and water treatment facilities. As of Aug. 1, trespassing near oil and gas pipelines in the state is now a felony offense, with a possible sentence of up to five years in prison.

US Atlantic Coast imports of WAF crude oil made difficult on wide Brent/WTI spread, FOB — US Atlantic Coast imports of West African crude oil are expected to decline due to harsh arbitrage conditions made difficult by the large premium of ICE Brent futures over WTI, as well as strong premiums for WAF grades. Traders tracking these grades exported in the US expect WAF imports to the USAC to fall to virtually zero. The USAC from May to August imported an average of roughly 24 million barrels a month, of which 8.7 million were from West Africa, data from the Energy Information Agency compiled by S&P Global Platts showed. "The arbitrage of WAF grades into the US is fully closed," a trader said. Although negligible in outright terms, WAF arrivals in the region in the four months sampled compared to all foreign imports reached as high as 45.4% in June and as low as 19.8% in July. Nigerian grades tend to make up 40% of WAF imports and Angolan 20%, the rest coming from smaller more regional grades. Traders lose money in buying basis Dated Brent and selling basis WTI, implying the arbitrage only becomes possible when local buyers are able to cover the cost of conversion by bidding above, something which prompts them to look at alternatives when the spread is high. The Brent/WTI spread closed at minus $10/b Monday last week, its highest level since mid-June, data from the InterContinental Exchange showed. Cargo premiums basis FOB have also made the arbitrage difficult. Healthy refinery margins in Europe and Chinese demand for Angola helped premiums reach fresh highs towards the end of the summer. An increased cost of crude at loading will also push the overall price higher for delivery into the US. Lastly, at a time when everything is becoming more expensive, US refiners are scheduled to enter seasonal maintenance throughout October, taking away the demand for foreign crudes.

Industry group says hurricanes bolster case for expanding offshore drilling  - Hurricane season is in full swing — and it's throwing into the spotlight an ongoing debate between industry and environmental groups over expanding offshore drilling.The National Ocean Industries Association is pointing to hurricanes as a reason the United States should allow offshore drilling in areas beyond the Gulf of Mexico. Because most of the nation’s offshore drilling is concentrated in such a hurricane-prone region, the lobbying group that represents offshore energy companies warns the country is “rolling the dice” with natural disasters, which can jeopardize the country's oil supply if bad weather forces companies to shut down oil production and evacuate oil platforms. The group wants the Interior Department to expand oil production into the southeast Atlantic, the eastern Gulf of Mexico, and off the coast of California and Alaska as part of the Trump administration's controversial proposal to open most of the nation's outer continental shelf to potential drilling. Yet environmental groups are pointing to Florence as the latest evidence this hurricane season that offshore drilling shouldn’t happen anywhere. “As this hurricane is proving, there’s no area off the coast of the U.S. that is immune to hurricanes or storms,” said Athan Manuel, director of the lands protection program for the Sierra Club. Florence was downgraded on Sunday to a tropical depression. Yet Manuel said the risk of oil spills and the fact that there’s no real way to move oil facilities “out of harm’s way” shows “there’s no safe place to drill.” For its part, NOIA says that dispersing drilling across a broader geographical area will better ensure the country's energy security in the event of a natural disaster. By concentrating drilling in the Gulf of Mexico, “what we’ve done is put all of our oil and natural gas eggs into one basket,” NOIA President Randall Luthi said in an interview.  NOIA in part blames energy policy, which makes about 94 percent of the U.S. continental shelf off limits to drilling. In January, the Trump administration announced its proposed five-year plan to widely expand drilling in U.S. continental waters. But in April, Interior Secretary Ryan Zinke told Congress he would scale back that plan, responding to opposition from both Democratic and Republican governors and lawmakers in coastal states.

Offshore Investments to Outpace Shale in 2019 - Offshore investments levels are set to rise in 2019 after decreasing each year during the industry downturn. Recent analysis by Rystad Energy shows that a recent surge in offshore oil and gas FIDs has set the stage for a significant increase in offshore investments next year. This will be the first time shale investments will not overtake offshore. The number of offshore projects sanctioned in 2017 rose 50 percent year-on-year and close to 100 offshore projects will be sanctioned this year. The industry is committed to spending $100 billion over the next few years, Audun Martinsen, Rystad’s head of oilfield service research, said during Rystad Energy’s Annual Summit Sept. 18. “Our offshore activity index is pointing to annual growth rates of about 6 percent towards 2022, thereby returning to the high activity levels seen in 2014,” said Martinsen. “Coupled with annual service price inflation of 5 percent, offshore oilfield service purchases are projected to grow by 11 percent per year towards 2022.” While offshore spending is on the rise, growth levels are slowing in the shale sector. Martinsen noted logistical challenges, takeaway capacity bottlenecks and a growing oversupply in the proppant and fracking market. Since April 2018, U.S. well fracturing activity has flattened to just above 50 wells per day. And frac sand demand in the U.S. is forecast to grow at 21 percent CAGR from 2018 to 2021, however, this will be overshadowed by an even greater jump in supply, which will have a negative impact on prices, Rystad reports. 

Gulf of Mexico oil spill much worse than thought, federal lawyers say   Federal government lawyers say a 14-year-old leak is releasing much more oil each day into the Gulf of Mexico than officials previously claimed, and it may be getting worse.A Friday court filing in a case involving Taylor Energy Co. says 10,000 to 30,000 gallons daily is leaking from multiple wells around a drilling platform toppled by 2004's Hurricane Ivan.That estimate is far above the 16,000 gallons of oil that the U.S. Coast Guard estimated in 2015 had been spotted in slicks over seven months.The government cites a report it commissioned from a scientist who has studied satellite images of persistent oil slicks and sampled floating oil at the site about 10 miles offshore. That report also suggests that while the amount of leaking oil decreased after some wells were plugged in 2011, the leak may be getting bigger again. "There has been an uptrend of the areas of the slick during the last two years," wrote Oscar Pineda-Garcia, who runs a company that maps oil spills and is an adjunct professor at Florida State University.  New Orleans-based Taylor said only 2 to 3 gallons was leaking daily out of mud on the seafloor. Spokesman Todd Ragusa said the company disputes the government's new estimate and will respond in court.

Cheniere Signs 15-Year LNG Deal With Commodity Trader Vitol -- Cheniere Energy has signed a 15-year sales and purchase agreement with major oil trader Vitol to sell around 0.7 million tons of liquefied natural gas (LNG) annually beginning this year, the U.S. company said on Monday, announcing its second major long-term LNG deal with one of the biggest oil and commodity trading houses.Under the deal, Vitol will buy LNG from Cheniere Energy’s subsidiary Cheniere Marketing on a free on board (FOB) basis, with the purchase price for LNG indexed to the monthly Henry Hub price, plus a fee.“This agreement continues Cheniere’s commercial momentum and supports our growth plans, while demonstrating the value LNG buyers place on Cheniere’s unique ability to offer flexible solutions tailored to the needs of LNG customers worldwide,” said Jack Fusco, Cheniere’s President and CEO.“We believe that LNG has an important role to play in the future energy mix and that its evolution will require a more flexible and tradeable LNG market,” said Russell Hardy, Group CEO at Vitol.Houston-based Cheniere Energy owns and operates the Sabine Pass LNG terminal in Louisiana and is developing and building liquefaction projects near Corpus Christi, Texas.“Cheniere is also exploring a limited number of opportunities d irectly related to its existing LNG business,” the company said today.

Leave oil and gas out of US-China trade dispute, energy execs warn - Oil and gas should be left out of the escalating trade dispute between the U.S. and China, global energy executives told CNBC on Tuesday. "One of the things that could be damaging for the LNG (liquefied natural gas) industry in the U.S. is the taxes that could be levied on them by China and others," Saad Sherida Al-Kaabi, the chief executive of Qatar Petroleum, the biggest LNG exporter in the world, said. Al-Kaabi told CNBC's Steve Sedgwick at the Gastech conference in Barcelona that the oil and gas sector should be "left out of this trade discussion." "I think it needs to be looked at carefully because I don't think it's to the benefit of the oil and gas industry to have politics and taxation enter into this (trade dispute)," he said. LNG exports matter to the U.S., particularly in its quest to become a dominant energy exporter. The International Energy Agency (IEA) said in its 2018 annual Gas report, released in June, that global LNG exports will increase 30 percent by 2023 with the U.S. expected to become the second largest supplier in the world. Qatar Petroleum's Al-Kaabi recognized that while tariffs on U.S. LNG exports to China might help his company, in terms of making its LNG exports more attractive, the measures would have a negative impact on the industry. "It could serve Qatar to be more competitive, in comparison with the U.S., when some of the countries put taxes on U.S. LNG — but I don't think long-term that it's good for the market to have politics and to have taxation on a very important basic requirement for humanity, which is energy." Like it or not, global energy supplies are a politicized issue with mounting competition between major energy exporting economies. The Nord Stream 2 gas pipeline is just one disputed energy project. Designed to bring Russian gas to Germany under the Baltic Sea, the pipeline has been repeatedly criticized by Trump and the U.S. Energy Department, who both say Moscow is weaponizing energy and trying to make Europe reliant on Russian gas. Russia supplies around a third of the region's gas.Nonetheless, the U.S. wants to boost its own LNG exports to Europe and the continent has promised to build a handful of terminals to store the gas.

Trump's latest tariffs are a 'new tax' on US businesses, oil industry says - The oil industry's largest trade group lashed back at President Trump's Monday night announcement imposing a 10-percent tariff on an additional $200 billion worth of Chinese goods. "We understand the need to address discriminatory trade practices, but this policy will essentially impose a new tax on $200 billion worth of products on which American families and businesses rely,” said Kyle Isakower, economic policy vice president for the American Petroleum Institute. He explained that the oil and natural gas boom the country is experiencing has supplied U.S. consumers and businesses with low cost energy, which strengthens the U.S. economy. The tariffs will not only harm drillers, but they will also harm the success of Trump's pro-growth agenda, which relies on oil and natural gas production and exports, said Isakower.The escalation of the trade war with China "works against" the American energy industry to "counter to the Administration’s stated goal of ‘energy dominance,'” Isakower added. The U.S. became the largest oil producer in the world last week, pushing out Russia and Saudi Arabia from the top spots, according to the Energy Information Administration. A substantial chunk of U.S. oil production is going to China in the form of exports. The oil industry has criticized the Trump trade agenda for ramping up tariffs on steel and other products, which limits the industry's ability to build pipelines and related infrastructure, which makes the nation less competitive. Much of the specialized steel products that industry relies upon are imported from overseas suppliers. Many U.S. foundries are not capable of producing many of the products the industry requires to continue its growth.  The new round of tariffs announced Monday targets an additional $200 billion worth of Chinese products, adding to the $50 billion in tariffs previously enacted. The massive escalation of the trade dispute may only be beginning, as Trump also threatened tariffs on $267 billion of goods on top of Monday's announcements.

China says to impose 10% tariff on US LNG from Sep 24; keeps US crude oil off list — China announced Tuesday retaliatory tariffs on an additional $60 billion worth of US imports that included a 10% tariff on LNG, effective September 24, but Beijing kept crude oil off its latest list of products incurring charges. The Chinese Ministry of Commerce's list imposed a 10% additional tariff on 3,571 US items, including LNG, and a 5% additional tariff on 1,636 US products -- all effective September 24. LNG does not attract a tariff currently. The latest tit-for-tat escalation in the trade war between the two countries came after the US said Monday it would implement a 10% tariff on an additional $200 billion worth of Chinese imports from September 24, and will further lift the duty to 25% January 1.

 US Gas Exports Hit by China Tariffs as Trade War Escalates -- China plans to slap tariffs on U.S. natural gas exports as trade tensions escalate, a likely setback for the burgeoning energy relationship between the world’s two largest economies. The Asian nation said in a statement Tuesday it would levy a 10 percent duty on liquefied natural gas starting Sept. 24, retaliation for a fresh round of tariffs announced the day before by the U.S. While China’s levy is less than the 25 percent it proposed last month, the tariff still brings additional pressure to bear on the U.S. gas industry, which is competing with Russia, Australia and Qatar for market share in China, the world’s biggest buyer. Just last year, American officials were courting Chinese companies to invest in new export projects. China’s move signals how much pain Presidents Xi Jinping and Donald Trump are willing to endure not to back down from a trade fight. Trump risks stifling the U.S. gas export industry, which is seeking about $130 billion to fund more than a dozen projects, while Xi threatens to raise the cost of his drive to eliminate smog by burning less coal. “Chinese companies will have an aversion to investing in U.S. LNG projects in the short term” if tariffs are imposed, Saul Kavonic, Credit Suisse Group AG’s director of Asia energy research, said before China’s announcement. “Australia and Qatar’s LNG sectors will benefit from being seen as a lower-risk source of supply by customers in the world’s fastest growing LNG market, at least over the near term.” 

China LNG tariff casts shadow over new U.S. export terminals (Reuters) - China set a 10 percent tariff on U.S. liquefied natural gas (LNG) imports, extending a trade dispute into energy and casting a shadow over U.S. export terminals that would propel the United States into the world’s second-largest LNG seller. Beijing on Tuesday said it would tax U.S. products worth $60 billion effective Sept. 24 in retaliation for tariffs imposed by U.S. President Donald Trump in an escalating trade war. The rate was smaller than the 25 percent tariff China had touted earlier, which offered some relief and helped shares in listed U.S. LNG companies climb. The tariffs undermine Trump’s drive to use U.S. shale oil and natural gas to turn the United States into a global energy leader. The U.S. is on track to export over 1,000 billion cubic feet (bcf) of gas as LNG in 2018. One billion cubic feet is enough to fuel about 5 million U.S. homes for a day. But China, which purchased about 15 percent of all U.S. LNG shipped in 2017, is now on track to buy less than 100 bcf of U.S. LNG in 2018, less than last year, according to Thomson Reuters vessel tracking and U.S. Department of Energy data. The country has taken delivery from just four vessels since June versus 17 during the first five months of the year. 

New US LNG Projects May Feel Pinch from Latest Salvos in US-China Trade War - In response to the Trump administration’s latest round of tariffs on approximately $200 billion of Chinese imports, the Chinese government has retaliated with plans to impose new tariffs on roughly $60 billion worth of imports from the United States. The Chinese government’s action includes a 10-percent tariff on U.S. liquefied natural gas (LNG), effective September 24.   “The impact on the short-term market is likely to be less than we previously indicated,” Giles Farrer, research director with Wood Mackenzie, stated in a commentary Wednesday. “This is partly because the level of the tariff is lower than initially proposed, 10 percent now versus 25 percent in August, but also because we think China has already completed the majority of its procurement for winter. Possibly because of this, we have recently seen spot and futures prices for winter come down despite strengthening oil prices.”Farrer noted that China purchased approximately 3 million tons per annum of U.S. LNG in the 12 months up to June 2018, making it the second-largest buyer of U.S. LNG in that period. As the U.S.-China trade dispute escalated, however, Chinese buyers gradually reduced their purchases of U.S. LNG, he added.  “If China still needs to procure spot cargoes, we think that this is likely to result in a premium of up to 10 percent on supply from non-U.S., lean sources like the Australia East Coast projects, Tangguh, Gorgon or the Qatari Mega-trains,” Farrer continued. “Chinese buyers’ appetite to pay significantly higher prices for LNG from other sources may be limited by the price they can sell gas domestically.”   In the longer term, developers of new LNG export projects may feel the pinch from China’s retaliatory tariff.  “It restricts the target market for developers of new U.S. LNG projects trying to sign new long-term contracts,” Farrer explained. “However there is still plenty of appetite for second-wave U.S. LNG projects from other buyers in Asia and Europe, as evidenced by recent contracting momentum at Freeport, Calcasieu Pass and Sabine Pass Train 6. The first wave of U.S. LNG projects were successful despite not signing contracts with Chinese buyers.” The tariff on U.S. LNG could also support development of Russian pipeline projects and other non-U.S. investments catering to the Chinese market by potentially allowing them to push for higher long-term contract prices, added Farrer.

Contractors express caution on bidding for new US LNG export projects — The leading global contractors that are bidding to build the second wave of US LNG export terminals gave developers Thursday a simple message to think about on their flights home from Spain: "You get what you pay for."  As Gastech wrapped up in Barcelona, executives at Bechtel, Fluor, KBR, McDermott International and Spain's Tecnicas Reunidas sought to inject a sense of realism about the costs that are necessary to ensure projects are completed when the market expects to see them.The concerted effort comes in the face of delays at several of the first wave export terminals under construction along the Gulf and Atlantic coasts, including at Freeport LNG's facility in Texas, Sempra's Cameron LNG site in Louisiana and Kinder Morgan's Elba Liquefaction Project in Georgia. Startup of Cheniere Energy's second export terminal, being built by Bechtel in Texas, is expected ahead of schedule.  "Enthusiasm is not a strategy," Fluor CEO David Seaton said during a panel discussion at the conference. "That's a lot of what we see with the new customers who are more the developer type. All they are doing is looking at their spreadsheet rather than the real cost of building one of these things."   With more than a dozen terminals being proposed as part of the second wave of US projects that are targeted to go online in the early- to mid-2020s, there is intense competition for long-term contracts with buyers of the capacity.With that comes pressure to sign engineering, procurement and construction deals for the lowest possible amount.  Cameron LNG's experience is an example of what can happen when insufficient attention is paid on the front end to properly bidding for the realistic cost of construction. It took a writedown in the second quarter because of extra costs related to construction. "A lot of it went wrong at the time of the estimation," . "Early engagement, technology, where we feel we can get closer to the customer in the early stages. In the US, particularly, where there is a lot of excitement about a new wave of LNG contracts, there are also challenges, especially on the construction side." With so many projects, skilled workers could be harder to come by for the second wave of US projects. Tighter restrictions on immigration in the US under the Trump administration are also affecting the situation, the executives said. Invariably, that could drive up costs.

Fayetteville Shale Assets Sold Off, Fracking Still On Hold -  -- Confronted with mounting debt and falling prices, the company that first developed one of the country's ten largest fields of natural gas is selling off its assets.   The Houston-area Southwestern Energy first began activity in the Fayetteville Shale play, a 50-to-500 foot thick sediment layer about a mile underground located across a wide swath of northern Arkansas, in 2002.    But, though estimates say gas reserves within the Fayetteville Shale can last until 2050, all drilling has stopped since 2016. Now, Southwestern Energy is selling its assets in the region to Oklahoma City-based Flywheel Energy for nearly $2.4 billion. Most of the play's wells used for hydraulic fracturing, or "fracking", were concentrated in the mostly rural counties of Conway, Faulkner, Cleburne, Van Buren and White.   "So we tried to warn our clients, you know, 'This isn't going to be here forever,'" Hayes said. "Let's save, let's do this, let's do that, but with any newfound money... it tends to go out as quick as it comes in."  But with those newfound mineral leases and royalty payments came numerous complaints of earthquakes, noise and air and water pollution. Studies have found carcinogens like benzene and formaldehyde near gas wells in Arkansas. In response, the Arkansas Department of Environmental Quality banned new disposal wells in areas that felt the most frequent earthquakes.  The total amount of gas produced in Fayetteville Shale counties fell from over 900 billion cubic feet in 2011 to a little over two-thirds of that last year, according to the Arkansas Oil & Gas Commission. Natural gas prices reached a peak of $12 per million British thermal unit in 2008. But, for the past year, that price has struggled to get over $3 per million Btu.   Other companies that followed Southwestern Energy's lead in developing the Fayetteville Shale have sold their assets to smaller companies. The play's second-largest producer, Chesapkeake Energy, sold off its stake in the region in 2011. 

Permian NatGas Prices Plunge to New Lows as Pipes ‘Jam-Packed Like Southern California Traffic’ - Constraints to the north and to the west have combined to clobber West Texas spot prices this week, including a new all-time low at the Waha hub, and analysts see more volatility on the way as Permian Basin producers wait on additional takeaway capacity.Day-ahead prices plummeted in West Texas Wednesday, as Waha collapsed $1.06 to average just 61 cents/MMBtu on the day. Other regional points also got crushed but not to the same extent, with El Paso Permian tumbling 56 cents to $1.17.The West Texas spot price doldrums continued Thursday. Waha bounced back from Wednesday’s all-time low, but on average trades couldn’t climb above the $1.00 mark, ending the day 35 cents higher at 95 cents. El Paso Permian, meanwhile, fell another 21 cents to average just 96 cents on the day.Wednesday’s average price at Waha easily undercuts the lowest trade on record at the point going back to 1995, a low of 95 cents reported in December 1998, NGI historical data show.Waha finished a whopping $2.45 cents back of Henry Hub on Wednesday. That’s not the widest negative basis differential on record for Waha because of  higher price levels at Henry Hub in the 1990s and early 2000s. However, since 2015 after the collapse in oil prices and the massive focus on the Permian Basin because of its best-in-class breakevens, the region’s basis differentials have seen a sharp downward trend.The takeaway constraints driving depressed pricing for the Permian have been well documented, and on a good day these constraints have seen West Texas points routinely trade more than $1 back of Henry Hub. It’s against this backdrop that news of additional downstream restrictions this week compounded the problems for Permian producers.“It’s no secret by now that” that gas takeaway pipelines out of the Permian “have been running near full the last few months, jam-packed like Southern California traffic while trying to whisk away copious volumes of mostly associated natural gas to markets north, south, west and east of the basin,” RBN Energy LLC analyst Jason Ferguson told clients Thursday.

Energy Department warns that oil drillers are leaving Texas amid pipeline woes -  The Energy Department says a lack of pipelines is beginning to drive oil companies out of the big shale region known as the Permian Basin, as they focus investment in regions where the oil is easier to get to market.The Energy Information Administration released its latest weekly oil analysis on Wednesday, focused on the lack of pipeline "takeaway capacity," which translates to there being plenty of oil, but not enough ways to move it to refiners or export terminals. The report highlights the case for more spending on pipes and for easing or expediting permitting decisions.The federal agency said it is tracking 45 publicly-traded oil companies' investment strategies, and spotted a trend. "As a result of these constraints, some producers with a geographically diverse portfolio of upstream assets announced plans in their second-quarter earnings releases to redirect capital expenditures from the Permian Basin to other regions," read EIA's Week in Petroleum report. The oil firm Baker Hughes is cutting the number of drilling rigs in the Permian, and the Houston-based Noble Energy announced "the reallocation of capital expenditures from the Permian to other U.S. onshore basins because of the transportation constraints," EIA said."Outside of the Permian, Noble Energy has U.S. onshore operations in the Denver-Julesburg Basin in Colorado and in the Eagle Ford region in Texas," the new report read.The Permian Basin, which covers Texas and New Mexico, is one of the richest shale oil deposits in the United States. But the lack of pipelines to move the oil to market is dropping the price, and making it economically unattractive for some companies to continue production there

Permian Highways Desperate for Traffic Relief  - U.S. Highway 285 is a major north-south route within the Permian Basin of West Texas and southeastern New Mexico, and it’s seen better days.Thanks to the oil boom in the region, the vital highway – particularly between Carlsbad, N.M., and Pecos, Texas – is much busier than it was a decade ago. More flatbed trucks rely on the road to haul equipment and supplies. In addition, the region’s constrained pipeline capacity translates into an abundance of tanker trucks hauling crude oil on 285 and other highways in the region. All of the extra traffic, a sign of the Permian’s enviable economic prosperity, has accelerated wear and tear on the roadway. “This surge has boosted the need for more trucks on the road,” Ronnie Witherspoon, CEO and president of Aveda Transportation and Energy Services, told Rigzone. “We now have tractor trailer combinations of all sorts hauling anything from water, proppants, chemicals, tubulars, large pieces of iron, etc. This increase in needs for oilfield services has caused intense congestion and, unfortunately has led to an increase in incidents.”The Texas Department of Transportation (TxDOT) appreciates the limitations of U.S. 285 and other key routes in the region and is addressing them through a series of improvements, an agency spokesman told Rigzone. “We have five projects worth about $100 million planned over the next few years in Reeves County between Pecos and the New Mexico state line,” Gene Powell, public information officer with the Odessa District of TxDOT, said. “In addition to rehabilitating the road, passing lanes will be added throughout the majority of the corridor. Intersection improvements will also be made in key places.” Although TxDOT is working to improve the safety and condition of U.S. 285 and other routes vital to the Permian’s oil and gas sector, Powell points out that individual driver behavior goes a long way in promoting safety. “Speeding, distracted driving and a lack of seat belt use are all key concerns,” said Powell. “Other crash causes are passing in no-passing lanes, driving on the shoulder, driving under the influence and failure to yield.”

Oil Giants Use Size to Overcome Fracking Challenges —Fracking is entering a new expansion phase in this Canadian town more than 2,000 miles from the center of the U.S. oil boom—one that heavily favors the world’s energy giants.Chevron Corpis laying the groundwork here for what it calls a “factory model” for shale drilling, master planning an entire region of small shale wells by locking up labor, building infrastructure and securing sand and other needed materials, all at once.Shale drilling, once the province of small, scrappy operators, has run into growing pains in places such as the Permian Basin in Texas and New Mexico, as producers struggle with pipeline bottlenecks and rising labor and material costs.Big oil companies seeking to re-create the U.S. shale boom in countries such as Canada and Argentina are trying to avoid these problems by managing shale sites in concert to prevent logistical difficulties and streamline operations, similar to the way they run traditional oil megaprojects.Already in Texas, there is evidence that larger companies such as Chevron and Exxon Mobil Corp. are weathering the bottlenecks and rising costs there better than smaller rivals—and continuing to ramp up production—because they have the economies of scale and wherewithal to develop their own solutions to these problems. The big international oil companies were initially slow to recognize the potential of fracking and found themselves behind the competition in the first phase of the shale boom as smaller operators locked up land and stepped up production in places such as North Dakota and Texas. But they have since become major players in the Permian Basin, and are in the process of trying to leverage large footprints in the region into tangible shale profits—something that to date has eluded many of their smaller rivals.

How long can the fracking spending spree last? - For the past decade Wall Street has lavished U.S. oil companies with cash, eager to get a piece of the fracking boom that turned what were thought to be undrillable shale fields in West Texas and North Dakota into the hottest oil prospects in the world. If companies spent billions more than they were taking in, to buy up more acreage and their competitors, not a problem — the money was funding a once in a generation opportunity. But after a decade of U.S. oil and gas companies spending beyond their means, a debate is underway in the energy and investment sectors on whether to keep pumping money into oil fields to keep the boom going full-speed. Or with interest rates rising and investors demanding better returns, are fracking firms going to have to live within their cash flows? “The history of the industry is companies spend every nickel they have and a bunch they didn’t have,” said Nick Cacchione, owner of Oil and Gas Financial Analytics, a Florida research firm. “The question is, has the industry changed and have the become more conservative or are they going back to their old ways of doings things?” Signs point to U.S. oil companies changing their habits, shrinking their capital budgets even as oil prices improve. After running a cash flow deficit totaling more more than $40 billion in 2015 - meaning their operating costs and capital expenditures exceeded the money they were paid - the 60 largest U.S. exploration and production companies shrunk that deficit to $17.7 billion last year. That followed intense pressure from hedge fund managers who questioned the fundamental economics of the fracking boom. After the first 12 months, the output of shale wells starts declining at a fast clip, requiring companies to drill more and more wells if they are going to keep up production. At an investment conference in 2015, billionaire investor David Einhorn dubbed the oil executives in Houston and Oklahoma City “frack addicts,” proclaiming “a business that burns cash and doesn’t grow isn’t worth anything.”

The Fracking Industry's Water Nightmare - The U.S. Environmental Protection Agency (EPA) has clearly documented the multiple risks — despite repeated dismissals from the oil and gas industry — that hydraulic fracturing (fracking) poses to drinking water supplies. However, the tables may be turning: Water itself now poses a risk to the already failing financial model of the American fracking industry, and that is something the industry won’t be able to ignore.The U.S. is setting new oil production records as horizontal drilling and fracking open up shale deposits in places like North Dakota and Texas.Fracking is based on the “hydraulic” process of using pressurized liquid to shatter shale rock to let the oil and gas inside escape. And while that liquid is a mixture of many hazardous chemicals, it is mostly water. And acquiring that water and then properly disposing of the toxic wastewater produced by fracking is becoming a big and expensive problem for the industry. Gabriel Collins is a fellow in energy and the environment at Rice University, and in August he gave a presentation at the Produced Water Society Permian Basin 2018 event in Midland, Texas. There, Collins presented a business case for starting a large water processing company to service the fracking industry. One sign that the fracking industry is becoming concerned about water is that there are now societies and conferences dedicated to the topic of “produced water.” Produced water is the term for the toxic water that is “produced” over the life of a fracked oil or gas well.In a story by Bloomberg News, Collins said he didn’t believe investors were aware of the risks that water poses to the fracking industry in the Permian Basin.“[Investors] aren't as well apprised of some of the other risks and challenges that could be just as material, if not more so,” he told Bloomberg News. “I'd put water right at the top of that list.”Why should water top the list of potential financial challenges facing the fracking industry? According to a study by Wood MacKenzie and reported by the Wall Street Journal, the costs of water disposal for the fracking industry could add another $6 per barrel of oil produced. For the U.S. shale oil and gas industry, which has consistently lost money over the past decade, adding another $6 per barrel in costs represents a grim outlook.

Trump Lets Fracking Companies Release More Climate-Warming Methane -- As expected, the U.S. Department of the Interior on Tuesday released a final rule that reverses Obama-era restrictions on methane emissions from oil and gas operations. President Obama's 2016 methane waste rule, which never went into effect, required fossil fuel companies on tribal and public lands to reduce emissions of methane, a potent greenhouse gas that's about 86 times more powerful than carbon dioxide. It called on drilling operators to capture leaking and vented methane and to update their leak-detection equipment.Had it been finalized, as The New York Times noted, it would have cut methane from the oil and gas sector by as much as 35 percent and helped the U.S. reach emissions-reduction targets under the Paris agreement.But the Trump administration said Tuesday that many parts of the 2016 rule were "unnecessarily burdensome" on the private sector, and found that it overlapped with existing state, tribal and federal regulations.The fossil fuel industry cautioned that the Obama rule could cost as much as $279 million to implement and would hinder production, according to The New York Times.The Obama administration estimated their "common-sense" rule would avoid nearly 170,000 tons of methane emissions annually and save the U.S. between $115 to $188 million per year by allowing oil and gas operators to sell recovered natural gas, in addition to the environmental benefits of reducing methane emissions. However, the Obama administration's figures could be outdated, as the rate of methane leaks in the U.S. is likely much higher than previously thought. A recent study published in Science found that U.S. oil and natural gas operations release 60 percent more methane than currently estimated by the U.S. Environmental Protection Agency. Yearly methane emissions from the oil and gas industry total 13 million metric tons (approximately 14.3 million U.S. tons), mostly from leaks—an amount of natural gas that could heat 10 million homes.

How energy companies set off earthquakes miles away from their waste dumps - 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 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. Most induced earthquakes are not a result of fracking itself but wastewater generated at the oil and gas wells.  Earthquakes occur when a crack underground — a fault — pulls apart. A few decades ago, when scientists were beginning to understand that humans could generate earthquakes, the idea was “you put water directly into the fault,” Brodsky said. It was assumed water would pry apart the fault, like a hydraulic jack lifting a car, triggering a quake. But that theory could not explain the quakes that happen miles from the wells. 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.  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."

Line 3 pipeline protesters block bridge near Bemidji - Protesters conducted a water ceremony and blocked a bridge near Enbridge Energy's planned Line 3 replacement pipeline in northern Minnesota on Tuesday An American Indian woman conducted the ceremony on the banks of the Mississippi River. Demonstrators also raised a tepee on the bridge south of Bemidji. There were no arrests, and the tepee is now down. Clearwater County Engineer Dan Sauve says the protest delayed a contractor for a couple of hours, and that the road project is unrelated to Line 3. In June, the Minnesota Public Utilities Commission gave Enbridge the green light to replace its aging Line 3 crude oil pipeline across Minnesota. A PUC meeting to discuss whether Enbridge met conditions was postponed after being disrupted by protesters last week. Native American and environmental activists contend the new line risks spills in fragile areas. But Republican state Rep. Matt Grossell of Clearbrook calls the replacement pipeline "the safest and most efficient way to move oil to market."

Colorado's economy vs. residents' health- Sides battle over what's at stake with oil and gas well setbacks — A statewide ballot measure that would dramatically increase the distance new oil and gas wells would have to be from homes, schools and waterways will be a job-gutting attack on Colorado’s economy, opponents say. It will deprive cities and towns of millions of dollars in tax revenues and rob thousands of mineral rights owners access to their underground property.Or Proposition 112, known during the petition process as Initiative 97, will bring long-sought sanity to neighborhoods throughout the state, bolstering the health and safety of thousands living above or on the edge of Colorado’s increasingly industrialized energy landscape.Those are the competing messages voters will have to sort out Nov. 6, when they will be asked whether additional controls should be placed on drilling in a state experiencing an ongoing population boom alongside an intensifying hunt for the resources that power modern life. Specifically, the measure would increase setbacks for new wells to 2,500 feet instead of current setbacks of 500 feet from homes and 1,000 feet from schools.The question has already brought out the big guns in what is quickly becoming a high-stakes battle over the future of a multibillion-dollar industry in Colorado.“For some sectors of the economy, (Proposition 112) is a Category 5 threat,” said independent political analyst Eric Sondermann. “I do believe the oil and gas industry, which is a huge player in this state, sees this not just as a nuisance or hassle. They see it in existential terms.”Proposition 112 has already insinuated itself into Colorado’s race for governor as a front-burner issue. Several weeks ago, during a speech at an oil and gas conference in Denver, Democrat Jared Polis was heckled by a trio of protesters intent on pressuring the gubernatorial hopeful to take a harder line on the energy extraction industry. Both Polis and Republican opponent Walker Stapleton have come out against the measure. Dan Haley, president and CEO of the Colorado Oil and Gas Association, told the crowd after Polis left the stage that the industry would fight Proposition 112 with everything it has. Already this year, oil and gas operators have given $21 million to Protect Colorado, the committee opposing the measure. By contrast, the committee backing the measure, Colorado Rising, has received $615,000 in contributions in 2018.

Current fracking laws are dangerous to health - Tom Stumpf: Initiative 97 has been accepted onto the fall election ballot as Proposition 112, requiring all new Colorado oil and gas development not on federal land to be located at least 2,500 feet from an occupied structure or vulnerable area. Currently, state law allows fracking operations to be within 500 feet of homes.Already, the industry is spending hundreds of thousands of dollars on promoting a no vote on the ballot in November. Citizens need to realize that existing laws regarding fracking are dangerous to the health, safety and welfare of every man, woman and child. We need to support this common sense regulation, providing safer setbacks.We have experienced several recent and local incidents: the Firestone deadly methane explosion, the Windsor well fire, the Boulder study of air pollutants near the reservoir. Each of these, as well as many others, palpably demonstrate the deadly threats to society. Living in such close proximity to oil and gas development is clearly a death sentence, if not immediately, then certainly in the future.Fracking is an inherently dangerous industrial process, because there is an unacceptable risk of explosions and fires. Since the Firestone explosion, for example, Colorado has experienced at least 14 fires and explosions at oil and gas sites alone. There are already nearly 129,000 oil and gas flow lines within 1,000 feet of occupied buildings, so to add thousands more is even more foolhardy, given that there have been 832 serious pipeline incidents in the U.S. in the past 20 years, causing 310 deaths and 1,229 serious injuries. In addition, pipelines can rupture, leading to fatal explosions, like the one in Mead, which killed one worker and seriously injured three others in 2014.

Colorado's Fracking Fright - WSJ- California normally gets all the attention on the front lines of environmental activism. But in real-world implications for the rest of the country, Colorado also deserves attention. A measure heading for the fall ballot would shut down nearly all oil and gas production in one of the top energy-producing states. Colorado’s current rules on energy production prohibit oil and gas operations within 500 feet of a home or 1,000 feet of a school or hospital. But an environmental group called Colorado Rising has collected enough signatures for a proposal on the November ballot to expand these buffer zones and effectively create bans in nearly all of the state. Proposition 112 would restrict new energy development within a 2,500-foot radius of any building, playground, amphitheater, park, body of water or “any other additional vulnerable areas designated by the state or local government.” The restrictions rule out 85% of all non-federal land in the state, according to the Colorado Oil & Gas Conservation Commission. In the five counties that produce 90% to 95% of Colorado’s oil and gas, 94% of non-federal land would be off-limits. The implications of such a ban would be national. Colorado ranks fifth among the states in production of natural gas and seventh for oil. In the first year the restrictions would take $201 million to $258 million out of state and local tax revenue. As energy production dwindled, that loss could rise to $1.1 billion annually by 2030, according to a Common Sense Policy Roundtable analysis reviewed by faculty from the Colorado School of Mines. The ban could kill up to 147,800 jobs and reduce state GDP by perhaps $218 billion between 2018 and 2030. It’s no surprise that GOP gubernatorial candidate Walker Stapleton opposes the ballot measure. More interesting is that his Democratic rival, left-wing Congressman Jared Polis, does too. Prop. 112 “would all but ban fracking in Colorado—a position I have never supported,” Mr. Polis said last month. . If this proposition passes in Colorado, the same de facto bans on energy production will migrate to other states.

BLM Okays Huge Wyoming Gas Well Project -- The U.S. Bureau of Land Management has given final approval of the environmental impact statement on a 3,500-gas well project proposed by Jonah Energy in Wyoming’s Powder River Basin. Jonah’s Normally Pressured Lance Project would generate 950 jobs and produce $17.85 billion in total revenues, with federal royalties totaling $2.2 billion over a ten-year period.The proposed well program covers 140,859 acres in Converse County, and would include 205 miles of new pipelines and roads.“We are very pleased to have concluded the regulatory process, and look forward to investing in the development of the energy resources beneath these lands,” said Jonah CEO Tom Hart. The company worked with several groups including the Wyoming Outdoor Council, The Nature Conservancy, National Audubon Society, and the Governor’s Sage Grouse Implementation Team.

Trump Relaxes Obama Curbs on Flaring Gas From Wells on US Land -- The Trump administration finalized a rollback of Obama-era limits on methane that is leaked, vented or flared from oil and gas wells on federal lands, part of a one-two punch on regulations designed to curb release of the potent greenhouse gas. The Interior Department’s Bureau of Land Management on Tuesday issued a final rule taking aim at regulations mandating that oil and gas companies drilling on public and tribal lands reduce methane pollution. It follows a proposal last week from the Environmental Protection Agency to push back on similar rules on private lands. “The Trump Administration is committed to innovative regulatory improvement and environmental stewardship,” said Deputy Secretary David Bernhardt. The move scraps a requirement that energy companies seek out and repair leaks and rescinds requirements for well completion, storage vessels and pneumatic controllers, as well as mandates requiring companies prepare plans for minimizing waste before getting drilling approvals. Erik Milito, the American Petroleum Institute’s, director of upstream and industry operations, praised the move and said the oil and gas industry has been moving on its own to reduce methane emissions. Even as natural gas production has risen 50 percent since 1990, methane emissions have dropped by 14 percent, he said. “We want to make sure we have rules that aren’t shutting in production,” Milito said in a phone interview. Environmentalists took a dim view of the change, calling the now revised Obama-era standards a “common sense” regulation that was good for public health and the environment. “The Trump administration is relentless in its push to give the oil and gas industry multimillion-dollar handouts at the expense of Americans’ health and environment,” David Doniger, senior strategic director of the Natural Resources Defense Council’s climate program. Congress unsuccessfully tried to repeal the venting and flaring rule using the Congressional Review Act last year after falling short by one vote last year. 

Interior Moves to Rescind Most of Venting/Flaring Rule; Two States Sue -- The Department of Interior (DOI) moved Tuesday to rescind most of an Obama-era rule governing associated natural gas flaring and venting on public and tribal lands while revising the remaining provisions, calling the parts of the rule marked for rescission "unnecessarily burdensome" for the oil and gas industry. By day's end, attorneys general (AG) for California and New Mexico asked a federal district court in San Francisco to block DOI from rescinding and revising its Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule, aka the venting and flaring rule.   Under the final rule, DOI's Bureau of Land Management (BLM) plans to rescind provisions of the Obama-era rule pertaining to waste minimization plans, gas-capture percentages, well drilling, well completion and related operations, pneumatic controllers, pneumatic diaphragm pumps, storage vessels, and leak detection and repair. For the remaining provisions, BLM said it plans to return to the regulatory environment that preceded the Obama-era rule when it came out in 2016.  "With respect to the flaring of associated gas from oil wells, the BLM will defer to appropriate state or tribal regulations in determining when such flaring will be royalty-free," DOI said in the final rule. The department will accept public comments on the rule for 60 days, following its publication in the Federal Register. "Sadly, the flawed 2016 rule was a radical assertion of legal authority that stood in stark contrast to the longstanding understanding of Interior's own lawyers," said DOI Deputy Secretary David Bernhardt. DOI Deputy Chief of Staff Kate MacGregor said the waste minimization plan "in some cases would have required operators to report information from other midstream companies that they are not privy to because it is proprietary." MacGregor added that the final rule announced Tuesday "understands and recognizes marginal well production in this country," which BLM has generally defined as wells that produce 10 b/d or less of oil or 60 Mcf/d or less of natural gas. She said BLM estimates that about 73% of wells on leases it administers, about 69,000 wells in total, are considered marginal.

Prices Little Changed As Cooling Demand Fades But Absolute Storage Levels Remain Low - Highlights of the Natural Gas Summary and Outlook for the week ending September 14, 2018 follow. The full report is available at the link below.

• Price Action: The October contract fell 0.9 cents (0.3%) to $2.767 on an 11.7 cent range ($2.869/$2.752).
• Price Outlook: Weather forecasts continue to moderate as cooling demand, even the South, begin to fade. Below normal temperature in Northern cities will soon be considered bullish and winter forecasts from leading vendors will likely begin to influence the market. While moderating temperatures and increasing storage injections may limit price upside, still massive storage deficits and solid demand may also provide support.. The current weather forecast is now warmer than 6 of the last 10 years. Pipeline data indicates total flows to Cheniere’s export facility were at 2.8 bcf. Cove Point is net exporting 0.3 bcf.
• Weekly Storage: US working gas storage for the week ending September 7 indicated an injection of +69 bcf. Working gas inventories rose to 2,636 bcf. Current inventories fall (675) bcf (-20.4%) below last year and fall (589) bcf (-18.3%) below the 5-year average.
• Storage Outlook: The EIA weekly implied flow was 5 bcf from our EIA storage estimate. Although our weekly storage error has been somewhat disappointing, over the last 5 weeks the EIA has reported total injections of 232 bcf compared to our 233 bcf estimate and that is more than acceptable.
• Supply Trends: Total supply fell (0.4)bcf/d to 80.1 bcf/d. US production rose. Canadian imports fell. LNG imports rose. LNG exports fell. Mexican exports rose. The US Baker Hughes rig count rose +7. Oil activity increased +7. Natural gas activity was unchanged +0. The total US rig count now stands at 1,055 .The Canadian rig count rose +22 to 226. Thus, the total North American rig count rose +29 to 1,281 and now exceeds last year by +133. The higher efficiency US horizontal rig count rose +3 to 921 and rises +126 above last year.
• Demand Trends: Total demand fell (0.3) bcf/d to +72.1 bcf/d. Power demand fell. Industrial demand fell. Res/Comm demand rose. Electricity demand fell (3,140) gigawatt-hrs to 86,716 which exceeds last year by +11,311 (15.0%) and exceeds the 5-year average by 3,842 (4.6%%).

The cooling season is now entering its final stretch. With a forecast through September 28 the 2018 total cooling index is at 5,420 compared to 4,779 for 2017, 5,483 for 2016, 4,294 for 2015, 3,370 for 2014, 4,804 for 2013, 7,146 for 2012 and 6,677 for 2011.

September 20 Natural Gas Storage Report: Nuclear Outages Remain Elevated - Last week, the number of total degree-days (TDDs) plunged by around 25% w-o-w, as cooling demand went down – particularly, in the Northeast and Southwest parts of the country – while heating demand was still too feeble across the country. However, we estimate that total energy demand (as measured in total degree-days – TDDs) was no less than 15% above last year’s level. Please note that during this time of the year, heating degree-days (HDDs) are only starting to have an effect on natural gas consumption. Cooling degree-days (CDDs) are still more important, but their weight is diminishing. Seasonal trend calls for high, but declining number of CDDs, and for a rising, but low number of HDDs. This week, the weather conditions heated up again. We estimate that the number of CDDs will rise by a whopping 32% w-o-w in the week ending September 21. Total energy demand (measured in TDDs) should be some 10% above last year’s level. Next week, however, the weather conditions are expected to cool down again, but only slightly. The number of CDDs is currently projected to drop by 5% w-o-w for the week ending September 28. At the same time, HDDs should jump by no less than 40% w-o-w. On balance, however, total energy demand is projected to weaken (see the chart below). The latest numerical weather prediction models are still showing above normal CDDs and TDDs over the next 15 days (September 19-October 3), but projected CDDs are falling fast, while projected HDDs are rising only slowly. Consumption-wise, however, the weather is bringing bearish changes as rising number of HDDs cannot compensate for the declining number of CDDs. However, as we said in our previous article, natural gas consumption is supported by a number of non-degree-day factors such as higher nuclear outages and low ng/coal spreads. Specifically, nuclear outages remain elevated. As of today, they were up some 700 MW to 14,300 MW, 56% above 5-year average (see the chart below). Our subscribers receive daily (early morning) update on all the market variables, including nuclear outages.

EIA introduces interactive dashboard detailing natural gas storage activity - EIA has developed an interactive dashboard that provides daily and weekly contextual information to the Weekly Natural Gas Storage Report (WNGSR). The new dashboard shows Lower 48 and regional storage activity and key market fundamentals that affect underground natural gas storage activity. The WNGSR is one of the U.S. government's Principal Federal Economic Indicators (PFEI). Most of these indicators, which include metrics such as employment, international trade, housing construction, and crop production, are released monthly or quarterly. EIA will post updates to the dashboard in the mid-afternoon on the same days EIA releases its latest weekly natural gas storage estimates, which is usually on Thursdays. The dashboard will follow the WNGSR holiday reporting schedule. The dashboard includes the Lower 48 and regional natural gas storage inventories, net inventory changes, and utilization indicators. Other metrics include temperature visualizations, estimated natural gas consumption by sector, net exports, and futures prices. Information sources reflect a combination of EIA data and third-party data. Key sources of non-EIA data include temperature data from the National Oceanic and Atmospheric Administration (NOAA), natural gas demand and import/export data from OPIS PointLogic, and natural gas futures prices from CME Group and Bloomberg.  EIA has incorporated many interactive features into the dashboard, such as the ability to select national or regional information, choose specific years or ranges, animate trends, and download selected data series or images. In addition to the data visualizations, the commentary section will provide analysis of recent natural gas storage-related market conditions. These entries will focus on many aspects of the natural gas storage market, such as potential drivers of changes in storage inventories, occasional details on EIA-derived storage statistics, and trends in natural gas storage infrastructure.

Natural Gas Production From Key U.S. Plays to Surpass 73 Bcf/d in October, Says EIA -- Production from the seven most prolific U.S. onshore unconventional plays -- the Anadarko, Appalachian and Permian basins, and the Bakken, Eagle Ford, Haynesville and Niobrara formations -- in October will continue an upward swing that began 22 months ago, with natural gas output forecast to reach 73.01 Bcf/d and oil an estimated 7.59 million b/d, according to the U.S. Energy Information Administration (EIA). Both numbers are higher compared to estimated September production. In its latest Drilling Productivity Report (DPR), which was released Monday, EIA said it expects total gas production from the the seven key regions this month to be 72.13 Bcf/d, and oil production to be 7.52 million b/d. Steady increases out of the plays began in January 2017, when total gas production out of the seven regions was estimated at 47.51 Bcf/d, and total oil production was an estimated 4.54 million b/d. Once again all seven plays are expected to see increased natural gas production in October compared to the previous month, with the Appalachian Basin, home to the mighty Marcellus and Utica shales, continuing to lead the way with an estimated 29.44 Bcf/d, up from 29.14 Bcf/d in September, EIA said. Increases are also expected in the Anadarko (7.32 Bcf/d from 7.22 Bcf/d), Bakken (2.52 Bcf/d from 2.50 Bcf/d), Eagle Ford (7.13 Bcf/d from 7.01 Bcf/d), Haynesville (9.70 Bcf/d from 9.56 Bcf/d), Niobrara (5.18 Bcf/d from 5.13 Bcf/d) and Permian (11.80 Bcf/d from 11.57 Bcf/d). Production increases are expected to be almost universal on the oil side of the ledger as well, according to the DPR. Nearly a third of the total oil production increase will come from the Permian, which is forecast to reach 3.46 million b/d, compared to 3.43 million b/d in September. Oil output increases are expected in five other plays, with the Anadarko estimated at 562,000 b/d, Appalachia at 130,000 b/d, Bakken at 1.33 million b/d, Eagle Ford at 1.45 million b/d and Niobrara at 620,000 b/d. The Haynesville (43,000 b/d) is forecast to see oil production remain unchanged month/month.

KBR, ConocoPhillips to Develop Off-the-Shelf LNG Tech - KBR, Inc. and ConocoPhillips will jointly develop a standardized liquefied natural gas (LNG) train to provide mid-scale LNG capacity for both greenfield and brownfield expansions seeking off-the-shelf technology to reduce costs and shorten project schedules, KBR reported Tuesday. “KBR and ConocoPhillips both have a well-established and respected history in LNG,” Farhan Mujib, president of KBR’s Hydrocarbons Services Americas unit, said in a written statement announcing the joint program. “This unique opportunity leverages that experience to combine KBR’s plant configuration and project execution experience with the reliable and well-proven ConocoPhillips’ LNG technology and operating experience.” The companies will complete a front-end engineering and design (FEED) quality reference design for a mid-scale capacity (1.5 to 3.0 million tonnes per annum) LNG train suitable for a wide range of feed gas and ambient temperature conditions, KBR stated. The integrated design approach will use ConocoPhillips’ “Optimized Cascade” process technology and will apply integrated modularized construction, the company added. ConocoPhillips and KBR launched the collaboration in 2017, with KBR applying its “SmartSPEND” methodology to achieve cost reductions for LNG facilities using the ConocoPhillips process technology, KBR continued. “Building on this experience and responding to demand in the marketplace, the parties decided to focus on developing a mid-scale LNG solution that achieves low unit costs and fast deployment while maintaining high efficiency and operability,” KBR stated, adding that the partners will apply a similar methodology and technology to large-scale LNG trains. KBR noted the technology should be available for new LNG projects starting next year. 

Natural gas says it's no longer a transition fuel. It may be wrong - Russell (Reuters) - Natural gas is no longer merely a transition fuel between the past of dirty coal and crude oil and the future of renewables, according to an increasingly confident cross-section of the industry. A procession of senior executives of major companies, including Royal Dutch Shell and Exxon Mobil Corp, espoused this view while speaking at this week’s GasTech event, the industry’s biggest annual gathering. While the industry has plenty to be buoyant about, including rapid and sustained Chinese demand for liquefied natural gas (LNG) and the shale gas revolution in the United States, it is running the risk of getting ahead of itself, while ignoring the threats it faces. The idea of natural gas as a transition fuel was largely cemented by the International Energy Agency in 2011, when it published a report on what it termed the “golden age of gas,” which would see demand for the fuel jump by 50 percent to become 25 percent of global energy consumption by 2035. Natural gas was seen as a cleaner alternative to coal, a factor the industry was happy to seize upon as it allowed them to boost output while being seen as part of the solution to climate change, rather than part of the problem. The rapid expansion of shale gas production in the United States was largely behind the demise of many coal-fired power stations, while in China coal used in industries and for residential heating is being replaced by natural gas as part of the government’s efforts to reduce air pollution. These dynamics are part of the reason why many players in the natural gas industry expect the market for LNG to rise from around 300 million tonnes a year currently to at least 450 million by 2025, and possibly even higher. But for this to happen, almost everything has to work in LNG’s favor, and the risks must remain only possibilities. 

Without much-needed investment, the US gas industry is facing a 'waste of capital,' IEA says -  On the production side, U.S. shale gas is performing strongly — but a trade war with China and a lack of investment projects in the sector could be "economically disruptive", according to the International Energy Agency (IEA).   "Without additional investments into American liquified natural gas (LNG) projects, the American gas industry will have to keep gas on the ground, which would be a waste of capital, economically quite disruptive," Laszlo Varro, chief economist at the IEA, told CNBC's Steve Sedgwick at the GasTech conference in Barcelona on Tuesday.U.S. natural gas is being produced at record levels thanks to the shale revolution, brought about by the extraction technique known as fracking. And the booming demand for LNG in Asian markets, China in particular, should mean massive business for U.S. gas exporters.But major bottlenecks in export capacity lie ahead due to global trade tensions and a lack of sufficient investment into projects for export infrastructure, the IAE has warned."If there is no export infrastructure development, then a large amount of American gas will simply stay on the ground," Varro explained. "Because given that the domestic energy system is not going to be able to absorb that much gas domestically, if there are no export projects, then American gas prices will have to go down to a very low level to shut production down."Energy industry forecasters predict a global demand for 500 million tons of LNG by 2030. That demand will be coming from Asia's emerging economies, in particular, with gas as a major part of China's growth plan in terms of energy consumption. Forty-five percent of China's natural gas will need to be imported, and the U.S. is expected to supply a vast amount of that need.But this week's announcement that the White House is raising tariffs on an additional $200 billion worth of Chinese goods does not bode well for prospects for trade, consequently stunting support for export infrastructure investments. Chinese authorities already promised to retaliate against the new tariffs, and have signaled their readiness to slap 25 percent tariffs on U.S. LNG imports, among other things. For competitor countries like Qatar or Canada this may be a good thing, but energy executives still maintain it won't be positive for the larger market.

U.S. natural gas prices remain on defensive despite low stocks: Kemp (Reuters) - Benchmark U.S. natural gas prices have remained stuck below $3 per million British thermal units for most of this year even as consumption has soared and gas stocks have slipped to their lowest seasonal levels since 2003.Working stocks in underground storage amounted to just 2,636 billion cubic feet at the end of the first week in September, down from 3,298 bcf at the same point last year and a five-year average of 3,232 bcf.Gas consumption by power producers has risen strongly as a result of high air-conditioning demand during a long, hot summer and the commissioning of another wave of combined-cycle generating units.   Cooling demand has been more than 13 percent higher than in 2017 and 14 percent above the long-term average so far in 2018 (https://tmsnrt.rs/2pmzdBb). Cumulative demand has been similar to the heatwave of 2016, according to degree-day statistics from the U.S. Climate Prediction Center. Power producers’ gas consumption is also being boosted by the large number of new gas-fired generating units that have started up. Power producers had 464 gigawatts of gas-fired generating capacity available at the end of June, up 3 percent compared with 2017.And low gas prices have encouraged power producers to run them for more hours, with capacity utilisation rates several percentage points higher every month so far in 2018 compared with 2017. Much of the increase in gas-fired generation has come at the expense of coal, where capacity has declined by more than 6 percent from year-ago levels and utilisation rates have been down in most months so far in 2018. Power producers generated almost 16 percent more electricity from gas in the first six months of the year while coal-fired generation was down almost 6 percent.

The Unexpected Jump In US Natural Gas Prices - Holy smokes. October prompt month natural gas price is up 21 cents to $2.98 per MMBtu this week (8%), despite the fact that Hurricane Florence was supposed to be a somewhat bearish event by wiping out electricity demand. Gas this year has accounted for 15% of electricity in South Carolina and 30% in North Carolina. Nearly 1 million people lost power.Generally, we have been stuck in this $2.77 to $2.98 range for months now. Prices have not hit the $3.00 mark since June 15, which is the only daily close at that level since the end of January. It's a price that has had massive technical resistance surrounding it, with gas being unable to get over that hump.We have had about a 3 Bcf/d of surplus in the gas market, with rapidly rising production keeping prices low, up 5% in the past two months alone. And the tremendous rain/flooding that was supposed to significantly lower output in Appalachia - an area that now produces 37% of all U.S. gas - wasn't exactly realized. Overall U.S. production is still in that record 82 to 84 Bcf/d range. Demand has been remarkably consistent in recent months, at ~78 Bcf/d.But very low gas inventory levels are the key looming bullish factor in the market, now 18% below the five-year average. Despite a pretty hefty 86 Bcf injection reported today, which was on target with expectations and 10% above the five-year average, prices jumped 7 cents.Now with 2,722 Bcf in gas stocks, we've continually been playing catch-up for storage. To start the year, during the first three weeks of January we had the two largest pulls from gas inventory ever to meet record heating demand during the "Bomb Cyclone." April was the coldest it has been in over 20 years, and gas storage at the end of that month was nearly 30% below the five-year average. We also had the hottest May in recorded U.S. history.

US natural gas in storage increases 86 Bcf to 2.722 Tcf: EIA — US natural gas in storage increased by 86 Bcf to 2.722 Tcf for the week ended September 14, Energy Information Administration data showed Thursday. The build was slightly more than an S&P Global Platts' survey of analysts calling for an 83-Bcf addition.The injection was just below the 87-Bcf build reported during the corresponding week in 2017 but more than the five-year average addition of 76 Bcf, according to EIA data. It is only the second time in the last month the injection was more than average.As a result, stocks were 672 Bcf, or 20%, less than the year-ago level of 3.394 Tcf and 586 Bcf, or 18%, less than the five-year average of 3.308 Tcf.The injection was more than the 69-Bcf build reported the week before as population-weighted temperatures across the Lower 48 dropped by 6 degrees and significantly dampened demand for gas-fired power generations, particularly across the Midwest and Northeast.The East region added 30 Bcf to 709 Bcf, which was 92 Bcf less than the five-year average. The Midwest gained 3 Bcf to 770 Bcf and is now 140 Bcf below average. A 4-Bcf injection in the Mountain region brought stocks up to 170 Bcf or 29 Bcf less than average, while the Pacific added 5 Bcf to 255 Bcf, compared the five-year average of 328 Bcf. South Central posted a 12 Bcf injection bringing volumes to 818, which is a staggering 253 Bcf below average.At 2.722 Tcf, total working gas is below the five-year historical range and sits 196 Bcf lower than the five-year minimum.The NYMEX October Henry Hub natural gas futures added 0.8 cent to $2.916/MMBtu following the 10:30 am EDT storage announcement.Over the past five years, storage levels have peaked on the week ending November 9 at 3.8 Tcf. That would allow for eight more injections before the flip to net withdrawals begin. An early forecast for at least the next three weeks show no significant reduction in the deficit, according to S&P Global Platts Analytics.  Storage is now expected to peak at 3.26 Tcf before the switch to withdrawals in early November, according to the latest forecast by Platts Analytics. If so, it would be the lowest level to start the heating season since 2003, when stocks peaked at 3.18 Tcf. However, high gas production has kept prices from rising despite the large storage deficit. Platts Analytics expects a build of 52 Bcf for the week in progress, which would expand the storage deficit to the five-year average by 29.

Strong Natural Gas Production Growth Continuing Not a Given, Says BP Analyst Innovation in the exploration and production (E&P) sector has helped drive rapid natural gas supply growth since last year, but the market shouldn’t assume this pace of growth will continue, according to BP North America Gas & Power’s Josh McCall, who directs fundamental analytics.A surge in Lower 48 dry gas production since January 2017 has pressured gas prices even as demand has proved sturdy enough to keep storage inventories well below recent averages. However, while the prospect of continued production growth has taken a some risk premium out of the forward curve, that outlook could change, McCall said during a presentation at the recent LDC Gas Forums conference in Chicago.“One thing to keep in mind, the market does respond to prices” as it did during the commodities downturn a few years ago, so “don’t necessarily take it for granted that production will grow forever,” McCall said. And “there’s not really a consensus on what growth is going to look like going forward.”One risk factor driving uncertainty in the production outlook is infrastructure. To sustain the kind of growth rates seen recently from Northeast producers requires more infrastructure buildout, he said.“It’s not just the Northeast,” McCall said. “The Permian, in particular, has a lot of infrastructure that’s needed, and it’s not just natural gas,” but also oil and natural gas liquids (NGL). “So if I’m going to get that associated gas to market, I need all that infrastructure in place,” including processing, NGL fractionation, and pipeline takeaway capacity.McCall delivered his remarks prior to Wednesday’s record-low Waha spot prices, which have coincided with a number of downstream restrictions to provide one the clearest signals to date of the Permian region’s takeaway constraints.With the U.S. gas-directed rig count showing relatively flat growth over the last 18 months or so, oil prices are likely to be “much more important going forward” for the gas market. “As different associated basins go, it’s not just a gas pipeline story, it’s really an oil pipeline story as well,” McCall said. “So oil prices really matter in terms of what the production now looks like.”

SoCalGas storage constraints sideswipe Permian gas prices -- It’s no secret by now that Permian natural gas pipelines have been running near full the last few months, jam-packed like Southern California traffic while trying to whisk away copious volumes of mostly associated natural gas to markets north, south, west and east of the basin. Despite every major artery running near capacity this summer, Permian prices had so far managed to avoid falling below the dreaded $1.00/MMBtu threshold, a precipice that historically defines a gas producing basin as definitively oversupplied. That all changed yesterday, as word came in that Southern California Gas Company, one of the largest recipients of Permian gas, has nearly filled its gas storage caverns and will soon need far less gas hitting its borders. That’s particularly bad news for the Permian, which has few other options if it needs to reduce the supply that is currently flowing west out of the basin to California. A large unplanned outage for maintenance was also announced on one of the pipelines leaving the Permian and heading north to the Midcontinent. As a result, the SoCalGas news and maintenance combined to put a huge dent in Permian gas prices, some of which plunged as low as 50 cents in Wednesday’s trading. Today, we detail this most recent development and the implications for Permian gas takeaway. We’ve written extensively on Permian Basin natural gas the last few months, most recently detailing the proposed Whistler Pipeline in Whatever It Takes. We also looked at Kinder Morgan’s Permian Highway Pipeline, which recently became the second new Permian pipeline to reach a final investment decision (FID) to proceed, in our blog titled P.H.P., Dynamite!. Our last blog focusing specifically on Waha gas prices was in July, when Rollercoasteranalyzed the price swings this summer. Earlier in the summer, in Trouble Every Day, we outlined potential options for Permian natural gas should pipeline capacity out of the basin fill up before the first new pipeline — Kinder Morgan’s Gulf Coast Express (GCX) — starts up in late 2019. We also recently discussed GCX and other potential competing projects as part of our Blame It On Texas series. Today, we dive into the drivers behind yesterday’s news that has likely turned the Permian gas pipeline traffic jam into a pileup.

North Dakota Sets All-Time Crude Output Record; Natural Gas a Record, Too - North Dakota set production records for crude oil and natural gas in July, but gas storage programs are on the to-do list to curb flaring and increase gas captured at the wellhead.Overall oil production hit an all-time record 39.3 million bbl (1.269 million b/d) in July, compared to 36.8 million bbl (1.227 million b/d) in June. For natural gas, total July production was 74.4 Bcf (2.4 Bcf/d), compared to 69 Bcf (2.3 Bcf/d) in June. Natural gas continues to outpace oil with a month-over-month increase of 4.3%, compared to 3.5% for oil."We lost another one percent on gas capture, as it fell to 82% in July," said Department of Mineral Resources Director Lynn Helms on Friday. Helms again expressed concern that some operators will be hit with production restrictions when capture goals increase to 88% on Nov. 1.Due to the gas capture struggle, Helms said the state Industrial Commission (IC) recently approved a $140,000 project by the state Energy and Environmental Research Center (EERC) to investigate the feasibility of sponsoring produced gas storage in the Bakken Shale."We've done some relatively simple modeling of that concept in the Oil and Gas Division, and it looks like it is geologically feasible," Helms said. "The EERC will look at what the best technology would be and where the most suitable formations are, along with what are the regulatory implications, if any." A report is due to the IC in December. "We're looking forward to being the first state in the nation to capture produced gas and geologically store it to help the industry with the gathering and processing of natural gas. It would be gas in its pre-processed state, being pumped into a geological formation temporarily [and] stored for two to five years, to help smooth out the disconnect we have between production and infrastructure."

North Dakota Is Producing As Much Oil As The Entire Country Of Venezuela -- The single state of North Dakota is now producing as much oil as Venezuela, a member of the Organization of the Petroleum Exporting Countries. While Venezuela continues to falter under its socialist regime, North Dakota continues its historic rise in crude oil production. The sparsely populated midwestern state churned out 1.27 million barrels a day in July, according to data reported by Bloomberg. This is approximately the same level of production seen in Venezuela during the same month. The numbers provide a snapshot of how much the industry landscape has evolved in the two places. Much like other regions in the United States, North Dakota has experienced a shale oil boom in recent years. The advent of hydraulic fracturing has allowed North Dakota — home of the Bakken shale play — to produce oil at rates four times greater than its previous peak set in the 1980s. The state is now second only to Texas in oil production and enjoys the lowest unemployment rate in the country.

Pipeline Leaks 63,840 Gallons of Produced Water in North Dakota -- A pipeline released 63,840 gallons (1,520 barrels) of produced water that contaminated rangeland in Dunn County, North Dakota, the Bismarck Tribune reported, citing officials with the North Dakota Department of Health. Produced water is a byproduct of oil and gas extraction, and can contain drilling chemicals if fracking was used.The pipeline is part of a gathering system owned by Dallas-based oil and gas producer Petro-Hunt LLC, which discovered the leak on Wednesday.   Bill Suess with the North Dakota Department of Health told Grand Forks Herald they were able to stop the produced water from reaching a nearby dry creek bed.  Fossil fuel explorations and operations produce an incredible amount of wastewater. Oil and gas reservoirs often contain water, which is brought to the surface along with the hydrocarbons. The fracking process itself also involves large quantities of chemically laden water being shot at high pressures into shale. Once fracking is done, much of the fracking fluid comes back up the well as "flowback" wastewater.  Dunn County, located in western North Dakota and part of the prolific Bakken Shale oilfield, is "known for its oil activity," according to the county website.The cause of the leak is now under investigation. The North Dakota health department has investigated the site and will continue monitoring the investigation and remediation. Walter Roach, vice president of Petro-Hunt, told the Bismark Tribune that its workers responded quickly to the spill and the company is committed to the clean up.

Massive 2013 oil spill in North Dakota finally cleaned up (AP) — Cleanup of more than 840,000 gallons (699,450 imperial gallons) of oil is complete nearly five years after a pipeline leak in a farmer's field in North Dakota.A Tioga farmer discovered the spill by Tesoro, now known as Andeavor, in September 2013. It has been called one of the largest onshore spills in U.S. history.The San Antonio-based company and the state of North Dakota announced completion of the cleanup on Wednesday.The company has blamed a lightning strike for the pipeline break.A state regulator says about 1.4 million tons (1.3 million metric tons) of dirt was excavated from the site and treated. Crews had been working round-the-clock to clean up the site after the spill was discovered. The company has estimated the cost of the cleanup at $93 million. The state fined the company $454,000 for the spill.

Trump’s Friends Get Rich Off Oil Boom as Industry Limits Info on Pipeline Worker Injuries & Deaths (video & transcript) This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Part 2 of our conversation on “Death on the Dakota Access: An investigation into the deadly business of building oil and gas pipelines,” the headline of a new investigation by Antonia Juhasz, a longtime oil and energy journalist. Published today in the Pacific Standard magazine, the piece looks at the deaths of two men who worked on the DAPL—Dakota Access pipeline—and the massive oil and natural gas boom that’s generated some of the deadliest jobs in the country. So we continue with Antonia Juhasz.

DUCs still flying high in Lower 48 - Despite three of seven drilling regions reporting a drop, the number of DUCs, drilled, but uncompleted wells, in the seven most active unconventional basins and plays in the Lower 48 U.S. states rose 3% from July to August.The U.S. Energy Information Administration’s Drilling Productivity Report (DPR) for September reported 238 new DUCs were added across the U.S. from July to August. The total number of DUCs at Aug. 31, was 8,269, up from 8,031 in July, Kallanish Energy reports.  The biggest increase in DUCs was reported in the Permian Basin, up 211, to 3,630, from 3,419. The second-highest increase in DUCs was in the Anadarko, up just 34 drilled, but uncompleted wells, bringing the play’s total to 1,026 for August, from 992 in July.The three regions reporting a drop in DUCs included the Niobrara, down 20, to 427 in August, Appalachia (the Marcellus and Utica Shale plays combined), down 19 DUCs, to 699 from 718, and the Bakken, down four DUCs in August, to 751, from 755 in July. The other basins or plays in the DUC survey included the Eagle Ford, up 28 to 1,545 in August; and the Haynesville Shale, up eight DUCs, to 191 drilled, but uncompleted wells at Aug. 31. 

Oil Companies Slash Debt To Pre-Crash Levels -- Global energy companies reduced their debt for seven quarters running in the second quarter of 2018, cutting their long-term debt-to-equity ratio to the lowest since the third quarter of 2014, when oil prices started crumbling, the EIA said in its Q2 2018 financial review of 107 oil and gas companies worldwide, including 76 U.S. companies.Based on data from the companies’ filings with the SEC, the EIA found that the free cash flow—the difference between cash from operations and capital expenditure—came in at US$119 billion for the four quarters ending June 30, 2018, the largest four-quarter sum in the period 2013 to 2018. In addition, cash from operations in Q2 2018 was US$118 billion, up by 27 percent compared to the second quarter of 2017.Capital expenditures also increased year on year in Q2—by 2 percent to US$70 billion, the EIA review of 76 U.S. energy companies, 13 Canadian firms, 9 European, and 9 other companies showed.About two-fifths of companies reported positive free cash flow, and 78 percent reported positive upstream earnings in Q2 2018. That was mostly due to the higher oil prices. Brent Crude oil prices were 48 percent higher in Q2 2018 than in Q2 2017 and averaged $75 per barrel, the highest since the fourth quarter of 2014, EIA data showed.

As administration pursues ANWR drilling, Trump official accuses federal employees of creating ‘road bumps’ -   Late last year, Congress ordered the federal government to hold oil lease sales in a portion of the Arctic National Wildlife Refuge. Defying opponents who say the land is too ecologically fragile to drill, the Trump administration has prioritized carrying out the new law. Now, without offering many details, a top Trump administration official is accusing federal employees of making that job more difficult, saying they seem unhappy about the prospect of oil development happening on land they’ve managed as a refuge for decades. Joe Balash is Assistant Secretary for Land and Minerals Management at the U.S. Department of Interior and a former natural resources commissioner for Alaska. He’s one of the top political appointees at the Interior Department, and he’s overseeing the process to begin oil development in the Arctic National Wildlife refuge. In an interview last month, Balash described what he called a “really difficult management challenge” with U.S. Fish and Wildlife Service employees. He said during a recent meeting with the agency in Alaska, he felt employees weren’t eager to carry out the new law. “You could just tell from all of the nonverbal communication going on in the room that they were not happy to see us, they were not happy to talk about this, they still weren’t necessarily prepared to accept this new reality,” Balash said.

Canadian oilfield companies see light on the horizon with prospects for LNG Canada --After years of suffering through plunging energy prices and declining spending by oilsands players, Canada’s oilfield service industry is finally seeing a light on the horizon.   Companies that do everything from drilling wells to building work camps are pinning their hopes on a potential C$40 billion liquefied natural gas facility on British Columbia’s Pacific Coast. LNG Canada, the Royal Dutch Shell Plc-led group behind the plant, may decide whether to build the project in the coming weeks. The export complex would be a boon for an industry that was hit hardest by the 2014-2016 downturn in oil and gas prices, and one that still hasn’t recovered. The project would need new pipelines built and fresh gas wells drilled, bringing scores of workers and tons of equipment off the sidelines. The LNG Canada facility would provide work similar to big oilsands projects before the crash. Horizon North owns 57 acres of land near the site in the coastal town of Kitimat. The land can be used for residential development, hotels and restaurants, as well as for a work camp with up to 1,000 beds. The company declined to provide financial forecasts of what the LNG project could mean. Another opportunity for service firms is that once the facility is built, the project partners -- which also include Malaysia’s Petroliam Nasional Bhd, PetroChina Co., Mitsubishi Corp. and Korea Gas Corp. -- will need to increase natural gas production to fill it.Precision Drilling Corp. expects to win some of that work, which would call for putting up to six more drilling rigs into operation,  There were about 74 active rigs targeting gas in Alberta and British Columbia at the end of August, less than half of the 180 running at the start of 2015, according to data compiled by RS Energy Group. By comparison, the number of rigs running in the U.S.’s Marcellus and Utica shale plays has dropped only about 30 percent from the start of 2015 through June.

Aboriginal Concerns Trigger Regulatory Pause for Atlantic Coast Goldboro LNG Proposal --- A Canadian sore spot -- aboriginal affairs -- on Wednesday triggered a regulatory pause liable to impose project changes on the plan to launch liquefied natural gas (LNG) shipments overseas from Goldboro LNG on the Atlantic coast.Over objections by export terminal sponsor Pieridae Energy, the Nova Scotia Utility and Review Board (UARB) scheduled a hearing for Oct. 15 in Halifax on a demand for attention by a branch of the Mi'kmaq community, the Sipekne'katik First Nation.Issues up for scrutiny at the UARB’s special session include defining the agency’s native affairs jurisdiction and the extent of tribal consultation required before the provincial government grants final project approvals.The board is reviewing a construction application by Goldboro LNG.  The UARB called the special native hearing after the Sipekne’tik prodded the Nova Scotia Office of Aboriginal Affairs into requesting a response to a claim that the Canadian constitution requires “deep” consultation on Goldboro LNG.

Utility owes citizens an update on Tufts Cove spill cleanup... Nearly a month and a half after thousands of litres of sticky bunker C fuel spilled into Halifax harbour, it remains unclear when the painstaking job of cleaning it up will be finished. A leaking pipe at the Tufts Cove Nova Scotia Power generating station spilled about 5,000 litres into Halifax harbour Aug. 2. Nearly two weeks later, the utility announced an additional 9,900 litres had leaked into a containment trench and another 9,400 litres entered the cooling water system of one of its generators. On Aug. 14, Nova Scotia Power's chief operating officer said the cleanup would be finished by mid-September. A month later, that work continues. "I'm curious as to what they've been doing for the last three weeks or so," said Mark Butler, the policy director at the Ecology Action Centre. "Are they finding more oil than they anticipated? Is it turning up on the sea floor? Is there more of it in the rocks or shoreline that they anticipated?" In an email to CBC News, utility spokesperson Tiffany Chase would only say that "steady progress" is being made on the cleanup.

Kinder Morgan to Divest Canadian Assets, Hires TD Securities -- Kinder Morgan Inc KMI has reportedly hired investment bank, TD Securities, for the scheduled sale of its Canadian business. The sale, which will indicate the U.S. pipeline giant’s exit from Canada, is expected to raise about C$2.4 billion ($1.8 billion). At a conference in September, Kinder Morgan’s chief executive expressed intent in divesting the remaining Canadian business, which was initially purchased to support the Trans Mountain project. However, no details were disclosed by either of the parties. The company divested Trans Mountain pipeline to the Canadian government for about C$4.5 billion at the end of August. In the same month, a Canadian court reversed its consent of the Trans Mountain expansion on grounds that Ottawa did not pay attention to native concerns. Recently, pipeline companies in Canada have faced face high resistance from environmental groups and First Nations groups for the consent of new projects. Due to such constraints, the existing pipelines are highly-valued assets in the country. In 2005, Kinder Morgan had purchased Terasen Inc, wherein it obtained the Trans Mountain pipeline and considerably expanded footprint in Canada. The remaining Canadian business of Kinder Morgan includes the Edmonton, Alberta and Vancouver Wharves terminal businesses as well as the Canadian portion of the Cochin pipeline.

Shell targets lower methane emissions from oil and gas operations   (Reuters) - Royal Dutch Shell announced on Monday plans to limit leaks of methane, a potent greenhouse gas, across its oil and gas operations as it tries to sharply curb carbon emissions. Shell aims to maintain methane emissions below 0.2 percent of its total oil and gas production by 2025, it said in a statement, joining British rival BP, which last year set a similar goal. Larger rival Exxon Mobil announced in May plans to reduce methane emissions by 15 percent by 2020. Methane is released into the atmosphere mostly from the burning of excess gas, known as flaring, as well as through leaks in gas infrastructure such as wells, pumps and pipelines. The gas has a bigger greenhouse impact than carbon dioxide, even though the oil and gas industry produces less methane and the gas also has a shorter lifetime. The methane target will be measured against a baseline leak rate, which is currently estimated at range from 0.01 percent to 0.8 percent across the company’s oil and gas assets, it said. The Anglo-Dutch company set out last year an ambitious plan to halve its carbon emissions by 2050, far exceeding rivals. Investors have called on the company to set binding targets to reach those goals. Climate change and emissions, caused by burning fossil fuels, have moved to the forefront of discussions between energy companies and investors since the signing of the 2015 U.N.-backed Paris climate agreement that seeks to curb emissions to zero by the end of the century in order to limit global warming. 

Ecopetrol: Fracking Likely In Colombia, Business Prospects Are Positive -- Ecopetrol is a Colombian oil and gas company with headquarters in Bogotá, Colombia. The company is the second largest oil company in South America behind Petrobras from Brazil. Fracking in Colombia has been a big debate since the recently inaugurated president Ivan Duque was proposing the possibility during his election campaign. Upon securing the presidency, his fracking project is moving forward with a majority of the senators in the Colombian Congress who are collaborating with him for the proposal. The fracking issue has long been debated and now with the government reaching a consensus and backing the fracking industry, the approval for the controversial extraction method is likely.  Fracking could provide the Colombian economy enough economic output to push their GDP towards ~3% and fuel a new era of economic expansion.  (Source) Fracking is possible in Colombia because of the “Luna” geologic formation in the Middle Magdalena of Colombia. This large fossil fuel reserve is highly debated among energy industry experts because it is difficult to extract and has the potential to produce more than 5 billion barrels of oil. If these estimates are accurate, the oil reserves are three times greater than the current reserves Colombia has through traditional extraction methods. This reserve could easily get over the 350 million barrels of oil and has the potential to push production to break the 1 billion goal that the company has stated will be achieved in the coming years. Fracking in Colombia has a large probability of being approved because of the coalition in the new government and support of the legislators. There is still a chance that non-governmental organizations could impede the legislative process to approve fracking extraction.

Chevron Arbitration Ruling Against Ecuador ‘Completely Off Base’ - Real News Network, video and transcript - As the Real News has previously reported, in 2011, the courts of Ecuador rendered a nine point five-billion-dollar judgment against Chevron, one of the world’s largest fossil fuel companies. The Ecuadorian plaintiffs persuaded the Ecuadorian courts that from 1964 to 1992, Texaco, which was later purchased by Chevron, dumped polluted wastewater into open pits across vast swaths of Lago Agrio in the Ecuadorian jungle, contaminating the water used by locals. Locals call the area the Amazon Chernobyl. Indigenous tribes have seen their cultures decimated by the pollution. Ecuador’s environmental judgment against Chevron is thought to be the highest ever to emerge from a court, but Chevron is doing everything it can possibly do to block collection. After Chevron sold off its assets in Ecuador during the trial there, the Ecuadorian plaintiffs sought to enforce the judgment and jurisdictions in which Chevron owns, directly or indirectly, substantial assets. Chevron has threatened the villagers with a “lifetime of litigation” and has vowed never to pay the judgment. So far, it has been true to its word. The plaintiffs’ attempts to enforce the judgement in The United States failed. Early this year, the Ontario Court of Appeal rejected the plaintiffs’ attempt to enforce their massive judgment in Canada, another country in which Chevron indirectly owns substantial assets. Then, on September 7, an international tribunal found that Ecuador violated a treaty with the United States by allowing its court system to issue a nine point five-billion-dollar judgment against Chevron in this case. Now here to discuss this with us is Steven Donziger, a human rights attorney based in New York who has been representing these indigenous and farmer communities in Ecuador’s rainforest for more than two decades. He joins us today from New York.

Cuadrilla to start fracking in England in weeks - (Reuters) - Shale gas developer Cuadrilla will start fracking at its Preston New Road site in northwest England in the next few weeks, it said on Wednesday as it announced government approval for a second well. Hydraulically fracturing, or fracking, involves extracting gas from rocks by breaking them up with water and chemicals at high pressure and was halted in Britain seven years ago after causing earth tremors. But the British government, keen to cut its reliance on imports as North Sea supplies dry up, has tightened regulation of the industry and gave consent in July for Cuadrilla to start fracking a first well at Preston New Road. After approval for a second well at the site, Cuadrilla said on Wednesday that it would begin work “in readiness to start hydraulically fracturing both wells in the next few weeks”. Cuadrilla said it would run an initial flow test of the gas produced from both wells for approximately six months. The British Geological Survey estimates shale gas resources in northern England alone could amount to 1,300 trillion cubic feet (tcf) of gas, 10 percent of which could meet the country’s demand for almost 40 years. However, attempts to extract the gas have come under fire from local communities and campaigners concerned about the potential effect on the environment and ground water, and arguing that extracting more fossil fuel is at odds with the country’s commitment to reducing greenhouse gas emissions. British energy and clean growth minister Claire Perry said consent for the second well had been granted after the company had met a number of criteria, including showing it had the necessary funds to carry out work at the site until at least June 30, 2019.

Fracking campaigners not 'extremists' – Sturgeon -  Nicola Sturgeon has said fracking protesters should not be considered “domestic extremists” after police labelling them as such was raised at First Minister’s Questions.Scottish Green co-convener Patrick Harvie referred to news reports the campaigners against fracking were among those Police Scotland termed “domestic extremists”.He said: “We’ve known for years that environmental campaigners, along with peace activists and others, have, in the past, been spied on or infiltrated by police forces in the UK, including in Scotland, but this statement of current practice is shocking. “Anti-fracking protesters who exercised their democratic right to protest are heroes, yet Police Scotland are labeling them as domestic extremists.”  He asked the First Minister to give an assurance that campaigners, including MSPs, planning to attend a protest against nuclear weapons at Faslane on Saturday will not be subject to the same treatment.  She said: “I do not consider people who protest against nuclear weapons, or fracking, or anything else in a peaceful and democratic way to be extremists in any sense and I would not expect anyone to consider them to be extremist.

North Sea oil and gas drilling falls to lowest level since 1965 - The number of new oil and gas wells being drilled in the North Sea has crashed to levels not seen since the basin was first tapped more than half a century ago. The UK’s oil and gas industry warned that the record low was a cause for “serious concern” and left the sector at a crossroads. Just four exploratory wells have been drilled in the first eight months of the year, with the most optimistic projections pointing to a total of 12 expected by the year end. That would put 2018 on a par with 1965, the second year that the modern era of exploratory work got under way in the North Sea.

Norway's Offshore Oil Boom Is Back On - The rise in oil prices brought about the recovery of Norway’s oil industry, with companies lining up plans to invest in boosting oil production on the Norwegian Continental Shelf (NCS)—surely most welcome news for Western Europe’s biggest oil and gas producer, which faces a decline from the mid-2020s onwards if new large discoveries are not made soon.Smaller oil firms, some of which are a result of recent mergers, plan to invest billions of dollars in Norway’s offshore oil and gas over the next five years, launching an unofficial race to see who will become the third-largest oil producer in Norway behind state-participated companies Equinor and Petoro, and the largest independent non-state-held company operating on the shelf.The three most likely candidates to become Norway’s top independent producer could be investing a combined US$20 billion offshore Norway by 2022, according to Bloomberg calculations.These companies are Aker BP, the result of a 2016 merger between Aker and BP’s Norwegian unit; Vår Energi AS, the company that will emerge from the merger of Point Resources AS into Eni’s local unit; and Wintershall DEA, the company expected to emerge from the proposed merger between Germany’s Wintershall and DEA. Over the past year, Aker BP has been actively pursuing acquisitions offshore Norway—it bought Hess Norge last year for US$2 billion, and two months ago it agreed with Total to acquire its interests in a portfolio of 11 licenses on the NCS for US$205 million.

Germany doesn’t need Trump’s gas  - The US government is trying to push Germany into buying US liquefied natural gas rather than keeping its Russian pipelines open. But there’s little logic in Germany doing so. In their opinion piece, US Ambassador to Germany Richard Grenell and his colleague in the US Department of Energy, Dan Brouillette offer up a shameless diplomatic sales pitch to convince Germany to import more liquefied natural gas (LNG) from the US. Germany can become “more energy secure,” they say, and support “energy diversification efforts” at the same time as strengthening the transatlantic alliance. But of course it isn’t really about selling more US shale gas, energy security or the transatlantic alliance; it’s a veiled warning that Germany should reject Russian gas. Donald Trump believes Germany is “captive” to Russian energy supplies and wants the country to wean itself off Siberian taps.Angela Merkel disagrees, but as a sop in the ongoing trade dispute between the EU and US, she has shown a sudden interest in US LNG. The chancellor sees it as a relatively cheap and easy way to placate the erratic US president while bigger issues are hammered out. There’s just one problem: Germany doesn’t want or need US LNG. First, as the American pair acknowledge, Germany has no LNG infrastructure. Its imported natural gas arrives entirely by pipeline, from Russia, Norway and the Netherlands. Under pressure from the US, Berlin is currently considering building an LNG terminal on its North Sea coast, but critics have labeled the project a white elephant. Private investment has failed to match government subsidies, and no one thinks a German terminal will ever make a profit.Second, Germany plans to be “almost completely decarbonized” by 2050. Everyone agrees this is ambitious, and that natural gas is a good intermediary source on the way to zero emissions. But even so, what’s the point of investing in an entirely new energy supply network if it could be redundant in just 32 years? Especially as a cheaper alternative already exists.

Russian oil firm seeks dollar alternative amid U.S. sanctions threat - traders (Reuters) - Russian oil producer Surgutneftegaz is pushing buyers to agree to pay for oil in euros instead of dollars if the need arises, apparently as insurance against possible tougher U.S. sanctions, traders who deal with the firm told Reuters. Russia has been subject to Western sanctions since its 2014 annexation of Ukraine’s Crimea region, but Washington has threatened to impose extra sanctions, citing what it has called Moscow’s “malign” activities abroad. The prospect that causes most alarm for Russian firms is inclusion on a Treasury Department blacklist that effectively cuts them off from conducting transactions in dollars, the lifeblood of the global oil industry. Surgutneftegaz, whose chief executive Vladimir Bogdanov is already on a U.S. blacklist in a personal capacity, declined to respond to Reuters questions. “We do not comment on our commercial activity,” said the company, Russia’s fourth largest by output. To date, Russia’s oil industry has been able to weather Western sanctions. In response to restricted access to Western finance and technology, firms have switched to borrowing from Russian state banks and developed their own technology. Most Russian oil majors, including Rosneft and Lukoil, also sell the lion’s share of output via long-term contracts with clients, giving them more time to work out alternative forms of payment when the contracts expire. But most of Surgutneftegaz’s exports — around 2 million tonnes per month — is sold through monthly tenders on the spot market, the largest volumes by far among its Russian peers. So it would have only around 30 days to find alternative payment methods. 

IEA says near-term natural gas export growth to be fueled by US, Australia and Russia — The International Energy Agency expects the US to account for 75% of the global growth in natural gas exports over the next five years, a bullish outlook for LNG developers facing challenges at home getting projects off the ground and abroad with tariffs affecting trade flows. During a presentation at Gastech in Spain on Wednesday, IEA senior natural gas analyst Jean-Baptiste Dubreuil said other countries contributing to the exports growth during that period will be Australia and Russia. Australia is a major LNG exporter, while Russia supplies significant amounts of pipeline gas to Europe. Besides its growing LNG exports efforts, the US is also a major exporter of pipeline gas to Mexico, which is heavily reliant on the supplies for power generation. "We do anticipate natural gas will have a positive contribution to the energy mix and, therefore, the volumes for natural gas consumption are expected to rise in all our long-term scenarios, even in the most restrictive with GHG emissions," Dubreuil said. The conference, in its third day at Fira Barcelona Gran Via, has provided an opportunity for leaders and emerging players in the natural gas and LNG sectors to put their best foot forward, in an effort to gain new customers and remain relevant in the market conversation. China's decision Tuesday to impose a 10% tariff on imports of US LNG starting September 24 rattled the conference, but exhibitors were looking to move beyond the noise with an eye toward the future. IEA forecasts natural gas growth to persist in the medium and long term, driven by China entering the global gas scene as a major importer, and thus a major source of consumption growth, Dubreuil said. Other drivers include LNG development and the shift in consumption from demand growth fueled by power generation to demand growth fueled by industry, especially in emerging markets. "In the near future, we do expect that emerging Asia will be the main driver for natural gas demand growth," Dubreuil said. "We also expect some growth from other regions, resource rich regions such as the Middle East but also North America, not just for domestic uses but also for exports.This growth will be met with additional production."

LNG industry is super bullish, but in no rush to benefit: Russell (Reuters) - Bullish, as a word, doesn’t quite capture the stampede of optimism that was gushing out from the natural gas industry at its biggest annual event this week in Barcelona. “The demand is there,” stated Saad Sherida Al-Kaabi, the chief executive of Qatar Petroleum, the world’s largest producer of liquefied natural gas (LNG), in confirming that his country was on track to lift its output to 100 million tonnes of the super-chilled fuel by 2023. Al-Kaabi’s remarks were among the more measured at the GasTech conference, with some executives making predictions that the market for LNG, currently around 300 million tonnes a year, will more than double by 2025. Speaker after speaker on the top-level panels offered up various versions of the view that natural gas is no longer merely a transition fuel from dirtier and coal and crude oil to renewables, but is now a major part of world’s energy mix for the long term. But in stark contrast to the swathes of optimism, there was very little talk of when the next round of major LNG projects will reach the stage of final investment decisions (FID). If the denizens of the natural gas industry truly believe in the forecasts of rapid and strong growth in LNG demand, led by emerging buyers in Asia and China’s ongoing embrace of the cleaner-burning fuel, it would be logical to expect a new round of project approvals. Instead, progress toward FIDs for many of the planned projects around the world appears glacial. The exception to this slow process are those developers who have access to capital and can take higher investment risks than more cautious energy companies, who have to satisfy not only a board of directors, but also bankers and shareholders. Qatar’s planned additional 23 million tonnes of LNG capacity is a case in point. The small Middle Eastern country has the capital to underpin such a decision, and its low-cost structure means it can still prosper even if the extra capacity turns out to be surplus to market needs, thereby lowering prices. Another exception appears to be Russia’s Novatek, the developer of the Yamal LNG facility. Novatek Chairman Leonid Mikhelson told a media briefing at GasTech that the company’s planned Arctic-2 project would add 20 million tonnes of LNG, taking his company’s total output to about 37.5 million tonnes by 2025.

 OPEC Warns of Threats to Oil Supply from Iran and Other Producers - -- The Organization of Petroleum Exporting Countries is concerned by threats to crude supply from large producers such as Iran, the group’s top official said. Unilateral U.S. sanctions on oil sales by Iran, OPEC’s third-biggest supplier, take effect on Nov. 4. Iran’s crude exports are already falling as the U.S. prepares to curb Tehran’s ability to sell oil and participate in global financial markets. Iran is a “very important producer and exporter” of oil, the group’s Secretary-General Mohammad Barkindo said at an event in the United Arab Emirates city of Fujairah. “When you have major producers facing supply challenges, it’s of concern” for OPEC and consumers alike, he said. Crude is averaging about $72 a barrel this year, and the International Energy Agency warned last week that prices could rise above $80 unless producers compensate for lost supply from OPEC members Iran and Venezuela. While trade disputes and financial woes in some countries may affect crude demand, the IEA said supply risks are the more important issue. Venezuela is pumping half as much oil as in 2016 and faces further declines amid economic upheaval. Algiers Meeting Barkindo made his comments two days after noting unspecified threats to global demand for crude. Oil consumption is “robust,” but crude use “is beginning to face some headwinds,” he said Sunday in an interview in Dubai, without elaborating. Saudi Arabia and Russia led OPEC and allied producers in agreeing to limit output starting in January 2017 to curb a glut. They changed course in June and have pledged to ensure that supplies are adequate to meet demand. A committee of OPEC members and other producers is to meet on Sept. 23 in Algiers to review compliance with their output targets. Most of the 25 producers in the alliance will attend, according to an OPEC delegate. OPEC plans to decide by December on a framework for permanent cooperation with allied producers, Barkindo said in Fujairah. The organization is to hold its next full ministerial meeting on Dec. 3 in Vienna.

Big Three oil states can offset fall in Iran supplies: Perry (Reuters) - Saudi Arabia, the United States and Russia can between them raise global output in the next 18 months to compensate for falling oil supplies from Iran and elsewhere, U.S. Energy Secretary Rick Perry said on a visit to Moscow on Friday.  U.S. sanctions on Iran’s oil exports, which come into force in November, have already cut supply back to two-year lows, while falling Venezuelan output and unplanned outages elsewhere could push up crude prices, hurting consumers. But Perry, in an interview with Reuters, said he felt comfortable about the outlook for global crude output, and for oil prices. “I don’t foresee spikes,” Perry said, although he added there was always the potential for unforeseen events. Some analysts have expressed concerns about Saudi Arabia’s long-term ability to significantly boost output. But Perry said: “There’s a number of things going on in the kingdom that continue to give me a very positive feeling about their ability to maintain their level and even increase their level” of crude production. He cited the prospect that Kuwait and Saudi Arabia would soon resolve a border dispute, unlocking access to an oil field in a contested area. “They are working toward a solution in the not too distant future,” he said. On U.S. production, which has already been growing over the past few years, Perry said: “You look out 18 months, and I think you’ll see even a more substantial increase in the United States because of pipeline capacity being built out.” Russia, meanwhile, was “working diligently” to deliver its oil output to the world market, Perry said. 

Iran Says Oil Market Is Too Tight For US Zero Exports Target (Reuters) - The U.S. will find it difficult to cut Iran's oil exports completely as the oil market is already tight and rival producers cannot make up the shortfall, a top Iranian official said on Friday. Washington is seeking to cut Iranian oil exports to zero by November as it reimposes sanctions, and is encouraging other producers such as Saudi Arabia, other OPEC members and Russia to pump more to meet the shortfall. Even so, the expected loss of Iranian oil, declining supply from another OPEC member Venezuela and other outages are boosting crude prices, which this week hit $80 a barrel, the highest since May. Iran's OPEC governor Hossein Kazempour Ardebili, said in comments to Reuters that a "supply shortage" meant that the United States would not be able to meet its zero export target. "There is no spare capacity anywhere," he said. A long-time adviser at Saudi Arabia's Energy Ministry also said last month that current U.S. sanctions on Iran were unlikely to stop Iranian oil exports completely. Under pressure from U.S. President Donald Trump to lower oil prices, the Organization of the Petroleum Exporting Countries and allies agreed in June to boost production, having participated in a supply-cutting deal in place since 2017. While OPEC production has increased since then, Saudi Arabia has added less crude than it initially indicated. Kazempour has voiced scepticism that other producers can add much more oil.

US sanctions on Iran are 'unproductive' and 'wrong', Russia's energy minister says - U.S. sanctions on Iran's oil industry are unproductive and there will be consequences to such a move, Russian Energy Minister Alexander Novak told CNBC."Our position remains that this is unproductive, this is wrong," Novak said when asked about the possible impact U.S. sanctions on Iran's oil industry could have."It is better to continue working in the market, Iran being just another exporter that provides stable supplies to the market," Novak said, speaking to CNBC's Geoff Cutmore at the Eastern Economic Forum (EEF) last week in Vladivostok, Russia."It is one of the richest in resources and has a solid standing in terms of its energy capability both in the OPEC, and in the energy markets as a whole. So, I think there will be consequences, I am sure, but we could only comment once they are in place," he said.Sanctions are due to be re-imposed on Iran's oil industry on November 4. The move comes after President Donald Trump decided to withdraw the U.S. from an international nuclear deal in May. The U.S. has said that any countries or companies that conduct transactions with Iran are liable to face secondary sanctions.Needless to say, the move is expected to severely impact Iran's oil industry and exports, with a production decline of over a million barrels a day -- and likely upward pressures on oil prices -- a distinct possibility, according to analysts. Novak told CNBC that it was difficult to comment on the consequences of Iranian sanctions as he was still waiting to "learn the legal particulars" and effects of the sanctions.

Just How Low Can Iran's Oil Exports Go? -  Iran’s oil exports started to fall noticeably in August as key customers in Asia began to curtail oil purchases to either comply with the U.S. efforts to bring Iranian exports to zero, or to win waivers with the U.S. Administration.  Iran’s crude oil and condensate sales fell in August to below 2 million bpd - the lowest level in more than a year, according to tanker tracking data compiled by Bloomberg.In September, the trend of reduced Iranian oil exports has continued, and analysts expect further cuts from some of Iran’s oil customers.  Going forward, there are two major factors for estimating how low Iranian oil exports could sink. One is how much of Iran’s oil China, India, and Europe will buy in October and then in November, when the sanctions kick in. The other is the concern that tanker tracking data may become less reliable, as Iran may try to use some ‘unconventional’ methods of keeping its oil sales on track, like switching off tracking devices on tankers—a ‘solution’ that Tehran is said to have used in the previous round of sanctions in 2012-2015.Between September 1 and 15, however, Iran’s crude oil and condensate exports surprisingly increased by around 200,000 bpd compared to the August 1-15 period, preliminary trade flow data by S&P Global Platts showed this week.Iran’s crude and condensate exports averaged 1.69 million bpd in the first half of September, up from 1.48 million bpd for the August 1-15 period. Yet, if the trend this month continues, Iran’s oil exports would still be around 200,000 bpd lower than in August, when exports had averaged 1.92 million bpd, down from 2.32 million bpd in July, according to Platts estimates. In the first two weeks of September, Iran’s crude oil exports made up 1.5 million bpd of the 1.69 million bpd total, while the rest was condensate, the ultra-light oil that Iran produces from its natural gas fields, Platts data showed. According to Bloomberg tanker tracking data, Iran’s crude exports from September 1 through to September 15 were 1.6 million bpd, with condensate exports at another 190,500 bpd, for a total of around 1.8 million bpd. Crude exports at 1.6 million bpd are down by around 35 percent compared to Iran’s peak 2.5 million bpd exports in April, just before the U.S. announced it was slapping sanctions back on Tehran. Iran’s key customers—no.1 China and no.2 India—are not expected to cut off their imports of Iranian oil, although India may reduce some of its Iranian intake as it tries to maneuver between cheap Iranian crude and U.S. pressure to curtail imports. Iran’s sales to Europe in the first half of September also jumped, with purchases from Italy, Spain, and Turkey steady. While Turkey may keep Iranian oil flowing, analysts widely expect EU companies in Italy, Spain, and France to cut off oil trade with Iran for fear of being cut off from the U.S. financial system.

Venezuela to significantly increase oil exports to China--  Venezuela will increase its oil exports to China to one million barrels a day, President Nicolas Maduro has said, following a visit to Beijing.Already a strong economic partner, China had agreed to invest an additional $5bn in Venezuela, Maduro said on Tuesday, adding that the investment would help it boost production and nearly double its oil exports to China."We are taking the first steps into a new economic era," he said, as cited by AP news agency. "We are on track to have a new economy, and the agreements with China will strengthen it."Maduro spent two days in China last week, welcomed by counterpart Xi Jinping, and attended meetings at the China Development Bank and the China National Petroleum Corporation (CNPC). Venezuela has already received more than $60bn in credit from Beijing over the last decade but still owes about $20bn and has been repaying the debt with oil shipments.

OPEC net oil export revenues increased in 2017, will likely continue to increase in 2018 - Members of the Organization of the Petroleum Exporting Countries (OPEC) received about $567 billion in net oil export revenues in 2017, up 29% from revenues in 2016. Increases in both crude oil prices and in net OPEC oil exports drove revenues higher in 2017, and EIA expects that revenues will continue to increase in 2018, based on EIA’s August Short-Term Energy Outlook.  EIA projects that OPEC net oil export revenues will increase to $736 billion in 2018, up 30% from 2017. This expected increase follows higher forecast annual crude oil prices in 2018 and more than offsets slightly lower crude oil production from OPEC members in 2018. OPEC revenues will decline to $719 billion in 2019, according to EIA projections, driven mainly by lower crude oil prices, as well as slightly lower OPEC production and exports.  Saudi Arabia receives more oil export revenue than any other member of OPEC. Saudi Arabia’s share of total OPEC net oil export revenues was nearly 30% in 2017, and it has remained relatively consistent since at least 1996, ranging between 28% and 34%. Iran’s share of OPEC revenues increased to 10% in 2017 to its highest level since 1999, recovering from declines from 2012 through 2015 that resulted from sanctions targeting Iran’s oil exports. Iraq’s share of total OPEC revenues also increased, reaching more than 12% in 2017, as the country’s crude oil production and exports continued to rise. Iraq’s exports averaged about 3.8 million barrels per day in 2017, despite the shut-in of northern Iraqi production and exports following the Kurdish Region’s independence referendum in September 2017 and the ensuing takeover of Kirkuk area fields by Iraqi forces. Iraq’s crude oil production from the southern fields largely offset the northern Iraqi output losses in 2017.  Libya’s share of total OPEC oil export revenues has fluctuated since 2010 as the country’s oil sector was disrupted during the civil war that overthrew the Gadhafi regime. Since 2010, warring factions in the country have repeatedly targeted oil sector installations, particularly Libya’s oil export facilities. Venezuela’s share of OPEC revenues also declined in 2017, as the country experienced significant declines in production amid severe economic instability.

Saudi Arabia July crude oil stock draw surges to 5.51 million barrels as output slides— Saudi Arabia drew 5.51 million barrels of crude oil from storage in July -- its most in eight months -- supporting robust exports as production slumped, the latest figures from the Joint Organizations Data Initiative show. The stock draw averaged 178,000 b/d in July, a significant rise from the 15,000 b/d draw in June and the 30,000 b/d build in May, according to JODI data released Tuesday. Crude exports from Saudi Arabia, OPEC's largest producer, were 7.12 million b/d in July, down from 7.24 million b/d in June. The country's refinery runs averaged 2.77 million b/d in July, down slightly from 2.79 million b/d in June. Direct burn of crude for power generation rose to 580,000 b/d in July, from 468,000 b/d in June. Combining the exports, refinery runs and direct burn figures results in a supplied to market figure of 10.47 million b/d for July, compared to the kingdom's reported production of 10.29 million b/d, thus necessitating the stock draw. Saudi production has since risen to 10.42 million b/d in August, the country reported to OPEC in the organization's most recent monthly oil market report. A source familiar with the kingdom's operations told S&P Global Platts earlier this month that July production had been lower partly because of an attack on state oil company Saudi Aramco's oil vessels in the Red Sea by Yemeni Houthi rebels that cause some shipments to be halted. Saudi Arabia's crude oil stocks, which have been declining steadily over the last three years, fell to 229.41 million barrels in July, down 11.4% since May 2017, the JODI data showed. OPEC on June 23 agreed with 10 non-OPEC partners to end overcompliance with production cuts in force since January 2017 and boost output by a collective 1 million b/d to replace barrels expected to be shut in by US sanctions on Iran and Venezuela's economic freefall. Saudi Arabia, under pressure from key ally the US to loosen the taps to moderate prices, has said it intends to use its spare capacity as needed to keep the market balanced. It has increased production by almost 400,000 b/d since May.

Russia Oil Production Jumps to a New Post-Soviet Record - The country’s oil output is currently fluctuating between 1.54 million and 1.55 million tons a day — driven mainly by state-run giant Rosneft PJSC — the official said, asking not to be named as the information isn’t public yet. That equates to 11.29 million to 11.36 million barrels a day, beating the previous record of 11.25 million barrels a day set in October 2016 before Russia agreed with the Organization of Petroleum Exporting Countries to cut production. Russia’s output increase comes just days before it meets in Algeria with other members of the group known as OPEC+. The producers agreed in June to start rolling back their output cuts to offset losses from countries including Venezuela and Iran while also responding to calls from U.S. President Donald Trump to ease pressure on prices.

Iraq's southern oil exports approach record high in Sept-sources (Reuters) - Oil exports from southern Iraq are heading for a record high this month, two industry sources said, adding to signs that OPEC’s second-largest producer is following through on a deal to raise supply and local unrest is not affecting shipments. Southern Iraqi exports in the first 19 days of September averaged 3.6 million barrels per day, according to ship-tracking data compiled by an industry source, up 20,000 bpd from August’s 3.58 million bpd - the existing monthly record. The increase follows June’s pact among OPEC and allied producers to boost supply after they had curbed output since 2017 to remove a glut. Iraq in August provided OPEC’s second-largest increase as shipments drop from Iran, which is facing renewed U.S. sanctions. A second industry source who tracks shipments also said exports this month had averaged 3.6 million bpd, reflecting smooth operations at export terminals and no sign that unrest in Basra, Iraq’s second city, was disrupting flows. “There were fears that the protests would get to the terminal,” this source said. “But so far, there is no impact.” Protests in Basra against Iraq’s political elite erupted in July. In early September, Basra airport was attacked with rockets a6nd protesters briefly took oilfield workers hostage. Before the June OPEC deal, Iraq had been boosting exports from southern terminals to offset a halt in shipments from the northern Kirkuk region last October after Iraqi forces seized control of oilfields there from Kurdish fighters. Northern exports have held steady in September, averaging around 400,000 bpd so far, according to shipping data and one of the industry sources. This is up from about 300,000 bpd in July but short of levels above 500,000 bpd in some months of 2017.

Hedge funds stay bullish on Brent while trimming WTI: Kemp (Reuters) - Hedge fund managers have remained bullish towards Brent even as the approach of Hurricane Florence turned them against WTI and refined fuels were hit by liquidation.Hedge funds and other money managers cut their combined net long position in the six most important petroleum futures and options contracts by 29 million barrels in the week to Sept. 11. The reduction in net length was a notable reversal after portfolio managers had boosted their bullish position by a total of 172 million barrels over the two previous weeks (https://tmsnrt.rs/2pfLG9I).For the third week running, fund managers added to their net long position in Brent, raising it by another 23 million barrels last week and by a total of 116 million since Aug. 21.But that was more than offset by reductions in NYMEX and ICE WTI (-28 million barrels), U.S. gasoline (-8 million), U.S. heating oil (-6 million) and European gasoil (-11 million).The liquidation of WTI positions is likely to have been encouraged by the approach Hurricane Florence and more generally by the peaking of the tropical cyclone season in the North Atlantic and the Gulf of Mexico.Florence was already clearly tracking towards the Atlantic coast, an area of net petroleum consumption, where it ultimately made landfall, rather than the production and refining centres on the Gulf Coast. (Full Story)  However, concerns about the risk of other storms, coupled with memories of last year's Hurricane Harvey, which put multiple refineries out of action for several weeks in 2017, appear to have encouraged caution.

Oil prices ease as trade row clouds demand outlook --Global oil prices edged up from early losses on Monday despite assurances from Washington that Saudi Arabia, Russia and the United States can raise output fast enough to offset falling supplies from Iran and elsewhere.U.S. Energy Secretary Rick Perry said in an interview with Reuters on Friday that he does not foresee any price spikes and that the countries, the world's top three oil producers, can between them raise global output in the next 18 months.Brent crude oil futures gained 59 cents to $78.68 per barrel, reversing a 0.2 percent loss earlier in the session.U.S. West Texas Intermediate (WTI) futures rose 54 cents to $69.53 a barrel after posting a drop of 20 cents earlier in the trading session.Iran's oil exports are falling as more buyers, including its second-largest buyer India, cut imports ahead of U.S. sanctions that will be re-imposed in November. Washington aims to cut Iran oil exports down to zero to force Tehran to re-negotiate a nuclear deal.Iran's OPEC governor said on Saturday that Saudi Arabia and Russia have taken the oil market "hostage" and accused other producers of turning OPEC into a U.S. tool.Iran is the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (OPEC).Trading remained choppy amid an unresolved trade war between the United States and China. U.S. President Donald Trump is likely to announce new tariffs on about $200 billion on Chinese imports as early as Monday, a senior administration official told Reuters on Saturday.The escalating trade row is raising concerns about the potential for slower growth in oil consumption, offsetting supply concerns stemming from the upcoming U.S. sanctions on Iran over its nuclear program.

Oil near flat as market weighs U.S.-China trade tensions, Iran sanctions (Reuters) - Oil prices were little changed on Monday as the market weighed deepening trade tension between the U.S. and China that is expected to dent global crude demand and potential supply tightening due to Iran sanctions. Brent crude futures dipped 4 cents to settle at $78.05 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 8 cents to settle at $68.91 a barrel. Top White House economic adviser Larry Kudlow said on Monday that he expected the United States would soon announce tariffs on an additional $200 billion worth of Chinese goods. Administration officials said on Saturday that President Donald Trump was likely to announce the new tariffs as early as Monday. “That has the potential to be a demand-killer and that is why the market is trading into the red,” said Bob Yawger, director of energy futures at Mizuho in New York. U.S. stock indexes broadly fell on Monday, weighing on oil futures, on expectations that the Trump administration would go ahead with the new tariffs and that Beijing would retaliate. Supporting crude futures were potential supply cuts from U.S. sanctions on Iran. Sanctions affecting Iran’s petroleum sector will come into force from Nov. 4. Iranian crude oil export loadings have declined by 580,000 barrels per day in the past three months, Bank of America Merrill Lynch analysts said in a note to clients. “We believe that the full effect of the Iranian oil sanctions has yet to be seen and we feel that the next 5-6 week anticipatory phase of the official sanctions will associate with steady speculative buying interest,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. Iran’s oil exports have been falling in recent months as more buyers, including its second-largest buyer India, cut imports ahead of U.S. sanctions that take effect in November. Washington aims to cut Iran’s oil exports down to zero to force Tehran to re-negotiate a nuclear deal.

Oil rises on signs OPEC not prepared to boost output - Oil firmed on Tuesday on signs that OPEC would not be prepared to raise output to address shrinking supplies from Iran and as Saudi Arabia signaled it was in no rush to bring prices down.  Brent crude futures were up $1.14 a barrel to $79.19 a barrel, after hitting a high of $79.37.U.S. West Texas Intermediate (WTI) crude was up 95 cents at $69.86 per barrel, after rising over $1 to $69.95. Ministers from OPEC and non-OPEC producers meet on Sunday to discuss compliance with output policies. OPEC sources have told Reuters no immediate action was planned and producers would discuss how to share a previously agreed output increase. Bloomberg reported on Tuesday, citing unnamed Saudi sources, the kingdom was currently comfortable with prices above $80 per barrel, at least for the short-term.The news agency reported that while the kingdom had no desire to push prices higher than $80 a barrel, it may no longer be possible to avoid it because of tightening supplies amid U.S. sanctions against Iran.OPEC and industry sources have previously told Reuters the kingdom was keen to keep the lid on prices at $80 per barrel until U.S. congressional elections to avoid coming under any additional pressure from U.S. President Donald Trump."It casts doubts on whether Saudi Arabia will increase output to compensate for the loss of Iranian crude once sanctions come into effect," said Carsten Fritsch, an analyst at Commerzbank in Frankfurt.U.S. sanctions affecting Iran's petroleum sector will come into force from Nov. 4.Russian Energy Minister Alexander Novak said an oil price between $70 and $80 was temporary and sanctions-driven, adding that the long-term price would stand around $50.U.S. Energy Secretary Rick Perry said last week in Moscow that he did not foresee any price spikes once sanctions came into effect and was positive about Saudi output.

Oil Markets Unfazed By $200 Billion Trade War Escalation - Oil prices rose on news that Saudi Arabia is comfortable with Brent above $80 per barrel, offsetting the concerns that have been building over the U.S.-China trade war.   Bloomberg reported that Saudi Arabia is not afraid of oil heading north of $80 per barrel, a bullish sign that suggests that Riyadh might not ramp up production to offset declines from Iran. “It casts doubts on whether Saudi Arabia will increase output to compensate for the loss of Iranian crude once sanctions come into effect,” said Carsten Fritsch, an analyst at Commerzbank. Meanwhile, U.S. Secretary of Energy Rick Perry dismissed concerns about a supply crunch, arguing that Saudi Arabia, Russia and the U.S. could add enough supply to the market to compensate for Iran. “I don’t foresee spikes,” Perry said. U.S. sanctions on Iran are set to go into effect in November, but countries have already been slashing purchases. Iran has lost an estimated 900,000 bpd of crude oil exports since April, with shipments down to 1.6 million barrels per day this month. “Iranian oil exports are coming down pretty hard,” Roger Diwan, a veteran oil analyst at consultant IHS Markit Ltd., told Bloomberg.  The Trump administration moved forward on a highly-anticipated plan to escalate the trade war with China, announcing $200 billion in tariffs on Chinese goods. The tariffs will start at 10 percent and go into effect on September 24, but will rise to 25 percent by January 1. He also suggested that an additional $267 billion in tariffs are in the works. The effects of a trade war have lingered as a downside threat to the U.S. and global economy, but unlike earlier rounds of tariffs, this tranche will affect consumer goods. Moreover, China is expected to retaliate, with the potential for tariffs on U.S. oil and gas exports. That could put a dent in crude oil exports while also threatening the economics of future LNG export terminals.   Hedge funds and other money managers have remained bullish on Brent futures, but cut their net length on WTI last week, likely because of fears about the impact of Hurricane Florence.

Oil Prices Rally Despite New US Tariff Threat: Oil prices rallied on Tuesday after Saudi Arabia said it was comfortable with Brent oil above $80 a barrel. Ahead of a meeting between major producing countries in Algeria, the Bloomberg reported citing people familiar with the kingdom's view that the country is comfortable with higher oil prices, at least in the short term. Benchmark Brent crude was up 1.56 percent at $79.27 per barrel while U.S. West Texas Intermediate (WTI) crude futures were up 1.49 percent at $68.70. Investors also took in their stride the U.S. announcement of a 10 percent tariff on about $200 billion in imports from China, staring next week. The tariffs will be set at 10 percent until the year-end, but would increase to 25 percent from January 1. U.S. President Donald Trump also warned that he would pursue tariffs on approximately USD 267 billion of additional imports if China takes retaliatory action. China said that the United States has not been "sincere" and it has no choice but to retaliate. The statement, however, gave no timeline or details of the proposed action.

 Oil gains 1 percent on signs OPEC not prepared to boost output - (Reuters) - Oil futures rose more than 1 percent on Tuesday on signs that OPEC would not be prepared to raise output to address shrinking supplies from Iran, and as Saudi Arabia signaled an informal target near current levels. Brent crude LCOc1 futures rose 98 cents, or 1.3 percent, to settle at $79.03 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 gained 94 cents to settle at $69.85 a barrel, a 1.4 percent increase. Prices pared gains in post-settlement trade after data from industry group the American Petroleum Institute showed U.S. crude inventories rose by 1.2 million barrels in the week to Sept. 14 to 397.1 million, compared with analysts’ expectations for a decrease of 2.7 million barrels. Official U.S. government data is due to be released on Wednesday. Ministers from the Organization of the Petroleum Exporting Countries and non-OPEC producers meet on Sunday to discuss compliance with output policies. OPEC sources have told Reuters no immediate action was planned and producers would discuss how to share a previously agreed output increase. Bloomberg reported on Tuesday, citing unnamed Saudi sources, that the kingdom was currently comfortable with prices above $80 per barrel, at least for the short term.  Reuters previously reported that Saudi Arabia wants oil to stay between $70 and $80 a barrel for now, as the world’s biggest crude exporter strikes a balance between maximizing revenue and keeping a lid on prices until U.S. congressional elections. Russian Energy Minister Alexander Novak said an oil price between $70 and $80 was temporary and sanctions-driven, adding the long-term price would stand around $50 a barrel. U.S. Energy Secretary Rick Perry said last week in Moscow that he did not foresee any price spikes once sanctions came into effect, and was positive about Saudi output.

Oil Prices Up Despite Crude Build - - The American Petroleum Institute (API) reported a build of 1.25 million barrels of United States crude oil inventories for the week ending September 14, compared to analyst expectations that this week would see a draw in crude oil inventories of 2.741 million barrels.  Last week, the American Petroleum Institute (API) reported a hefty draw of 8.636 million barrels of crude oil.The API reported a draw in gasoline inventories for week ending September 14 in the amount of 1.485 million barrels. Analysts predicted a small draw of 104,000 barrels in gasoline inventories for the week. Oil prices were trading up in afternoon trade prior to the release of the API data on inventories. At 1:56pm EDT, WTI was trading up 0.80% (+$0.55) at $69.54 per barrel—almost $1.00 above last week’s prices. Brent crude was also trading up, by 0.79% (+$0.62) at $78.71—up slightly from last week’s figures.Tuesday’s rising prices are largely a reflection of persistent supply deficits in Iran and Venezuela and the market’s opinion that Saudi Arabia’s newfound love for $80 Brent will translate into KSA’s reluctance to make up for any real or imagined supply deficits.In fact, S&P Platts cited JODI data today that showed The Kingdom saw in July its highest crude oil inventory drawdown in eight months.US crude oil production as estimated by the Energy Information Administration was down slightly for week ending September 7 at 10.9 million bpd. Distillate inventories were up this week—by 1.536 million barrels, compared to an expected build of 651,000 barrels. Inventories at the Cushing, Oklahoma, site decreased this week by 1.57 million barrels.

Oil prices fall amid surprise growth in US crude stocks - Oil steadied on Wednesday, as concerns that producers may fail to cover a shortfall in supply once U.S. sanctions on Iran come into force outweighed an increase in U.S. inventories. Brent crude futures were up 2 cents at $79.05 a barrel by 0854 GMT, having gained 1.3 percent on Tuesday following media reports that Saudi Arabia, the world's largest oil exporter, was comfortable with prices above $80.U.S. crude futures were up 15 cents at $70.00, after gaining 1.4 percent the day before."Whether or not this (price) development was justified, it is a supply-side development and the market has reacted to it," PVM Oil Associates strategist Tamas Varga said."Trade wars, if anything, should impact oil demand, but that's being completely ignored, which goes to tell me that the market is much more sensitive to supply-side developments ... I think that is going to remain the theme for the next six weeks until the next round of U.S. sanctions against Iran kick off."The focus on oil supply has been reflected in the options market this week, where investors have scooped up large amounts of bullish buy, or call, options.Data from the InterContinental Exchange shows open interest in calls that give the owner the right to buy Brent futures at $80 and $85 by next week grew by nearly 45 percent on Monday and Tuesday to an equivalent of 54 million barrels of oil.Reuters reported on Sept. 5 that Saudi Arabia wants oil to stay between $70 and $80 a barrel to keep a balance between maximizing revenue and keeping a lid on prices until U.S. congressional elections.The Organization of the Petroleum Exporting Countries and other producers including Russia meet on Sept. 23 in Algeria to discuss how to allocate supply increases within their quota framework to offset the loss of Iranian supply. U.S. sanctions affecting Iran's oil exports come into force on Nov. 4. Although many buyers have scaled back purchases, it is unclear how easily other producers can compensate for any lost supply.

Why WTI Could Crash In The Coming Weeks -West Texas Intermediate could drop to US$65 a barrel later this year on the back of extra maintenance work at U.S. refineries, Tom Kloza from the Oil Price Information Service has warned. Speaking on CNBC, Kloza said this maintenance season was the last chance for many refineries to hop on the new bunker fuel train by boosting their capacity for low-sulfur diesel and fuel oil."The next six to seven weeks we're going to see demand for crude drop by about 1 to 1.5 million barrels a day. It's refinery maintenance season," Kloza said.The new bunker fuel emission rules, effective from 2020, stipulate that only vessels using fuels with sulfur content of 0.5 percent or less will be allowed to roam the oceans. The change is part of the International Maritime Organization’s strategy to cut carbon emissions from maritime transport by half by 2050.The change has been touted as beneficial for refiners that are equipped to produce low-sulfur fuel oil and diesel, as well as LNG producers. Yet the adjustment will take time, and during this time demand for crude will be lower. How serious the effect on WTI prices will be remains to be seen, however.For starters, many of those following WTI must have already factored in maintenance season and winter as weakening demand press down on prices. True, Kloza’s comment that this maintenance season will have a more severe impact on prices makes sense, but this additional maintenance should not come as a surprise to market watchers: there has been a lot of coverage about the IMO fuel rules and there’s likely to be even more in the run-up to its entry into effect.Another thing that could curb the downside effect on maintenance season is hurricane season: Florence has hit demand for oil products but, one analyst told Market Watch, “there will be demand destruction in the short term, but a surge in demand in a few weeks when [the region] starts to rebuild.” In other words, amid refinery season, rebuilding what Florence has damaged will apply counter pressure on prices, possibly curbing the decline.

WTI Surges Above $70 After Crude, Gasoline Draw - WTI traders shrugged off API's surprise crude build overnight, breaking back above $70 ahead of DoE data, and extending gains as crude and gasoline inventories drewdown and Cushing stocks dropped again.Despite expectations for a draw, a crude build is more seasonally normal as we enter refinery maintenance season, yet we are still seeing high utilization rates, according to James Williams, president of energy researcher WTRG Economics.Bloomberg Intelligence Senior Energy Analyst Vince Piazza warns that while oil inventories are expected to show a decline in the latest week, concerns about oversupply are mounting. Our immediate focus is weaker global demand growth in 2H, following a softer 2Q in Europe and Asia, along with fears of tepid growth in non-OECD economies next year because of currency depreciation and trade bickering. Global supply of more than 100.2 million a day adds a layer of worry. DOE:

• Crude -2.06mm (-2.5mm exp, -1.77 WHIS)
• Cushing -1.25mm (-800k exp)
• Gasoline -1.72mm (+100k exp)
• Distillates +839k (+1.5mm exp)

We're coming into a tricky time of year when refinery maintenance is starting, which should be bearish for crude inventories. At the same time, throughput has been high for weeks and it's hard to judge when the maintenance will translate  into a build. This is the 5th weekly drawdown in crude in a row... even as refinery runs slowed (-2.2 ppt vs est. -0.8 ppt)

U.S. oil ends at 2-month high after EIA reports 5th stockpile drop in a row - Oil futures climbed Wednesday, with the U.S. benchmark settling at its highest since July after a government report revealed a fifth-straight weekly decline in U.S. crude inventories. The decrease in supplies was smaller than the market expected, but it contradicted the increase reported by a trade group on Tuesday. Traders also weighed expectations for lower global output due to impending U.S. sanctions on Iran, as well as the prospects for energy demand on the heels of a worsening trade dispute between the U.S. and China. The U.S. benchmark, October West Texas Intermediate crude CLV8, +0.72% rose $1.27, or 1.8%, to settle at $71.12 a barrel on the New York Mercantile Exchange—the highest for a front-month contract since July 10, according to FactSet data. The October contract expires at Thursday’s settlement. November Brent LCOX8, +0.34% the global benchmark, added a more modest 37 cents, or 0.5%, to finish at $79.40 a barrel on ICE Futures Europe, a day after posting a climb of 1.3%.  The Energy Information Administration reported Wednesday that U.S. crude supplies fell by 2.1 million barrels for the week ended Sept. 14. The EIA had reported declines in each of the previous four weeks. Analysts surveyed by S&P Global Platts had forecast a fall of 3 million barrels, but the American Petroleum Institute on Tuesday reported an increase of 1.25 million barrels.

Factbox: Escalating US-China trade war shakes up energy, commodities markets — US-China trade hostilities continued to escalate this week as each side announced new tariffs with a number of potential market impacts, including slowing long-term US LNG export growth.  Late Monday, the White House announced new tariffs on $200 billion worth of Chinese goods beginning September 24, including various aluminum and steel items that had been left out of tariffs imposed in March. Hours later, China announced retaliatory tariffs on $60 billion worth of US imports including a 10% tariff on LNG effective the same day. The duty comes as a second wave of US LNG export projects works to secure financing to reach final investment decisions. This new impediment to tapping China's demand, which S&P Global Platts Analytics expects to reach 10 Bcf/d within 10 years, may hurt some some projects' chances of moving forward. "A number of export projects vying for long-term offtake contracts are now effectively barred from the Chinese market, which is expected to account for a third of global LNG demand growth over the next five years," said Ross Wyeno of Platts Analytics. "This could give an advantage to non-US suppliers such as Canada, the Middle East and Russia." Meanwhile, US crude oil exports to China, which reached record levels in June, are safe for now with oil's exclusion in this announcement. The White House statement promised a phase three set of tariffs if China retaliated. That next phase would include an additional $267 billion worth of goods. Here are the key takeaways across commodities:

• LNG - US LNG exports are unlikely to be affected in the near term as cargoes can go to other destinations, freeing up supply to go to China. But a shift in trade flows could affect flexibility in the spot LNG market. **China accounted for 15% of US LNG exports in 2017, according to the US Energy Information Administration. **The US accounted for about 5% of China's LNG imports in 2017, according to Platts Analytics.
• PRICES - Tariffs will likely price US LNG out of the Chinese market, but there is no expected impact on near-term prices. **Platts November JKM was assessed at $11.764/MMBtu Tuesday, with the prompt-month contract falling about 30 cents after rolling to November because of declining autumnal demand.
• INFRASTRUCTURE - In the US, there are at least 25 prospective LNG export projects, accounting for roughly 27.7 Bcf/d of capacity, that are in various stages of pre-development and actively courting buyers.
• METALS  -The US Trade Representative said Monday that more aluminum and steel items from China, including aluminum scrap and stranded wire plus stainless steel and alloy steel products, will be subject to a 10% tariff starting September 24. The tariff rate will increase to 25% on January 1, 2019. Copper, zinc, molybdenum, lead, cobalt, tin and titanium will also be subject to a tariff.
• OIL - Following months of concern about the risk of Chinese duties on US crude, the commodity was excluded from this round of tariffs. **The risk of tariffs contributed to US crude exports to China falling in recent months following a record-high 510,000 b/d in June that accounted for 23% of the country's crude exports, EIA data show. **US crude exports to China could be hindered by a less lucrative spot arbitrage. Platts calculations show WTI is roughly at parity with North Sea Forties crude on a delivered basis into China. But back in July -- when exports were higher -- WTI held a more than $2.50/b discount to North Sea Forties. Economics between WTI and ADNOC's Murban show a similar pattern.

 The Biggest Risk In Today’s Oil Markets - -The oil market is “tightening up,” but the Trump administration could still spoil oil prices if its aggressive trade war against China drags down economic growth.The U.S. stepped up the trade conflict with China on Monday when the Trump administration announced $200 billion in tariffs on Chinese imports. The move had been expected for weeks but trade proponents had hoped that the administration would ultimately shelve the idea when push came to shove.  Not only did Trump move forward with punitive tariffs on China, but he also hinted that another $267 billion in tariffs are under consideration.The trade war could hit the oil and gas markets in several ways. First, the back-and-forth escalation of tariffs could drag down economic growth. The first round of tariffs, which hit $50 billion in Chinese goods, targeted a relatively narrow set of products. But the latest $200 billion in tariffs will raise the cost for a wide array of consumer goods in the U.S., which could slow the economy. Specific industries that are affected by the tariffs will see more concentrated damage.  Second, oil and gas are likely to be specifically affected by the trade war, which wasn’t the case in the previous rounds of tariffs. China announced $60 billion in retaliatory measures on Tuesday, which included a 10 percent tariff on imported LNG from the United States.The problem with the trade fight is that once the tariffs are in place, there is pressure on both sides not to back down. Over the longer-term, the tariff upends the economics of building new LNG export terminals in the United States. According to S&P Global Platts Analytics, China is expected to make up a third of global demand growth through 2023, with consumption rising by 154 percent over 2017 levels.

Trump accuses Mideast producers of pushing oil price higher -- US President Donald Trump called on Thursday for OPEC to take action reducing oil prices as many of the group's key members prepare to meet with their Russian allies in Algeria this weekend. We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember," wrote Trump in a tweet. "The OPEC monopoly must get prices down now!"His remarks come as Brent crude trades just under $80/b in London ahead of OPEC's monitoring committee meeting with its allies led by Russia scheduled for Sunday. Saudi Arabia's oil ministers Khalid al-Falih and his Russian counterpart Alexander Novak will both attend the summit, which isn't scheduled as a policy-setting gathering.OPEC, Russia and nine other producers outside the grouping on June 23 agreed to raise their collective output by 1 million b/d but have left open how these allocations will be distributed.Trump has previously used Twitter as a platform to accuse OPEC of inflating oil prices. However, US sanctions due to come into force on Iran in November are expected to reduce supplies of crude by up to 1.4 million b/d, according to S&P Global Platts Analytics. Iran's oil minister Bijan Zanganeh told Platts this week that he would veto any OPEC deal which would threaten the country's market share. He has also pulled out of attending the meeting in Algeria.

 Oil prices climb amid fall in US stockpiles, supply worries - Oil prices were mixed on Thursday after U.S. President Donald Trump called on OPEC to "get prices down now!" ahead of a meeting of major oil exporters.Global benchmark Brent crude was down by 46 cents at $78.94 by 9:44 a.m. ET (1344 GMT), after gaining half-a-percent on Wednesday.U.S. West Texas Intermediate crude rose 47 cents to $71.59 a barrel, after briefly dipping following Trump's tweet. The contract rose nearly 2 percent the previous session.The North Sea benchmark has been trading close to $80 a barrel, near its highest for almost four years, on expectations that U.S. sanctions against Iran, OPEC's third biggest producer, will reduce supply in world markets.The U.S. sanctions were imposed by Trump in response to Iran's nuclear program, which the White House says is designed to produce weapons, an allegation Tehran denies.The Organization of the Petroleum Exporting Countries and other producers, including Russia, meet on Sunday in Algeria to discuss how to allocate supply increases to offset the loss of Iranian barrels.The meeting is unlikely to agree an official rise in crude output, although pressure is mounting on top producers to prevent a spike in prices.U.S. President Donald Trump weighed into the debate via Twitter on Thursday, urging OPEC to cut prices."The OPEC monopoly must get prices down now!," Trump said."We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember."

Trump blasts OPEC, sending oil prices lower: 'Monopoly must get prices down now'  - President Donald Trump tweeted on Thursday the Organization of the Petroleum Exporting Countries needs to keep crude prices lower because of the military protection the U.S. provides for the region."The OPEC monopoly must get prices down now," Trump said in the message. Tweet. Futures prices for West Texas Intermediate crude, the U.S. benchmark, dipped slightly following the tweet before recovering and then retreating once again to trade roughly flat. On Wednesday, WTI climbed back above $70 a barrel. The price of oil is up 7 percent in the last month and nearly 18 percent for 2018. The cartel, which includes Saudi Arabia and Iran, will meet this weekend with non-OPEC producers such as Russia to discuss production levels. That will be the last meeting before the November U.S. midterm elections. Trump has called on OPEC to take action to lower oil prices several times this year. The 15-member cartel, along with the Russia-led producers, has capped output since January 2017 in order to end a prolonged and punishing oil price downturn that bankrupted hundreds of U.S. energy companies and heaped financial pressure on crude exporters. The rebound gained steam earlier this year after production problems in countries like Venezuela and Libya caused the group to cut more deeply than they intended. The Trump administration also boosted prices by restoring sanctions on Iran, OPEC's third biggest producer, and saying it aims to cut the nation's exports to zero by November.OPEC and Russia's alliance of roughly two dozen producers agreed in June to slightly raise output and restore some of the barrels they took off the market, in part to compensate for the loss of the Iranian supplies. Despite that, oil prices have moved back towards four-year highs near $80 a barrel for international benchmark Brent crude and above $70 for WTI. The average cost of gasoline has also remained stuck at multi-year highs at roughly $2.85 a gallon and shows few signs of falling before Americans go to the polls in November. The Trump administration set a deadline for oil buyers to cut imports from Iran for Nov. 4, just two days before the midterm elections.

Crude Oil and Gasoline Tumble in Twitterverse Tizzy -- Just one of the four commodity benchmarks Rigzone tracks was unfazed by a tizzy in the Twitterverse on Thursday. “WTI and Brent were up this morning on continued supply concerns after yesterday’s Energy Information Administration (EIA) Weekly Petroleum Status Report showed another withdrawal,” said Tom Seng, Assistant Professor of Energy Business in the University of Tulsa’s Collins College of Business. “But, Trump’s demand for lower prices from OPEC tumbled prices this afternoon.” Seng was referring to a tweet from President Trump this morning accusing members of the Organization for the Petroleum Exporting Countries of continuing to “push for higher and higher oil prices!” The President also urged the “OPEC monopoly” to “get prices down now!” The October WTI futures price lost 32 cents to settle at $70.80 a barrel. Thursday’s settlement price was seven cents higher than the intraday low. The WTI peaked at $71.81. The Brent futures price for November delivery also declined, falling 70 cents to settle at $78.70. Also declining was the front-month price of a gallon of reformulated gasoline, which lost just under a penny to settle at $2.01. Holding the distinct honor Thursday of exhibiting positive momentum was the Henry Hub futures price. The benchmark for October added seven cents to settle at $2.98. Seng noted that the Henry Hub ended trading higher as the market digested EIA’s latest Weekly Natural Storage Report, which indicated a 20-percent year-on-year decrease in total gas in storage. In addition, the report showed that gas in storage is 18 percent lower than the five-year average for this time of year, he said. 

Oil futures end lower as Trump demands that OPEC 'get prices down’ - Oil futures ended with a loss on Thursday after President Donald Trump in a tweet called for the Organization of the Petroleum Exporting Countries to maintain lower crude-oil prices.“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!” Trump tweeted on Thursday.October West Texas Intermediate crude CLV8, -0.49% lost 32 cents, or nearly 0.5%, to settle at $70.80 a barrel on the New York Mercantile Exchange. The U.S. benchmark contract on Wednesday closed at the highest for a front-month contract since July 10, according to FactSet data. The October contract expired at the end of session. November WTI crude, which became the front month, shed 45 cents, or 0.6%, to settle at $70.32.  Global benchmark November Brent meanwhile, fell 70 cents, or 0.9%, to finish at $78.70 a barrel on ICE Futures Europe, pulling back from an intraday high of $79.83.Trump’s comments came ahead of a closely watched meeting in Algiers of a committee made up of representatives of OPEC members and its outside allies on Sept. 23. The producers had agreed in June to boost production in an effort to get output nearer a previously agreed ceiling. The June agreement was seen, in part, as a response to U.S. pressure.Oil prices have been on the rise, boosted in part by Trump’s decision to pull out of the Tehran nuclear accord and renew sanctions on Iran aimed at sharply curtailing the major producer’s exports. Trump’s latest tweet also came after a news report earlier this week said officials from Saudi Arabia, OPEC’s de facto leader and the crucial swing producer, were growing comfortable with the possibility of crude prices above $80 a barrel.

US spends $81 billion a year to protect global oil supplies, report estimates - The United States military spends about $81 billion a year to protect oil supplies around the world and keep fossil fuels flowing into American gas stations, according to new analysis.Securing America's Future Energy, a think tank that advocates for reducing U.S. dependence on oil, released the study the same day President Donald Trump claimed that some Middle Eastern countries are pushing up crude prices while benefiting from U.S. military protection.The $81 billion price tag is likely "very conservative" and doesn't include the full cost of the 15-year war in Iraq, according to SAFE, whose CEO Robbie Diamond also leads the pro-electric car group the Electrification Coalition.The estimate pencils out to 16-20 percent of the Defense Department's annual base budget, showing the nation's oil habit has a direct military cost, SAFE said. It also means the government subsidizes the cost of oil to the tune of $11.25 per barrel and the price of transportation fuels like gasoline and diesel by 28 cents a gallon.U.S. crude oil production is poised to reach 11 million barrels a day and eclipse output from top producer Russia, but the United States still imports roughly 8 million barrels a day.On Thursday, Trump renewed his call for the 15-nation oil producer group OPEC to tamp down crude prices, which are near four-year highs. Trump suggested that OPEC members like Saudi Arabia, Iraq and Kuwait owe the United States, saying "We protect the countries of the Middle East, they would not be safe for very long without us.  "To be sure, government agencies like the Environmental Protection Agency and the National Highway Traffic Safety Administration don't factor in the cost of protecting oil supplies when they set fuel policy. The agencies say the cost is actually zero because the Pentagon wouldn't save any money if it stopped defending foreign crude flows. It would simply reallocate those funds elsewhere. A 1992 Congressional Research Service assessment came to a similar conclusion, SAFE notes. However, SAFE says this approach doesn't account for opportunity cost. In other words, the military could devote budget dollars to other priorities if it wasn't focused on protecting the parts of the world that supply the nation with oil, particularly the Persian Gulf. Americans "spend somewhere around $3 per gallon, but we're really paying a lot more because of all the operations in the Middle East," said retired General Charles Wald, vice chairman and senior adviser at consulting firm Deloitte and a member of SAFE's Energy Security Leadership Council.

Oil stable, OPEC in focus after Trump call for lower prices --Oil prices were mixed on Friday after falling in the previous session as U.S. President Donald Trump urged OPEC to lower crude prices ahead of its meeting in Algeria this weekend.International benchmark Brent crude for November delivery was up 5 cents at $78.75 a barrel by 0424 GMT.U.S. West Texas Intermediate crude for October delivery fell 8 cents to $70.24 a barrel.Trump called on the Organization of the Petroleum Exporting Countries (OPEC) to lower prices, saying on Twitter "they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices."OPEC and its allies are scheduled to meet on Sunday in Algeria to discuss how to allocate supply increases to offset a shortage of Iran supplies due to U.S. sanctions.    Trump's remarks just days before the OPEC meeting put "a focus on the likely supply impacts of U.S.-led Iran sanctions.""The market had until that point been trading fluidly with the assumption that Saudi Arabia is now comfortable with Brent at $80 or even higher, which is challenging the market's long-held supposition that prompt Brent between $70 and $80 was OPEC's sweet spot," Innes added.Brent has been trading just below $80 a barrel, backed by concerns of supply shortages from looming U.S. sanctions against Iran, which are set to take effect in November. "Iranian crude exports are coming earlier and bigger-than-expected, at a time seasonal demand is strong. With spare capacity also falling sharply, the market remains exposed to supply-induced price shocks," according to a report by ANZ Bank.

Trump sets implied oil price target below $80: Kemp- (Reuters) - The United States has sent mixed messages to OPEC and its allies over the last week about whether they need to do more to raise oil production and hold down prices."The OPEC monopoly must get prices down now" President Donald Trump demanded on Twitter on Sept. 20."We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices," he complained."We will remember," the president added, implying that U.S. security support might be reassessed if OPEC members fail to cut crude prices.But just seven days earlier, the president's own energy secretary had told reporters that Saudi Arabia, OPEC and Russia "are to be admired and appreciated" for raising their production to avoid a spike in oil prices.The mixed messages illustrate the narrow and difficult path the administration is trying to take imposing tough sanctions on Iran's oil exports without sending prices sharply higher.The United States is coordinating policy on sanctions and production closely with both Saudi Arabia and Russia; the U.S. energy secretary has met both his Saudi and Russian counterparts in the last fortnight.At the same time, the White House is anxious to avoid being blamed by U.S. motorists for any further escalation in the cost of oil and gasoline, especially in the run-up to a tough congressional election on Nov. 6, but perhaps afterwards too.In effect, there are two separate policies, or at least two different messages, one run by the president, and the other by his administration. It is not unusual for governments to try to run multiple policies and messages, addressed to different audiences and intended to achieve different objectives, though it risks creating confusion and disappointment.The president has criticised OPEC for rising oil prices four times on Twitter this year as well as in an interview with Fox News (https://tmsnrt.rs/2MUmIWZ).The president's tweets have generally been prompted when Brent crude prices have recently risen sharply and are in the $75-80 range.From the president's behaviour, it is possible to infer that he doesn't want prices to rise above $80 per barrel and would prefer them closer to $70 or even below.The president's tweets are creating an implicit price target, even if officials have been careful not to specify an explicit one. So far, the president has been careful to blame "OPEC" and unspecified countries in the "Middle East" for rising oil prices, eschewing identifying individual countries by name.As a practical matter, Saudi Arabia, the United Arab Emirates and Kuwait are the only OPEC members that have significant volumes of spare capacity and could raise output.

Is Oil On Its Way To $80? - Oil prices gained this week on outages in Iran and data showing demand from the United States in August was the highest since 2007. “Exports are already down quite a bit and will probably continue to fall,” from both Iran and Venezuela, UBS Group AG analyst Giovanni Staunovo told Bloomberg. Meanwhile, strong U.S. demand is “helping the market to stay in a deficit.” In early trading on Friday, Brent was flirting with $80 per barrel. OPEC+ is set to meet in Algiers this weekend to discuss some of the details stemming from the June decision to increase collective output by 1 million barrels per day. Iran’s oil minister has vowed not to attend in protest of what Iran views as a Saudi attempt to take over market share from Iran, in collusion with the United States. Ultimately, the meeting might not amount to much, and Saudi Arabia could increase production anyway, offsetting declines in Iran. “It’s likely to be a meeting high on politics and low on decisions,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S, according to Bloomberg. “The producers that count are producing at will.”  India’s government may ask its state-owned oil companies to lock in oil at hedged prices, both to avoid the possibility of a price spike as Iran sanctions bite, but also because of the uncertain value of the rupee. India imports about 80 percent of its oil, and the sharp depreciation of the rupee this year has magnified the cost of imports. Meanwhile, India will use rupees to pay for oil from Iran beginning in November after U.S. sanctions take effect.   Russia’s oil companies are enjoying a bonanza due to higher oil prices but also a weaker ruble. With costs in rubles but earnings in U.S. dollars, the cash is pouring in, pushing an index of Russian oil companies to a record high. The danger is that American sanctions related to the chemical poisoning attack in the UK or election interference in the U.S. could target Russian companies. "All investors are asking themselves -- OK, the Russian companies look attractive right now, but what about the next six months, what about the next 12 months?" Alexandre Dimitrov, head of Emerging Europe EQ Funds at Erste Sparinvest Kap Mbh, told Bloomberg.

Oil Prices Rise As Rig Count Sees Minor Dip - Baker Hughes reported a loss of two rigs in the United States this week, bringing the total number of active oil and gas rigs to 1,053 according to the report, with the number of active oil rigs decreasing by one to reach 866 and the number of gas rigs holding steady for the second week in a row at 186. The miscellaneous rig count fell by one rig.The oil and gas rig count is now 118 up from this time last year.At 12:03pm. EDT on Friday, WTI Crude was trading down 0.13 percent at $70.23—but over $1 per barrel up from this time last week, while Brent Crude was trading down 0.35 percent at $77.95—a few pennies down from this time last week.The lower prices are partially attributed to President Donald Trump’s Twitter Chastisement on Thursday that berated OPEC for manipulating prices upwards as Brent neared the scary $80 per barrel mark. Limited the price decline is reports that Japan and South Korea both have ceased all crude oil trading with Iran, and India has significantly reduced its purchases of Iranian oil this month and next. Speculation that Libya may be forced to close its Wafaa oilfield completely if a current blockade of an airport there continues.Canada’s oil and gas rigs for the week lost 29 rigs this week after adding 22 rigs last week, bringing its total oil and gas rig count to 197, which is 23 fewer than this time last year, with an 13-rig decrease for oil and a 16-rig decrease for gas for the week.On the production side, the EIA’s estimates for US production for the week ending September 14 were for an average of 11.0 million bpd. By 1:09pm EDT, WTI was trading up 1.02% (+$0.72) at $71.04. Brent crude was trading up 0.08% (+$0.06) at $78.28 per barrel.

Permian Up, Cana Woodford Down as US Rig Count Pulls Back - The U.S. rig count pulled back slightly to 1,053 for the week ended Friday (Sept. 21) as gains in the Permian Basin countered a drop in activity in the Cana Woodford, according to data from Baker Hughes, a GE Company (BHGE).The United States saw one oil-directed rig and one miscellaneous rig exit the patch, while natural gas rigs finished flat at 186. The domestic count for the week outpaced its year-ago tally by 118 rigs.Two directional units and two horizontal units packed up shop, while two vertical units returned to action. Offshore drilling activity held steady as the Gulf of Mexico rig count finished flat at 18, according to BHGE.Canada, meanwhile, dropped 29 rigs for the week -- 13 oil-directed and 16 gas-directed -- to finish at 197, down from 220 a year ago. The combined North American rig count stood at 1,250, versus 1,155 active units at this time last year.Collapsed natural gas basis differentials didn’t stop the oil-focused Permian Basin from adding five rigs to finish at 488, up more than 100 rigs year/year. The Cana Woodford, meanwhile, saw its tally drop by six units. According to a more detailed breakout of BHGE data by NGI’s Shale Daily, two rigs exited the SCOOP (aka, South Central Oklahoma Oil Province) as four packed up in the STACK (aka, the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties).In other changes, the Utica Shale dropped two rigs to fall to 20 active units, 10 behind its year-ago count. The Eagle Ford Shale and Granite Wash each added onr rig, while one rig packed up in the Williston Basin.Among states, Texas, host to a sizeable chunk of the Permian, unsurprisingly proved the biggest mover for the week, adding six units to grow its tally to 531 from 453 a year ago. Oklahoma on net dropped three rigs for the week. Ohio and Alaska each saw two rigs exit the patch, while one rig departed in North Dakota. Constraints to the north and to the west combined to clobber West Texas spot prices during the week, including a new all-time low at the Waha hub, and analysts see more volatility on the way as Permian producers wait on additional takeaway capacity.

 Brent crude close to four year highs as US demand increases - The oil price remained strong this week as American oil demand increased and the country’s President upped his demands on OPEC to lower prices. In Friday trading, Brent crude was priced above US$79 with WTI close to US$71 a barrel. American oil demand is on the increase and stockpiles declined to a three-year low last week, as refiners and exporters produce at record levels. This is usually the time of year when refineries should be undergoing maintenance, but demand remains high. The US Energy Information Administration said that inventories were down more than 2mln barrels last week. US crude exports rose to 2.37mln barrels as international buyers are attracted by the WTI discount to Brent. Many oil buyers have begun to cut back on Iranian crude orders and this is causing tightness in the market. The American president, Donald Trump is laying the blame for the price increase firmly with the OPEC producers, demanding “the OPEC monopoly must get prices down now,” and threatening that countries in the Middle East “would not be safe for very long” without American support. Many analysts believe that President Trump needs to understand the fundamentals of demand and supply to see that robust American demand is also fueling prices.

OPEC/non-OPEC coalition talks intensify ahead of key Algiers summit- With a critical meeting in Algiers fast approaching, a fractured OPEC and its allies are still searching for consensus on how members with spare output capacity can equitably distribute the extra barrels they intend to pump without upsetting those unable to produce more. The Saudi and Russian energy ministers met over the weekend to align their positions, while delegates on a six-country technical committee are scheduled to hold a conference call Monday to mull various proposals. Meanwhile, Iran's OPEC governor accused Saudi Arabia and Russia of being in cahoots with the US to undermine other OPEC members and destabilize the oil market. The posturing comes ahead of Sunday's summit of the OPEC/non-OPEC monitoring committee in the Algerian capital, which reportedly will be attended by ministers from almost the entire the 24-country producer coalition. There, the group aims to reveal a production policy that can calm market fears of tight supplies in the months ahead, while remaining nimble enough to prevent a glut if global demand proves softer than expected. The coalition on June 23 agreed to raise output by 1 million b/d, but left unsettled how that will be allocated, with Iran insisting that members stick to individual quotas and Saudi Arabia saying the deal involves a collective production ceiling. "As things stand, the overriding theme across the oil market is one of uncertainty," said Stephen Brannock, an analyst with brokerage PVM Oil Associates. "Market players are bracing for the full impact of US sanctions on Iran's export capabilities and the full extent of Venezuela's downward spiral. Add in a sprinkling of downside risks on the demand side of the oil equation and you have all the ingredients for price fireworks." S&P Global Platts Analytics expects 1.4 million b/d of Iranian oil supplies to leave the market by November, when the US sanctions go into force. Venezuela, which pumped 1.22 million b/d in August, according to the latest Platts survey of OPEC production, could see output fall to 1 million b/d in 2019, Platts Analytics forecasts. Politically unstable Libya also presents a supply risk. Meanwhile, on the demand side, Platts Analytics sees a negligible impact from the US-China trade dispute, though OPEC's own analysis arm has projected a contraction of some 350,000 b/d in global consumption in a worst-case scenario of ratcheting tariffs.

Saudi Arabia faces a tightrope walk between Trump and fellow oil producers at OPEC meeting - Analysts don't expect Saudi Arabia and its allies to make a major policy decision at this weekend's meeting of oil- producing nations, but the Saudis face another challenge: appeasing President Donald Trump while keeping the kingdom's vision for a grand alliance of crude producers on track. Trump wants the Saudis to boost output to prevent oil prices from spiking as his administration restores sanctions on Iran, OPEC's third biggest producer and Riyadh's chief regional rival. If Saudi Arabia had any doubts about Trump's expectations, the president reminded OPEC in an early morning tweet on Thursday. @realDonaldTrump: We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!But Saudi Arabia faces threats to its leadership among roughly two dozen oil-producing nations if those countries perceive the kingdom is doing Washington's bidding at their expense.This weekend at a meeting in Algeria, the Saudis hope to advance their goal of making the ad hoc alliance — formed two years ago to end a devastating oil price downturn — more permanent ahead of its next major meeting in December. The 15-nation OPEC cartel and a group of other producers led by Russia have voluntarily throttled back their output since 2017 to boost oil prices. Now, the Saudis and OPEC want to institutionalize the alliance."The Saudis do want to have as amicable a discussion as possible, and they want to prepare for the launch of this organization in December. That argues against rubbing new supply in Iran's face. They have a balancing act to strike," said Robert McNally, president and founder of Rapidan Energy Group.While kowtowing to Trump could raise questions about Saudi leadership, failing to send a clear signal to the mercurial U.S. president could put OPEC in Trump's crosshairs. This comes as Congress has revived legislation aimed at preventing OPEC from manipulating oil prices. Analysts say the Saudis are likely worried Trump will back the bipartisan legislation if OPEC crosses him, something presidents George W. Bush and Barack Obama refused to do.

Exclusive: OPEC and allies consider oil output boost as Iranian supply falls - source (Reuters) - OPEC and other oil producers are discussing the possibility of raising output by 500,000 barrels per day (bpd) to counter falling supply from Iran because of U.S. sanctions, a source familiar with the discussions told Reuters. The development comes as oil reached $80 a barrel this month, prompting U.S. President Donald Trump to call again on the Organization of the Petroleum Exporting Countries (OPEC) to help to bring down prices. OPEC, Russia and other allies agreed a deal in late 2016 to cut supply, but after months of cutting by more than the pact had called for, they agreed in June to boost output by returning to 100 percent compliance. That equates to an increase of about 1 million bpd. The current discussions are not finalised, but it would mean that oil producers would need to lower compliance to less than 100 percent, the source said on Friday. Benchmark Brent oil prices LCOc1 fell by more than $1 on the news of a potential output boost, slipping to below $79 a barrel. OPEC and its non-OPEC allies will gather in Algeria over the weekend to review compliance with existing cuts. Three OPEC and non-OPEC sources told Reuters on Friday that latest data has shown that OPEC and its allies supplied less oil in August to world markets than they did in July, mainly because of a drop in Iranian production. In July OPEC and non-OPEC producers reduced output by 9 percent more than called for in their pact. The cut in August was even higher, the three sources said without providing exact figures, which will be discussed in Algiers this weekend. OPEC sources said that any official action to raise output would require OPEC to hold what it calls an extraordinary meeting - a proposal that is not on the table yet. But the joint OPEC and non-OPEC ministerial committee known as the JMMC, which meets on Sunday, can still recommend a further increase in output if needed, the sources said. “There are discussions to increase production by another 500,000 bpd. They (OPEC and non-OPEC) can increase output when they meet in December,” the source said, referring to the next formal OPEC meeting, scheduled for Dec. 3.

In Saudi Arabia, black gold is still king - Saudi Arabia’s young crown prince may be looking to the post-oil future, but state oil monopoly Aramco is setting itself up for another two decades of growing demand.The much-touted Aramco IPO so coveted by Donald Trump has been cast to the wayside, making way for more elegant plans by the OPEC kingpin. “All the research looking at crude oil shows there is no way we see peak oil demand until 2040,” said Peter Volkmar, a graduate fellow with Rice University’s Center for Energy Studies in Houston, Texas.“Everyone in the developing world is reaching that level of income where they can buy private vehicles, and they’re doing it at a rate similar to the rate Americans did and developed countries did,” he said.“If we’re moving to a world where car ownership in China is anything like America, oil demand is going to go through the roof.” Volkmar, whose PhD focuses on the behavior of oligopolies in the crude oil and natural gas markets, says Riyadh is indeed looking to diversify its economy — but not away from oil.Instead, he anticipates a drive to slash domestic consumption, thus freeing up the kingdom’s cheaply-extracted oil for lucrative export.

Push to Execute Saudi Clerics Rattles Kingdom’s Power Structure —Saudi authorities are seeking the death penalty for three prominent clerics, rights activists and a government official said, testing the unwritten code that has kept the kingdom’s rulers in power. Crown Prince Mohammed bin Salman and his father, King Salman, have jailed activists, businessmen and government officials as part of their efforts to reshape Saudi society and economics. But Saudi clerics have long been a power unto themselves, with fame and influence beyond that of others caught up in recent crackdowns. The jailed clerics are among Saudi Arabia’s best-known and most popular Sunni Muslim religious figures: Salman Al-Odah, who has more than 14 million Twitter followers; Awad al-Qarni, a popular and outspoken cleric; and Ali Alomari, a TV preacher.They were arrested a year ago in a roundup of imams with large followings for not openly supporting the government’s pressure campaign against Qatar, The Wall Street Journal reported, citing rights activists. They are now facing trials in a national-security court on charges that include conspiring against the monarchy and supporting terrorism, and prosecutors are seeking the death penalty, said relatives, activists and the government official. A senior Saudi official said the clerics are “under investigation for constituting a danger to society because they belong to terrorist organizations.” The senior official said Saudi prosecutors and judges were independent and that the crown prince would play no role in a verdict or punishment, if any. “Nobody in Saudi Arabia is being investigated because of their political views,” the senior official said. “The arrests of these individuals and others is in line with the kingdom’s keenness with the international community to exert efforts to combat the extremism that the world suffers from and to combat terrorism in all its forms,” the official said.

Made in America: Shrapnel in Yemen ties US bombs to civilian deaths - Last month, a CNN investigation found remnants of a US-made bomb at the scene of an airstrike that left dozens of schoolboys dead. Now, an independent Yemen-based human rights group called Mwatana has given CNN exclusive access to a trove of documents that show fragments of US-manufactured bombs at the scene of a string of other incidents since 2015, when the civil war began. In each of those cases, civilians were either killed or put at risk.Mwatana, which documents violations by all parties in Yemen’s conflict, used its network of trained field researchers to photograph evidence at the scene of strikes. The group consulted weapons experts to identify the weapons used from serial numbers found on the fragments. Mwatana was recognized last month with an award by US body Human Rights First.While CNN was not on the ground, we have made our own checks using image metadata and publicly available government websites linking each of these incidents to a US manufacturer. An internationally renowned weapons expert also analyzed each image for CNN. The incidents give a snapshot of US involvement in Yemen’s conflict through its support for the Saudi-led coalition that is battling a Houthi-led rebel insurgency. The United States says it does not make targeting decisions for the coalition. But it does support its operations through billions of dollars in arms sales, the refueling of Saudi combat aircraft and some sharing of intelligence.

Over 5 million children face starvation as US-backed forces attack Yemeni aid port  -- Soaring food and fuel prices and dwindling supplies have driven another million Yemeni children to the brink of famine, bringing the total number of children facing starvation to 5.2 million, the UK-based aid group Save the Children warned in a report issued Wednesday.The report appeared as the US-backed coalition led by Saudi Arabia and its fellow Persian Gulf oil monarchies announced an escalation of their offensive against the Yemeni port city of Hodeidah, which constitutes the sole lifeline for food, medicine and fuel for some 80 percent of the country’s population.Save the Children warned that any disruption in the supplies flowing through Hodeidah could “cause starvation on an unprecedented scale” and risk killing “an entire generation of Yemeni children.” The United Nations food agency, meanwhile, reported that it anticipates its current estimate of 8.4 million Yemenis confronting famine will rise by another 3.5 million, given rising food prices—35 percent over the past year alone—and the collapse in the value of the country’s currency. “Time is running out for aid agencies in Yemen to prevent this country from slipping into a devastating famine,” David Beasley, the executive director of the World Food Program (WFP), warned in a statement Wednesday. The country is already facing what the UN has termed the worst humanitarian crisis on the planet and the threat of the worst famine in modern history, with the WFP reporting that 18 million Yemenis, almost two thirds of the population, do not know where their next meal will come from. Conditions have descended to the point that in some areas of the country families are trying to stay alive by eating leaves. In the capital of Sana’a, fuel shortages have led to streets being emptied of vehicles, leaving people unable to transport the wounded and sick to hospitals.  New deaths have also been reported as a result of a cholera epidemic—the worst in modern history—that has affected over a million Yemenis and claimed the lives of well over 2,000. UN officials have warned that the siege of the city could claim as many as a quarter of a million lives, while the blocking of aid through the port could kill millions more.

America’s Death Trail in Yemen, and the Importance of Showing Graphic Images of War - Admittedly, it’s not an easy photograph to look at. Children—or at least what’s left of them after American bombs ripped through their school bus in Saada, Yemen, on Aug. 9—lie in a heap in the back of a pickup truck. It’s a veritable mosaic of human destruction. Vibrant hues of red, pink, blue, and yellow are punctuated by blacks, greys, and skin tones. Muscle tissue erupts from shredded flesh, mouths hang slightly agape, and charred, mutilated limbs protrude like gaunt twigs, their sources indistinguishable amidst the carnage. The video footage is even worse. A minute-long tape shows a father sobbing and wailing hysterically, shaking the pickup carrying his son’s corpse. He desperately kisses the dead boy’s hand, and for moment lifts him by the arm in an apparent effort to wake him. As he lays the body back down, his face betrays mournful resignation to his new reality. Another clip. Children’s screams and frantic shouts sound in the background as the camera pans across bodies—some dead, looking like debris, others attempting to crawl from the blast zone, bloodied and twisted. One child sits in the mud, shell-shocked, his leg shredded by the blast. These searing images document a masterwork of unbounded cruelty for which American tax dollars supplied the medium, and which American apathy has enabled. For the last three years, the United States has been providing military and logistical support to a Saudi-led coalition of Sunni Muslim countries trying to restore Yemen’s internationally recognized Hadi government which was deposed by Shia Houthi rebels in 2015. Claiming to be fighting against Iranian influence in the region (a connection the rebels deny), the coalition has been targeting civilians and civilian infrastructure. The Saada attack killed over 50 people, 44 of whom were children between the ages of six and 11. Despite their propensity to offend viewer sensibilities, these scenes are necessary for American audiences. Images have a unique power to humanize brutality—to connect terms like “civilian casualties” and “collateral” to faces across the globe belonging to people who, as it turns out, look an awful lot like us. Footage can sway public opinion and catalyze policy change by delivering us from our detachment and laying bare our egocentrism.

Russian aircraft shot down during Israeli missile attack on main Syrian government port - Latakia, Syria’s major port city and a stronghold of President Bashar al-Assad’s government, came under a missile attack on Monday, apparently downing a Russian military plane with 14 military personnel aboard. The strikes came within hours of Russia and Turkey announcing a joint agreement to forestall a Russian-backed government offensive in the northwestern province of Idlib that had threatened to trigger a major Western intervention and a potential confrontation between the world’s two major nuclear powers, the US and Russia. The state-owned Syrian news agency SANA said that the missile attacks were aimed at the Technical Industries Corporation, which is connected to the Syrian defense ministry and is reportedly involved in the production of missiles.Syrian government sources said that the attacks came from the Mediterranean Sea, where both the US and Russia have built up naval forces in recent weeks amid rising tensions in Syria.The missile strikes apparently took place near a major Russian airbase at Hmeymim.Syrian sources claimed that the country’s air defense systems brought down a number of the missiles, which they said had been fired by Israel. Russian sources attributed the attacks to four F-16 fighter jets that had apparently flown over Lebanon and the Mediterranean to attack the port city.  Israel’s Jerusalem Post speculated that “Russian-Israeli coordination may have been involved.” The Russian and Israeli military commands have established close “deconfliction” ties, and it is widely believed that Israeli strikes on Iranian assets in Syria have been cleared in advance with Moscow.But there were reports that Russian air defense systems were involved in shooting down the missiles fired at Latakia. The Russian Defense Ministry also reported that one of its Il-20 aircraft with 14 people aboard had gone off the radar screens during the attack, raising the prospect that it had been shot down by the Israeli warplanes.

 Russia blames Israel after military plane shot down off Syria - Russia has said Syria shot down one of its military planes - but laid the blame for the deaths of the 15 personnel on board with Israel.The defence ministry said Israeli jets put the Il-20 plane into the path of Syrian air defence systems on Monday after failing to give Moscow enough warning of a strike on Syrian targets.The Il-20 disappeared off the radar at about 23:00 local time (20:00 GMT).The Israel Defence Force (IDF) has expressed "sorrow" over the deaths. However, in a statement released on Twitter, it added: "Israel holds the [Syrian President Bashar al-]Assad regime, whose military shot down the Russian plane, fully responsible for this incident."It went on to say its jets were back in Israeli airspace by the time the missiles were launched. Israel - which also blamed Iran and Hezbollah - rarely acknowledges carrying out strikes on Syria, but an Israeli military official recently said it had hit more than 200 Iranian targets in Syria over the past 18 months.

Syria – Israel’s Provocation Kills Russian Soldiers – Moscow Will Take Political Revenge -Yesterday Turkey and Russia agreed on a further de-escalation in Idelb province in Syria (see the update here). This agreement takes away the chance of an imminent wider war in which the U.S. and some of its allies would use a fake 'chemical attack' as a pretext to launch missiles against a large number of Syrian government targets and military positions.A peaceful solution of the Idleb situation is unsatisfying for Israel. The successful Syrian defeat of the Jihadi enemy inside the country would allow Syria and its allies to concentrate their forces against Israel. Israel wants the Syrian government destroyed and the country in chaos.On Sunday September 16 Israel tried to hit an Iranian Boeing 747 freight plane at Damascus airport. The plane allegedly carried an Iranian copy of the Russian S-300 long range air defense System for the Syrian army.On Monday around 10:00pm local time 4 F-16 jets of the Israeli airforce, coming from the sea, launched missiles against at least three targets on Syria's coast. The strike came only hours after Israel released satellite images of what it called "strategic targets" in Syria. The integrated Syrian and Russian air-defenses responded.The Israeli air force had warned the Russian forces in Syria only one minute before the strike. A Russian IL-20 electronic warfare airplane (red line) was preparing to land at the Russian airport near Latakia just as the Israeli attack (blue) happened.

The Major Attack On Syria Followed Putin-Erdogan Agreement For Demilitarized Zone In Idlib -  The world once again was taken to the brink of World War 3 Monday night, and the situation is still extremely dangerous. A massive wide-ranging assault on multiple Syrian provinces, including the coastal cities of Latakia and Tartus, occurred Monday evening reportedly by Israel and possibly with the help of France or the US, though the Pentagon is denying any US assistance during the assault. With Syrian and Russian air defenses responding during the over hour-long attack which targeted among other things an alleged chemical weapons research center, and in the confusion of missiles cross the sky, a Russian maritime patrol plane was shot down with 14 personnel on board. The Pentagon is claiming it was Syrian defense which "accidentally" downed the plane, while Russia is pointing out its radar observed a French frigate firing in the area just before the plane went down. Regardless, this is an incredibly dangerous situation which puts world powers closer to major war. And crucially, the whole event came immediately after Russia and Turkey announced they've agreed to establish a "demilitarized zone" around Idlib. The Russian Ministry of Defense (MoD) announced just hours before the reported Israeli attack was initiated that Russia and Turkey have agreed to establish a 15-20km demilitarized zone along Syrian government positions.This means the widely reported Syrian-Russian offensive is off for the time being, according to the Russian MoD.But this raises the following questions given the timing of Monday's night's escalation: with Putin negotiating for a 'world power deescalation' over Idlib after the US threatened attack, was Monday's attack part of an Israeli (and Western allies) strategy for keeping regime change in Damascus on the table? Why escalate now?  This at the very least appears a conscious effort to keep the fires burning in Syria, to prevent Putin from being in the driver's seat, and to continue to provoke hostilities with the Tehran-Damascus axis, and to further keep alive the possibility of the eventual military ouster of Assad.

Here's How Turkey Stalled The Syrian-Russian Offensive On Idlib -Turkey is pushing further reinforcements of troops, commando units and tanks into the northern Syrian city of Idlib and around it, for a specific objective: to disrupt the attack against the city by the Syrian forces and their allies supported by Russia.Ankara is indeed taking advantage of the Russian slowing down of its strategy to liberate the city from jihadists (including al-Qaeda) due to the US threat to bomb the Syrian Army and government forces under that excuse of “using chemical weapons”. This “chemical weapon” has become part of the battle of Idlib, used as a tool to wage war on Syria just as the war is coming to an end.Russia considers the Turkish reinforcements as a breach of the Astana Turkish-Russian-Iranian deal, which limited the number of observation points and the military presence around the city and rural areas of Idlib. Moreover, Russia effectively considers Turkey to be unable to fulfil its commitment to totally end the presence of jihadists, especially including the group of al-Qaeda, stationed in the city and around it.  In fact, the Turkish president Erdogan has asked for an extended delay to meet the Russian and the Iranian demands related to Idlib. This delay has been rejected by the government of Damascus whose leaders believe it is counterproductive to the interests of the country (to liberate the whole of Syria) and, further, would confirm Russian President Putin's hesitancy which is apparently due to the US threat. Decision makers in Damascus said the following: Turkey has offered Russia the protection of its military base in Hmaymeem by preventing any further drone attack against it. The Russian base has been subject to over 55 armed drone attacks, all shot down by the Russian defence system around the base which is on the Syrian coast.  Russia has rejected the Turkish offer, asking Ankara to abide by its agreement and eliminate the Jihadists from the city using Turkish influence to avoid the attack. Damascus believes Turkey would like to annex Idlib and is, therefore, rejecting any deal with Turkey beyond the one already signed in Astana which consisted of a commitment to finish off all jihadists. Furthermore, according to the sources, Turkey “promised to include Jabhat al-Nusra, aka Hay’at Tahrir al-Sham, within one single army in Idlib to satisfy the Russian demands and show its control over the jihadists. Ankara’s troops are bringing in more military personnel – as Turkey presents it – to support all Turkish proxies in their battle against jihadists who refuse to surrender or merge with the other groups.

An Unending U.S. War in Syria?  -- Amid a week of attention-grabbing drama about the dysfunction of Donald Trump’s presidency, it almost escaped notice that his administration is putting U.S. troops in harm’s way in a foreign war for a new purpose—a purpose that does not entail countering a threat to the United States. Newly appointed special envoy for Syria James Jeffrey stated that under a “new policy” on Syria, the United States is “no longer pulling out by the end of the year.” This policy goes against what Trump had been saying not only in the presidential campaign about wanting less U.S. involvement in Middle Eastern wars but also, more recently and more specifically, about wanting to withdraw the twenty-two thousand U.S. soldiers now in Syria. Those troops have been in the northeastern part of the country, hitherto focused on aiding the fight against the so-called Islamic State or ISIS. But now, according to Jeffrey, besides mopping up the remnants of ISIS’s former mini-state in eastern Syria, U.S. troops are to stay in Syria indefinitely with the objective of ejecting from the country all troops of Syria’s ally Iran. Administration officials say that a motivation for the new policy is growing doubt that Russia will be either able or willing to assist in such an ejection.  The new policy is an entirely new war aim, not an extension or corollary of the prior declared purpose of combating ISIS. In fact, Iran’s presence in Syria, aimed at supporting the Assad regime, has been on the opposite side of the Syrian civil war from ISIS, which has aimed to overthrow that regime. Hawks in the administration have been talking for some time, of course, about confronting and opposing Iran any way and anywhere they can, but Jeffrey’s statement marks an official departure from what had been a U.S. war objective in Syria exclusively focused on ISIS.

Assad Has Won and America Must Go - Syrian government forces and their allies stand ready to roll into the province of Idlib and extinguish the last major rebel stronghold in the country. Russian air attacks pummeled Idlib in early September. Today’s announcement of a Russo-Turkish agreement for a buffer zone in Idlib appears to have postponed a full-scale attack on the province, but it is likely to be only a temporary reprieve . The Syrian civil war is in its endgame.  Yet at this late hour, holding few cards, the United States has doubled down on its Syrian intervention. Why? America’s Syria policy is now in dire straits. On September 3 President Trump made a typical Twitter threat, warning Bashar al-Assad not to “recklessly attack Idlib Province.” This bluster was paired with a far more serious announcement. The administration’s newly-appointed “representative for Syria engagement,” retired diplomat James Jeffrey, told reporters that the United States had redefined its Syria goals to include the withdrawal of all Iranians and Iranian proxy forces from Syria and the “establishment of a stable, non-threatening government acceptable to all Syrians and the international community.” Jeffrey added: “That means we are not in a hurry .”In March, President Donald Trump proclaimed, “We’re coming out of Syria, like, very soon.” So much for that.  There is little use in fully discussing the illegality of further American involvement in Syria. The post–9/11 Authorization for the Use of Military Force was stretched to provide a legal fig leaf for the counter-ISIS campaign in 2014. Employing it to justify an anti-Assad and anti-Iran intervention is untenable. A reassertion of congressional prerogatives is not something the Trump administration has to worry about, however. With a few notable exceptions , most American legislators are too timorous take a firm stand against any war. Some don’t even know where our troops are .

Iran puts on 'show of strength' military exercise in Gulf (Reuters) - The Iranian Revolutionary Guards and army carried out a joint aerial military drill in the Gulf on Friday in what official media said indicated the “pounding reply” that awaited the country’s enemies. Tehran has suggested in recent weeks that it could take military action in the Gulf to block other countries’ oil exports in retaliation for U.S. sanctions intended to halt its sales of crude. Washington maintains a fleet in the Gulf that protects oil shipping routes. “In addition to a show of strength, this ceremony is a message of peace and friendship for friendly and neighboring countries,” Colonel Yousef Safipour, the deputy commander of the army for public relations said, according to the Islamic Republic News Agency (IRNA). “And if the enemies and arrogant powers have an eye on the borders and land of Islamic Iran they will receive a pounding reply in the fraction of a second.” Mirage, F-4 and Sukhoi-22 jets took part in the exercise on Friday, according to IRNA. The Islamic Republic has a large naval military drill, including approximately 600 naval vessels, planned on Saturday, IRNA reported. Separately, a prominent Iranian cleric said Friday that the time had come for Israel to say goodbye. He did not give any further information on what that could mean. “Mr. Netanyahu, you and your intelligence services know well that the time to say goodbye has arrived and what position of strength the resistance of Hezbollah and the people of Gaza are in,” Hassan Abu-Torabi Fard, the temporary Friday prayers leader in Tehran, said, according to Fars News.

Iran military parade attacked by gunmen in Ahvaz- Gunmen have opened fire on an Iranian military parade in the south-western city of Ahvaz, killing at least 25 people, including civilians, and injuring 60, state media say. The attackers shot from a park near the parade and were wearing military uniforms, reports say. An anti-government Arab group, Ahvaz National Resistance, and Islamic State (IS) have both claimed the attack. President Hassan Rouhani has vowed a "harsh response". "The response of the Islamic Republic of Iran to the smallest threat will be harsh, but those who sponsor the terrorists must be held accountable," he said in a statement. Foreign Minister Javad Zarif blamed "terrorists paid by a foreign regime", adding that "Iran holds regional terror sponsors and their US masters accountable". Iran has previously accused its regional rival, Saudi Arabia, of supporting separatist activity amongst Iran's Arab minority. Meanwhile, an Iranian military spokesman claimed the attackers were not from IS but "were trained and organised by two Gulf countries", and had ties to the US and Israel. Fars news agency said the attack started at 09:00 local time (06:30 BST), lasted about 10 minutes, and appeared to involve four gunmen.  The attackers fired at civilians and attempted to attack military officials on the podium, Fars reports.  Nearly half of those killed were members of Iran's Revolutionary Guard, reports say.  A number of civilians, including women and children, who were watching the military parade, were also among those killed, Irna news agency said.

Norway Officials Admit They Knew Nothing About Libya But Joined Regime Change Efforts Anyway - A new official report produced by the Norwegian government illustrates the continuing absurdity of NATO expansion and foreign adventurism in places very far away from the "North Atlantic" explicit in the name North Atlantic Treaty Organization — places like Afghanistan, Libya, Ukraine or Syria. Top Norwegian officials have now admitted they "had very limited knowledge" of events unfolding in Libya during 2010 and 2011, prior to NATO's military intervention on behalf of anti-Gaddafi rebels — a war that resulted in regime change and a failed state ruled by competing governments and extremist militias to this day. Norway enthusiastically joined the US, UK, and French led bombing of the country initiated in March 2011 even knowing full well its military knew next to nothing of what was unfolding on the ground.  But what did decision-makers have to go on? Consider this absurd admission from the official report: “In such situations, decision-makers often rely on information from media and other countries,” the report reads.

China To Take Over Israel's Largest Port, Could Threaten US Naval Operations - A top Israeli military and energy official has questioned Israel and China's growing economic ties just as a Chinese company is set to begin operating Haifa Port as part of a major 25-year contract previously struck in 2015. “When China acquires ports,” Israeli Brigadier General Shaul Horev began in an interview this week with national news source, Arutz Sheva, “it does so under the guise of maintaining a trade route from the Indian Ocean via the Suez Canal to Europe, such as the port of Piraeus in Greece. Does an economic horizon like this have a security impact?" Gen. Horev, who has also served as navy chief of staff and chairman of the Atomic Energy Commission, continued to sound the alarm over a Chinese takeover, "We are not weighing that possibility sufficiently. One of the senior American figures at the conference raised the question of whether the U.S. Sixth Fleet can see Haifa as a home port. In light of the Chinese takeover, the question is no longer on the agenda.” He is calling for an Israeli security mechanism that that will review and scrutinize Chinese investments in Israel and the Mediterranean to ensure they don't harm the security interests of Israel or its partners, like the United States. Chinese military ship at Haifa port in 2012. The Shanghai International Port Group (SIPG) will manage Israel's largest port at Haifa as part of a contract to be inagurated in 2021, which will run for 25 years. Meanwhile a separate Chinese firm was recently awarded a contract to construct a new port in the southern Israeli city of Ashdod. According to various reports China has been spending roughly $150bn a year in the countries involved in its massive Belt and Road Initiative (BRI) which seeks to link Asia, Europe, and Africa in a vast Chinese-underwritten free trade infrastructure. Mediterranean outposts like Haifa are a key link in this corridor, a corridor which China hopes will be fully established as a "21st century Silk Road" by 2049. But as we've noted recently, major multi-billion dollar infrastructural projects in host counties could come at a cost, namely it could open the door to Chinese spying and expanding influence of its security services.

China, the Port of Haifa and Mideast Peace - It has been reported recently in Newsweek and Haaretz regarding a deal that has been struck for the management of Haifa’s port to be handled by a Chinese company, the Shanghai International Port Group. This is due to begin in 2021 and to run for 25 years. While most of the coverage on this topic has been around the effect this may have on US naval interests in Israel, there is another issue at stake, which is that Haifa’s strategic value is such that it could well be the single largest prize of any regional peace settlement, and handing its control to the Chinese could backfire on Israel’s interests should there be a regional agreement in the next 28 years. Israel’s unique geographic location on the east of the Mediterranean gives it a strategic advantage as a conduit of trade between the East and West. Although most of this trade currently goes through the Suez Canal, the port at Haifa allows countries of the Middle East to bypass the canal and to access the Mediterranean directly.There are three significant benefits of this, particularly for the export of oil from the Persian Gulf to Europe and the US.The first is that it is a more secure route than the current route around the Arabian Peninsula, where there are threats of the closure of the straits of Hurmuz near Iran, instability near Yemen and complete control of the Suez Canal by Egypt, which has only stabilised in recent years and is still fighting an insurgency in Sinai. The whole region is often embroiled in conflict, including Sudan and Eritrea which also line the Red Sea route. A pipeline from the major exporters through Jordan to Israel, can actually be a more stable and reliable route.The second, is cost. Transit fees through the Suez Canal are steep, at around US$400,000 per ship depending on size. This provides Egypt with $5b in revenues last year alone. This fee is so steep that some struggling carriers are considering taking the long route around Africa to get to Europe when fuel costs are low, despite the additional 7000 miles of transit.The third reason is speed. There is an additional thousand miles of transit when shipping along the Arabian Peninsula route, than if the oil was piped and loaded onto tankers in Haifa. Haifa’s port also has a natural deep harbour, making it ideal for the loading up of oil tankers, and is one of the largest in the western Mediterranean in terms of volume. This is part of a larger strategy of insuring the Maritime Belt of the new Silk Roads.

Pakistan invites Saudi Arabia to join China-led project - After Pakistani Prime Minister Imran Khan’s visit this week to Saudi Arabia, his government announced on Thursday that the Gulf state had been invited to be the third investor in a key segment of the China-led Belt and Road Initiative. Information Minister Fawad Chaudhry made the announcement but did not detail whether Saudi Arabia had agreed to lend money to the Pakistani government, which is struggling to cope with an accumulating debt burden. Pakistan has invited Saudi Arabia to join CPEC as the 3rd strategic partner – Minister Information Fawad Chaudhry (20.09.18)#PTI @fawadchaudhry pic.twitter.com/vETts8eyhK — PTI (@PTIofficial) September 20, 2018 Also on Thursday, the deputy secretary general of the ruling Pakistan Tehreek-e-Insaf party said on Twitter that “Pakistan and Saudi Arabia struck an agreement worth US$10 billion,” as translated by The News. Dunya News also reported the US$10 billion deal. Chinese investments in the China-Pakistan Economic Corridor have come under fire recently, as Pakistan copes with an economic crisis that has seen its foreign-exchange reserves fall to near-record lows. CPEC is an important part of Beijing’s Belt and Road Initiative, but lack of transparency and due diligence has prompted criticism, including from the recently elected Prime Minister Khan. Earlier this month, during a visit to Pakistan by China’s top diplomat, Wang Yi, the two countries reaffirmed their cooperation and also proposed inviting a third-party investor to assuage concerns about Beijing burdening Islamabad with debt.

A ‘massive’ spike in oil smuggling has eased the economic pressure on North Korea -- Last spring, as the Trump administration was preparing for the historic U.S.-North Korea summit, a flotilla of strange-looking tanker ships steamed out of North Korea’s Nampo harbor on a series of clandestine missions off the Chinese coast. Many of the vessels bore crude disguises, from fictitious names painted on their bows to fake hatches built of canvas and wood to give them the look of a cargo ship. Once at sea, they would rendezvous at night with a foreign tanker, toss hoses over the rail and fill their hulls with illicit oil before sailing home again. Such fuel-smuggling runs are not uncommon in the Yellow Sea, yet the scale of activity over the spring and summer startled U.S. and East Asian intelligence officials who tracked the ships’ movements by satellite. By late August, spy agencies had counted 148 of these secret maritime transfers — for a total of between 800,000 and 1.4 million barrels of oil, gasoline and diesel — with the volume increasing in recent months as diplomacy with North Korea picked up steam. A confidential U.N. report last month identified 40 vessels and 130 companies, many with Chinese or Russian ties, as contributing to a “massive” spike in smuggling that analysts say has helped stabilize North Korea’s economy just as U.S. diplomats are attempting to compel leader Kim Jong Un to give up his nuclear arsenal. The flurry of activity is coinciding with what intelligence officials described as a steady erosion in sanctions enforcement in the region: With tensions on the Korean Peninsula cooling — and with a U.S.-China economic cold war looming — Russia and China have shown little enthusiasm for cracking down on the profiteers who are helping supply crucial fuel for Pyongyang’s vehicles and factories, U.S. officials and independent analysts said in interviews. “Neither China nor Russia are doing what they should to stop this,” said a Trump administration official, who, like others, spoke on the condition of anonymity to discuss sensitive diplomacy. “The Russians are even trying to block our efforts to do something about” the spike in oil deliveries to North Korea. 

Despite US Opposition, Joint Liaison Office Opens On Shared Korean Border - On Friday an unprecedented development occurred that could put the Korean peninsula on a permanent trajectory of stability should talks between the North and South continue their positive direction, and which signals an intensification of diplomacy between the two.  South Korea has opened a new liaison office in the North Korean city of Gaeseong (or alternately Kaesong), which is to allow for 24-hour communication between the two sides for first time since war. The office is located inside an industrial park — and Gaeseong is just inside the North's side of the border.  It's being described as allowing "around-the-clock" communication between rival officials on either side the military demarcation line, and could avoid the potential for future misunderstandings or provocations, and further comes amidst a parallel diplomatic push by the United States and its allies for complete North Korean denuclearization.  When the proposal was being finalized this summer, however, the US was opposed to the plan, with the State Department last month saying progress between the two Koreas must occur "in lockstep" with talks on the north's denuclearization.  According to Bloomberg: The Aug. 20 announcement of the office’s establishment had raised concerns in the U.S. about whether it would violate sanctions meant to penalize Pyongyang over its nuclear arsenal. But on Thursday, the United Nations Command said it had approved South Korean vehicles and personnel to cross the border into North Korea and begin constructing a communications center at the Gaeseong complex. Meanwhile the United Nations welcomed the development, with UNC commander Vincent Brooks saying in a statement that communication between two sides is “a way to prevent incidents or crises.”

South Korea leader: North Korea agrees to take steps toward denuclearization  - South Korean President Moon Jae-in on Tuesday said his North Korean counterpart Kim Jong Un has agreed to take specific steps toward denuclearization.Moon, who was in Pyongyang to attend a summit with Kim, said North Korea will dismantle a missile test site and launch pad in the presence of international observers, according to the Associated Press.The South Korean president also said Kim had agreed to dismantle a nuclear complex on the condition that the United States takes corresponding steps.The two leaders held a joint press conference in the North Korean capital following the second day of their closely watched joint summit. Moon's visit is the first time in more than a decade that a South Korean president has visited the North."What I want to achieve is peace. Not a tentative change which could be volatile dependent on international situation, but irreversible, permanent and unwavering peace, regardless of what might happen on the global arena," Moon tweeted prior to the summit, according to CNN.His visit comes after President Trump met with Kim during a much-publicized summit in Singapore in June, fueling hopes that Pyongyang would begin the process of denuclearization. However, Kim made only vague promises in exchange for unspecified "security guarantees" from the U.S., and the summit has yielded few concrete results so far.Trump regardless has remained vocal about his desire to pursue peace negotiations with Kim. The White House earlier in September said it was already at work planning a second summit between the two leaders.

North Korea Pledges To Dismantle Nuclear Reactor, Shutter Missile Launchers - North Korean leader Kim Jong Un has proven in the past that he would be willing to say anything to keep South Korea and the US at the bargaining table, even if he doesn't intend to follow through. And just a few weeks after President Trump canceled a planned visit to North Korea by Secretary of State Mike Pompeo, Kim on Wednesday announced that he would allow international monitors to enter the country and observe the dismantling of the North's nuclear reactor in Yongbyon, its primary source of nuclear fuel, amid a raft of other bilateral promises including plans for the North and South to field a joint team at the Tokyo Summer Olympics in 2020 while seeking a joint bid to host the 2032 Summer Olympics. While Moon heralded this announcement as an important breakthrough in attaining a "nuclear-free" North Korea, it's worth noting that the North has promised to close down Yongbyon before - going as far back as 2007, according to NPR. In addition to Yongbyon, the North promised observed shutdowns of its missile engine testing site and launch pad in the Northwestern town of Dongchang-ri. However, the significance of shuttering these two facilities is not clear, according to Reuters, and suspicions remain that these shutdowns could be easily reversed. Experts who spoke with Reuters said the US shouldn't read too much in to these gestures. Seo Yu-suk, a research manager at the Institute of North Korean Studies in Seoul, said the facilities at Dongchang-ri and Yongbyon are "almost obsolete" and the North has mobile missile launchers that are easier to use and harder to detect, while there are likely covert sites elsewhere. What's more, satellite images and other evidence released in recent months have found evidence that North Korea has continued clandestine work on its nuclear program. Though the North promised it would reveal the locations of many of these hidden facilities and mobile launchers as part of the deal. But that didn't stop President Trump from chiming in on twitter to praise the agreement as "very exciting!"

China’s Soybean Harvest Drops by 300,000 Tons Because of Early Frost -- Chinese soybean production has dropped precipitously as unusually frosty weather hit key agricultural regions in early September, damaging more than 2.5 million acres of soybean fields and reducing the harvest by an estimated 300,000 tons in the northeastern province of Heilongjiang.The downturn comes as China maintains tariffs on soybeans imported from the United States as part of the escalating Sino–U.S. trade war.On Sept. 17, China’s Ministry of Agriculture and Rural Affairs reported that northwestern Heilongjiang had experienced low temperatures and early frost between Sept. 9 and Sept. 10, damaging the harvest. According to the National Meteorological Center of China Meteorological Administration, over the past 50 years, the Heilongjiang frost hasn’t usually begun until late September, making the latest weather an unusual event.Soybeans grow ideally in temperatures between 68 and 77 degrees Fahrenheit. In the production period between May and September, a two-degree reduction in average temperature reduces the yield by acre by over a hundred pounds; frost is especially damaging.   On Aug. 10, Reuters quoted a Chinese agricultural official as saying that Chinese soybean production typically falls short of demand by over 90 million tons, and that it relies on imports to make up the rest. In 2017, China consumed more than 110 million tons, of which it imported 95.53 million tons, or 87 percent of total consumption.In April, local authorities in Heilongjiang and Jilin, a neighboring province, issued ordinances requiring farmers to expand their soybean production, and significantly increased subsidies for the crop. The subsidy per Chinese mu (0.165 acres) of soybeans is now 100 yuan (about $15) higher than that for corn.The United States has been China’s primary supplier of soybeans, but exports of the product have decreased since the beginning of the Sino-U.S. trade war this spring. The Chinese Communist Party (CCP) has been attempting to use the soybean trade to counter U.S. tariffs introduced by the Trump administration to punish Beijing for its longstanding unfair or illegitimate business practices. The CCP has imposed a 25 percent tariff on U.S. soybeans.

Collapsing Investment Doesn’t Mean Collapsing China -  Infrastructure investment in China is nose-diving and bears are roaming the Shanghai Stock Exchange. Does that mean that President Trump’s planned tariffs on another $200 billion of Chinese imports, which could be announced any day, will be enough to nudge the Chinese economy over the brink? Maybe not. There’s a risk that American trade negotiators, watching the forest, are missing some important—and still rather healthy—trees. Infrastructure and small-scale private industry are suffering from the shadow banking crackdown championed by President Xi Jinping. But two other important drivers of the economy—state-owned firms and real estate—are doing well. As long as real estate holds up, a sharp slowdown remains unlikely. Real estate is thriving thanks to a massive Beijing-financed apartment-buying program for “slum dwellers,” which has kept inventories near multiyear lows. That helps prices keep rising, even though sales growth has been trending sideways. A construction site in Qingdao, China. Photo: Qilai Shen/Bloomberg News .Developers have also proven adept at finding ways around restrictions on shadow banking. One helpful development has been the explosion of asset-backed securities, including so-called supply chain ABS, which has allowed developers to put off paying their contractors for up to a year. Overall shadow credit outstanding fell 3.8% on the year in August, and infrastructure investment growth in the first eight months of the year, excluding power and heat, slowed to a record low of 4.2%. But property developers’ year-to-date funding actually rose 6.9% on the year, according to ANZ, the second straight month of acceleration. While infrastructure is important to Chinese growth, real estate is far more important. Sky-high land prices and tweaks to China’s statistical methodology make the headline property investment data hard to interpret. But the message from property-related industry is that, for now, things remain healthy.

 Beijing urged to print more money to cope with trade war -- Beijing should loosen its monetary policy to boost domestic demand as a way of managing the threat of additional tariffs from Washington, a former senior official said on Sunday. “We must fully play up the role of monetary policy in bolstering domestic demand” when Donald Trump’s trade war is directly hitting the country’s export sector, Zheng Xinli, former deputy director of the Central Policy Research Office of the Communist Party told a seminar in Beijing. Speaking at Renmin University of China, Zheng said Beijing’s “prudent monetary policy”, which means it will not print more money to help growth, was binding its hands. The Chinese leadership has already decided to make its fiscal policy more proactive by accelerating spending on infrastructure projects and encouraging local governments to issue bonds. But Chinese banks remain largely restrained in their lending – a sharp contrast to the situation a decade earlier when the banking system pumped out money to maintain an all-out stimulus programme. Zheng said Beijing should be bolder in printing money. “It is like a battle. China has kept its most powerful force in reserve but sent the second-best troops to the frontline,” Zheng told dozens of participants during a discussion on the 2008 global financial crisis and the country’s risk management policies. Instead, he argued, China’s banking system and monetary policy should do their part in helping the country cope with the escalating trade war. Trump has decided slap tariffs on an extra US$200 billion of Chinese goods and could do so as early as next Monday, according to The Washington Post. 

Companies scramble to hire as production shifts from China to cheaper Asian centres amid deepening trade war - Hong Kong and mainland companies are planning to hire more staff in cheaper regions of Asia as trade tensions between Washington and Beijing prompt firms to shift parts of their production lines to India, Bangladesh, Vietnam, and Malaysia, according to an international headhunter. Executive search company DHR International, which has its headquarters in Chicago, said the search to diversify production from China was among the major drivers behind the talent search. “Mainland China remains an important manufacturing base for many companies. However, we have seen more hiring demand in Southeast Asian countries as many manufacturers are now expanding their production outside the mainland to prepare for the trade war,” according to Christine Greybe, DHR’s president and head of international. David Nagy, the headhunter’s managing partner of Asia-Pacific industrial practice, said manufacturers are also expanding to other regions because of rising mainland labour costs in recent years. Favoured destinations for relocation include Thailand, Vietnam and Malaysia, Nagy said. “These companies are not completely moving out of the mainland, but they want to set up additional production lines in the Southeast Asia countries,” Nagy added.

China Will Never Devalue Currency To Boost Exports, Premier Vows -  The Chinese yuan rose for a second day after Premier Li Keqiang echoed previous comments from the PBOC when he stressed that China will not weaponize its currency and will not stoop to competitive devaluation of the yuan, hours after China hit back, with a "softer punch" as Reuters put it, than the one landed by the United States in the escalating tariff war between the world’s largest economies. Speaking before a World Economic Forum event in the city of Tianjin on Wednesday, Li did not directly mention the trade conflict but he said that devaluation would do "more harm than good", and that talk of Beijing deliberately weakening its currency was "groundless." "One-way depreciation of the yuan brings more harm than benefits for China,” he said. “China will never go down the road of relying on yuan depreciation to stimulate exports." He added that China will not do that to chase "thin profits" and "a few small bucks." Li also said that the world’s multi-lateral trading system should be upheld, and that unilateral trade actions will not solve any problems. His remarks pushed the yuan higher, after the currency had lost about 9 percent of its value since mid-April amid the ongoing trade war.

China urges US to withdraw sanctions or face 'consequences' - China has urged the United States to withdraw punitive sanctions imposed on the Chinese military over its purchase of fighter jets and missiles from Russia or "bear the consequences".On Thursday, the US State Department said Chinese purchases of SU-35 aircraft and S-400 surface-to-air missiles breached a US sanctions law targeting Russia over its alleged meddling in the 2016 US election and actions in Ukraine.But Beijing, on Friday, warned of consequences for Washington if it does not cancel those sanctions."The Chinese side expresses strong indignation over the above-mentioned unreasonable practices of the US side," foreign ministry spokesperson Geng Shuang told journalists. Moscow also warned that Washington was "playing with fire" and accused the US of trying to squeeze Russia out of the global arms market. "This is unfair competition, dishonest competition, an attempt to use non-market methods that that run counter to norms and principles of international trade to squeeze the main competitor of US makers out of the markets," said President Vladimir Putin's spokesperson Dmitry Peskov.

Britain Joins US In Unwise Confrontation In The South China Sea -  The US research agency Stratfor has forecast that “the United States will solidify its naval presence in the South China Sea and continue building up defence and economic ties along China's periphery from Taiwan to Southeast Asia,” and given the all-embracing belligerence that seems to envelope Washington, its analysts are probably right. There are few countries or international accords that are not targeted by the malevolence of a president who declared at his inauguration that “it’s going to be only America first, America first” and whose disciples applaud his erratic lurches from truculent insults to maudlin self-pity.  So the Pentagon continues to send nuclear-capable bombers and missile-equipped warships and electronic warfare aircraft around and over the South China Sea, to make it clear to China that the most important thing to Washington in the region is its military domination of China’s coast. The most recent confrontational activity was three months ago when the US Navy’s Antietam, a guided-missile cruiser, and the Higgins guided-missile destroyer were sent to try to provoke Chinese reaction by operating within 12 nautical miles of the Paracel Islands. They didn’t just pass through the Paracels : they conducted tactical manoeuvres among the islets,  Britain, which is roughly the same distance from the South China Sea as America (10,000 km as against 12,000 km) decided to join Washington in making political statements by sending HMS Albion, an Amphibious Assault Ship of Britain’s Royal Navy to mimic US antics in the region. Albion is impressive-looking but is not a combat vessel, because its mission is simply to deliver troops and equipment to a previously secured landing area.  There was absolutely no need for a British warship to sail close to any of the islands where China has for decades had a large presence. On its way to Vietnam from Japan, the Albion had no reason whatever to pass close to any of the Paracels. It could have sailed more directly from Tokyo to Ho Chi Minh City with no problem at all — and it would have used less fuel. But the UK government authorised the Navy’s spokesman to declare that “HMS Albion exercised her rights for freedom of navigation in full compliance with international law and norms.”

Japan Sends China A Message With Submarine War Drill In South China Sea - New information is surfacing about a Japanese submarine military exercise in the South China Sea. The Maritime Self-Defense Force (MSDF) said in a rare statement on Monday that one submarine and three other vessels performed aggressive maneuvers to deter China's militarization of the region. "Japan has been performing submarine exercises in the South China Sea since 15 years ago. We did so last year and the year before that," Prime Minister Shinzo Abe said on a TV program on Monday. "The purpose of the Self-Defense Force drills is to improve their skill. It is not intended for specific countries."According to the Nikkei Asian Review, this is the first public announcement that the MSDF revealed military exercises by a submarine in the region. Last Thursday, the Hiroshima-based submarine Kuroshio joined helicopter carrier Kaga and two other missile destroyers for maneuvers.During the exercise, destroyers worked with helicopters to hunt for the submarine using sonars, while the Kuroshio pursued the carrier as it lurked beneath the waters. What is notable, however, is that the exercises took place within China's self-declared maritime claim known as the Nine-Dash Line, which includes most of the South China Sea.

Why Japan’s First Submarine Visit to Vietnam Matters This week, in a notable regional development, a Japanese submarine visited Vietnam for the first time. The move did not receive nearly as much attention as it should, perhaps because the interactions tied to the visit itself seem rather routine. Still, the significance of the visit is unmistakable from the perspective of both countries, their strengthening defense ties, and the wider regional context.The Japanese Maritime Self-Defense Force (JMSDF) submarine Kuroshio docked at Cam Ranh International Port in Kham Hoa on September 17, commencing what was characterized as a scheduled five-day visit. The Vietnamese defense ministry correctly noted that the visit itself consisted of the usual elements in such interactions, including courtesy calls on Vietnamese officials and naval personnel, sports and professional interactions, and cultural activities including tours. But while the interactions themselves may seem routine, the significance of the first-ever Japanese submarine visit is unmistakable in several senses. First, at a general level, it is just the latest manifestation of the building of intraregional security relationships between like-minded states in the Asia-Pacific. As I have observed repeatedly in these pages, the confluence of several trends, including a growing list of traditional and nontraditional security challenges and the rise of more informal kinds of alignments, has catalyzed the formation of looser links between regional states under the banner of regional strategies or outlooks, with the Indo-Pacific being just one of them (See: “Trump’s Indo-Pacific Strategy Challenge in Focus at 2018 Shangri-La Dialogue“). One of those shifting relationships has been that between Japan and Vietnam. Over the past few years, the two countries have been boosting their security ties as part of their so-called extensive strategic partnership, with Vietnam seeing Japan as one important power to engage in its wider omnidirectional foreign policy, and Japan viewing Hanoi as a key node in its greater engagement of Southeast Asia and as part of its own Indo-Pacific strategy, which dates back over a decade to Shinzo Abe’s first stint as prime minister from 2006 to 2007 (See: Southeast Asia’s Role in Japan’s Indo-Pacific Strategy”).

China’s Sea Control Is a Done Deal, ‘Short of War With the U.S.’ - NYT  — A rare visit on board a United States Navy surveillance flight over the South China Sea pointed out how profoundly China has reshaped the security landscape across the region.  As the United States Navy reconnaissance plane banked low near Mischief Reef in the South China Sea early this month, a Chinese warning crackled on the radio. “U.S. military aircraft,” came the challenge, delivered in English in a harsh staccato. “You have violated our China sovereignty and infringed on our security and our rights. You need to leave immediately and keep far out.” Aboard the P-8A Poseidon maritime patrol aircraft, flying in what is widely considered to be international airspace, Lt. Dyanna Coughlin scanned a live camera feed showing the dramatic evolution of Mischief Reef. Five years ago, this was mostly an arc of underwater atoll populated by tropical fish and turtles. Now Mischief Reef, which is off the Philippine coast but controlled by China, has been filled out and turned into a Chinese military base, complete with radar domes, shelters for surface-to-air missiles and a runway long enough for fighter jets. Six other nearby shoals have been similarly transformed by Chinese dredging. The country’s aggressive territorial claims and island militarization have put neighboring countries and the United States on the defensive, even as President Trump’s administration is stepping up efforts to highlight China’s controversial island-building campaign. In congressional testimony before assuming his new post as head of the United States Indo-Pacific Command in May, Adm. Philip S. Davidson sounded a stark warning about Beijing’s power play in a sea through which roughly one-third of global maritime trade flows. “In short, China is now capable of controlling the South China Sea in all scenarios short of war with the United States,” Admiral Davidson said, an assessment that caused some consternation in the Pentagon.

India considers raising import duty on steel to support rupee - document (Reuters) - India’s steel ministry has proposed increasing the effective import duty on some steel products to 15 percent from current rates ranging from 5 percent to 12.5 percent, according to two sources and a government document reviewed by Reuters, as the country looks to support the rupee. The proposal is a part of a broader government plan to cut “non-necessary” imports to stop an outflow of dollars that has sent the rupee to record lows. “The broader message is to address the trade balance but we will try to promote ‘Make in India’ by encouraging domestic (steel) production,” said the source, who declined to be named ahead of a possible decision. The source said there was no certainty that the proposed duty would be imposed. Steel and trade ministry officials were expected to meet on Wednesday to discuss the proposed import steps but the talks did not take place, one of the sources said, without giving details. The steel and trade ministries did not respond to requests seeking comment. Shares of Indian steel companies jumped after the news. In afternoon trading, JSW Steel Ltd was up 3.3 percent, while Tata Steel Ltd and Jindal Steel and Power Ltd rose by more than 2 percent. State-run Steel Authority of India Ltd also rose by more than 2 percent. The broader Nifty metal index rose as much as 2.2 percent, its biggest gain in nearly a week. 

US-Indian Relations- Trump Gets A Unique Partner For America First - The inaugural meeting of the foreign and defence ministers of India and the United States in a new “2+2” format on September 6 in New Delhi assumed added significance as an attempt by the Trump administration to translate its Indo-Pacific vision outlined in the National Security Strategy (NSS) of last December. The NSS had explicitly singled out Russia and China as “revisionist” powers that “challenge American power, influence and interests.” Equally, it ascribed a pivotal role to India in the Indo-Pacific. The “2+2” deliberations fleshed out these two templates. For the first time in the post-Cold War era, the US has inserted itself into the “time-tested” relationship between India and Russia. Demolition of Indian-Russian partnership has been a hidden agenda of the US’ regional policy since the 1990s but it surged in an overt and abrasive form last week. This shift from an aspirational approach to intrusive approach can be seen in the backdrop of the deterioration of US-Russia relations and the probability that tensions are unlikely to dissipate in a foreseeable future. The US sanctions against Russian defence sectors have been enacted in the full knowledge that India would be an acutely affected party. The US sanctions laws against Russia are acting like the Damocles’ sword to wear down India’s resistance to rollback in ties with Russia. A similar US assault on India-Russia energy cooperation can be expected soon, which is another promising area for US exports to India. Besides, the US is also threatening to sanction Russia’s financial sector. Clearly, what the US is seeking goes far beyond a reset or atrophy in the Indian-Russian relationship. It aims at nothing less than draining the contents of the “Special Privileged Strategic Partnership” between India and Russia and make it an empty shell. Yet, partnership with Russia has been historically an anchor sheet of India’s strategic autonomy. Indeed, it becomes a sad reflection of the huge inroads the US has made through the recent decade since the signing of the 2008 US-Indian nuclear deal to breach India’s strategic autonomy. Put differently, weakening of the India-Russia relations is an imperative need for Washington to hustle India on the path of becoming its key ally in the Indo-Pacific. Such a profound shift in the US approach can only be understood in terms of the strategic importance and the sense of urgency that the NSS attaches to the Indo-Pacific region.

Central Banks Have Gone Rogue, Putting Us All at Risk -- Ellen Brown - Central bankers are now aggressively playing the stock market. To say they are buying up the planet may be an exaggeration, but they could. They can create money at will, and they have declared their “independence” from government. They have become rogue players in a game of their own.  Excluding institutions such as Blackrock and Vanguard, which are composed of multiple investors, the largest single players in global equity markets are now thought to be central banks themselves. An estimated 30 to 40 central banks are invested in the stock market, either directly or through their investment vehicles (sovereign wealth funds). According to David Haggith: Central banks buying stocks are effectively nationalizing US corporations just to maintain the illusion that their “recovery” plan is working . . . . At first, their novel entry into the stock market was only intended to rescue imperiled corporations, such as General Motors during the first plunge into the Great Recession, but recently their efforts have shifted to propping up the entire stock market via major purchases of the most healthy companies on the market. The US Federal Reserve, which bailed out General Motors in a rescue operation in 2009, was prohibited from lending to individual companies under the Dodd-Frank Act of 2010; and it is legally barred from owning equities. It parks its reserves instead in bonds and other government-backed securities. But other countries have different rules, and today central banks are buying individual stocks as investments, with a preference for big tech stocks like Amazon, Apple, Facebook and Microsoft. Those are the stocks that dominate the market, and central banks are bidding them up aggressively. Markets, including the US stock market, are thus literally being rigged by foreign central banks. The result, as noted in a January 2017 article on Zero Hedge, is that central bankers, “who create fiat money out of thin air and for whom ‘acquisition cost’ is a meaningless term, are increasingly nationalizing the equity capital markets.” At least they would be nationalizing equities, if they were actually “national” central banks. But the Swiss National Bank, the biggest single player in this game, is 48% privately owned; and most central banks have declared their independence from their governments. They march to the drums not of government but of big international banks.  The goal of the Bank of Japan, which now owns 75% of Japanese exchange-traded funds,  is evidently to stimulate growth and defy longstanding expectations of deflation. But the Swiss National Bank is acting more like a hedge fund, snatching up individual stocks because “that is where the money is.”

Speculation over fate of missing Dutchman linked to WikiLeaks - On 20 August, Arjen Kamphuis, a leading Dutch cybersecurity expert, checked out of his hotel in Bodø, northern Norway. He had told friends that he planned to take the train to Trondheim, 10 hours away. He never boarded the train. Nor, two days later at the supposed end of his holiday, did he catch his return flight to Amsterdam. An intensive search by Norwegian police, and two Dutch investigators dispatched to help them has failed to locate him. A kayak believed to belong to Kamphuis, who advised governments, corporations, journalists and activists on information security, was pulled from the sea about 50km from Bodø on Thursday, police said, the day after an amateur fisherman found some of his belongings – reportedly including an ID card – floating in the water. But mobile phone records show that 10 days after the Dutchman was seen leaving his hotel, both his work and personal mobile phones were briefly switched on – with German SIM cards inserted – more than 1,700km from the small northern town, at Vikeså near Stavanger. Police said on Thursday they were “holding all possibilities open in respect to what might have happened” to Kamphuis and pursuing three distinct lines of inquiry: a “voluntary disappearance” including a possible suicide; an accident; or foul play.  But if investigators have no clear idea of what happened, the internet has plenty - mainly because on 1 September the whistle-blowing website Wikileaks tweeted to its 5.4 million followers: “@JulianAssange associate and author of ‘Information Security for Journalists’ @ArjenKamphuis has disappeared.” The anti-secrecy organisation has since published several updates and comments on the investigation, describing Kamphuis’s disappearance as “strange” and highlighting the fact that his phone was activated a long way from where his belongings were found.

Russian Pussy Riot activist hospitalized in grave condition; poisoning suspected - Los Angeles Times: Russian news reports say that a member of Russian punk protest group Pussy Riot has been hospitalized in grave condition for what could be a possible poisoning. Ekho Moskvy radio and online news portal Meduza reported Wednesday that Pyotr Verzilov has been in emergency care since late Tuesday. They quoted a fellow Pussy Riot member, Veronika Nikulshina, as saying Verzilov's symptoms included losing his eyesight and ability to speak.  Nikulshina said Verzilov was being treated in the toxicology unit of a Moscow hospital, indicating a suspected poisoning. Verzilov, Nikulshina and two other activists served 15-day jail sentences for disrupting July's World Cup final. They ran onto the field wearing police uniforms, briefly interrupting the match between France and Croatia. Pussy Riot said they were protesting excessive police powers in Russia.

Ireland collects more than €14bn in taxes and interest from Apple -  Ireland’s government has fully recovered more than €14bn (£12.4bn) in disputed taxes and interest from Apple, which it will hold in an escrow fund pending its appeal against a European Union tax ruling.The European commission ruled in August 2016 that Apple had received unfair tax incentives from the Irish government. Both Apple and Dublin are appealing against the original ruling, saying the iPhone maker’s tax treatment was in line with Irish and EU law.Ireland’s finance ministry, which began collecting the back taxes in a series of payments in May, estimated last year the total amount could have reached €15bn including EU interest. In the end the amount was €13.1bn in back taxes plus €1.2bn interest.While the €14.3bn would be enough to fund the country’s health service for a year, the government said it had never given any company a special deal and that the appeal was important to preserve Ireland’s attractiveness for investment. “While the government fundamentally disagrees with the commission’s analysis and is seeking an annulment of that decision, as committed members of the European Union, we have always confirmed that we would recover the alleged state aid,” the Irish finance minister, Paschal Donohoe, said in a statement. Ireland has appointed investment managers to oversee the disputed cash, whom Donohoe said would make low-risk investment decisions and the Irish taxpayer would be protected from any losses. For its part, the commission said it would scrap its lawsuit against Ireland, which it initiated last year because of delays in recovering the money.

Despite Pledge Not To, Germany Approves Sale Of Weapons To Saudi Arabia - With Saudi Arabia forever escalating their war in Yemen, the growing calls by human rights groups to stop selling them arms with which to commit war crimes are struggling to compete with the vast sums of money the Saudis are offering for those arms. Germany is the latest to renege on promises to ban weapons sales for use in the Yemen War, announcing Wednesday that the Economy Minister has greenlit a new round of artillery systems for sale to the Saudis. However, as Statista's Niall McCarthy notes, even though the Saudi-led coalition is using advanced western warplanes and precision guided munitions in its aerial campaign over Yemen, innocent civilians are still ending up in the crosshairs. Around 10,000 people are thought to have perished in the conflict so far, two thirds of them civilians, according to the UN. The fighting and a partial blockade has also left 22 million people in need of aid and the situation could deteriorate even further depending on the outcome of the assault on the coastal city of Hudaydah. It is a vital port for humanitarian aid and severing that flow could put hundreds of thousands more people at risk of starvation. Reliable statistics about the conflict in Yemen are notoriously difficult to come by. A non-profit organization called The Yemen Data Project has been monitoring airstrikes by the Saudi coalition and their findings help build a picture of the scale of the air campaign. There have been around 17,000 airstrikes in total since March 2015, the following infographic provides an overview of some of the targets struck. While around 3,400 military sites have been hit, residential areas have been targeted on 1,543 occasions. There have been 70 airstrikes on medical facilities, along with 266 on educational institutions and 45 on mosques.

Danske Bank boss quits over $234 billion money laundering scandal (Reuters) - Danske Bank’s (DANSKE.CO) chief executive Thomas Borgen resigned on Wednesday after an investigation revealed payments totaling 200 billion euros ($234 billion) through its small Estonian branch, many of which the bank said were suspicious. The Danish bank detailed compliance and control failings amid growing calls for a European Union crackdown on financial crime after a series of money laundering scandals which have attracted the attention of U.S. authorities. “Even though I was personally cleared from a legal point of view, I hold the ultimate responsibility. There is no doubt that we as an organization have failed in this situation and did not live up to expectations,” Borgen, who will stay on until a new CEO is appointed, told a press conference. Borgen, 54, was in charge of Danske Bank’s international operations, including Estonia, between 2009 and 2012. While the report shed some light on the bank’s activities in Estonia, investors are concerned whether the United States, which has placed sanctions on Russia, will punish it. “As this is the largest money laundering scandal in European history, and Danske Bank is a major bank that sends dollars around the world, I imagine that this will certainly get the attention of the U.S. authorities,” Bill Browder, the founder and CEO of Hermitage Capital Management who has campaigned against corruption in Russia, told Reuters. Danish politicians were critical of Danske Bank for not revealing exactly how much money was allegedly laundered and not saying who was legally responsible for the lapses.

New EU Copyright Law Could Force Online Platforms To Ban Memes Across Europe - A new law being just passed in European Parliament and in the process of becoming finalized has received scant media attention, but could be nothing short of revolutionary in terms of its lasting impact on the internet, political speech and discourse, and the potential for censorship. So far the EU is moving the law forward, but it has sparked fierce push back, as it looks likely that soon entirely legal content will be caught in the law's dragnet.   The law, in its full named called The European Union Directive on Copyright in the Digital Single Market, is intended to updated existing copyright laws for social media and the internet, but critics say it's incredibly short sighted and creates more problems than it does solutions. At the heart of the law is Article 11, which as been dubbed the "link tax," and Article 13, which is being called the "meme ban" due to the likely potential that internet memes could be banned across Europe.  Whereas so far the onus has been on artists and creators to flag copyright infringements, the new EU law requires platforms like YouTube, Google, Twitter, and Facebook to be responsible for copyright violations.This means these large platforms which host immense amounts of constantly updated images, memes, and information could be forced to require users to pass all content through an "upload filter" first which would theoretically ensure copyrighted information doesn't make it onto the platform. This is where memes, which are most often created using existing official images of political figures, events, or cartoons, could be banned as they would likely be flagged by such upload filters. The intent of the law is to protect the copyrighted content of artists, photographers, companies, and individual content creators, but critics say it will change the internet and social media platforms as we known it.

 Marine Le Pen Must Undergo Psychiatric Evaluation, French Court Rules - In a decision that will undoubtedly outrage conservatives who have sought to highlight the horrors of terrorist groups like ISIS, a French court has ruled that Marine Le Pen, the leader of the party formerly known as the National Front (now National Rally) and runner-up in last year's French presidential vote, must undergo a psychiatric evaluation to determine whether "she is capable of understanding remarks and answering questions." In other words, the court is treating Le Pen as if being conservative is a mental illness.  The ruling follows formal charges that were brought against Le Pen in March after she tweeted gruesome photos of the bodies of innocent people subjected to horrific deaths at the hands of ISIS. The decision horrified conservatives who accused the French government of attempting to criminalize conservative political speech, as it was only the latest example of a disturbing trend in the European Union, per the Local. Le Pen tweeted her anger at the decision, saying the court's ruling felt like a "hallucination." The order was issued by a district court in Nanterre and was dated Sept. 11.  The charges stem from a series of tweets Le Pen sent in the weeks after the Bataclan massacre, where she shared disturbing photos including images from the beheading of American journalist James Foley. Le Pen later took the photos of Foley down after being contacted by his family.  Other pictures showed a man in an orange jumpsuit being run over by a tank - another showed a man being burned alive in a cage.

How to Humanely Solve Europe’s Migration Crisis - Der Spiegel - The consequences of the refugee crisis have been dramatic for the European Union, which now sees itself drifting apart. At first, Poland and Hungary refused to take in refugees. Now, other EU countries are following the same path. Currently, Italy, the country where the most migrants arrived, is behaving the most radically. Refugee policy in the country is determined by a right-wing populist interior minister. Migrants are forced to wait on rescue ships at sea for days at a time because no European port is willing to allow them to come ashore. "Ethical pillars have been torn down," says Berlin-based social scientist Naika Foroutan. "Cracks are developing in our ideal image of a society that is cosmopolitan, liberal and humane. Europe is failing to meet its own standards, and that is creating enormous tension." Foroutan argues that is one of the reasons why the conflict over the refugees continues to escalate. Because what is happening in the Mediterranean and elsewhere is also reflects our own society and the decay of our own values. And Europe's refugee policy is indeed as lacking in plans as it is in morals. It puts the weakest at a disadvantage and gives preference to those who can afford the services of human-traffickers and are strong enough to make the dangerous crossing to Europe. Almost 70 percent of all the asylum-seekers who crossed via the Mediterranean Sea in 2017 were men. That's neither sensible nor fair. It's another reason why support for this policy is dwindling. With each week that passes, new ideas are developed and discarded. The applicable rules are being partly ignored and going it alone has become the order of the day for many EU countries. And as drastic as this may sound, refugees no longer have any legal certainty. But it doesn't have to be that way. There are certainly solutions that would achieve better treatment of migrants and people in need of protection. The refugee crisis has doubtlessly become morally agonizing, David Miller, a philosopher at Oxford University told DER SPIEGEL in an interview published in July. "But it is not morally unsolvable." A policy that melds humanity and reason should be possible. DER SPIEGEL spoke with migration policy experts, economists, political advisers, maritime rescue workers and refugees in Syria, Niger, Malta and Bavaria. In doing so, we were able to create a detailed overview of the most decisive issues. What emerged is a plea for better immigration and refugee policies.

Reforming the EU fiscal framework -Bruegel - VoxEU has been publishing a number of contributions on reforming the EU fiscal framework. Coen Teulings thinks that the EU fiscal rules urgently need revision, because the fiscal rules in the Stability and Growth Pact were too strict and their update – laid down in the new European Fiscal Compact – made matters worse. The euro area’s demography makes a 60% sovereign debt more of a lower bound than an upper bound.The rules should allow, during a bad recession, for an upper bound to fiscal deficit of 5-6% of GDP, but the Stability and Growth only allows for 3%. The Fiscal Compact added that the structural deficit must not exceed 1 % of GDP. This corresponds to a level of sovereign debt of 33% of GDP. So, if the member states will live by the rules during the next decades, the euro area is heading for an unprecedented decline of public debt. The more likely outcome is the rules being simply ignored. But then it is better to revise them now, so that member states can be held accountable when violating them. Xavier Debrun, Luc Eyraud, Andrew Hodge, Victor Lledo and Catherine Pattillo summarise lessons from recent research on fiscal rules, including the new generation of ‘smart’ rules that emerged around the Global Crisis, to answer the question of whether numerical constraints on broad indicators of fiscal performance can contain politicians’ penchant for borrowing too much and at the wrong time. The 7+7 Franco-German economists’ paper published in January suggested a two-pillar approach, consisting of (1) a long-term target debt level, such as 60% of GDP, or a more bespoke objective taking into account, for example, implicit liabilities arising from pay-as-you-go pension systems; and (2) an expenditure-based operational rule to achieve the anchor. Zsolt Darvas, Philippe Martin and Xavier Ragot elaborate on this and make the economic case for an expenditure rule in Europe. The current framework has suffered from procyclicality: there was insufficient debt reduction in many countries during the ‘good times’ in the 2000s, and this in turn reduced fiscal capacity during the bad years of the crisis. In addition, the current rules – centred on the concept of structural budget – suffered from large measurement problems. Lars Feld, Christoph Schmidt, Isabel Schnabel, Volker Wieland portend that the opacity and complexity of the current EU fiscal framework implies that the rules are not sufficiently effective in confining the deficit bias of governments and ensuring sustainable public finances. They propose a re-focused framework with a long-term public debt limit. In contrast to other proposals, this one however retains as a key element the structural balanced budget rule as stated in the Fiscal Compact.

On Putin’s time-traveling assassins (and other huge holes in the Skripal poisoning “case”) --Let's start with the fact (noted by George Ades on Facebook) that Petrov and Boshirov arrived in Salisbury at 11:40 a.m. on the day the Skripals were "attacked"—two hours after the Skripals left their house at 9:45, touching their (allegedly) poisoned door handle. ("Can you see a discrepancy there?" asks Ades. "Of course, the Russians could have perfected time travel; I wouldn't put anything past them. They have, after all, perfected the invisibility cloak for their submarines.") And why did the British authorities announce that Petrov and Boshirov were suspects while the two were back in Russia, rather than wait until the two were back in Europe, where they could have been quickly nabbed, and ultimately tried? The British obviously do not want them tried, because a trial would blow their whole preposterous fantasy to smithereens. Last March, NFU sent out a sober, thorough survey of the "evidence" in the Skripal case, put together by the Working Group on Syria, Media and Propaganda, an ad hoc association of British academics. The British having now revived their lethal fiction of "another Russian poisoning," I'm sending you that link again: http://syriapropagandamedia.org/doubts-about-novichoks Below are some sharp questions about Petrov and Boshirov's alleged role in that alleged poisoning, from Joseph O. Boyd-Barrett, a member of the Working Group. Please send those urgent questions far and wide, so as to throw a monkey wrench into the Western war machine.

UK constitutional crisis looms if Brexit talks founder  - What is the balance of bargaining power between the European Union and the United Kingdom as we approach the Brexit negotiating endgame? Is Brexit too heavy a burden for the UK’s political union to bear? Is a blind Brexit therefore the most plausible outcome of the talks on withdrawal and a future framework?  It helps to stand back from the immediate noise of the Brexit drama to look at these three strategic questions, the answers to which are highly consequential for Ireland. This state has hitched its negotiating wagon to the EU team and now relies heavily on their solidarity for a beneficial outcome. Whether that is delivered depends in good part on how the British side weighs up the effects of a harder or softer deal on the future of the UK itself. A compromise fudging and postponing of the most difficult decisions may be the only way to avoid breakdown.Brexit is a radical answer to the question of whether EU states want to scale up or down the level and scope of their integration. The usual approach to such heterogeneous preferences among a growing membership is differential integration, whereby some states go ahead with projects such as the euro or defence while others opt out. It is much easier to negotiate opt-outs while remaining a member state because you can veto departures from the status quo. Ahead of the Brexit referendum in June 2016, David Cameron tried unsuccessfully to get more opt-outs on migration.   He failed because the relative inter-governmental bargaining power changes radically when exit is chosen, in a transition to differential disintegration.   Brexit finds the remaining 27 states defending the status quo against the departee, while the institutional balance of power and the decision-making rules shift towards them too.

 How Brexit deal will be struck— Get ready for the Brexit Big Bang.After more than a year of excruciating negotiations, and despite continuing fierce differences, the U.K. and the EU have reached a shared understanding of how they can clinch a deal.It will be hard, fast and with a bang, at a yet-to-be-arranged special summit in Brussels in November, according to senior government officials and diplomats in Brussels, the U.K. and other EU capitals. There is still no guarantee of success, particularly given the continuing sharp divide over how to solve the Irish border issue, and the timetable could yet slip further. But if a deal is clinched, according to the diplomats and officials in Britain, Brussels and Berlin, it will come at a highly scripted moment to be quickly followed by EU27 leaders approving the package.Both sides hope it will be a “transformative” political moment for Theresa May, with the goal of a jolt of momentum that will help the U.K. prime minister force a deal through parliament before her opponents can pick it apart. Negotiators in London and Brussels are now working hand-in-glove to get the deal over the line, intent on avoiding any drip-drip of mini developments that critics can gnaw on.  A bland statement issued by Brexit Secretary Dominic Raab following an “extended phone call” Friday morning with his opposite number Michel Barnier was typical of this tight-to-the-chest approach. “Our teams are closing in on workable solutions to the outstanding issues,” said Raab with no hint of what they might be.Barnier, the EU’s chief negotiator, offered his own bland confirmation, noting differences but stressing “useful dialogue,” “progress” and “continuing our discussions to find common ground on the future relationship.”A week earlier, the pair had met in Brussels, but chose not to release any statement at all, or hold a press conference.

UK will shift Brexit stance in its ‘darkest hour’ claim EU officials - The British government will have to experience its “darkest hour” and stare into the abyss of a no-deal Brexit before it will cave in to Brussels demands, senior EU diplomats have predicted. Ahead of a summit of EU leaders in Salzburg, diplomats in Brussels privately warned that Theresa May still needed to make a significant shift on her red lines for a deal to be possible, with the Irish border issue remaining a major hurdle in the talks. The stark prediction came as a French government official said that the president, Emmanuel Macron, wanted to nail down the key terms of the future deal now, rather than allow any ambiguous drift on the major issues after 29 March 2019. That was at odds with the UK environment secretary, Michael Gove, who had claimed over the weekend that any deal with the EU on the political declaration could be undone by MPs after Brexit, as he urged his Tory colleagues to support the Chequers proposals “for now”. Brussels wants credible assurances from May that any deal will not be unpicked by her successor. The prime minister was only to be given “a few minutes” to talk to leaders at a dinner on Wednesday night in Salzburg before the 27 talk among themselves the following day, in a sign of the low expectation that she will have anything significant to say until after the Conservative party conference. EU diplomats said they feared that the UK government would have to be pushed to the brink of the economic disaster before it does move on the most contentious issues. Christine Lagarde, the IMF’s managing director, warned on Monday that a no-deal Brexit would deliver “reduced growth, an increase in the [budget] deficit and a depreciation of the currency”. “A lot of movement is needed by the UK side before we can actually reach agreement”, said one senior diplomat. “We need a substantial change in the UK red lines still.” A second EU diplomat added: “It seems that the UK needs to have a ‘darkest hour’ moment before they will shift position. But they will have to shift their position.”

Small businesses entirely unprepared for chaotic no deal Brexit - Only one in seven (14%) small businesses have starting planning for a no deal Brexit, according to new research from the Federation of Small Businesses (FSB). FSB’s latest research shows that a further 41% believe that a no deal Brexit will have an impact on their business but haven’t yet started planning for the possibility. One in ten (10%) believe that a no deal Brexit will have a positive impact on their ability to do business.It reveals that almost half of small businesses (48%) believe that a no deal Brexit will have a negative effect on their ability to do business. This figure rises sharply to 66 per cent for those small firms that trade with the EU and to 61 per cent for those that employ a staff member from the EU.The research also exposed the actions those small firms, who will be impacted by Brexit, intend to take between now and the time the UK leaves the EU in preparation for a no deal Brexit. 35 per cent of small businesses say that they would postpone major business decisions or innovations, while around one in five (21%) say they would cut staff or expenditure. Responding to the findings, FSB National Chairman, Mike Cherry, said: “Looking at this research it is obvious that our small firms are not prepared or ready for a chaotic no deal Brexit and the impact that it will have on their businesses.

Parliament has a ‘golden moment’ to halt Brexit before it’s too late  - First, we must be clear that the goal must be to stop Brexit entirely. Brexit is a cliff, not a gradient. The mistake we are in danger of making is to believe that some Brexits are better than others when the fundamental problem is Brexit itself.Being on the edge of a cliff, the necessary course is to step back from the edge, and not delude ourselves with ever more absurd and bizarre schemes for jumping over while clinging to a branch and hoping to find a ledge a third or half the way down. We are at risk of pursuing a Wile E. Coyote Brexit – running so fast over the edge that we don’t notice, until it is too late, that there’s nothing holding us up.It is now crystal clear that the fatal flaw of Brexit is the act of putting the UK outside the European Union – its markets, its customs union, its institutions, its law, its leadership, its future. Working out what we might do having left is the politics of “least worst” options, unworthy and dangerous for this nation and this people with its European geography and destiny.After two years of ceaseless Brexiteering by government and parliament, it is a statement of fact that there is no viable Brexit plan on offer, none in sight, and that all of those mooted involve massive dislocation and ongoing uncertainty for our trade, our security, Ireland, and our whole international position as a country. Even if we could get to something like a Norwegian or Swiss option – and don’t get me going on the complexities even of those, and of course such arrangements aren’t remotely government policy – the difference between that and our present position in the EU would have to be measured in miles, not inches. And anything short of this is frankly ludicrous, as the last few weeks of “keep calm and carry on”, Battle of Britain-style planning for food stockpiling and transport chaos has demonstrated.Point two. The path away from the cliff edge is for Theresa May to announce that the government’s Brexit deal will be put to a referendum after it comes to parliament at the end of the year, giving the people the choice not to proceed and instead to stay in the European Union. If the prime minister will not do this, the House of Commons should direct her or her successor to hold this referendum, as it has directed monarchs and governments in moments of national crisis over the centuries since Magna Carta  There is a lot being said about democracy and referendum results that must be honoured irrespective of circumstances. Democracy is not a single event; it is a process of constant public engagement, what Clement Attlee called “government by discussion”. That discussion is not over simply because Jacob Rees-Mogg declares it over. The people should make the final decision on Brexit when they see the government’s Brexit deal.

At EU summit, upbeat mood music on tough issues — In the city of Mozart, the message from EU leaders was this: Neither Brexit nor migration has delivered the requiem for Europe that their fiercest critics had predicted.At a summit to discuss the EU’s two biggest, lingering existential crises, the leaders could not claim victory on either front. A Brexit deal is still not at hand. On migration policy, they are as divided as ever.And yet, the EU is still standing, and the mood is guardedly optimistic.As they arrived on Wednesday for a dinner of veal Wiener schnitzel and Sachertorte at Felsenreitschule, a historic concert hall and theater that once served as a movie set for “The Sound of Music,” leaders consoled themselves over the lack of a broader deal on migration by citing the precipitous decline in the numbers of arrivals.“My contribution will be to highlight the good work we have been doing so far together, on the external sides of our migration policies, in particular the strong political partnership we have established with the African Union,” Federica Mogherini, the bloc’s foreign policy chief, said as she arrived.“No deal or a hard Brexit would be difficult for Europe but it would be terrible for the U.K.” — Austrian Chancellor Sebastian Kurz“That has brought results,” Mogherini said on the red carpet. “Numbers of arrivals have never been so low. But we have to keep working on this.” Mogherini said there is general agreement among EU nations to continue Operation Sofia — the bloc’s anti-smuggling effort in the Mediterranean Sea. And she said further partnerships would be pursued with African and Middle Eastern countries, to be discussed at a high-level meeting with United Nations Secretary-General António Guterres in New York this weekend.

Theresa May tells EU27 she won’t delay Brexit despite lack of a deal - Theresa May has tried to threaten EU leaders over dinner at a special summit in Salzburg by telling them the UK would not seek to delay Brexit, prompting European leaders to warn that the two sides remained far apart on trade and the Irish border despite months of negotiations. The prime minister told her counterparts “that the UK will leave on 29 March next year” and as a result “the onus is now on all of us to get this deal done” by the end of an emergency summit that the EU confirmed would happen in mid-November. It was the first time since Chequers that May has had a chance to address the EU’s other 27 heads of government instead of going through their chief negotiator, Michel Barnier, with No 10 hoping that it would inject some urgency into the divorce talks. “We all recognise that time is short but extending or delaying these negotiations is not an option,” she said. But as the summit started Jean-Claude Juncker, the president of the European commission, said that a deal remained “far away” while Donald Tusk, the president of the European council, warned that the UK’s proposals for the Irish border and future trade relations with the EU needed to be “reworked and further negotiated”. Tusk added that “various scenarios are still possible” – a clear hint that no deal was still a possibility. Despite the EU leaders’ statements, No 10 is hoping that May’s pitch to EU leaders will eventually prompt some greater flexibility on the part of Brussels in the critical period for the Brexit negotiations between a scheduled European council meeting in October and the decisive summit in November. Theresa May would then have to get her deal signed off by parliament – the so-called “meaningful final vote” – before the government can then implement the legislation it needs in time to hit the deadline of leaving the EU on 29 March 2019, two years after serving notice under article 50.

Brexit deadlock: Theresa May urges EU to compromise - European leaders gathered in the Austrian city of Salzburg on Thursday for the second day of an informal summit. One of the main issues are the deadlocked negotiations on Brexit, the final agreement on which was supposed to be inked in October. On Thursday, however, EU leaders announced a special Brexit summit is to be held in November.Immigration, a major policy point for Austrian Chancellor Sebastian Kurz, whose government holds the rotating EU presidency, and security in the bloc are the other major talking points. UK Prime Minister Theresa May told EU leaders on Wednesday that Britain has "put forward serious and workable proposals" and that it was now up to the EU to "respond in kind" and "evolve its position." What the key players said at the summit:

• Austrian Foreign Minister Karin Kneissl told DW that the EU member states disagreed on many things, there was "no friction when it comes to Brexit. There is a high degree of cohesion."
• Irish Prime Minister Leo Varadkar:  Ireland is a country that obviously wants to avoid a no-deal scenario...[but] we are preparing for that, we are hiring extra staff and officials, putting in IT systems, we're ready for that eventuality should it occur."
• European Commission President Jean-Claude Juncker: "It was interesting, it was polite, it was not aggressive. She [May] is doing her job."
• EU Council President Donald Tusk: Despite progress in some areas, on the two thorniest issues of the Irish border and post-Brexit trade ties, "the UK's proposals will need to be reworked." He said a no-deal scenario was "still quite possible."
• French President Emmanuel Macron: "We [the EU] need to continue to act as a group, make sure we approach this as the EU-27. He stressed that a "solution needs to be found, but it shouldn't jeopardize the coherence and the four freedoms of the single market."

A major summit planned for October 18 was being treated as the last chance for a concrete deal for Brexit, which is supposed to go into effect on April 1. The November summit announced on Thursday is now seen as the deadline to reach a deal, which have to be ratified both by the EU legislature, all member states' Parliaments, and the UK Parliament.

Pushing the BoE to the limit: what a no-deal Brexit will mean for UK exchange and interest rates -The absence of a trade agreement between UK and EU will yield further depreciations of the pound relative to leading currencies, explain Michael Ellington and Costas Milas. This will then lead to a sharp cut in the Bank of England’s policy rate and to another round of quantitative easing. In other words, a no-deal Brexit will push the Bank of England to the limit. Prime Minister Theresa May has warned “it’s either my [Chequers] deal or no deal”. With betting odds implying a probability of 62.5% on no deal being reached before April 1st 2019, one way of looking at the impact of such an outcome is to consider its consequences in terms of an economic policy uncertainty shock. There are good reasons why policy uncertainty affects the economy. Policy uncertainty motivates agents to delay investment and hiring decisions, and so leads to a decline in investment employment and total output. Further, under these conditions, monetary policy becomes less effective. This is because agents tend to postpone decisions until more precise information becomes available, and this cautiousness makes them less responsive to changes in the economic environment, including the interest rate. Last but not least, credit rating agencies respond by downgrading the credit profile of countries hit by rising policy uncertainty.We measure economic policy uncertainty based on articles from The Times and The Financial Times regarding policy uncertainty. We count the number of articles containing the terms uncertain or uncertainty, economic or economy, and one or more policy-relevant terms. Following from the EU Referendum result, policy uncertainty recorded an unprecedented spike in June 2016 (see Figure 1). Since then, policy uncertainty has somewhat receded; nevertheless, it remains elevated compared to its pre-2015 levels.

Just say no to a ‘blindfold Brexit’ — To fudge or not to fudge? That’s the question on the menu as EU leaders turn their attention to the problematic issue of Brexit in Salzburg today. The leaders of the other 27 countries seem split on the issue. France wants a “political declaration” clearly spelling out the U.K.’s future relationship with the bloc after it leaves. Some other countries, however, think accepting a lack of clarity — a so-called blindfold Brexit that kicks some of the hardest decisions about the future relationship until after the U.K. has already departed — may be necessary to get a deal done. This is the wrong conclusion. A fudged deal would be dishonest and store up trouble. It would be against the EU’s values and interests. Those who advocate fudge worry that if the EU insists on the final details of an agreement now, British Prime Minister Theresa May will not be able to sell a deal to the British Parliament. She could be kicked out by hardline Brexiters in her party and replaced by somebody like Boris Johnson, the former foreign secretary — and then the U.K. might then crash out of the EU without a deal. It is easy to see why a blindfold Brexit is tempting. At the heart of the trouble is the prime minister’s current proposal — the so-called Chequers plan — which suggests that the U.K. keep its borders with the EU open while pulling out of the bloc’s single market and customs union. To try to square the circle, May has come up with a fantastically bureaucratic scheme based on yet-to-be-developed technology. The European Commission and the other EU countries know May’s idea is unworkable. They also don’t like that the U.K. should have free movement for goods while abandoning free movement for people and services. The Commission believes the U.K. should either stay completely in the single market and customs union — or pull out of them properly and cut a free-trade deal a bit like the one Canada has with the EU. It is easy to see why a blindfold Brexit is tempting. The EU doesn’t have to be honest about what it wants, the thinking goes, because the political declaration on the future relationship will not be legally binding — unlike the U.K.’s Withdrawal Agreement itself, which will spell out the divorce deal in detail. It should therefore be possible to come up with some waffly language that different people can interpret in different ways.

Tusk: May's Brexit plan won't work - Theresa May's proposed new economic partnership with the EU "will not work", the head of the European Council has said. Donald Tusk said the plans risked undermining the EU's single market. He was speaking at the end of an EU summit in Salzburg where leaders of the 27 remaining member states discussed Brexit. Mrs May said her proposals were the "only serious credible" way to avoid a hard border in the Northern Ireland. Responding to Mr Tusk's remarks, she said: "Yes, concerns have been raised and I want to know what those concerns are." There was "a lot of hard work to be done", she said, but added that the UK was also preparing for having to leave without a deal. Mrs May reiterated that she would not accept the EU's "backstop" plan to avoid a hard border in Northern Ireland, and said the UK would shortly be bringing forward its own proposals. The UK is due to leave the EU on 29 March 2019, and both sides are trying to reach a deal in time. There is still no agreement on issues including how to avoid new checks on the Northern Ireland-Republic of Ireland border.

Bitter row with the DUP left Theresa May unable to make any progress during Brexit talks with EU leaders A BITTER row with the DUP left Theresa May unable to deliver any progress to EU leaders on Brexit talks – prompting them to reject her Chequers plan. Ministers are in secret negotiations with the Ulster unionist party over a new bid by the PM to break the negotiations deadlock, The Sun has learned. The PM has been left unable to deliver any progress to EU leaders – prompting their rejection of Chequers Mrs May wants to establish a different system of rules for goods in Northern Ireland than Great Britain as the missing part of a backstop plan to ensure the Irish border remains open. But DUP leaders are refusing to agree the move, which they argue would split up the United Kingdom. And any extra regulatory barriers without the Northern Irish people’s express consent would be a serious breach of the Good Friday peace agreement, they insist. A senior DUP source told The Sun: “We have told Theresa that we will never allow her to divide up the UK’s single market, and we will never budge on that”.

EU summit marked by Brexit threats and ultimatums - UK Prime Minister Theresa May suffered political humiliation in Salzburg, when European Union (EU) leaders rebuffed her appeal to give at least conditional support to her Chequers proposal for a “soft Brexit.”May was given only 10 minutes to address EU heads of state Wednesday, after dinner at the informal summit, during which she appealed to her audience, “You are participants in our debate, not just observers.”She said she had counted on at least supportive noises for her “serious and workable” plan, given that she was seeking to head off a potential challenge from the “hard-Brexit”/Eurosceptic wing of the Conservative Party. She warned that the UK could be torn apart—with respect to Northern Ireland and Scotland, as well as by social tensions; that if her government fell, Jeremy Corbyn’s Labour Party could win a general election; and cited the potential damage to the EU itself of lost trade, investment and military support from the UK.Instead, her address was met with silence and her implied threats were stonewalled, as the main players within the EU combined the next day to declare her proposals to be “unworkable.”Prior to her dinner address, European Council President Donald Tusk had rejected May’s proposal for an EU-UK free trade area covering goods and agriculture, but not services, which she claimed would eliminate the need for tariffs and border controls, especially between Northern Ireland and the Republic in the south, an EU member state. The “suggested framework for economic cooperation will not work, not least because it risks undermining the single market,” Tusk said.May was said variously to be “staggered,” “shocked”, “humiliated” and “angry.”Tusk laid down an ultimatum by stating that without decisive progress on the Irish border, there would be a “moment of truth” by the planned EU summit on October 18, when the Brexit negotiations are due to be finalised. If there were no such progress, he would not call the planned EU summit in Brussels November 17-18 to “finalise and formalise” a deal. “I can’t rule out the possibility of a no deal. We are not ready to compromise on our four freedoms, on our single market as well as on the Irish borders,” he said. French President Emmanuel Macron, said to be the main author of Tusk’s hardline stance, declared at the summit’s close, “We must defend the single market and its coherence. The Chequers plan cannot be a take-it-or-leave-it plan… Brexit shows us one thing: it’s not that easy to exit the European Union. It’s not without cost. It’s not without consequences.”

Crash Out Brexit Virtually Guaranteed as EU Leaders Talk Tough to Theresa May, Reject Chequers Plan, and Give Her October Deadline – Yves Smith - Theresa May insisted on getting an audience with EU leaders on Brexit at this month’s Salzburg conference, with the aim of wresting Brexit concessions from them. Barnier showed an uncharacteristic bit of ire when May announced her plan, telling her she’d find no distance between his position and that of his principals.  May would have done well to heed Barnier’s warning. Donald Tusk and Emmanuel Macron, among others, told May in no uncertain terms what Barnier and other high level sources had said in a not-very-coded manner, that her so-called Checquers plan was dead on arrival. This should have been no surprise. As Richard North wrote today:On 7 July, in the wake of the now infamous Chequers meeting, I wrote of what has now become known as the “Chequers plan” that: “the precise reasons for the EU’s rejection, when it comes, will not be at all difficult to work out”.It was always going to be the case that the EU would reject the plan but, at that point, I reasoned that it would be given the deep six by the European Council at the October meeting. What no-one reckoned on was it being thrown out at the informal European Council at Salzburg. The EU has been clear from the get-go: no four freedoms (and that includes the free movement of people), no Single Market. And asking the EU to set up a whole new bureaucracy and legal arrangements to let the UK have its cake and eat it to was an obviously ludicrous demand, save to those inside the UK’s bubble.  Tusk told May she needs to deliver a new plan by October 18, and that also includes a “breakthrough” for the Irish border, and that the emergency EU summit set for November was on only if the European Council deemed there to be a realistic possibility of getting a deal done in its October meeting.  The UK press reaction is decidedly unhelpful. For instance, the headline of the Financial Times’ account describes May as “ambushed” and the Guardian’s, as “humiliated”. And some details, first from the Financial Times:The UK prime minister’s allies had hoped the EU would help her fend off her Conservative Eurosceptic critics at home.Instead Donald Tusk, European Council president, threw out the centrepiece of Mrs May’s proposal — an EU-UK free trade area covering goods and agriculture — leaving her fighting to save her Brexit strategy.“There are positive elements in the Chequers proposal but the suggested framework for economic co-operation will not work, not least because it risks undermining the single market,” Mr Tusk said…

Chequers goes pop: Theresa May’s Salzburg catastrophe - Chequers, as the journalist Chris Deerin has pointed out, goes pop. Which wry and funny as it is for those of us of a certain age will not be cheering up Theresa May. Because the EU summit in Salzburg has been a personal catastrophe for her. And worse than that, it was an avoidable catastrophe. Because every EU expert bar those she employs in Whitehall has been saying very loudly for weeks that the trade and commercial proposal in her Chequers Brexit plan would never win favour among the EU 27.So the question is why she waited to have that so publicly and humiliatingly stated by the EU’s president Donald Tusk today, rather than quietly acquiring some wriggle room over recent days. She’s also rejected the EU’s proposal to keep the Northern Ireland border with the Republic open – because, in her estimation, it would undermine the integrity of the UK – but won’t tell them what her revised proposal may be, though she insists she has one.Neither she nor EU leaders want a hard no-deal Brexit. But probably the only way for her to avoid it is to eat the humblest of humble pies and jog back to the deal her departed Brexit secretary, David Davis, naively thought he had been mandated to negotiate – a more conventional free trade agreement based on Canada’s deal with the UK.And maybe she could get that through the House of Commons, if her Remainer MPs were terrified into believing that the alternative to backing it would be a general election – which they assume Corbyn would win (whatever opinion polls may indicate).That said, Canada still wouldn’t solve the Irish border conundrum. Which means that the UK may not be in a position to sign a withdrawal agreement – and that, in turn, means a no-deal Brexit remains a live possibility, even a probability.A couple of things follow from all of this:

• 1) May will emerge as unique in the annals of history if she survives as PM much longer in the face of setbacks on this scale
• 2) If all conventional roads lead to a hard no-deal Brexit, the notion of Parliament exerting control and forcing another referendum on us would begin to look not wholly fanciful.

United Ireland would ‘permanently reduce’ living standards of those in Republic - Belfast Telegraph - Income and living standards could be hit permanently for those living in the Republic, in the event of a united Ireland, research suggests. A united Ireland would permanently reduce the living standards of those living in the south, a new academic report suggests.  The Irish Times reports on a study carried out by economists from Trinity College Dublin and Dublin City University economists.The research suggests that in the event of a united Ireland the income and living standards of those living in the Republic would reduce by as much as 15% - and may never recover. The paper says this would be the price for the new administration having to accommodate the £10billion Northern Ireland receives from the Westminster government on an annual basis. “Taking on such a bill would reduce permanently the standard of living in this part of the island by 15%,” Prof John FitzGerald was quoted to have said on presenting his findings.

Collapse of Outsourcing Giant Carillion May Have Silver Lining  - The bankruptcy of UK outsourcing behemoth Carillion in January has left in its wake a trail of financial destruction and mayhem, but it may end up having a positive legacy. More than 200 British MPs (out of a total of 650) have backed a campaign to crack down on construction firms which, like Carillion, routinely pay their suppliers late to spruce up their own balance sheets. The Aldous Bill, named after the MP who is leading the campaign, Peter Aldous, is intended to put an end to this practice.Late payment of suppliers and subcontractors is a widespread problem in the UK, and many other countries. Perversely, the worst offenders are often large companies that claim to comply with official payment codes.“It’s a bitter irony that while Carillion were fully signed up to the government’s prompt payment code, they were making their suppliers hang on for 120 days or more to be paid,” said Rachel Reeves, chair of the Business, Energy and Industrial Strategy Committee.  One of the common ways payment is delayed in the UK is through the use of so-called “retentions”. These are monies — often between 5-10% of a contract’s total value — that are held back by contractors until a sub-contractor has completed its job satisfactorily. This is a common occurrence in the UK, often with brutal cash-flow effects for smaller firms lower down the supply chain, says Peter Aldous in the preamble to his bill:

Multiple Online Banking Systems Go Down in the UK - Internet banking has become a crisis-prone business in the UK, as the online platforms of big banks suffer regular outages and other forms of IT disruption.Friday morning, the online systems of the Royal Bank of Scotland, Ulster Bank and Natwest — all part of the RBS Banking Group — crashed in unison, leaving millions of customers unable to pay bills or view their balance on their online and mobile accounts. The group has 19 million customers in the UK and Republic of Ireland and 5.5 million active mobile app users.After around five hours of chaos, the RBS Group announced that the problems had been resolved. The failure had apparently been caused by a “technical glitch” — a word that is being used with increasing frequency by high-street lenders — in a regular update to their firewall. The bank emphasized that it was an “access issue” and there is no evidence that customer data was compromised. But then, it would say that!On Thursday, it was the turn of the UK’s largest bank, Barclays, whose website and telephone banking service crashed for around seven hours, leaving frustrated customers locked out of their online accounts.Fed-up customers took to social media to vent their anger, with some complaining that they were unable to access their accounts not only through the Internet platform but also ATMs. Barclays has around 24 million UK customers, though it’s not clear how many of them were affected by the outage.The bank told customers that they should still be able to make payments to existing payees through mobile banking, though new payees weren’t possible due to the incident. It also claimed that payments into accounts were unaffected by the issues. One alarmed customer begged to differ, complaining to the BBC that a payment due into his account had gone missing, while another customer reported the systems inside branches being down, preventing customers from carrying out transactions even in the old fashioned, pre-digital way. By mid-afternoon, the IT “glitch” — that word again! — had been “resolved,” though no explanation has yet been given as to what caused it.

UK government attempt to gag teachers as cuts deepen -- The broad-based opposition to massive austerity in education has provoked a threatening directive from the UK Conservative government to school staff to stay silent on the terrible impact the cuts are having on education. An update issued by the government’s Department for Education (DfE) to all schools as they returned from the summer break—billed as departmental advice for school leaders, governing bodies and local authorities—contained a new paragraph with a blunt statement in a staff management section.In the document titled, “Staffing and employment advice for schools,” the section reads: “All staff have a responsibility to ensure that they act appropriately in terms of their behaviour, the views they express (political views) and the use of school resources at all times, and should not use school resources for party political purposes.” A DfE spokesman added, “This update simply brings … guidance in line with the law, which makes clear that headteachers and local authorities must not promote partisan political views in school.” The warning, first reported by the Schools Week newspaper, comes after campaigns by school leaders over budget cuts since 2016, which included lobbies of parliament by head teachers and letters sent to parents across the UK informing them of the impact of cuts, and calling on them to lobby MPs. The government reaction, to what is a very limited opposition organised by the trade unions, must be seen as a warning, that not only will school cuts continue unabated, but that the government will move forcefully against any attempts to block their agenda.

Why the Public Debt Should Be Treated as an Asset --The claim that our public debt is excessive has been used as a major justification for austerity – cuts in spending. That massive debt, we are told, 1) must be repaid, 2) threatens our country with bankruptcy, and 3) is a burden on future generations. All these are wrong. Let me explain why. When our government borrows it does so by selling a promise to pay, called a bond. For example, a household buys a £100 bond and our government promises to buy it back at the same amount in ten years with interest (at present 2.5% or £2.50 every year). A pound note also is a promise to pay (look at the small print near the Queen’s picture). A pound note is a bond paying zero interest. Britain’s national currency is managed by our central bank, the Bank of England, owned by the citizens of the United Kingdom (that is, our elected government). As a result, the British government can never default on its bonds. Our government can replace maturing public bonds with new ones. Should private buyers, households and businesses, refuse to purchase the new bonds at the interest rate set by the British government, our government can sell them to the Bank of England. The option to sell to the Bank of England provides a fool-proof mechanism to prevent excessively high bond rates.  Whether the economy is strong or weak, the British government can never default on its debt. The debt is nothing more than pieces of paper that the government promises to buy back on a specific date. These pieces of paper can be bought back with new pieces of paper (new bonds) with later buy-back dates. If the private owners of the debt paper do not want the new bonds (new debt paper), our government can sell those new bonds to the Bank of England for cash and use the cash to pay the bond holders. In the UK, the public sector itself owns 25% of the £1.9 trillion UK gross public debt (see Figure 2). The government pays the interest on this portion of the debt to itself. Thus, one-quarter of the debt and the interest paid on it are not a burden.  Pension funds hold a large portion of the 75% of gilts not owned by the government. The interest paid on debt held by pension funds is income to retired households. As such, this portion of the national debt is a source of household income, a benefit not a burden to citizens.At the end of 2016, private corporate and foreign gilts holders owned 41% of the UK’s national debt. Only the £524 billion of gilts held by foreign creditors could be considered a “burden” in that the associated interest payments are from UK taxpayers to non-UK creditors. For fiscal year 2015/16 interest payments to foreign creditors were approximately £12 billion, or 0.6% of GDP – quite a small burden.