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

Saturday, October 6, 2018

week ending Oct 6

 Powell says we're 'a long way' from neutral on interest rates, indicating more hike are coming - Federal Reserve Chairman Jerome Powell said the central bank has a ways to go yet before it gets interest rates to where they are neither restrictive nor accommodative. In a question and answer session Wednesday with Judy Woodruff of PBS, Powell said the Fed no longer needs the policies that were in place that pulled the economy out of the financial crisis malaise. "The really extremely accommodative low interest rates that we needed when the economy was quite weak, we don't need those anymore. They're not appropriate anymore," Powell said. "Interest rates are still acommodative, but we're gradually moving to a place where they will be neutral," he added. "We may go past neutral, but we're a long way from neutral at this point, probably." The question of the neutral rate is critical for the Fed's policymaking. Officials have been debating for years where that level may be, with the Fed consensus near 3 percent. The current range for the central bank's benchmark rate is 2 percent to 2.25 percent; projections released last week indicated the policymaking Federal Open Market Committee is likely to take the funds rate to 3.4 percent before pausing. During the interview, the euro dropped to its lowest level since Aug. 21 as investors saw Powell's remarks as affirmation of more rate hikes down the road. Government bonds were getting slammed in early market action Thursday, responding both to Powell's comments and stronger economic data. The 10-year U.S. Treasury note's yield jumped to 3.21 percent, its highest level in seven years. While he said the trade war in which the U.S. finds itself with a number of its partners is not having an impact on data, the Fed has heard plenty from its business contacts who are concerned about multiple issues. Rising materials costs, supply chains and the loss of markets are among the worries. However, Powell said the end result could be positive both for the U.S. and other economies around the world. "If we wind up with lower tariffs broadly speaking and people obeying the rules of global trade, then that will be good for us it will be good for other countries, too," he said. "If perhaps inadvertently we wind up instead in a more protectionist era where countries are putting tariffs back and forth on each other, that will be bad for American workers and the American economy and perhaps for other countries as well." Asked what keeps him up at night, Powell said "basically everything."

The Era of Near-Zero Interest Rates Is Over -  The era of zero interest rates in the world’s major economies ended with the Federal Reserve’s decision to raise borrowing costs last week. The average interest rate in developed economies weighted for output passed 1 percent for the first time since 2009, according to JPMorgan Chase & Co. A similar gauge for the Group-of-10 economies compiled by Natwest Markets also touched that level.The landmark, reached almost exactly a decade since the collapse of Lehman Brothers Holdings Inc. sent the world economy spiraling toward recession, underscores the gradual path that central banks around the world are taking away from their emergency policy settings. There is a “glacial trend of monetary policy normalization,” Jim McCormick, head of strategy at NatWest in London, said in a report to clients. Much of the heavy lifting has been done in the U.S., where interest rates now stand at 2.25 percent, compared with near zero in Japan and the euro-area. In a year, JPMorgan still expects the average for developed economies to be 1.6 percent, around half a percentage point less than the average of 2005 to 2007. The Fed is not totally alone in shifting. Rate hikes in Indonesia, the Czech Republic, Hong Kong and the Philippines last week pushed Natwest’s index for emerging-market policy rates to its highest since the gauge began in 2001. Together, the five rate increases were the most in any week since records started in 2001, according to NatWest.

What Happened To Treasurys On Wednesday? - A couple of weeks back, I wrote something for this platform called "The Bond Selloff That Nobody Noticed".That was a recap of events that transpired during the week of September 17, when yields rose on what looked like a combination of rising inflation expectations and the term premium trade.One of the oddities of that week was the dollar (NYSEARCA:UUP), which did not rise in tandem with U.S. yields. Instead, the greenback fell as commodities rallied, a combination that helped buoy sentiment in downtrodden ex-U.S. assets, particularly emerging markets, where equities outperformed their U.S. counterparts handily and currencies logged their best week since February. On September 18, Jeff Gundlach expressed his incredulity at the perceived lack of press coverage: Fast forward to Wednesday and Treasurys sold off hard. This time around, the financial media definitely took note. Wednesday's bond rout was the talk of the financial universe as 30-year and 10-year yields hit their highest levels since 2014 and 2011, respectively. The selloff began in earnest with a big ADP beat and gathered steam following an extremely hot ISM services print.Futures volume was enormous (around 180% of the 10-day average) and the close was very ugly, with 10-year yields rising further and closing near the day highs:The curve bear steepened, as the 2s10s sliced up through 30bps, the widest in at least two months:  What should you make of all this? Well, first of all, based on the volume, it looks like folks got stopped out, which likely exacerbated the selloff. Either that, or people were adding new shorts. If it's the latter, just note that the spec short in the 10-year was already sitting at a record high (this the latest data available, current through Tuesday, September 25): But more importantly for average investors, this feels a whole lot like late January/early February. We're staring down an acute selloff in bonds that so far has been accompanied by rising stock prices (SPY) and we're headed into a pivotal jobs report on Friday. January was defined by rising yields and a melt-up in U.S. stocks. Incoming Fed Chair Jerome Powell was expected to adopt a more data-dependent approach to monetary policy than his predecessor, and that had markets on edge about inflation. That is very similar to the current setup. 10-year yields have risen more than 30bps since September 1. Meanwhile, U.S. equities have made new high after new high since August, when the S&P finally recouped losses incurred in February and March. Today looked like the market attempting not only to catch up to the 2019 dots, but also to start pondering the possibility that inflation could accelerate meaningfully going forward.

U.S. Treasury Yields Go Haywire as Times Reveals Trump Tax Evasion - Pam Martens and Russ Martens -- Yesterday’s Treasury market was a mess. So was the front page of the New York Times, which featured a montage of tax records evidencing tax scams by the Trump family. We think there’s a connection.The New York Times’ 14,000 word expose and exhibits effectively render Trump a lame-duck president. That means that the country is left with the unprecedented national debt created under his big tax cuts for corporations and the wealthy along with a billionaire Emperor devoid of either clothes or the aura of a self-man man. The outlook for mounting U.S. debt pushing up Treasury yields comes at the same time that theFederal Reserve is scaling back its crisis-era purchases of Treasuries and as the European Central Bank begins this month to halve its bond purchases. The Federal Reserve, using a previously released schedule, began on October 1 to remove an additional $10 billion in bond liquidity from the market (by reducing its rollovers of maturing Treasury debt on its balance sheet from $40 billion to $50 billion). The European Central Bank has added to that loss of liquidity this month by cutting its bond purchases (Quantitative Easing) from about $35 billion to $17.5 billion.  Yields on 10-year and 30-year U.S. Treasury notes spiked bizarrely higher yesterday and this morning. The 10-year U.S. Treasury note opened yesterday with a yield of 3.0644 percent and then proceeded to spike more than 12 basis points to close at 3.1873 percent, the high of the day and the highest level since 2011. The unusual spike in the 10-year continued into this morning, with the yield reaching 3.229 percent in early morning trade. The idea that the move in yields is directly connected to Trump’s fading fortunes (literally and figuratively) is supported by the way the Treasury market behaved on November 9, 2016 – the first day the market traded after Trump was elected President on November 8.  On November 9, 2016, the 10-year Treasury yield jumped past 2 percent and kept going up through December. Yields didn’t enter a downward trajectory until March of 2017. (See graph below.) A sudden strange move like yesterday’s in the 10-year Treasury should have sent the derivative-laden mega banks on Wall Street and the big insurance companies, that are still living on the edge as counterparties to Wall Street’s derivatives, tanking. But that didn’t happen as the chart above indicates. (It’s within the realm of possibility that the big Wall Street banks could have an algorithm in their Dark Pools that’s instructed to buy back their own stock when there’s a sudden surge in intermediate and long-term Treasury yields.) But there could be some serious stock pain in the future for these derivatives boys as buybacks can only go so far when there is a tsunami of selling.

Q3 GDP Forecasts -- From Merrill Lynch: We continue to track 3Q GDP at 3.7% qoq saar as stronger than expected vehicle sales were offset by weaker core capital goods shipments [Oct 5 estimate].  From Goldman Sachs: We boosted our Q3 GDP tracking estimate by two tenths to +3.3% (qoq ar) [Oct 5 estimate].  And from the Altanta Fed: GDPNow  The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2018 is 4.1 percent on October 5, unchanged from October 1. [Oct 5 estimate]From the NY Fed Nowcasting Report  The New York Fed Staff Nowcast stands at 2.3% for 2018:Q3 and 2.8% for 2018:Q4. [Oct 5 estimate  CR Note: It looks like GDP will be in the 3s in Q3.

How Will The Surge In Oil Prices Impact US GDP- One Bank Answers -- Brent oil prices are trading back near $85/barrel, their highest level since October 2014, right before they tumbled. And with the "lower oil is beneficial for GDP" narrative discredited, following the recent rally, questions about the economic impact of oil prices have resurfaced, among them: have higher oil prices contributed to the upside surprises to 2018 growth via higher energy capex, as Chairman Powell suggested last week? Can US shale further ramp up production when capacity constraints are looming? Do higher energy prices still exert a meaningful drag on consumer spending and boost core inflation in an era of increased energy efficiency?This is an analysis that Goldman conducted this week, and found that higher oil prices have had a neutral impact on GDP growth so far this year with a -0.25pp contribution from lower real consumption roughly offset by a +0.25pp contribution from higher energy capital spending. However, if oil prices remain at their current level the net growth contribution will decline to -0.1pp to -0.2pp in 2018Q4 and 2019H1.The key reason is that while higher oil prices will remain a steady drag on consumption growth, the boost to energy capex is likely to shrink as the shale industry runs into transportation capacity constraints. It is only in 2019 H2 that the eventual arrival of new pipelines will likely trigger a re-acceleration of energy capital spending.Stepping back for a look at the big picture, Goldman adds up the consumer spending and energy capex channels, with the estimated net effects of energy price moves on GDP growth shown in the chart below.

Two-Thirds Of Economists See Recession by End-2020 - Two-thirds of business economists in the US expect a recession to start in the second half of 2020 according to the National Association for Business Economics (NABE), while a majority of respondents say President Trump's trade war is the greatest threat to the most extended bull market ever. About 10% believe the next economic downturn could begin in 2019, 56% say 2020, and 33% said 2021 or later, according to the August 28-September 17 poll of 51 economists issued by the NABE, as per Bloomberg.  41% of economists said the most significant downside risk was trade policy, followed by 18% of respondents indicating the Federal Reserve's interest rate hikes, and the same amount saying it could be a stock market repricing event or volatility shock."Trade issues are clearly influencing panelists’ views," David Altig, Federal Reserve Bank of Atlanta research director and NABE’s survey chair, said in a statement with the report.  Bloomberg said the economic expansion became the second-longest in May (and will become the longest on record next summer) with no significant warning signs yet and Fed officials upgrading growth forecasts for this year and next -- what could go wrong?  If the expansion continues into mid-2019, it could become the nation's longest ever, based on data from National Bureau of Economic Research figures that date back to the mid-1850s. Despite data already showing Trump's trade aggressive tariff policies slowing global growth momentum, disrupting global supply chains, and repricing markets in some developed world but most emerging markets, economists have maintained their rosy forecasts for the US economy, as nothing in their models indicate danger. Meanwhile, 33% of respondents said the most significant potential driver of stronger economic performance is Trump's tax cuts (increased financialization: stock buybacks, M&A, dividends, etc...), 27% cited wage increases and 10% said stronger global growth.  Overall, the economists were more pessimistic than optimistic about their assessment of potential risks to expansion, as the cycle has been overextended thanks to quantitative easing programs via the Federal Reserve and now fiscal stimulus via Trump's tax cuts. Fed policy makers said "risks to the economic outlook appear roughly balanced" in their statement last week while raising their 2018 growth estimate to 3.1% from 2.8% in prior forecasts and 2019 to 2.5% from 2.4%. Fed officials also raised the main interest rate by +25bps to a target range of 2% to 2.25%, this year’s third hike.

US Gross National Debt Soars $1.27 Trillion In Fiscal 2018, Hits $21.5 Trillion - The US gross national debt jumped by $84 billion on September 28, the last business day of fiscal year 2018, the Treasury Department reported Monday afternoon. During the entire fiscal year 2018, the gross national debt ballooned by $1.271 trillion to a breath-taking height of $21.52 trillion.Just six months ago, on March 16, it had pierced the $21-trillion mark. At the end of September 2017, it was still $20.2 trillion. The flat spots in the chart below, followed by the vertical spikes, are the results of the debt-ceiling grandstanding in Congress: These trillions are whizzing by so fast they’re hard to see. What was that, we asked? Where did that go?Over the fiscal year, the gross national debt increased by 6.3% and now amounts to 105.4% of current-dollar GDP.But this isn’t the Great Recession when tax revenues collapsed because millions of people lost their jobs and because companies lost money or went bankrupt as their sales collapsed and credit froze up; and when government expenditures soared because support payments such as unemployment compensation and food stamps soared, and because there was some stimulus spending too.But no – these are the good times. Over the last 12-month period through Q2, the economy, as measured by nominal GDP grew 5.4%. “Nominal” GDP rather than inflation-adjusted (“real”) GDP because the debt isn’t adjusted for inflation either, and we want an apples-to-apples comparison. The increases in the gross national debt have been a fiasco for many years. Even after the Great Recession was declared over and done with, the gross national debt increased on average by $954 billion per fiscal year from 2011 through 2017. And the regular debt-ceiling fights in Congress, rather than accomplishing something noticeable in terms of fiscal rectitude, are just political charades that leave some flat spots in the chart above followed by some dizzying spikes right afterwards. But now we have even more profligacy: Increased spending combined with tax cuts. As a result, the surge in the debt in fiscal 2018 of $1.27 trillion was 33% more than the already mind-blowing average surge in the debt over the past seven fiscal years ($954 billion). For the first 11 months of fiscal 2018, through August, total tax receipts inched up by only $19 billion, or by 1%, according to the CBO, though the economy, as measured by nominal GDP, grew at an annual rate of about 5.4% (none of the figures are adjusted for inflation).

Modern Monetary Theory Grapples With People Actually Paying Attention to It -- When Donald Trump signed a huge corporate and upper-income tax cut into law in December, it seemed like there was one small bright spot. With the GOP-backed bill projected to increase the national deficit by $1.9 trillion over the first decade, at the very least the Democrats could finally quit saying that an increase to the national debt — the vice that trapped so much progressive legislation — was per se political suicide.  In fact, as many Democrats reckoned at the time, if they reclaimed power, they could then repeal those Republican tax cuts and redirect the revenue to new social programs. But this month, despite the sky decidedly not falling from the Trump tax cuts, Nancy Pelosi confirmed her intent to bringing back the “pay-go” rule, which requires all new spending to be offset with budget cuts or tax hikes. Pelosi first instituted the rule in 2007, effectively barring Congress from taking up progressive legislation that would increase the national debt.This stark contrast between Republicans and Democrats was front-and-center at the second annual Modern Monetary Theory (MMT) conference, held last weekend at the New School in New York City. The MMT movement, started in the 1990s by a few heterodox economists, has since grown into a vocal and eclectic mix of academics and activists, trying to change the way we think about government spending.In a nutshell: MMT proponents believe that the government can safely spend far more money than it currently does, and increasing the federal deficit is not a bad thing in and of itself — a public deficit is also a private-sector surplus, after all. While typically we hear rhetoric that our political leaders must first “find” money through new taxes or budget cuts in order to pay for new programs, MMT proponents say that’s a fundamental misunderstanding of how money works. In so-called fiat currency systems (meaning societies in which money isn’t backed by physically valuable commodities like gold or silver) governments literally create the money and tax it later to control for inflation and keep it in demand.  Inflation is still a risk, MMT advocates say, but it’s a much more remote risk than mainstream economists let on, and it’s one that can be addressed down the line if it arises, without so much pre-emptive austerity.

Under Fog of Kavanaugh, House Passes $3.8 Trillion More in Tax Cuts - With attention fixed on the Brett Kavanaugh confirmation hearings, the U.S. House of Representatives passed a new $3.1 trillion tax cut on Friday. The vote was 220 to 191, including three Democrats. The down-to-the-wire 2017 tax act passed in late December contained a mix of permanent and temporary changes that had to result in a net increased cost that fell within a structural limit of $1.5 trillion that allowed the Senate to approve the bill with a simple majority.The House’s new bill takes effect starting in 2025, and would add $600 billion to the national debt within the next decade, and then $3.2 trillion in the 10 years after that, according to Howard Gleckman of the Tax Policy Center.Despite the House vote, it is unlikely the Senate will take up the legislation. The first round of tax cuts landed with a thud, with even a leaked Republican National Committee poll—reported on by Bloomberg News—showing American voters thought it benefited “large corporations and rich Americans” by an overall 2-to-1 margin and the same margin among independent voters.Without special rules in place, the Senate would vote under normal procedures, which can require 60 senators’ votes to pass a bill that is heavily opposed.

Tax cuts: The gift that keeps not giving - Brookings - Largely unnoticed alongside a seemingly unending stream of scandals and crises, Republicans have pushed forward a second round of tax cuts. The legislation has little chance of passing the Senate, and so is more a messaging maneuver than a serious attempt at reform. But if the tax bills that will be voted on in the House on Friday are intended to mobilize midterm voters, the plan is profoundly ill-conceived.With additional tax cuts, Republicans are throwing good money after bad. An analysis of last year’s Tax Cuts and Jobs Act (TCJA) indicated that it would do little to help Republicans in the midterms. As the campaign season has unfolded, more and more evidence has helped to confirm this prediction. An internal GOP poll commissioned by the Republican National Committee and obtained by Bloomberg News this week found a significant number of voters believed President Trump’s tax overhauls benefitted “large corporations and rich Americans” over “middle class families.” (That is to say, most Americans were correct about the legislation’s impact.) The report’s conclusion was blunt: “we’ve lost the messaging battle on the issue.”On the campaign trail, at least, Republicans seem to have recognized that the promise of “tax cuts” is not thrilling the voters like it used to be. Upcoming data by the Brookings Primaries Project shows the proportion of Republican candidates discussing federal tax policy has actually declined in 2018, compared to the previous two election cycles. Democrats, by contrast, are talking about federal tax policy more than usual. It’s not the data you would expect, if Republicans were confident in the appeal of their party’s signature legislative achievement.Into this far-from-auspicious political environment, however, House Republicans have doubled down on tax reform. The rationale, perhaps, is to force Democrats to vote against tax cuts one more time before the midterm. But, particularly given the public’s reaction to the TCJA, there is no compelling reason to imagine this would be effective.And the strategy could well backfire. The new tax legislation would make permanent the cap on the state and local tax (SALT) deduction passed as part of the TCJA. This provision raised taxes on people who pay both a lot of federal income tax and high state and local taxes—i.e., rich people in progressive states. So blue state Republicans, many of whom face serious challengers in November, will find themselves again forced to choose between the party and the interests of their wealthy constituents.

After Budget Cuts, the IRS’ Work Against Tax Cheats Is Facing “Collapse” - Pro Publica - Tax evasion is at the center of the criminal cases against two associates of the president, Paul Manafort and Michael Cohen. The sheer scale of their efforts to avoid paying the government has given rise to a head-scratching question: How were they able to cheat the Internal Revenue Service for so many years?The answer, researchers and former government auditors say, is simple. The IRS pursues fewer cases of tax evasion than it did less than 10 years ago. Provided you’re not a close associate of President Donald Trump, there may never be a better time to be a tax cheat.Last year, the IRS’s criminal division brought 795 cases in which tax fraud was the primary crime, a decline of almost a quarter since 2010. “That is a startling number,” Don Fort, the chief of criminal investigations for the IRS, acknowledged at an NYU tax conference in June.Bringing cases against people who evade taxes on legal income is central to the revenue service’s mission. In addition to recouping lost revenue, such cases are supposed “to influence taxpayer behavior for the hundreds of millions of American citizens filing tax returns,” Fort said. With fewer cases, experts fear, Americans will get the message that it’s all right to break the law.Starting in 2011, Republicans in Congress repeatedly cut the IRS’s budget, forcing the agency to reduce its enforcement staff by a third. But that drop doesn’t entirely explain the reduction in tax fraud cases. Over time, crimes only tangentially related to taxes, such as drug trafficking and money laundering, have come to account for most of the agency’s cases.

Washington threatens preemptive strike against Russian missiles -- On Tuesday, the United States government issued its most direct and public threat of a military strike against Russia since the height of the Cold War.The US ambassador to NATO, Kay Bailey Hutchison, told a press conference at NATO headquarters in Brussels that if Russia failed to stop its development of a new cruise missile that Washington claims is in violation of the 1987 Intermediate Range Nuclear Forces Treaty (INF), the Pentagon was prepared to “take out” the missile.Asked by a reporter what the US intended to do about the new class of Russian missiles, Hutchison replied, “The counter-measures would be to take out the missiles that are in development by Russia in violation of the treaty.”She continued: “Getting them to withdraw would be our choice, of course. But I think the question was what would you do if this continues to a point where we know that they are capable of delivering. And at that point we would then be looking at a capability to take out a missile that could hit any of our countries in Europe and hit America in Alaska.” To emphasize her threat, the US ambassador declared that Russia had been put “on notice.” This is the same kind of language used by Washington to threaten military action against Syria and Iran.

US Threatens To Destroy Russian Nuclear-Capable Missile System If Necessary - U.S. Ambassador to NATO Kay Bailey Hutchison on Tuesday warned that the U.S. could be forced to "take out" missiles Russia is developing that violate a Cold War-era treaty. If completed, the 9M729 Russian missile system could give it the capability to launch a missile strike on Europe with little or no notice, the Associated Press reported."It is time now for Russia to come to the table and stop the violations," Hutchison told reporters in Brussels, where US Defense Secretary Jim Mattis would later meet his NATO counterparts. She added that if the system became operational, the U.S. "would then be looking at the capability to take out a missile that could hit any of our countries in Europe and hit America."Hutchison also urged Russia to cease development of the missile system, which fits into a class of banned weapons under the 1987 Intermediate-range Nuclear Forces Treaty. "There will come a point in the future in which America will determine that it has to move forward with a development phase that is not allowed by the treaty right now," Hutchison said.Earlier in the day, NATO Secretary General Jens Stoltenberg urged Russia to be more transparent, and explain its alleged breaches of the INF Treaty.She also noted that the US had no intentions of violating the 1987 Intermediate-Range Nuclear Forces Treaty (INF), adding, however, that it might occur because of Russia. The pact bans countries from developing land-based cruise missiles with a range of between 310 and 3,410 miles. NATO officials have said the nascent Russian system fits into that category, the AP reported.According to the US, the new Russian 9M729 missile systems violate the conditions of the pact, as they give Russia the possibility of launching a nuclear strike in Europe with little or no notice.Meanwhile, Russia's Foreign Ministry has said that the 9M729 missiles correspond to Russia's obligations under the INF Treaty and have not been upgraded and tested for the prohibited ranges. Moscow also noted that Washington had never provided any evidence that Russia had violated the agreement because such proof does not exist. Earlier in July, Russian Defense Minister Sergei Shoigu claimed that the United States is violating the treaty by deploying in Europe missile defense systems with launchers, which might be used for firing Tomahawk cruise missiles.   Hutchison's comments come a day before Defense Secretary James Mattis was scheduled to meet with other NATO officials. Mattis said he intends to bring up the missile issue during the meeting according to the AP.

Note To NATO – You Don’t “Take Out” Missiles Without Having A War  --Earlier today the U.S. ambassador to NATO threatened to "take out" a new kind of Russian missiles: The U.S. envoy to NATO on Tuesday said that Russia must halt development of new missiles that could carry nuclear warheads and warned that the United States could “take out” the system if it becomes operational. The U.S. and Russia have for some time disagreed about the INF treaty. The Intermediate-Range Nuclear Forces Treaty was signed in 1987 between the Soviet General Secretary Gorbachov and U.S. President Reagan. It prohibits land based (not sea based) nuclear capable systems with a range of more than 500 kilometers and less than 5,500 kilometers. Russia said for years that the U.S. broke the INF agreement when it stationed missile defense systems in Europe to allegedly take out North Korean and Iranian intercontinental missiles. The missile defense missiles could be armed with nuclear warheads and could probably be used in a surface-to-surface mode. Previously deployed U.S. Nike-Hercules 'air defense' missiles had such capabilities. The National Defense Authorization Act for the year 2018 calls for (pdf, pg 240): ... evaluating existing U.S. missile systems for modification to intermediate range and ground-launch, including Tomahawk, Standard Missile-3, Standard Missile-6, Long-Range Stand-Off Cruise Missile, and Army Tactical Missile System. Any such modification would be undetectable from the outside, especially when the missiles are stored in launch canisters or silos. It would also clearly be in breach of the INF treaty. The U.S. denies that its current missile defense systems break the INF and accuses Russia of breaking the treaty by testing a land launched version of its sea launched Kalibr cruse missiles. Russia denies that it is testing anything that is not compatible with the INF treaty. If there is a land launched version it is likely confined to a range below 500 kilometers and thus in compliance with the INF.  The U.S. ambassador to NATO is Kay Baily Hutchinson, a long-term Republican politician with no military experience. Her choice of words in today's press briefing was clearly unprofessional:

  • Question: [...] Ma’am, can you be more specific what kind of countermeasures that you are considering.
  • Ambassador Hutchison: The countermeasures would be to take out the missiles that are in development by Russia in violation of the treaty..

So what is the ambassador going to do? Bomb Russia over a disagreement about the technical specification of a potential new missile that is not even deployed yet?This nonsense comes just days after the U.S. Interior Secretary Ryan Zinke suggested that the U.S. Navy might blockade Russia's energy trade. One hopes that the ambassador erred in her "take out" response. Otherwise Russia will probably consider to "take out" the ABM assets the U.S. deploys over Europe. That would surely produce a lot of frightening content for the Express' "World War3" category.

US Switching to Ukraine as Location to Start World War III Against Russia - The United States Government is now treating Ukraine as if it were a NATO member, and on September 27th donated to Ukraine two warships for use against Russia. This is the latest indication that the US is switching to Ukraine as the locale to start World War III, and from which the nuclear war is to be sparked against Russia, which borders Ukraine.  Here is why Syria is no longer the US alliance’s preferred choice as a place to start WW III:  For the US to war against Russia there would also be war against fellow-NATO-member Turkey — out of the question.  The US has been using Al Qaeda in Syria to train and lead the jihadist groups which have been trying to overthrow Syria’s Government and to replace it with a government that has been selected by the Saud family who own Saudi Arabia. Ever since 1949 the US Government has been trying to do this (to place the Saud family in charge of Syria). That plan is now being placed on-hold if not blocked altogether, because of the Russia, Turkey, Iran, Syria, agreement. As I reported on September 25th, “Turkey Now Controls Syria’s Jihadists”. The US would no longer be able to save them, but Turkey would, if Erdogan wants to. “Turkey is thus now balanced on a knife’s edge, between the US and its allies (representing the Saud family) on the one side, versus Russia and its allies (representing the anti-Saud alliance) on the other.”  During the same period in which the US Government was setting Syria up as the place to start WW III, it was also setting up Ukraine as an alternative possibility to do that. US President Obama, in a very bloody February 2014 coup which he had started planning by no later than 2011, overthrew Ukraine’s democratically elected President, and replaced him by a rabidly anti-Russian racist-fascist regime whose Ukrainian tradition went back to ideologically nazi Ukrainian organizations that had supported Hitler during World War II. Though communism is gone from Russia ever since 1991, the US aristocracy never ended its goal of conquering Russia; the Cold War was secretly continued on the US-NATO side. Ukraine’s nazis (meaning its racist-fascists) are now the US and UK aristocracies’ chief hope to achieve this ambition of a US-and-allied global conquest. Here are the recent steps toward WW III regarding the US alliance’s new (since 2014) prize, Ukraine:

Trump and Washington’s Warmongers Sow Death and Destruction - Trump’s threats against Venezuela were in line with similar intimidating remarks he made about North Korea at last year’s UN Assembly, but it’s unlikely we’ll see a similar reversal this time round. He also threatened Venezuela last year, and he’s maintained the offensive, in all meanings of the word. In 2017 he declared that President Nicolas Maduro’s government was strangling the country through “faithfully implemented” socialism and vowed to help the Venezuelan people “regain their freedom, recover their country and restore their democracy”. In New York on September 25 he said it would be easy for the Venezuelan military to launch a coup d’état and impose regime change, which was a direct threat to the country’s sovereignty. His encouragement of revolution followed his announcement to the Assembly that “I honour the right of every nation in this room to pursue its own customs, beliefs and traditions. The United States will not tell you how to live or work or worship. We only ask that you honour our sovereignty in return.” But Trump is telling — ordering — many countries how to live and work, and has no respect whatever for customs or beliefs that do not fit with his confused and distorted view of how the nations of the world should conduct their affairs. He contradicted his statement about all nations having the right to do as they wish by calling on the UN to “resist socialism and the misery it brings to everyone.” He has no idea that India, a country on which he heaped praise during his bizarre UN tirade, has a Constitution that begins, “We, the people of India [resolve] to constitute India into a Sovereign Socialist Secular Democratic Republic.” But that is a minor example of absurd contradiction in Trump’s erratic approach to the world. As pointed out in a Newsweek column, “Even in his choice of countries worthy of praise, America’s president signalled values set at odds with erstwhile American ideals... His praise of reforms undertaken by Saudi Arabia’s young crown prince omitted the severe crackdown on human rights activists in what remains a theocratic, absolute monarchy. His singling out of Poland and Israel as thriving democracies left many perplexed, given each country’s recent and well-documented struggles with democratic governance.”

Be Outraged by America's Role in Yemen's Misery –   President Trump didn’t mention it at the United Nations, but America is helping to kill, maim and starve Yemeni children. At least eight million Yemenis are at risk of starvation from an approaching famine caused not by crop failures but by our actions and those of our allies. The United Nations has called it the world’s worst humanitarian crisis, and we own it.An American bomb made by Lockheed Martin struck a Yemen school bus last month, killing 51 people. Earlier, American bombs killed 155 mourners at a funeral and 97 people at a market.Starving Yemeni children are reduced to eating a sour paste made of leaves. Even those who survive will often be stunted for the rest of their lives, physically and mentally.Many global security issues involve complex trade-offs, but this is different: Our behavior is just unconscionable. At least eight million Yemenis are at risk of starvation from an approaching famine.CreditEssa Ahmed/Agence France-Presse — Getty Images“Yemen’s current crisis is man-made,” said David Miliband, the former British foreign secretary and current president of the International Rescue Committee, who recently returned from Yemen. “This is not a case where humanitarian suffering is the price of winning a war. No one is winning, except the extremist groups who thrive on chaos.”The United States is not directly bombing civilians in Yemen, but it is providing arms, intelligence and aerial refueling to assist Saudi Arabia and the United Arab Emirates as they hammer Yemen with airstrikes,destroy its economy and starve its people. The Saudi aim is to crush Houthi rebels who have seized Yemen’s capital and are allied with Iran.That’s sophisticated realpolitik for you: Because we dislike Iran’s ayatollahs, we are willing to starve Yemeni schoolchildren.

How Saudi Money Keeps the US at War in Yemen -- It was May 2017. The Saudis were growing increasingly nervous. For more than two years they had been relying heavily on U.S. military support and bombs to defeat Houthi rebels in Yemen. Now, the Senate was considering a bipartisan resolution to cut off military aid and halt a big sale of American-made bombs to Saudi Arabia. Fortunately for them, despite mounting evidence that the U.S.-backed, supplied, and fueled air campaign in Yemen was targeting civilians, the Saudi government turned out to have just the weapon needed to keep those bombs and other kinds of aid coming their way: an army of lobbyists. That year, their forces in Washington included members of more than two dozen lobbying and public relations firms. Key among them was Marc Lampkin, managing partner of the Washington office of Brownstein Hyatt Farber Schreck (BHFS), a company that would be paid nearly half a million dollars by the Saudi government in 2017. Records from the Foreign Agents Registration Act (FARA) show that Lampkin contacted Senate offices more than 20 times about that resolution, speaking, for instance, with the legislative director for Senator Tim Scott (R-SC) on May 16, 2017. Perhaps coincidentally, Lampkin reported making a $2,000 contribution to the senator’s political action committee that very day. On June 13th, along with a majority of his fellow senators, Scott voted to allow the Saudis to get their bombs. A year later, the type of bomb authorized in that sale has reportedly been used in air strikes that have killed civilians in Yemen.  Lampkin’s story was anything but exceptional when it comes to lobbyists working on behalf of the Kingdom of Saudi Arabia. It was, in fact, very much the norm. The Saudi government has hired lobbyists in profusion and they, in turn, have effectively helped convince members of Congress and the president to ignore blatant human rights violations and civilian casualties in Yemen. According to a forthcoming report by the Foreign Influence Transparency Initiative program, which I direct, at the Center for International Policy, registered foreign agents working on behalf of interests in Saudi Arabia contacted Congressional representatives, the White House, the media, and figures at influential think tanks more than 2,500 times in 2017 alone. In the process, they also managed to contribute nearly $400,000 to the political coffers of senators and House members as they urged them to support the Saudis. Some of those contributions, like Lampkin’s, were given on the same day the requests were made to support those arms sales.

On Iran, White House Criticism Grows, but U.S. Military Posture Recedes - WSJ - —The Trump administration has been steadily ramping up its rhetoric on the threat posed by Iran this year. But the U.S. military has scaled back its presence in the Persian Gulf region, say officials and military experts, removing ships, planes and missiles that would be needed in a major confrontation. There has been no U.S. aircraft carrier strike group in the Persian Gulf since the Theodore Roosevelt left for the Pacific in March, the longest period of time in two decades that a carrier hasn’t traveled those waters, according to officials familiar with carrier deployments. U.S. aircraft carriers until recently have maintained a continuous presence in the Persian Gulf region, carrying thousands of personnel and dozens of planes, missiles and other firepower. But the U.S. has not filled the absence with the same level of air power, officials acknowledged. In addition, Defense Secretary Jim Mattis is pulling four Patriot missile-defense systems out of Jordan, Kuwait and Bahrain in October, in a realignment of capabilities away from the Middle East and toward China and Russia, senior military officials told The Wall Street Journal last week.The apparent mismatch between estimates of the Iranian threat and the military’s posture in the region stems from factors that include U.S. strategic shifts and equipment limitations. The 2018 U.S. national security strategy deems big powers like China and Russia—not Iran—to be the greatest threats. At the same time, schedules for maintenance and upkeep have affected the availability of U.S. aircraft carriers, and the military lacks the ships and other equipment to thoroughly address every security threat. U.S. officials said that they have enough military resources to counter Iran or others. But they acknowledged the aircraft carriers and the Patriot missile batteries also served as a show of force. Defense analysts cautioned against removing too many of these assets. .“The concern is the president looks [like] a Twitter tiger,” “If the rhetoric is not backed by a credible threat and a credible presence of American military power, then there is a danger that Iran will assess there is American mush, not American steel, behind the president’s tough rhetoric.”

'The Drums of War Are Beating': ICJ Ruled US Sanctions Violate Treaty With Iran, So Pompeo Just Ditched It - After the International Court of Justice (ICJ) on Wednesday ruled the Trump administration's sanctions against Iran violate the 1955 Treaty of Amity, Secretary of State Mike Pompeo "impetuously" declared at a morning press conference that the United States will terminate the decades-old bilateral agreement rather than comply with the United Nations court's order to ease sanctions. Critics of the move immediately spoke out and warned of potentially dire consequences. "The 1955 US-Iran treaty provided a tool for resolving disputes when diplomacy failed," noted Trita Parsi, founder and president of the National Iranian American Council (NIAC). "Pompeo walking out of it signals that he wants to make sure that disputes with Iran are NOT resolved peacefully." The ruling earlier in the day by the Hague-based court had stated U.S. assurances that the sanctions would not negatively impact humanitarian aid and aviation safety "were not adequate." The decision was welcomed by Iran's Foreign Ministry, which condemned the measures as "illegal and cruel."Pompeo's announcement that the U.S. is canceling the 1955 agreement—similar to the  President Donald Trump's decision to ditch the Iran nuclear deal earlier this year and coupled with reports that Pompeo and Trump National Security Adviser John Bolton are actively working to "foment unrest" in Iran—elicited immediate concerns about future engagement with the country.  “The drums of war are beating," journalist Aaron Rupar warned on Twitter. "As you can see, Article 1 on the Treaty—'There shall be firm and enduring peace and sincere friendship between the United States of America and Iran'—hasn't aged very well over the years," remarked Foreign Policy reporter Robbie Gramer. During his announcement at the State Department on Wednesday, Pompeo said with a chuckle, "This is a decision, frankly, that is 39 years overdue," an apparent reference to the 1979 Iranian revolution in which the U.S.-backed Shah was overthrown.

 The U.S. Just Tore Up a Six-Decade-Old Treaty With Iran -  On Wednesday, the Trump administration tore up a little-known, Eisenhower-era treaty of amity with the Islamic Republic on the same day the International Court of Justice ruled that U.S. sanctions on Iran must exempt humanitarian items.In announcing the decision concerning the 1955 treaty, Mike Pompeo, the U.S. secretary of state, said at the State Department. “This is a decision, frankly, that is 39 years overdue.”The more than six-decade-old accord survived the 1979 Islamic revolution in Iran that was followed by the takeover of the U.S.Embassy, and the hostage-taking of 52 Americans, including diplomats, for 444 days. It also survived what has mostly been low after low in the intervening decades, including near weekly chants of “death to America” in the Islamic Republic, round after round of crippling U.S. sanctions, and even the shooting down of by the U.S.military of an Iranian airliner with 290 people on board. As Farshad Kashani wrote in National Interest, the two countries have used the treaty’s dispute-resolution mechanism, which relies on the ICJ, at various times since 1988 when the Iran Air flight was shot down—most recently in July. That’s when Iran brought a case at The Hague-based court alleging violations of the Treaty of Amity, challenging, among other things, the U.S. withdrawal from the multilateral nuclear agreement with the Islamic Republic. But the court’s ruling Wednesday was much narrower in scope, dealing only with the sale of “humanitarian” goods to Iran, which the court said the U.S. should not sanction. Pompeo said that “existing exceptions, authorizations and licensing policies for humanitarian-related transactions and safety of flight will remain in effect.” But, he added: “We’re disappointed that the court failed to recognize that it has no jurisdiction to issue any orders related to these sanctions measures with the United States.” The ICJ’s orders are legally binding but not enforceable.

Eroding the Chain of Command by Trashing Trump - Several weeks ago, Admiral William McRaven publicly chastised President Donald Trump’s decision to revoke the security clearance of John Brennan, a former CIA director and one of the president’s most vociferous critics. Since then, a number of commentaries have insisted that a critical norm governing civil-military relations was violated in the process. Many of these commentaries suggest that doing so was the price paid for speaking out against what they consider abuses of presidential power.Why does this matter? One, the American public reveres the military to an extent enjoyed by no other institution. Two, commissioned officers, in particular active and former top brass like McRaven, are held in a regard enjoyed by few other professions. Three, McRaven was a Navy SEAL and as the leader of Special Operations Command (SOCOM) was widely credited for the successful operation to eliminate Osama bin Laden in 2011. If the public reveres the military, it practically worships the special operations forces. The success of films and memoirs like American Sniper and the lionization of fallen special operators within the fitness community serve as evidence that when those who have served in elite units speak, folks listen.McRaven was not criticizing the president over his handling of a single issue. He was questioning the president’s leadership and character. He declared of Trump, “you have embarrassed us in the eyes of our children, humiliated us on the world stage and, worst of all, divided us as a nation.” This criticism goes well beyond what’s typically leveled at presidents by top brass in the military. There’s a big difference between judging one’s actions and one’s person; McRaven did the latter.When the public sees a military officer of McRaven’s stature judging the president’s character, can the military still be regarded as apolitical? Or has the “cesspool of domestic politics” finally contaminated every last corner of American life? The fact that this debate is unfolding against the backdrop of a highly controversial and deeply unpopular presidency makes the implications all the more unsettling.

Trump says he told Saudi's King Salman that the ruler wouldn't last without US support - President Donald Trump made an undiplomatic remark about close ally Saudi Arabia on Tuesday, saying he warned Saudi Arabia's King Salman he would not last in power "for two weeks" without the backing of the U.S. military."We protect Saudi Arabia. Would you say they're rich. And I love the King, King Salman. But I said 'King — we're protecting you — you might not be there for two weeks without us — you have to pay for your military,'" Trump said to cheers at a rally in Southaven, Mississippi.Trump did not say when he made those remarks to the Saudi monarch.Despite the harsh words, the Trump administration has had a close relationship with Saudi Arabia, which it views as a bulwark againstIran's ambitions in the region. Trump made Saudi Arabia his first stop on his maiden international trip as president last year.Trump called King Salman on Saturday and they discussed efforts being made to maintain supplies to ensure oil market stability and global economic growth, according to Saudi state news agency SPA.Saudi Arabia is the world's top oil exporter and the de facto leader of OPEC, which has been criticized by Trump for high oil prices.Speaking at the United Nations General Assembly in New York last month, Trump said OPEC members were "as usual ripping off the rest of the world.""We defend many of these nations for nothing, and then they take advantage of us by giving us high oil prices. Not good. We want them to stop raising prices, we want them to start lowering prices," Trump said. He has also pressed other U.S. allies, such as Japan, South Koreaand Germany, to take more of the financial burden of their defense.

 Trump speaks of his ‘love’ for Kim Jong Un -- Donald Trump has declared his “love” for North Korean leader Kim Jong Un, even as Pyongyang emphasised its hard line on scrapping nuclear weapons. The US president’s remarks, which came the same day as a top North Korean official blamed the US’s “coercive” sanctions policy for the deadlock in nuclear talks, may add to fears that Mr Trump is being played by the repressive regime. “I was really being tough — and so was he. And we would go back and forth,” the president told a rally on Saturday, referring to a period last year when he exchanged personal insults with Mr Kim, such as “Little Rocket Man” and “mentally deranged dotard”. “And then we fell in love, OK? No, really — he wrote me beautiful letters, and they’re great letters,” Mr Trump continued. The comments underscore how far relations between the two nations have developed in the past year and the strengthening personal bond between Mr Trump and Mr Kim since the two leaders’ Singapore summit in June.  Mr Kim has repeatedly praised Mr Trump’s style of diplomacy this year — as has South Korean President Moon Jae-in. But North Korea has made little if any evident progress towards denuclearisation. Robert Kelly, a North Korea expert at South Korea’s Pusan National University, said Mr Trump’s remarks raised concerns about the state of US diplomacy ahead of a slated second summit between the US president and the North Korean dictator. “This is how easy it is to con him. The president is a bubbly high-schooler talking about love letters,” Prof Kelly said. “That’s US diplomacy now.”

Pompeo to meet with North Korea’s Kim on Sunday - Secretary of State Mike Pompeo is set to meet with North Korean leader Kim Jong Un next week as part of his upcoming trip to Asia, the State Department announced on Tuesday. State Department spokeswoman Heather Nauert said Pompeo will meet with Kim in Pyongyang on Oct. 7.  Nauert didn't provide specific details of what Pompeo plans to discuss with the North Korean leader, but she said the meeting will focus on Pyongyang's nuclear capabilities.Pompeo and Kim will also likely discuss a second summit between Kim and President Trump, which the White House said was in the works earlier last month.“It shows forward progress and momentum that the secretary is making his fourth trip back in less than a year,” Nauert said, noting that the talks marked a positive step toward the Trump administration keeping its promises.“That shows the president’s commitment to agreement that he and Chairman Kim made at the Singapore summit,” she said.Pompeo was invited to visit Pyongyang this month during a Sept. 26 meeting with North Korean Foreign Minister Ri Yong Ho. The invitation came on the sidelines of the United Nations General Assembly meeting in New York.Ri's invitation marked an improvement in U.S.–North Korea diplomatic relations after Trump, in August, canceled a scheduled visit by Pompeo to Pyongyang. Trump canceled the secretary of State's visit after receiving a letter from Pyongyang convincing Trump such a visit would not be worth it. Ri, speaking at the U.N., also criticized the U.S. for a lack of trust in North Korea’s denuclearization policy. “Without any trust in the U.S. there will be no confidence in our national security and under such circumstances there is no way we will unilaterally disarm ourselves first,” he said in a Saturday speech at the annual U.N. meeting. Still, Trump expressed hope that a deal ultimately could be reached with North Korea. “We have a very good relationship. He likes me, I like him, we get along,” Trump said at a press conference Wednesday. “He wants to make a deal, and I’d like to make a deal.”

South Korea reveals plan to break stalemate in U.S.-North Korea talks WaPo -- South Korea is proposing that the United States hold off on a demand for an inventory of North Korea’s nuclear weapons and accept the verified closure of a key North Korean nuclear facility as a next step in the negotiations, Seoul’s top diplomat said in an interview with The Washington Post. The plan is designed to break the impasse between North Korea and the United States as President Trump comes under mounting pressure to demonstrate progress on the denuclearization talks. It will be one of the options available to Secretary of State Mike Pompeo as he arrives in North Korea on Sunday to restart negotiations. In exchange for the verified dismantlement of the Yongbyon nuclear facility, the United States would declare an end to the Korean War, a key demand of Pyongyang that U.S. officials have been reluctant to make absent a major concession by North Korea. “What North Korea has indicated is they will permanently dismantle their nuclear facilities in Yongbyon, which is a very big part of their nuclear program,” South Korean Foreign Minister Kang Kyung-wha said during a discussion at the South Korean mission to the United Nations. “If they do that in return for America’s corresponding measures, such as the end-of-war declaration, I think that’s a huge step forward for denuclearization.” Sustained fighting in the Korean War ended with a truce in 1953, but a formal peace treaty has never been signed. In recent weeks, North Korea has demanded almost daily that the United States sign an end-of-war declaration. U.S. negotiators have tried to get North Korea to provide a list of nuclear facilities and weapons they want dismantled but failed to secure an agreement even after Trump’s meeting with North Korean leader Kim Jong Un in Singapore and three trips to North Korea by Pompeo.

 China Cancels US Security Summit As Military Tensions Escalate - Though US media has largely ignored the trend, military tensions between Washington and Beijing have continued to escalate in 2018, aggravated by the US's trade-war push, the US's insistence on selling arms to an increasingly emboldened Taiwan, US sanctions against a Chinese military unit and the ever-more-frequent "freedom of navigation" operations in the South China Sea, which China views as a challenge to its "indisputable sovereignty" over the South China Sea. Just yesterday, the guided-missile bearing USS Decatur, a Navy warship, sailed within 12 miles of two Chinese military outposts situated on the parts of the disputed Spratly Islands, elicited nothing but a discomforting silence from Beijing. One week earlier, China accused the US of staging a "provocative" flight of B-52 bombers over the South China Sea, which also served to heighten tensions. And with what appears to be China's response to these latest transgressions, Chinese officials have canceled a security meeting with US Secretary of Defense Jim Mattis which had been planned for October, the New York Times reported, citing an anonymous senior US official. The cancellations comes just days after a top Chinese official said there was no reason to panic over tensions between the world's two largest economies. According to the NYT, the Chinese government told US officials on Friday, just before the beginning of China's Golden Week holiday, that the summit would not happen.China told the Trump administration on Friday that a senior Chinese military official would not be meeting Mr. Mattis, the American official said, who spoke on the condition of anonymity per diplomatic norm.At last year’s security and diplomatic dialogue, the chief of the People’s Liberation Army, Gen. Fang Fenghui, attended the sessions held in Washington. (General Fang was purged shortly afterward, for unrelated reasons.)Whether the accumulation of last week’s episodes, or one in particular, provoked the decision to scuttle the dialogue is not clear, the American official said. While the announcement came out of the blue, in some respects, Beijing's decision to cancel the talks wasn't a surprise.

US vice president issues bellicose diatribe against China --  US Vice President Mike Pence delivered a blistering diatribe against China Thursday designed to ratchet up already intense economic and military tensions that have produced a growing trade war and increasingly dangerous confrontations between US and Chinese forces in the South China Sea. The speech came amid reports that the Pentagon is preparing to launch a massive and provocative series of military exercises centered in the South China Sea and the Taiwan Strait next month as a direct challenge to China. CNN quoted military sources as saying that the Pentagon was planning a “global show of force as a warning to China and to demonstrate the US is prepared to deter and counter their military actions.” An unprecedented concentration of US military forces would be deployed in back-to-back exercises staged over the course of one week, the CNN report states. US warships and combat planes, as well as ground troops, would be mobilized for the operation. While military officials acknowledged that Beijing sees even far smaller exercises in the region as provocations and that there are “concerns about reactions from China,” the Pentagon has “no intention to engage in combat with the Chinese.” Of course, such a statement of purported intent is itself an acknowledgement that US imperialism is risking just that: a military confrontation between two major nuclear-armed powers. China’s state-owned tabloid Global Times issued an ominous response to the report of the planned exercises: “As the US continues to provoke, it will face stronger reactions from the PLA [People’s Liberation Army], and the warships of the two sides will be drawn closer in the situation of confrontation. If that happens, China-US strategic relations and peace in the Asia-Pacific will be in the hands of pilots, ship commanders, and even chief engineers. Peace and stability could be on the edge of collapse at some point. If Washington wants to play this way, China will have to respond accordingly.”  Pence’s speech served to provide a reactionary and duplicitous justification for Washington’s plans for military escalation. Expanding on the provocative allegation made by US President Donald Trump at the United Nations Security Council last week that Beijing was interfering in the US midterm elections, Pence claimed that China is “pursuing a comprehensive and coordinated campaign to undermine support for the President, our agenda, and our nation’s most cherished ideals.”

Mike Pence: Trump’s fight with China just got personal --Events of the past year have left no doubt that the relationship between Washington and Beijing has fundamentally changed for the worse. Words from the Trump administration on Thursday confirmed that there is plenty of room for it to deteriorate even more before it gets better. “A new consensus on China is rising across America,” US Vice-President Mike Pence told an audience in Washington, warning Beijing in fighting terms that “this president will not back down.” The wide-ranging speech called out China for criticisms long-levied against Beijing, including back peddling on reforms and representing a malign influence in global politics. But Pence also denounced the Chinese government on a new front that related to US President Donald Trump himself: election meddling.“China has initiated an unprecedented effort to influence American public opinion, the 2018 elections and the environment leading into the 2020 presidential elections.” Beijing, he said, “is pursuing a comprehensive and coordinated campaign to undermine support for the president, our agenda, and our most cherished ideals.” The notion that Beijing is specifically targeting Trump, which served as an exclamation point at the end of Pence’s laundry list of grievances, raises the question of whether the US president will abandon his insistence on maintaining the public image of a warm relationship with his Chinese counterpart, Xi Jinping. The US president acknowledged this possibility last week, saying “maybe he’s not anymore,” when asked whether they were still friends. That could have implications for other areas of contention between the world’s two largest powers, analysts say, whether it be trade, the balance of military power in the Pacific, or the future of Taiwan. Trump has consistently stressed the importance that personal relationships of heads of state play in bilateral negotiations. From the first time he met with Xi until now, he had not previously wavered in his confidence that they are good friends.

China will lose trade war with the US, then things will get really nasty  --With Washington’s punitive tariffs on US$200 billion worth of Chinese imports and Beijing’s reciprocal tariffs on US$60 billion in American goods taking effect on Monday, on top of duties imposed on each other’s US$50 billion worth of imports, a full-blown trade war between the world’s largest and second-largest economies has begun, which will severely hit both countries and elsewhere, and thus slow global growth. However, China will suffer much more pain than the United States because of its over-reliance on trade and on core US technology in the supply chain, among other things.  First, China will not inflict as much pain on its rival as it is unable to match US tariffs on a dollar-for-dollar basis, because it exports far more to, than it imports from, the US. Last year, China exported more than US$500 billion worth of goods to the US. In contrast, the US sold just US$130 billion worth of goods to China.Second, the Chinese economy relies more on mutual trade than America’s. China’s exports to the US accounted for 19 per cent of its total exports, while US exports to China represented 8 per cent of total US exports, according a White Paper released by China’s State Council, its cabinet, on Monday. Currently, trade represents nearly 20 per cent of China’s gross domestic product (GDP) while it makes up about 14 per cent of US economic output. And US value-added exports to China were equivalent to 0.7 per cent of its GDP, while such Chinese exports to the US were equivalent to roughly 3 per cent of its economic output. Economic theory suggests a trade war will hurt an exporter more than an importer. Third, one consequence of the trade war will be the restructuring of the well-established global supply chain, which has served China’s best interests. China’s economic boom in the past four decades has been built on its role as the world’s manufacturing hub. A lasting trade war will force foreign companies to diversify or shift supply away from China and to relocate their production lines to safer countries like Vietnam, Malaysia, Indonesia and Mexico, in an effort to bypass increased costs. Likewise, Chinese firms that buy American hi-tech industrial products will also seek to move to “safe” countries to avoid the punitive tariffs.

U.S. military comes to grips with over-reliance on Chinese imports (Reuters) - A Pentagon-led review ordered by President Donald Trump has identified hundreds of instances where the U.S. military depends on foreign countries, especially China, for critical materials, U.S. officials said. The study is expected to be released in the coming weeks and aims to lessen the U.S. military’s reliance on foreign countries and strengthen U.S. industry. Among the study’s conclusions will be a determination the United States is too dependent on foreign suppliers for a range of items including some micro-electronics, tiny components such as integrated circuits and transistors, the officials told Reuters on condition of anonymity. These kinds of essential components are embedded in advanced electronics used in everything from satellites and cruise missiles to drones and cellphones. The focus on China reflects an effort under Trump to address the risks to U.S. national security from Beijing’s growing military and economic clout. Pentagon officials want to be sure China is not able to hobble America’s military by cutting off supplies of materials or by sabotaging technology it exports. The report could add to mounting trade tensions with China, bolstering the Trump administration’s “Buy American” initiative, which aims to help drum up billions of dollars more in arms sales for U.S. manufacturers and create more jobs. Lieutenant Colonel Mike Andrews, a Pentagon spokesman, did not comment on the contents of the report but told Reuters the study would make recommendations “to ensure a robust, resilient, secure and ready manufacturing and defense industrial base.” China, which has also become the main supplier of many of the rare earth minerals used by the United States, will be given special emphasis in the report, said the officials who spoke to Reuters on condition of anonymity.

Trump's Top Econ Advisor Accuses Goldman Of Slanting Research To Help Democrats - Over the weekend we reported that as increasingly more banks evaluate the worst case scenario in the ongoing US-China trade war, we highlighted that Goldman Sachs, which assigns a 60% probability the US will impose tariffs on most or all of the additional $267 billion of imports from China that are not covered by the tariffs announced to date, issued a warning that whereas so far S&P profits and margins have been able to avoid a direct hit, this may change soon:"Tariffs threaten corporate earnings through higher costs and lower margins. Conservatively assuming no substitution or pass-through of expenses, we estimate a 25% tariff on all imports from China could lower our 2019 S&P 500 EPS estimate by roughly 7% (from $170 to $159), resulting in no EPS growth next year." And while Goldman did not predict a severe impact to either the market or stocks, the bank's chief equity strategist David Kostin repeated an analysis he made three weeks ago, warning that if trade tensions spread significantly and a 10% tariff were implemented on all US imports - the highest rate since 1940s - the bank's EPS estimate could fall by 15% to $145 in the "severe case", resulting in a bear market for equities; a less draconian scenario of imposing 25% tariffs on all Chinese imports would wipe out all corporate profit growth in 2019.As it turns out, Goldman's analysis made its way all the way to the White House, and on Tuesday Kevin Hassett, the chair of President Donald Trump's Council of Economic Advisers, took heavy aim at the Goldman Sachs research team, which he claimed was overtly political and negative toward Trump's policies.Asked during an interview on CNN about the conclusion of the analysis by the Goldman equity strategists - which as noted above showed that Trump's potential tariffs could wipe out corporate profit growth in 2019 and offset all the stimulative benefits of other policies, Hassett compared the analysts to the Democratic Party."I haven't read that report, but the Goldman Sachs economic team almost at times look like they are the Democratic opposition," Hassett said, which is ironic as it was former Goldman COO, Gary Cohn, who led Trump's economic team for over a year.

News Analysis: Why global trade in urgent need of change (Xinhua) -- The global trading regime is in great need of change to avert real and potentially destabilizing losses resulting from the escalating trade frictions between the United States and China and elsewhere, experts said. The Trump administration has leaned heavily towards unilateralism in addressing what it sees as unacceptable status quo in which the United States has long been taken advantage of by countries around the world, including its allies, in terms of trade and others, defense included. Trump has fired the first shot in this global trade battle by failing to adequately negotiate. Furthermore, China is increasingly singled out as the source of the world's trade woes. Caught in the cross fire, many U.S. soybean farmers are feeling uneasy about their coming harvest and have contemplated planting other crops for the next season, even though the Trump administration has said it will offer a package of 12 billion U.S. dollars to compensate for their losses. "I do not want government compensation, I want the Chinese market," said Don Lutz, a farmer in Scandinavia in the state of Wisconsin. In Brazil, the farmers there seem to have benefited from the U.S.-China trade friction, with the price of Brazilian soy beans rising by over 15 percent year on year on expectations of higher demand from China. Nevertheless, experts said the picture is not as simple as it looks. While the Brazilian farmers are trying to fill the void left by the U.S. farmers on the back of tariff hikes, Marcos Jank, executive director of the Asia-Brazil Agro Alliance, said the trade frictions triggered by rising protectionism will distort the global supply chain and increase the uncertainty of the international market, potentially harming all.

Canada's race against time with US to reach NAFTA deal -  Will Canada and the United States thaw their unprecedented diplomatic chill and reach a deal to revamp the North American Free Trade Agreement by a US-imposed Sunday deadline? Ottawa is certainly working hard on it. Foreign Minister Chrystia Freeland, Canada's chief NAFTA negotiator, opted to push back her planned Saturday speech before the UN General Assembly until Monday so she could concentrate on trade matters. Those talks are now in a crucial phase. Negotiators are racing against the clock because of a US-set deadline. The United States and Mexico want to push their deal through their respective legislatures before Mexican President-elect Andres Manuel Lopez Obrador takes office on December 1. In the United States, Congress must have the text of the deal by Sunday if a 60-day review period is to be respected. In a surprise twist, Mexican Economy Minister Ildefonso Guajardo said Friday that Washington and Ottawa had told him they could reach a compromise on an updated trilateral agreement within "48 hours." "For the first time, we're seeing a real effort by both sides," Guajardo added. US and Canadian negotiators were expected to work all weekend via secure video link, The Globe and Mail newspaper reported Saturday, citing sources in Prime Minister Justin Trudeau's administration and on the US industry side.US President Donald Trump has been pushing for a complete overhaul of the 25-year-old continental trade deal, which he says has been a "rip-off" for the United States. 

U.S. and Canada reach last-minute accord to conclude talks on new NAFTA In an eleventh-hour breakthrough that may have saved the North American Free Trade Agreement, the Trump administration and top Canadian officials came to terms late Sunday on a deal — opening the way for the United States, Canada and Mexico to sign a renewed trade pact at the end of November. The agreement still needs to be ratified by legislatures in all three countries, which won’t happen until next year at the earliest. But in striking an accord with Canada after settling with Mexico in late August, negotiators hit a crucial U.S.-imposed Sunday midnight deadline that otherwise could have pushed President Trump toward a breakup of the trilateral accord. The U.S.-Canada deal came after furious negotiations in recent days and repeated threats from Trump and his chief negotiator, Robert Lighthizer, that the administration was prepared to leave Canada behind. The agreement marks a milestone in Trump’s efforts to rewrite the United States’ most consequential free-trade pact, which he promised to overhaul or tear up. And it may help soften criticisms of his overbearing negotiating style and heavy use of tariffs, as the administration can now lay claim that it successfully completed a revamping of a major trade agreement. “It’s a great win for the president and a validation of his strategy in the area of international trade,” said a senior administration official, in a briefing with reporters as midnight was approaching. Trump has repeatedly denounced NAFTA as a disaster for U.S. industries and workers. Administration officials said the new agreement would be renamed the U.S.-Mexico-Canada Agreement, or USMCA. Lawmakers, business interests, labor and other civic groups reacted more cautiously to the news, saying they would carefully analyze details of the text of the new agreement. Administration officials said the revisions to NAFTA include notable rule changes on auto sourcing, investor-state disputes and labor rights, as well as new or updated provisions on digital trade, financial services and other areas of commerce that were not major factors when the pact was ratified a quarter-century ago under the Clinton administration. .

U.S. and Canada Reach Nafta Deal – WSJ - The U.S. and Canada reached a dramatic, last-minute deal late Sunday night on revising the North American Free Trade Agreement, lifting a cloud of uncertainty over the quarter-century-old continental commercial bloc. The pending agreement will allow Canada to join an accord reached in late August between the U.S. and Mexico and diminishes the prospects for President Trump to follow through on his threats either to kill Nafta outright or to break the trilateral pact into separate pieces. The surprising Washington-Ottawa accord came just four days after Mr. Trump’s trade representative told Congress that the gaps between the two countries appeared too great to bridge in time to meet the U.S.-imposed Sunday deadline and that the administration was prepared to keep moving down the path of a Mexico-only agreement. The accord restores—for now, at least—harmony with two neighbors that Mr. Trump has repeatedly criticized in public, paving the way for him to hold a late-November signing ceremony with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto. Early Monday, Mr. Trump tweeted: “It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, [reduces] Trade Barriers to the U.S. and will bring all three Great Nations closer together in competition with the rest of the world.” Mr. Trump’s top economic adviser, Lawrence Kudlow, told reporters on Monday that the president had spoken with Mr. Trudeau after an agreement was reached. Mr. Trump intends also to speak with Mr. Peña Nieto and President-Elect Andrés Manuel López Obrador.

Trump Hails Revised Nafta Deal, and Sets Up a Showdown With China - NYT - — President Trump said Monday that the revised North American Free Trade Agreement with Mexico and Canada would pour “cash and jobs” into the United States. But the deal’s importance may have less to do with the details than the signal it sends that Mr. Trump is methodically settling his multifront trade war to fight a single enemy: China. A jubilant Mr. Trump celebrated the new Nafta agreement as the fulfillment of a bedrock campaign promise. He claimed it was a vindication of his aggressive use of tariffs and vowed to keep imposing them to extract deals from other trading partners, like the European Union and Japan. But while Mr. Trump expressed confidence about eventually reaching deals with Europe and Japan, he was far more grudging about China, saying it was too soon to begin talking. Administration officials say privately that Mr. Trump is content to leave tariffs on $250 billion of Chinese goods in place for the foreseeable future to weaken its hand. “China wants to talk very badly,” Mr. Trump said at a news conference in the White House Rose Garden. “I said frankly it’s too early to talk, because they’re not ready.” He added, “If politically, people force it too quickly, you’re not going to make the right deal.” The updated Nafta, which will be called the United States-Mexico-Canada Agreement, or U.S.M.C.A., represents Mr. Trump’s biggest trade achievement to date, and it comes after more than a year of intense negotiations that frequently fell into personal rancor between Mr. Trump and the leaders of Canada and Mexico. After languishing for weeks, negotiations with Canada suddenly broke through Friday morning, according to a senior American official. The Trump administration, having received a detailed proposal from Canadian officials the day before, submitted a counteroffer, which the Canadians accepted in principle. With a deal safely in hand, Mr. Trump lavished praise on Mexico’s outgoing president, Enrique Peña Nieto, with whom he had tangled repeatedly over the phone. He was less effusive about Prime Minister Justin Trudeau of Canada, but suggested their Cold War was over, too. It was not personal, Mr. Trump suggested about both men; it was just business.

Trump touts tariffs and trade war following NAFTA renegotiation -- The United States, Canada and Mexico agreed late Sunday night to replace the quarter-century-old North American Free Trade Agreement (NAFTA) with a new “US-Mexico-Canada Agreement,” or USMCA. Sunday’s deal was reached after 13 months of tense negotiations and a final week punctuated by threats from Donald Trump and other top US officials that they would proceed without Canada and impose a 25 percent tariff on Canadian auto exports to the US.Under the new deal, both Mexico, a country historically oppressed by US imperialism, and Canada, a lesser imperialist power that has long been a key US ally, made significant concessions in the face of US demands that the continental pact be refashioned to make it an even more explicit US-led protectionist trade bloc. Both the substance of the agreement and the manner in which it was negotiated were meant as a message to the more substantial global economic rivals of Wall Street and Washington, above all China, that the US will use all the means at its disposal, including ultimately its military might, to prevail in the struggle for markets and profits. At a White House press conference on Monday, Trump boasted that his imposition of 10 a percent tariff on aluminum and a 25 percent steel tariff, and his threat to introduce a 25 percent auto tariff, had proven crucial to the new trade pact. “Without tariffs, we wouldn’t be talking about a deal,” declared the US president, who then went on to mock those critical of his willingness to employ trade war measures as “babies.”

Renegotiated NAFTA Deal: Improvements on Some Key Demands and More Work Needed (PDF) Lori Wallach, Public Citizen -- Note: A renegotiated North American Free Trade Agreement (NAFTA) was just announced. Here is our initial analysis of the Investment Chapter, which eliminates NAFTA’s Chapter 11-B, Investor-State Dispute Settlement (ISDS). An initial analysis of how the full text measures up to our demands will be available here tomorrow:  “The new deal includes some important improvements for which we have long advocated, some new terms we oppose and more work required to stop NAFTA’s ongoing job outsourcing, downward pressure on our wages and environmental damage. Important progress has been made with the removal of investment terms that help outsource jobs and a dramatic reining-in of NAFTA’s outrageous corporate Investor State Dispute Settlement tribunals under which corporations have grabbed hundreds of millions from taxpayers after attacks on environmental and health policies. This is a major change: The inclusion of expansive investor privileges and powers in the 1993 NAFTA hatched a new corporate-coup-de-etat-by-trade-agreement model that’s been followed ever since. That even this corporate-compliant administration whacked ISDS means a future Democratic president cannot backslide and sends a powerful signal to the many nations worldwide also seeking to escape the odious ISDS regime. More work remains to be done. Unless there are strong labor and environmental standards that are subject to swift and certain enforcement, U.S. firms will continue to outsource jobs to pay Mexican workers poverty wages, dump toxins and bring their products back here for sale. Areas of progress include a first-time-ever innovation of conditioning trade benefits for a percentage of autos and auto parts on the workers producing them being paid $16 per hour or more. Terms that forced countries to continue to export natural resources that they seek to conserve are eliminated. Longstanding safety and environmental problems relating to Mexican-domiciled trucks’ access to U.S. roads are addressed. Rules of origin that allowed goods with significant Chinese and others non-North American value were tightened.

I Was Wrong: US-Mexico Trade Deal Lives With Canada: USMCA Rarher Than NAFTA -- Barkley Rosser -- At the last minute last night the US and Canada cut a deal, so now Canada is on on the deal to change NAFTA to USMCA.  I think the name change is the biggest part of it, even though Trump still claims that NAFTA was “the worst trade deal ever” and the new deal makes relatively minor changes in it, especially if one considers what would have been the case if the US had actually joined the TPP, as most of the environmental, labor, and intellectual property parts of the new deal (the environmental and labor parts largely improvements, if not too dramatic) were already agreed to by Mexico and Canada when rhey joined TPP, which they belong to along with all its other members aside from the US. Beyond continuing NAFTA and adding the TPP parts, the main changes are in the auto industry and the dairy industry, the former mostly affecting Mexico, the latter mostly affecting Canada.  Between the restrictions on outsourcing and the $16 per hour limit on imports, there may be some shifting of auto parts production from Mexico to the US and possibly Canada as well.  This will lead to job losses in Mexico, but there may be some Mexican autoworkers who see wage boosts also.  The auto deal has little impact on Canada aside from Trump retracting his threat to impose tariffs, which was opposed by GM and Ford as well as the UAW thanks to the profound integration between the US and Canadian auto industries.  .  The new rules will increase costs on top of the existing steel and aluminum tariffs, which were not removed by this agreement, although both Mexico and Canada wanted them to be removed.  So  US consumers will be hurt, but the higher costs will make all auto exports from the three nations less competitive, and indeed US auto exports have been declining in recent months, something likely to accelerate after this deal really goes in.   Regarding dairy, well, Scott Walker gets some help in Wisconsin as indeed there will be some increased exports to Canada of dairy products, especially powdered milk and infant formula.  Apparently the opening is not as big as being advertised, and this looks to be where Trump made some give.  Probably overall US dairy industry is getting about 50% of what was asked for.  I note that dairy was never part of NAFTA, so I guess it will now officially be part of the new USMCA.

Here's What Inside Trump's Historic Trade Deal With Canada And Mexico - While Trump wasted no time in taking a victory lap for his "historic" new trade deal between Canada and the US, which was (literally) struck in the 11th hour on September 30 to save the North American Free Trade Agreement, henceforth called USMCA (even though it is called NAFTA 2018 in the legal document), and which saw Canada joining the previously reached US-Mexico agreement, there has been some confusion about what's in it.  Below we provide a summary and detailed breakdown of the key components of the new trade agreement. First, courtesy of BofA's Carlos Capistran, here are the main points in the agreement, in which Canada conceded on dairy and the US on dispute resolution:

  1. Canada agreed to ease protections on its dairy market, among them, it will now provide US access to about 3.5% of the market (Canada is likely to compensate dairy farmers);
  2. The US relented on its demand to eliminate the dispute settlement system on Chapter 19, a big win for Canada;
  3. Canada agreed to the terms of the US-Mexico deal, among them a de minimis of US$100 (the amount of imports without duties, which in NAFTA is US$20), stricter rules of origin for autos, a 10 year sunset clause with a 6 year revision and an update on several topics from labor to commerce to intellectual property; and
  4. The US and Canada reached an agreement to protect Canada's autos from high auto tariffs if the US imposes them under law 232 with a quota of 2.6 million vehicles exported. The latter is similar to the "side-letter" that Mexico agreed with the US that protects 2.4 million vehicles. So far there are no exemptions from steel and aluminum tariffs.

Some more details via the WSJ:

Here’s Who Wins and Who Loses from Changes to NAFTA - The Conversation NAFTA is out but the United States-Mexico-Canada-Agreement (USMCA) is in. But how different is USMCA from NAFTA? Who loses and who wins? Canadian negotiators and government officials are singing the praises of the new deal, still subject to approval by U.S. Congress. U.S. Trade Representative Robert Lighthizer and Foreign Affairs Minister Chrystia Freeland said the agreement“will result in freer markets, fairer trade and robust economic growth in our region.”They added: “It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.” It’s understandable that the chief negotiators would try to sell the deal as a win-win-win agreement, but, like any deal resulting from long and at times acrimonious negotiations, it’s not quite that simple.  The most significant achievement by Canadian negotiators is their success in preserving Chapter 19 from the original NAFTA. These provisions allow Canada, Mexico and the United States to challenge one another’s anti-dumping and countervailing duties in front of a panel of representatives from each country. This is generally a much easier, less costly and more predictable process than trying to challenge a trade practice in a U.S. court. Canada has successfully used Chapter 19 to challenge the United States on its softwood lumber restrictions. Canada has also staved off the tariffs Trump threatened to impose on autos and auto parts that could have devastated the Canadian auto industry, which contributes over $50 billion in income and sustains more than 500,000 direct and indirect well-paying jobs in Canada.The agreement would shield the first 2.6 million Canadian car exports to the U.S. from any tariffs. This is significantly higher than the current 1.8 million cars that Canada on average exports to the U.S. annually.Under the terms of the agreement starting in 2020, a car will qualify for tariff-free treatment only if 75 per cent of its contents are made in North America, up from 62.5 per cent in the current NAFTA.In addition, at least initially, 30 per cent of the content must be produced by workers earning at least US$16 an hour. This will ramp up to 40 per cent in 2023. The wage is more than three times what the average Mexican autoworker earns now. Despite these successes, there are a few negatives to contend with that would affect this key industry. The wage hikes required in Mexico will undoubtedly raise the cost of production of North American cars and render a good part of them non-competitive on world markets, particularly in Asia.

New Nafta Has American Corn Farmers Breathing Easier -  U.S. corn farmers such as Aron Carlson in northern Illinois can breathe easier thanks to the renegotiated North American Free Trade Agreement.     Growers have watched prices tumble this year, with December futures dropping 13 percent since May 1, partly amid trade concerns. The U.S.-Mexico-Canada Agreement secured Sunday is expected to allow leaders from the three countries to sign an accord by late November. The accord alleviates the risk that Mexico, the biggest importer of U.S. corn, will turn to competing exporters such as Argentina.  For American producers, the trade deal comes at a crucial time as farmers including Carlson begin harvesting a massive crop. He’s gathered about 20 percent of this season’s output.Having an agreement to replace the 24-year-old Nafta also helps ease concerns over the long-term relationships built with U.S. grain handlers. The original pact has been seen as a success for U.S. agriculture, and many farming groups had pushed the Trump administration to “do no harm” as it renegotiated the deal.Last year, the U.S. exported $3.2 billion of corn and corn products to Mexico and Canada, according to the National Corn Growers Association. “It takes away some of the uncertainty.”Corn futures for December delivery rose as much as 2.9 percent to $3.665 a bushel, the biggest intraday gain since Sept. 20. Prices also climbed Monday as rain delayed harvesting in parts of the U.S. Midwest, while gains for crude oil signaled support for ethanol demand, Grow said. Soybean futures also advanced on optimism that the Nafta negotiation could herald more U.S. trade deals, especially with China, the world’s biggest buyer of the oilseed. China has shunned U.S. shipments amid the trade war and has increased purchases from Brazil and other countries.  Carlson, who is president of the Illinois Corn Growers Association, sees the Nafta replacement as a “big deal” because a lot of grain from his state goes south of the border, but he’s also anxious for a pact with China. This year, 60 percent of his roughly 3,600 acres in Winnebago County are sown with corn, and the rest has soy.

The USMCA is not a free trade deal. That’s because there are no free trade deals. - Jared Bernstein --I’m doing my best to work through the text of the new NAFTA, now called YMCA, I mean CAMUS, no…wait…USMCA! Trade agreements make for a dense read…here’s a snippet from the Ag chapter, one of the 34 chapters, followed by “annexes” and “side letters”: […] In the real world, agreements exist between trading partners that comprise hundreds of pages of rules by which they will engage in trade. These rules can be straightforward, like the one above, or seemingly obscure (have a look at the side letter on cheese names; as far as I know, I’ve never had Emmentaler cheese, but if this deal becomes law, I can enjoy it free of tariffs!). Trade rules can favor workers, like the new language in support of independent Mexican unions, or investors, like the dispute settlement procedures that are somewhat weakened in the new agreement. It’s all about who got a seat at the table when the deal is drawn up. Many journalists have done nice work unpacking what’s in the deal, so I’ll just share a few reflections and highlight some parts I find of interest. There are, as noted, differences but they are not big enough for Trump to credibly claim that NAFTA was a horrible disaster while the USMCA is incredible. As noted, I don’t see the deal, should it become law, changing the flows of goods, services, money, or people in ways that would change economic outcomes. Some reporting suggests new rules for Mexican auto production, including a) requirements for more production in the trade zone and b) that a subset of Mexican auto workers get paid $16 per hour, could lead to higher car prices. It’s possible, but nothing is that simple in international trade. Auto exporters trying to sell cars here in the US can forgo the duty-free benefits of the trade deal and pay the existing (WTO) auto tariff amounting to a mere 2.5 percent. And exchange rate movements can eventually swamp such price differences, especially as the $16 is not indexed to inflation.   Some of the auto requirements just noted are intended to reduce the trade-induced wage arbitrage opportunities that have long hurt production workers exposed to export competition. The new rules on Mexican unions are also a positive change. It’s not just that these rules potentially make it easier for Mexican workers to form unions. It’s that the unions could finally gain some true independence, as too often, Mexican unions have been Potemkin unions, fronts for management to impose harsh labor conditions with impunity. Again, this is where enforcement is especially crucial. What’s bad in the new deal is the same stuff that was bad in the old one (same with TPP): protectionist measures that further belie the idea of “free trade.” I’m talking here about patent and IP extensions that American lobbies like Big Pharma insist on as the price of their support (Dean Baker has some details here). Surely those complaining about higher car prices based on labor protections should be lodging the same complaints here.

New Nafta Shows Limits of ‘America First’ – WSJ - To free traders, the new Nafta is a bitter pill to swallow. It introduces managed trade to autos, waters down the foreign rights of corporations and normalizes national security as a pretext for tariffs. Many of its improvements, such as on intellectual property and labor rights, were already in the 12-nation Trans-Pacific Partnership, from which President Donald Trump has withdrawn.  But the verdict is different when judged by a different standard—how the world’s trading system survives the most protectionist U.S. administration in memory. The new deal shows the limits to Mr. Trump’s “America First” agenda and an underlying resilience to the existing order. The reason: The resistance Mr. Trump encountered from Congress, business, his own advisers and U.S. trading partners circumscribed his leverage and may again in the future. At the outset, the U.S. held all the cards: Mexico and Canada depended far more on exports to the U.S. than vice versa. Mr. Trump shared none of his predecessors’ affection for trade agreements, either on their own merits or as tools of foreign policy. His threats to abandon the North American Free Trade Agreement, the U.S.-Korea Free Trade Agreement and even the World Trade Organization weren’t hollow. He proved this with unilateral tariffs on washing machines, solar panels, steel and aluminum. He told U.S. Trade Representative Robert Lighthizer, “I will back you up like no other USTR has been backed up in history,” Mr. Lighthizer recounted to reporters on Monday. “And he did that.” Yet in the end, the new U.S.-Mexico-Canada Agreement looks a lot like the old Nafta. Mexico’s only significant concession was on autos and parts: rules requiring more production in North America, higher wages for workers, and potential tariffs if its exports to the U.S. exceed 2.6 million vehicles. Yet these auto rules may have little practical significance. Jeff Schuster of LMC Automotive, a consulting firm, says some lower-priced models now assembled by Volkswagen , Mazda and a few other manufacturers in Mexico may no longer qualify for duty-free entry. Rather than shift production to the U.S., they may simply pay the 2.5% tariff, he says. That would hurt U.S. consumers (especially on lower incomes) without helping U.S. workers.

‘No, no, no’: Trump tries out Juncker’s accent-- U.S. President Donald Trump was riffing in the Rose Garden about his prowess in trade talks when he decided to try out his best Jean-Claude Juncker routine. “Jean-Claude, a great business person, head of the European Union,” Trump said. “Jean-Claude my friend. I’d say, ‘Jean-Claude, we want to make a deal.'”  “He goes, ‘No, no, no. We are veryhappy,'” Trump said, slightly rolling the “r” and dropping the “h” and drawing out the “pee” in “happy” for emphasis. It was more a failed imitation of Inspector Jacques Clouseau than an impersonation of the European Commission president, whose accent, like his native Luxembourg, tends to fall somewhere between France and Germany, bordering on Belgium. There was also quite a bit of hyperbole, with Trump repeating the claim that his tariffs on steel and aluminum and threats of additional levies on cars intimidated Juncker and the EU into agreeing to new trade negotiations. Trump’s affection for Juncker appears to be growing. Recently, he called Juncker a “tough cookie” but also “nasty” and “the kind of guy I want negotiating for me.”But his praise has also been laced with disdain, insisting that Juncker “crumbled” and the EU came begging for negotiations because of fear over the additional tariffs.  In fact, the EU stared Trump down and only entered into talks with the U.S. president after slapping down retaliatory tariffs, including on signature goods made in Republican strongholds, like Kentucky bourbon. Alternative facts aside, Trump used his event in the Rose Garden, where he trumpeted his deal with Canada and Mexico to replace NAFTA, as an opportunity to repeat his claim that he had brought the EU to its knees, and was fighting back against a hugely unfair trade deficit.

What if Trump’s confrontational trade stance actually works? -  The NAFTA 2.0 agreement, or USMCA as Donald Trump wants to call it — and he would appear to have won the right to call it anything he wants — ought to be sending chills up the spines of diplomats and trade negotiators around the world. Trump largely got his way. And now, no one can tell him his bull-in-a China-shop way won't work. Should Sunday night's sudden 11th-hour approval of the U.S.-Mexico-Canada Agreement give hope or dismay to Europeans hoping to do a trade deal with America, to China fearing a trade war with the United States, or to Iran and Europeans hoping to do any sort of side deal without American participation? In fact, from this perspective across the Atlantic, this NAFTA reboot should only reinforce the newly apparent reality. Trump's unhinged-from-precedence-in-your-face negotiating style actually works.Indeed, Sunday evening, a senior American official came right out baldly and boasted to the Wall Street Journal that the new pact was "a template for the new Trump administration playbook for future trade deals." The official might even have left off "trade." This kind of bludgeon-thy-neighbor tactics could work quite well, thank you, in dealing with most of the adversaries Trump has created or confronted in his first two years in office.All three countries — the US, Mexico and Canada — were characterizing it as a win-win-win. But the leading French daily Le Monde called it like they saw it: "Trump imposes on Canada a new free trade accord."This is the second trade pact that Trump has managed to strike this year. In March, following months of bluster and threats of torpedoing the 6-year-old KORUS (Korean-US) trade agreement, Korea consented to a new omnibus pact, agreeing at once to slash its average annual steel exports to the US. by 30 percent and have its aluminum exports to the US taxed at a 10 percent level. At the same time, Korea agreed to double the number of American trucks that could be sold there to 50,000 per manufacturer each year, while scrapping other sales barriers, including emission standards.  Trump bludgeoned the South Koreans into this arrangement -- which he finally signed last month -- at the very moment North and South Korea were seeking a rapprochement that would, within weeks, lead to an invitation culminating in the Singapore summit between Trump and North Korean leader Kim Jong Un. It showed, Trump pointed out, that tough talk on the trade front and use of other forms of diplomatic pressure, not to mention military threats, can produce significant results.

CNN, Axios Suggest Trump Trade Tactics Working -- Following the announcement of Nafta 2.0, or the United States Mexico-Canada Agreement (USMCA), liberal news outlets CNN and Axios published articles suggesting that Trump's negotiation tactics might just be working. In a Tuesday article, CNN contributor David Andelman asks "What if Trump's confrontation trade stance actually works?" - which suggests that after USMCA was announced, "Trump largely got his way. And now, no one can tell him his bull-in-a China-shop way won't work." Axios's Jim VandeHei and Mike Allen offer similar analysis in their piece entitled, "The Trump way often works." For a left-of-center publication like Axios to publish an acknowledgement of Trump's successes is interesting, however for the insurgent "alt-left" at CNN, even admitting that Trump's tactics might be working is quite frankly shocking - even if it's an Op-Ed.  Trump's unhinged-from-precedence-in-your-face negotiating style actually works.Indeed, Sunday evening, a senior American official came right out baldly and boasted to the Wall Street Journal that the new pact was "a template for the new Trump administration playbook for future trade deals." The official might even have left off "trade." This kind of bludgeon-thy-neighbor tactics could work quite well, thank you, in dealing with most of the adversaries Trump has created or confronted in his first two years in office. All three countries — the US, Mexico and Canada — were characterizing it as a win-win-win. But the leading French daily Le Monde called it like they saw it: "Trump imposes on Canada a new free trade accord."CNN

China ‘threatened with isolation’ by US-Mexico-Canada trade deal - A special clause in the new US-Mexico-Canada trade agreement would give Washington a near-veto over any attempt by Canada or Mexico to agree to a free-trade deal with a “non-market economy”, in what analysts have said is a major threat to China’s position in the global trading system.The United States-Mexico-Canada Agreement (USMCA), finalised on Sunday to replace the 24-year-old North America Free Trade Agreement, stipulates that any of the three parties to the deal has the right to be informed about any negotiations on a free-trade agreement with a “non-market economy” at an early stage, and can review any such deal signed by another member.If one of the three were to sign a free-trade deal with a non-market country, either of the other two would have the right under article 32.10 to terminate the trilateral USMCA with six months’ notice and form its own bilateral deal on the same terms. The agreement needs to be approved by the governments of all three counties, including the US Congress, which isn’t expected to take it up until early next year.Despite repeated Chinese demands that they do so, the US and European Union have refused to classify China as a “market economy” – a technical distinction in the World Trade Organisation framework that would reduce the ability of Washington and Brussels to impose trade sanctions on Beijing.Although the new stipulation – which was not included in the trade deal between the US and South Korea agreed last month – does not name any specific country, analysts understand it to be aimed at China.With the power to review and then impede or effectively veto a possible free-trade deal between China and Canada or Mexico, the US can block potential “backchannels” for Chinese products to enter US markets via its neighbours, and gain a significant advantage in weakening Beijing’s negotiating power in future trade talks.The clause would effectively end any dalliance between Canada and China – Canada’s second-largest trading partner after the United States – over a possible free-trade deal. The two countries agreed in 2016 to study the feasibility of such a deal, although it was not taken further and the Chinese government’s announcement in March of its existing and potential future free-trade deals did not mention Canada. But the clause has wider implications than scuttling any future China-Canada deal. If the US were to insert a similar clause into trade deals it is negotiating with the EU and Japan, it would mean Beijing’s best hope of trading with the EU, Japan and Canada to offset an extended trade war with the US would be quashed, according to trade experts.

After the trade war, US-China relations will never be the same -- “A glass is easily broken, but difficult to repair,” Chinese Foreign Minister Wang Yi said last week in New York, in reference to the current state of China-US relations. But, even if present differences can ultimately be resolved, there’s no going back to how things were. The glass may not yet have shattered, but it is cracked.US President Donald Trump railed last week about a recent China Daily-sponsored advertising supplement that ran in an Iowan newspaper, the Des Moines Register.Trump has argued that such an action represented an attempt to interfere in next month’s US midterm congressional elections, but the supplement’s attempt to flag up how, in particular, Iowa’s farmers have benefited from the way the China-US economic relationship has evolved, nevertheless rings true. By extension, those farmers will lose out if that same economic relationship isn’t repaired.Last month, Iowa State University estimated that the imposition of tariffs in 2018 on products exported by the state, of which those retaliatory imposts levied by China are a very material part, could cost the Iowan agricultural economy up to US$2.2 billion. More pointedly, the university report said, previous trade battles such as the Russian grain embargo of the 1980s and the 2009 dispute with China (tyres versus chickens), show that “once trade market share is lost, it is difficult for markets to return to the previous relationships”. Then there’s the potential inelasticity of US demand for Chinese goods. If those goods cannot be easily substituted, either from within the United States or from an alternative overseas source not covered by Trump’s trade tariffs, the US consumer will either have to forego those purchases or pay up for them. In the latter case, at least to some extent, the Trump tariffs could become a tax on the US consumer.

 Damaged soy crop hits farmers reeling from U.S.-China trade war (Reuters) - A rain-damaged soybean harvest in the U.S. Mississippi Delta is heaping more pain on farmers already suffering from a damaging trade war between the United States and China that has dragged prices to lows not seen in a decade. Late-season storms, including bands of showers from Hurricane Florence, soaked ripe soybeans from Memphis, Tennessee, to northern Louisiana over the past two weeks, enhancing mold and fungus growth and causing some beans to rot in their pods, grain traders said. Now those soybeans do not meet the market’s crop quality guidelines, so farmers that sold soybeans through forward contracts are facing a penalty because they cannot deliver beans with the quality required, they said. The crop quality woes come as farm income has plunged by half over the past 5 years and as the deepening U.S.-China trade war harms demand for soybeans, the most valuable U.S. agricultural export product. China bought $12.3 billion of the $21.5 billion in U.S. soybean exports in 2017. “The export market’s not in a good position to take a lot of the off-grade quality this year because of the issues we’re having without the Chinese (market),” said J.O. Norman, vice president at Oakley Grain in North Little Rock, Arkansas, which operates six elevators in the region. China halted purchases after slapping 25 percent tariffs on U.S. shipments on July 6. Instead, the country has been drawing nearly all of its soybean needs from Brazil. Normally, grain elevators - which buy, sell and store crops - and shippers can compensate for damaged soy by blending it with higher-quality beans to meet export specifications that require less than 2 percent damage. But high-quality beans are in very tight supply in the Delta this year because weak export prices are discouraging Midwest elevators from shipping them south. “The damage we’re seeing is only like 3 or 4 percent, which is manageable in a normal year. But we don’t have the export market so it’s been hard to get good beans,” said a grain buyer at a Mississippi elevator who asked not to be named because he is not authorized to speak to media. Elevators across the Delta have cut bids for soybeans to discourage a flood of farmer deliveries until demand improves. Quality discounts have also widened due to the extent of the crop problems and the lack of higher-quality blending supplies, grain handlers said.

ECB’s economic model shows US losing trade war but neglects politics - Economists at the European Central Bank have joined the ranks of other European experts in forecasting doom and gloom from US trade policies. In a new study, ECB economists predictably use forecasting models replete with somewhat arbitrary hypotheses to conclude that the US will suffer most from its benighted disruption of free trade. The ECB forecast echoes earlier studies from British and French central banks. The ECB study posits two years of escalating trade disputes spiraling into a mutual 10 percent tariff across the board with negative impacts on the US and global economy. In this scenario, GDP in the US would be 2 percent lower in the first year alone, and global trade would decline by almost 3 percent. China would gain, at least in the short term, the ECB experts believe, as exports to third countries replace those of goods previously shipped to the US. In a separate study released Wednesday, Germany’s five major economic institutes warned in their joint fall report that that escalation of the trade dispute could lead to recession in Germany and the EU.. Retaliation by the EU could soften that recession while pushing the US into a downturn, the German economists believe. Whatever merit these economic models have, they have little to do with the real world. To begin with, they ignore the political dimension. Administration officials from President Donald Trump on down have made it fairly clear that the punitive tariffs and threats of tariffs are brinksmanship designed to achieve a more level playing ground in trade and above all to stop China’s cheating on world trade rules. China’s infractions in trade have become so commonplace that the world seems resigned to accepting them. While not mentioning China by name, Mr. Trump minced no words in his speech Tuesday to the United Nations General Assembly in criticizing its practices. Washington hardly expects the dispute to escalate and run over two years, even though it has established these are not empty threats. Rather, US officials expect China and other affected trading partners to come to the table and negotiate a clearer set of rules that will actually be observed. The chicken-little studies from the ECB and others are beside the point in this context. They recall the bon mot from US journalist Salena Zito during the 2016 presidential campaign. Critics of Mr. Trump take him literally but not seriously, while his supporters take him seriously but not literally.

Chinese spy chips are found in hardware used by Apple, Amazon, Bloomberg says; Apple, AWS say no way - Data center equipment run by Amazon Web Services and Apple may have been subject to surveillance from the Chinese government via a tiny microchip inserted during the equipment manufacturing process, according to a Bloomberg BusinessWeek report on Thursday. The claims in the report have been strongly disputed by the technology giants.The chips, which Bloomberg said have been the subject of a top secret U.S. government investigation starting in 2015, were used for gathering intellectual property and trade secrets from American companies and may have been introduced by a Chinese server company called Super Micro that assembled machines used in the centers.Apple, AWS and Super Micro dispute the report. Apple said it did not find the chips as asserted by BusinessWeek — which cited anonymous government and corporate sources. Super Micro reportedly denied that it introduced the chips during the manufacturing.Shares of Super Micro plummeted more than 40 percent following the report. Trading of the small server company's common stock on the Nasdaq was suspended on Aug. 23 after repeatedly missing SEC filing deadlines. Super Micro shares now trade on over-the-counter markets. Apple shares edged 1 percent lower in Thursday trading, while Amazon fell about 1.5 percent.

The Big Hack: How China Used a Tiny Chip to Infiltrate U.S. Companies - The attack by Chinese spies reached almost 30 U.S. companies, including Amazon and Apple, by compromising America’s technology supply chain, according to extensive interviews with government and corporate sources. In 2015, Amazon.com Inc. began quietly evaluating a startup called Elemental Technologies, a potential acquisition to help with a major expansion of its streaming video service, known today as Amazon Prime Video. Based in Portland, Ore., Elemental made software for compressing massive video files and formatting them for different devices. Its technology had helped stream the Olympic Games online, communicate with the International Space Station, and funnel drone footage to the Central Intelligence Agency. Elemental’s national security contracts weren’t the main reason for the proposed acquisition, but they fit nicely with Amazon’s government businesses, such as the highly secure cloud that Amazon Web Services (AWS) was building for the CIA. To help with due diligence, AWS, which was overseeing the prospective acquisition, hired a third-party company to scrutinize Elemental’s security, according to one person familiar with the process. The first pass uncovered troubling issues, prompting AWS to take a closer look at Elemental’s main product: the expensive servers that customers installed in their networks to handle the video compression. These servers were assembled for Elemental by Super Micro Computer Inc., a San Jose-based company (commonly known as Supermicro) that’s also one of the world’s biggest suppliers of server motherboards, Nested on the servers’ motherboards, the testers found a tiny microchip, not much bigger than a grain of rice, that wasn’t part of the boards’ original design. Amazon reported the discovery to U.S. authorities, sending a shudder through the intelligence community. Elemental’s servers could be found in Department of Defense data centers, the CIA’s drone operations, and the onboard networks of Navy warships. And Elemental was just one of hundreds of Supermicro customers.  This attack was something graver than the software-based incidents the world has grown accustomed to seeing. Hardware hacks are more difficult to pull off and potentially more devastating, promising the kind of long-term, stealth access that spy agencies are willing to invest millions of dollars and many years to get.

Biggest US Export to China? Spending by Chinese Tourists - - International tourism is counted in the official economic statistics as an export industry. We don't always think about it that way. But when, say, Chinese tourists in the US purchase goods and services, then Chinese consumers are buying goods and services produced in the United States--which is what "exports" means. Thus, I found it interesting that US exports of services to Chinese tourists in the US is the US industry with the largest exports to China. Here are some facts as compiled by the US Travel Association:"In 2016, 3.0 million Chinese travelers visited the U.S., an increase of 15 percent from 2015."  "China was the third-largest overseas inbound travel market to the U.S. in 2016." Apparently, 12% of all overseas tourist visits to the US originate from the United Kingdom, 9% from Japan, and 8% from China.  "Travel exports to China (ie: spending by Chinese visitors and students in the U.S., and on U.S. airlines) reached $33.2 billion in 2016, significantly higher than any other country. This includes $12.5 billion in education-related spending by Chinese students in the U.S." "Average spending per Chinese visitor was $6,900 in 2016, the highest of all international visitors." If I'm reading the footnotes correctly, this number doesn't include spending on education."  "Travel is the largest U.S. industry export to China, accounting for nearly 20 percent of all exports of U.S. goods and services to China." As the trade conflicts between the US and China continue, what is the likelihood that China might retaliate by making it harder for Chinese tourists to reach the US? After all, China has used limitations on tourism to put pressure on South Korea, Taiwan, and others. At least one commenter in t he travel industry thinks it unlikely, for several reasons. Many Chinese firms are involved in the Chinese tourism industry, so limiting tourism would hurt them, too. China has been choosing its tariff retaliation targets with some eye to hitting states that supported the election of President Trump, but limits on Chinese tourism to the US would have the biggest effects in California, New York, Illinois, and Massachusetts--none of them Trump strongholds. Finally, cutting Chinese travel to the US would also affect a lot of Chinese firms operating in the US and world markets, as well as Chinese students at US colleges and universities, which does not appear to be a goal of China's government

With Donald Trump bringing xenophobia back, it’s an awful time to be a Chinese abroad -  As the US-China trade war escalates, it’s hard to be blind to the impact it has on the rest of the world. For one thing, Chinese-Americans are already feeling the heat – finding that their loyalties are increasingly, constantly called into question. It’s not just answering “Where are you really from?”; now it’s also, “Whose side are you on?”   It reaffirms not only the awful reality that Chinese-Americans are considered perpetual foreigners, but as Frank Wu, chairman of the Committee of 100 and former dean of the University of California Hastings College of the Law, said, “Even if you’re born in America, even if your family has been here for generations, people look at you and think you must be a foreign agent or a spy or you’re up to no good.”  If almost every Chinese student at an American college is a spy, it must follow that there are Fu Manchu’s and Fah Lo Suee’s running amok, lurking around, readying to threaten the Western world. Xenophobia towards East Asian people is not a relic of Western colonialism, fear of the “yellow peril” is very much alive today. If it was ever a cancer in remission, it’s back with a vengeance, coming to the fore again with the trade war and China bashing. The xenophobia has been shamelessly tweeted and prominently featured, most recently at the United Nations’ annual meeting. Although China wasn’t the only country attacked by United States President Donald Trump in his speech, and even though he made it a point to express his “great respect and affection for my friend President Xi”, the hostility towards the Chinese was on full blast. Having an unabashed bully as the leader of the free world has consequences. Such antagonism, coupled with the notoriety of ill-behaved Chinese tourists, has engendered an increasing hostility towards China or, at least, a lack of inhibition about showing that animosity.

Pew poll finds Trump viewed more negatively than Xi, Putin - The Trump administration’s dispute with China may have begun as a trade war, but to many, it’s now something much bigger: an attempt to contain and control a rising China before it is too late.That plan may have significant global support, if new research is to be believed. But there could also be a problem — the persistent, global unpopularity of President Trump.Polling data from 25 countries released Monday showed a widespread global belief that China is a growing power, perhaps one that now rivaled the United States in economic might, but that most people wanted the United States to retain its leading role in global affairs. However, the poll also found very little confidence in the countries surveyed that the current U.S. leader would do the right thing in global affairs. Indeed, confidence in Trump was lower than for world leaders such as Germany’s Angela Merkel, France’s Emmanuel Macron, Russia’s Vladimir Putin — and even China’s Xi Jinping. Negative views of Trump were prevalent in many traditional U.S. allies. Seventy-five percent of Canadians were found to have no confidence or not too much confidence in Trump, as were 80 percent of Swedes, 70 percent of Britons and 90 percent of both the Germans and French. The lowest positive views of Trump were found in Mexico, where just 6 percent of the country expressed confidence in his leadership. One notable outlier was Israel, where 69 percent of the country was found to have at least some confidence in Trump to do the right thing in global affairs. In the past year, the Trump administration has implemented a number of policies that were interpreted as pro-Israeli, including the decision to move the U.S. Embassy in Israel from Tel Aviv to Jerusalem.

Protests hit mass detention of immigrant children in Texas tent camp -- Scores of protesters gathered outside the Tornillo border crossing about 35 miles southeast of El Paso, Texas over the weekend to protest the mass incarceration of immigrant children there in a barren tent camp in the desert on the Mexican border. The demonstrators demanded the immediate release of the children as well as that of their parents. The protest came amid reports that over 1,600 children have been relocated to the camp as part of a brutal immigration policy involving what amounts to midnight raids on shelters and foster care homes throughout the country. Children are literally being dragged from their beds in the middle of the night without warning in order to prevent them from escaping, according to a report Sunday by the New York Times. They are then loaded onto buses and transported hundreds if not thousands of miles from as far away as New York and Kansas to be imprisoned in the Tornillo detention camp. The Times reported that caregivers at the shelters and homes from which the children are removed have protested the action and have been left in tears by the government’s action. Children already traumatized by their detention and separation from their parents are once again subjected to the cruelty of the US government’s police-state regime against immigrants and refugees.  The Tornillo detention camp, or “Tent City” was originally opened in June to house 400 boys after the Trump administration’s implementation of its “zero tolerance” policy, which effectively meant that all undocumented immigrants, including those claiming refugee status, were to be imprisoned, and all those deemed to have violated immigration law criminally prosecuted. While held in custody, parents were separated from their children. While the administration has formally ended the policy of separation, it acknowledges that nearly 500 children are still separated from their parents and in custody, including 22 who are under the age of five. The parents of at least 322 of these children have already been deported. Moreover, the Department of Health and Human Services (DHHS) notified Congress earlier this month that it cannot locate about 1,500 children released into custody by immigration authorities and for whom it is responsible to ensure care.

Child concentration camps in America --Across the United States, under cover of darkness, the government is rounding up immigrant children and sending them to a desert concentration camp in Tornillo, Texas, near the US-Mexico border. In recent weeks, hundreds have been transferred from foster shelters to Tornillo, where they live in tents, 20 to a room.  The New York Times spoke with employees at shelters who described scenes that recall the most shameful episodes in American history, including the capture of fugitive slaves, the forced removal of Native Americans from their land, and the internment of Japanese-Americans during World War Two. According to the Times, “In order to avoid escape attempts, the moves are carried out late at night because children will be less likely to try to run away. For the same reason, children are generally given little advance warning that they will be moved.”  Roughly 13,000 children are currently detained in shelters and immigration detention facilities nationwide, a record high. Conditions in immigration detention centers and shelters are deplorable, with children reporting cases of rape, sexual abuse and physical violence. The Department of Homeland Security (DHS) is expanding the size of the Tornillo tent city, which currently houses 1,600 immigrant youth, to 4,000. Starting in November and extending through March, the average daily low temperature will be below 40 degrees Fahrenheit. The Trump administration will soon begin detaining children indefinitely, having pulled out of the Flores settlement, a court agreement that barred the government from detaining immigrant children for more than 20 days. The administration has also been arresting, detaining and deporting relatives of detained children who submitted official applications to sponsor the children.

Inspector General: The Family Separation Policy Was a Disaster From Its Inception - The Trump administration’s family separation policy, which resulted in thousands of children being taken from their parents at the U.S.-Mexico border earlier this year, was needless and cruel. That much was obvious from the moment it was implemented. But now, more than three months after President Trump ended the brutal policy, we’re learning that it was also poorly conceived and terribly executed. That’s according to a report from the Department of Homeland Security Inspector General that’s set to be released Tuesday and was leaked by the Washington Post. Among the most appalling findings in the report is that at least 860 children were kept in Border Patrol holding cells past the 72-hour legal limit. One child was locked up for 12 days and another for 25 days. According to the Washington Post, these “chain-link holding pens” lacked showers and beds and were “designed as short-term way stations.” Coordination between agencies was disorganized and poorly thought-out, the IG found. The consequences of this were dire. When children were taken from their parents, the adults were left with little information about their child’s whereabouts. And children too young to communicate were separated without any means of identification. It’s little wonder that once the policy was reversed, the process of reuniting families was such a challenge. In addition to the haphazard execution of a monstrous policy, the IG found that DHS lied about the process of reuniting parents and children. The Post reports: On June 23, three days after the executive order halting the separations, DHS announced it had developed a “central database” with HHS containing location information for separated parents and minors that both departments could access to reunite families. The inspector general found no evidence of such a database, the report said. In a response to the report, DHS officials said the IG didn’t give it credit for cleaning up its own mess, complaining that the report “provides no mention of the Department’s significant accomplishments to reunify families.”

Poll: 1 in 3 Americans can pass citizenship test - Only about a third of Americans can pass a multiple-choice test consisting of questions from the U.S. Citizenship Test, according to a new poll released Wednesday by the Woodrow Wilson National Fellowship Foundation. Around 60 percent of respondents didn't know which countries the U.S. fought in World War II, according to the poll. The results also found that 57 percent did not know how many Justices sit on the Supreme Court; 72 percent either incorrectly identified or were unsure of which states were part of the 13 original states; and 12 percent believed Dwight D. Eisenhower commanded troops in the Civil War.  “With voters heading to the polls next month, an informed and engaged citizenry is essential,” Woodrow Wilson Foundation President Arthur Levine said in a press release. “Unfortunately this study found the average American to be woefully uninformed regarding America’s history and incapable of passing the U.S. Citizenship Test. It would be an error to view these findings as merely an embarrassment. Knowledge of the history of our country is fundamental to maintaining a democratic society, which is imperiled today.” The poll found an age discrepancy among the results. Respondents age 65 and older scored the best, with 74 percent of them answering at least six out of ten questions correctly, which would correspond with a passing score. Only 19 percent of respondents age 45 or under passed the exam.

Trump Administration to Deny Visas to Same-Sex Partners of Diplomats, U.N. Officials The Trump administration on Monday began denying visas to same-sex domestic partners of foreign diplomats and United Nations employees, and requiring those already in the United States to get married by the end of the year or leave the country. The U.S. Mission to the U.N. portrayed the decision—which foreign diplomats fear will increase hardships for same-sex couples in countries that don’t recognize same-sex marriage—as an effort to bring its international visa practices in line with current U.S. policy. In light of the landmark 2015 Supreme Court decision legalizing same-sex marriage, the U.S. extends diplomatic visas only to married spouses of U.S. diplomats. “Same-sex spouses of U.S. diplomats now enjoy the same rights and benefits as opposite-sex spouses,” the U.S. mission wrote in a July 12 note to U.N.-based delegations. “Consistent with [State] Department policy, partners accompanying members of permanent missions or seeking to join the same must generally be married in order to be eligible” for a diplomatic visa. But critics says the new policy will impose undue hardships on foreign couples from countries that criminalize same-sex marriages. Samantha Power, a former U.S. ambassador to the United Nations, denounced the new policy on Twitter as “needlessly cruel & bigoted.” “State Dept. will no longer let same-sex domestic partners of UN employees get visas unless they are married,” she tweeted, noting that “only 12% of UN member states allow same-sex marriage.”

 Judge blocks DHS from stripping temporary protected status from Haitians, Salvadorans, Nicaraguans and Sudanese Washington Post  - A federal judge in California temporarily blocked the Trump administration’s plans to terminate the legal status of about 300,000 immigrants who fled violence and disaster in Haiti, Sudan, Nicaragua and El Salvador. In a decision late Wednesday, U.S. District Judge Edward M. Chen in San Francisco found substantial evidence that the administration lacked “any explanation or justification” to end the “temporary protected status” designations for immigrants from those countries. At the same time, he said there were “serious questions as to whether a discriminatory purpose was a motivating factor” in the administration’s decision, which would violate the Constitution’s guarantee of equal protection under the law.He cited statements by President Trump denigrating Mexicans, Muslims, Haitians and Africans, including his January remark about “people from shithole countries” and his June 2017 comments stating that 15,000 recent immigrants from Haiti “all have AIDS.” The plaintiffs “have raised serious questions whether the action taken” by Department of Homeland Security officials “was influenced by the White House and based on animus against nonwhite, non-European immigrants in violation of Equal Protection guaranteed by the Constitution,” Chen wrote. “The issues are at least serious enough to preserve the status quo.” It is one of numerous cases in which such racial or ethnic comments or tweets by the president have been cited by judges to block administration policies, including on immigration and transgender people serving in the military. “Absent injunctive relief, TPS beneficiaries and their children indisputably will suffer irreparable harm and great hardship,” Chen wrote. “TPS beneficiaries who have lived, worked, and raised families in the United States (many for more than a decade), will be subject to removal. Many have U.S.-born children; those may be faced with the Hobson’s choice of bringing their children with them (and tearing them away from the only country and community they have known) or splitting their families apart.”

New California internet neutrality law sparks US lawsuit (AP) — California Gov. Jerry Brown has approved the nation's strongest net neutrality law, prompting an immediate lawsuit by the Trump administration and opening the next phase in the battle over regulating the internet. Advocates of net neutrality hope California's law, which Brown signed Sunday to stop internet providers from favoring certain content or websites, will push Congress to enact national rules or encourage other states to create their own. However, the U.S. Department of Justice quickly moved to halt the law from taking effect, arguing that it creates burdensome, anti-consumer requirements that go against the federal government's approach to deregulating the internet. "Once again the California Legislature has enacted an extreme and illegal state law attempting to frustrate federal policy," U.S. Attorney General Jeff Sessions said in a statement. The Federal Communications Commission repealed Obama-era rules last year that prevented internet companies from exercising more control over what people watch and see on the internet. The neutrality law is the latest example of California, ground zero of the global technology industry, attempting to drive public policy outside its borders and rebuff President Donald Trump's agenda. Brown did not explain his reasons for signing the bill or comment on the federal lawsuit Sunday night. Supporters of the new law cheered it as a win for internet freedom. It is set to take effect Jan. 1.

DOJ Sues to Overturn California Net Neutrality Law -- Jerri-lynn Scofield - The Department of Justice (DoJ) yesterday filed a lawsuit against the state of California alleging that itsSenate Bill 822, which would restore net neutrality and was signed into law earlier during the day by Governor Jerry Brown, “unlawfully imposes burdens on the Federal Government’s deregulatory approach to the Internet,” according to a DoJ press release.The California bill is one of several state measures to roll back the Federal Communications Commission’s (FCC) 2017 decision to scupper net neutrality. At least half of US states have introduced bills restoring net neutrality and three states —Oregon, Vermont, and Washington— have already enacted legislation. Governors in six states– —Hawaii, New Jersey, New York, Montana, Rhode Island, Vermont—  have signed executive orders to this effect, according to the National Conference of State Legislatures. The Los Angeles Times in California enacts strongest net neutrality protections in the nation — and the Trump administration sues summarized the California measure: the new law would impose the toughest net neutrality regulations in the country by reinstating the rolled-back federal regulations at the state level. It tasks the state attorney general with evaluating potential evasion of the net neutrality rules. The California law goes farther than the previously existing federal net neutrality rules on zero rating, and, according, to The Verge in Trump administration sues California over tough net neutrality law:  Attorney General Jeff Sessions issued the following statement yesterday, according to the DoJ: “Under the Constitution, states do not regulate interstate commerce—the federal government does. Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. And FCC Chairman Ajit Pai also had his say, according to the DoJ: “Not only is California’s Internet regulation law illegal, it also hurts consumers. The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits. They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them.

Cybersecurity Expert John McAfee Issues Warning About Those Cell Phone "Presidential Alerts" -  Despite the wording of the message, this is not a presidential alert system, explains Law & Crime:It is a Wireless Emergency Alert system set up by the Federal Emergency Management Agency (FEMA) to allow government officials to swiftly send information to the American public in a time of crisis, specifically terror attacks, natural disasters, or other public safety threats.The alert everyone got this week was not sent by Trump, despite the misleading title. It was sent by FEMA as a test of the system. In the future, the president will have the ability to send messages, as will other officials from federal, state, tribal, and local governments.On its surface, the system appears to be a harmless way to reach US citizens in the event of an emergency.It’s no secret that we are all being watched by the government in various ways – there seems to be no way to fully escape Big Brother’s prying eyes these days.People are so used to being spied on now that many are shrugging off the possibility that the system is more invasive than it appears.Cybersecurity expert John McAfee is not one of them.In a Tweet, he explained that the alert system is just one more way the government is invading our privacy:The "Presidential alerts": they are capable of accessing the E911 chip in your phones - giving them full access to your location, microphone, camera and every function of your phone. This not a rant, this is from me, still one of the leading cybersecurity experts. Wake up people! — John McAfee (@officialmcafee) October 3, 2018

Trump administration denied it has ‘secret’ committee seeking negative information on marijuana: report - The White House has denied that it has a "secret" committee seeking negative information about marijuana, according to a letter from the White House's Office of National Drug Control Policy (ONDCP) obtained by BuzzFeed News. “I assure you that ONDCP seeks all perspectives, positive or negative, when formulating Administration policy. You have my full and firm commitment that ONDCP will be completely objective and dispassionate in collecting all relevant facts and peer-reviewed scientific research on all drugs, including marijuana,” ONDCP acting Director James Carroll wrote in the letter dated Sept. 21 and sent to Colorado Sen. Michael Bennet (D).Bennet previously questioned the White House after BuzzFeed News reported that the Trump administration was convening a multiagency committee tasked with combating public support for marijuana.The committee, called the Marijuana Policy Coordination Committee, was reportedly directed not to consider positive health effects and societal benefits of marijuana, which the ONDCP in the September letter denied.In a letter to the ONDCP in August, Bennet called the committee an "intentional effort to mislead the American people."“I am deeply concerned by this intentional effort to mislead the American people,” Bennet wrote in the letter. “At a time when we should be investing in objective and peer-reviewed scientific research on marijuana and the effects of legalization, the White House is instead using taxpayer money to spread a politically-driven narrative.”

Jeff Flake Explains Himself Jeff Flake barely slept the night before he upended the battle for the Supreme Court. The Arizona senator had spent days agonizing over what to do with the explosive allegation that Judge Brett Kavanaugh had sexually assaulted a young woman when he was in high school. For hours on Thursday, Flake—a key Republican swing vote—listened intently to raw testimony from the accuser and the accused, searching for something like certainty. But when it was over, he felt he was no closer to knowing for sure what happened in that suburban-Maryland bedroom 35 years ago. The next morning, Flake’s office announced that, given the lack of corroborating evidence, the senator was prepared to move forward with Kavanaugh’s confirmation—but in private, he remained conflicted. “I was just unsettled,” he told me. A few hours later, Flake shocked Washington with a dramatic last-minute call to delay the confirmation so that the FBI could spend a week investigating the accusation against Kavanaugh. The move was greeted with scorn from the right and plaudits from the left. But when Flake called me Friday, just before midnight, he was quick to emphasize that this was not an act of ideology. In an interview Friday night, Flake told me about why he changed his mind on the Kavanaugh vote, what it was like to be confronted by sexual-assault survivors on Capitol Hill, and what he hopes to learn from the FBI investigation in the coming week. This interview has been edited for length and clarity.

Conservative Women Are Angry About Kavanaugh—And They Think Other Voters Are, Too - When many conservative women around the country watched Christine Blasey Ford appear before the Senate Judiciary Committee last week, they didn’t find her testimony compelling or convincing, as many liberals did.They saw a political farce.“Honestly, I don’t think I have ever been so angry in all of my adult life,” says Ginger Howard, a Republican national committeewoman from Georgia. “It brings me to the point of tears, it makes me so angry.” In interviews with roughly a dozen female conservative leaders from as many states, this was the overwhelming sentiment: These women are infuriated with the way the sexual-assault allegations against the Supreme Court nominee Brett Kavanaugh have been handled. They are not convinced by Ford or any other woman who has come forward. They resent the implication that all women should support the accusers. And they believe that this scandal will ultimately hurt the cause of women who have been sexually assaulted.Above all, these women, and the women they know, are ready to lash out against Democrats in the upcoming midterm elections. Nearly all the women I spoke with are plugged into state- and local-level conservative politics. Their collective, overwhelming sense is that, like Howard, women voters are angry about what’s happening to Kavanaugh. “I’ve got women in my church who were not politically active at all who were incensed with this,” says Melody Potter, the chairwoman of the West Virginia Republican Party—the first woman to hold that position, she made sure to point out. In her state, the stakes of the Kavanaugh scandal are immense: Democratic Senator Joe Manchin is fighting for his seat in a place where more than two-thirds of voters supported Donald Trump in 2016. With voters “energized” to elect people “who are going to support President Trump,” Potter says, West Virginians are closely watching how Manchin acts on Kavanaugh—especially now that the situation has become so politicized.

 Limits to FBI's Kavanaugh investigation have not changed, despite Trump's comments - NBC — The FBI has received no new instructions from the White House about how to proceed with its weeklong investigation of sexual misconduct allegations against Supreme Court nominee Brett Kavanaugh, a senior U.S. official and another source familiar with the matter tell NBC News. According to the sources, the president’s Saturday night tweet saying he wants the FBI to interview whoever agents deem appropriate has not changed the limits imposed by the White House counsel’s office on the FBI investigation — including a specific witness list that does not include Julie Swetnick, who has accused Kavanaugh of sexual misconduct in high school. Also not on the list, the sources say, are former classmates who have contradicted Kavanaugh’s account of his college alcohol consumption, instead describing him as a frequent, heavy drinker. The FBI is also not authorized to interview high school classmates who could shed light on what some people have called untruths in Kavanaugh’s Senate Judiciary Committee testimony about alleged sexual references in his high school yearbook. The sources said nothing would preclude the FBI from asking Kavanaugh's high school friend Mark Judge, who is on the witness list, about Swetnick’s allegations, but the sources stressed that this is not a top priority. Separately, a White House official made clear that the White House is the client in this process. This is not an FBI criminal investigation — it is a background investigation in which the FBI is acting on behalf of the White House. Procedurally, the White House does not allow the FBI to investigate as it sees fit, the official acknowledged; the White House sets the parameters. Committee member Sen. Dianne Feinstein sent a letter Sunday to White House counsel Don McGahn and FBI Director Christopher Wray requesting a copy of the written directive the White House sent to the FBI. "In addition," she wrote, "if the FBI requests any expansion beyond the initial directive, please provide the names of any additional witnesses or evidence." Trump announced on Twitter late Saturday that the White House had placed no limitation on the FBI's ability to investigate the allegations against Kavanaugh.

White House Directs FBI to Interview First Two Kavanaugh Accusers, But Not the Third - WSJ - The Federal Bureau of Investigation has been instructed by the White House to interview two of the women who have alleged sexual misconduct by Brett Kavanaugh, according to people familiar with the matter. The parameters of the FBI probe don’t include interviewing Julie Swetnick, who said this week the Supreme Court nominee attended a party decades ago where she was gang-raped, according to one of the people. The focus on the first two accusations suggests that the White House doesn’t consider Ms. Swetnick’s accusations credible, people familiar with the instructions said, a decision that drew criticism from Ms. Swetnick’s attorney, Michael Avenatti. The Wall Street Journal has attempted to corroborate Ms. Swetnick’s account, contacting dozens of former classmates and colleagues, but couldn't reach anyone with knowledge of her allegations. No friends have come forward to publicly support her claims. She has recorded a TV interview to be aired Sunday, the first woman making accusations against the Supreme Court nominee to do so. NBC’s “Morning Joe” on Thursday aired a clip of her interview with John Heilemann of Showtime’s “The Circus,” in which Ms. Swetnick called for an investigation into the allegations against Judge Kavanaugh. Republican Sen. Jeff Flake demanded on Friday that the FBI be allowed up to a week to investigate allegations against Judge Kavanaugh before the full Senate considers his nomination. President Trump later in the day ordered the FBI to conduct a “supplemental investigation” to Judge Kavanaugh’s routine background check that would be limited to credible allegations of sexual assault and conclude in less than a week. That investigation, already under way, is being “tightly controlled” by the White House, and the FBI won’t have free rein to pursue all potential leads, according to the person who said Ms. Swetnick’s allegations wouldn’t be included. It includes instructions to interview Dr. Christine Blasey Ford, who testified to the Senate on Thursday that Judge Kavanaugh assaulted her when they were teenagers, and Deborah Ramirez, who alleged Judge Kavanaugh exposed himself to her during a drunken party when they were both freshmen at Yale University, several people said. Judge Kavanaugh has repeatedly denied all allegations of sexual misconduct. He told the Senate Judiciary Committee on Thursday that he was too busy with sports and other summertime events to party hard and that he was likely out of town when the alleged assault against Dr. Ford occurred. On Saturday, Mr. Avenatti, Ms. Swetnick’s lawyer, said on Twitter that he and his client hadn’t yet heard from the FBI, despite their repeated requests for an interview. Ms. Swetnick alleged earlier this week that Judge Kavanaugh attended a party in the early 1980s where she was gang-raped and that he tried to get women drunk at several gatherings so they could be targeted for sexual assault.

Yale classmate says Kavanaugh has not told the truth about his drinking - A Yale classmate of Supreme Court nominee Brett Kavanaugh accused him on Sunday of being untruthful in his testimony to the Senate Judiciary Committee and making a "blatant mischaracterization" of his drinking while in college. "I can unequivocally say that in denying the possibility that he ever blacked out from drinking, and in downplaying the degree and frequency of his drinking, Brett has not told the truth," Chad Ludington said in a statement to CNN. Ludington said in the statement he often drank with Kavanaugh when they were classmates, and said Kavanaugh had played down "the degree and frequency" of his drinking in his testimony. Ludington said he often saw Kavanaugh "staggering from alcohol consumption," and said he often became "belligerent and aggressive" while drinking. In his testimony to the judiciary committee Thursday, Kavanaugh denied ever blacking out from drinking. Ludington said in his statement he witnessed Kavanaugh throw a beer in a man's face once for making a semi-hostile remark, "starting a fight that ended with one of our mutual friends in jail." "It is truth that is at stake," Ludington said in a statement. "and I believe that the ability to speak the truth, even when it does not reflect well upon oneself, is a paramount quality we seek in our nation's most powerful judges." Ludington is a professor at North Carolina State University, The New York Times reports, and he has appeared to have made small political contributions to Democratic candidates. Ludington said in the statement he does not believe "heavy drinking or even loutish behavior of an 18 or even 21 year old should condemn a person for the rest of his life," but said if Kavanaugh "lied about his past actions on national television, and more especially while speaking under oath in front of the United States Senate, I believe those lies should have consequences."

Brett Kavanaugh and alcohol: Two dueling narratives - WaPo. Questioned directly whether he blacked out, Kavanaugh said: “I’ve gone to sleep, but I’ve never blacked out. That’s the allegation? That’s wrong.”  So far, no evidence has emerged that Kavanaugh was arrested for a bar fight, cited for underage drinking or treated for alcoholism. Moreover, no one has come forward to say they remember Kavanaugh, as a student, admitting that he could not remember what happened the night before. Instead, we have diametrically opposed recollections offered by friends and former classmates in media interviews — that he was either a social drinker who never went to excess or that he was a stumbling, sometimes nasty drunk. Disturbing accounts have also emerged of Washington prep school culture in the 1980s, in which men lined up to have their way with a drunk woman, and Yale’s stratification between the jocks and legacy students such as Kavanaugh and people from humbler backgrounds. Given that these recollections have been spread across various media outlets, here is a complete collection of these conflicting accounts. The Fact Checker found at least six on-the-record statements critical of his drinking and at least three people who disputed it was a problem. (We did not include anonymous accounts.) There is not enough consistent information to assign a Pinocchio rating, so readers can judge for themselves. Liz Swisher, a Yale classmate who is now chief of the gynecologic oncology division at the University of Washington School of Medicine, told The Washington Post: “Brett was a sloppy drunk, and I know because I drank with him. I watched him drink more than a lot of people. He’d end up slurring his words, stumbling .… There’s no medical way I can say that he was blacked out. . . . But it’s not credible for him to say that he has had no memory lapses in the nights that he drank to excess.” On CNN, Swisher expanded on her memories: “He drank heavily. He was a partyer. He liked to do beer bongs. He played drinking games. He was a sloppy drunk. He was more interested in impressing the boys than he was in impressing the girls. I never saw him be sexually aggressive but he definitely was sloppy drunk.”

Kavanaugh Knew About Ramirez Allegation Much Earlier Than He Says -- During Brett Kavanaugh’s Senate testimony last week, Orrin Hatch asked the prospective Supreme Court justice, “When did you first hear of Ms. Ramirez’s allegations against you?” Kavanaugh replied, “In the last — in the period since then, the New Yorker story.” Hatch was referring to Deborah Ramirez’s charge that Kavanaugh humiliated her by waving his penis in her face while she was intoxicated. Kavanaugh appeared to be saying he heard of the charges after they appeared in The New Yorker in September.NBC reports that this, like many things Kavanaugh said in his testimony, is false. Kavanaugh’s friends gathered testimony attempting to refute Ramirez’s allegations weeks before The New Yorker’s story was published. Some of the witnesses were contacted by people working on Kavanaugh’s behalf as early as July, according to text messages one witness has shared with the FBI.This demonstrates to a near-certainty that Kavanaugh knew about the incident weeks before the story came to light. It is possible he had somehow heard about false charges being circulated in advance, worked to refute them, and then misled the Senate about when he heard about them. An alternative, more direct explanation would be that he worked to refute the charge because he knew about it from having actually done what he was accused of.There is no doubt, however, that Kavanaugh intentionally misled the Senate. In a transcribed interview with the Senate Judiciary Committee, he very clearly stated that he had no advance knowledge of Ramirez’s allegations until The New Yorker’s story was published:  In the 9/25 transcribed interview with Senate investigators, Kavanaugh unequivocally denies knowing about the Ramirez story at any time between his college graduation and when the New Yorker story was published. https://t.co/0oX12wbi64 pic.twitter.com/RLdthewsJd

Here’s the Kavanaugh Power Brokers the FBI Will Have to Navigate to Probe Mark Judge -- Pam Martens --Mark Judge is a conservative writer who, until the sexual assault allegations surfaced against Supreme Court nominee Brett Kavanaugh, had an unremarkable career. Despite the unlikelihood that Judge has squirreled away the funds from this writing career to pay one of Washington D.C.’s top white-collar criminal defense lawyers to represent him, or the kind of credible history that would entice such a legal engagement, Judge has secured an expensive lawyer with a remarkable pedigree. Judge is the pivotal witness that the FBI will want to interview following President Donald Trump’s announcement yesterday that he will reopen the FBI’s background investigation of Kavanaugh. Trump caved to pressure yesterday from Republican Senator Jeff Flake, the American Bar Association, the Yale Law School (Kavanaugh’s alma mater) and every Democratic Senator on the Senate Judiciary Committee who called for a reopened FBI investigation of Kavanaugh following multiple sexual assault allegations and college classmates stating on TV and to journalists that he lied under oath in the confirmation hearing on September 27. Dr. Christine Blasey Ford, the first Kavanaugh accuser to come forward, testified under oath on Thursday that Judge was in the locked room when Kavanaugh sexually assaulted her and joined with Kavanaugh in uproarious laughter as the assault occurred. Judge is being represented by Barbara (Biz) Van Gelder of the law firm Cozen O’Connor. Van Gelder has previously represented high profile men in the George W. Bush administration, the same administration in which Kavanaugh served as counsel and staff secretary. Prior to joining her current law firm on February 1, 2016, Van Gelder worked for Wall Street’s go-to law firm Morgan Lewis from September 2007 to May 2011; and now defunct corporate law firm Dickstein Shapiro from May 2011 to January 2016 where she was known as one of its rainmakers. From 1983 to 1997, Van Gelder worked as an Assistant U.S. Attorney in the Washington D.C. U.S. Attorney’s office, a regional branch of the U.S. Justice Department, the Federal agency that oversees the FBI. That will give Van Gelder major insights into how to handle the FBI’s probe of Mark Judge. Thus far, Van Gelder has simply written letters to the Senate Judiciary Committee indicating that her client has no recollection of the event alleged by Dr. Ford to the outrage of Democratic Senators on that Committee who are former prosecutors and have stated that their ability to cross examine Judge under oath is essential to any serious effort to get at the truth.

Kavanaugh Pal, Mark Judge, Erases His Creepy Social Media History -- Pam Martens --Increasingly, the much-aligned U.S. media appears to be doing the job that the FBI failed to do in its first six background checks of U.S. Supreme Court nominee Brett Kavanaugh. The FBI’s seventh background check isn’t looking much better either, thus far. According to reporting at NBC, even Kerry Berchem, a law-partner at the 900+ lawyer firm, Akin Gump, couldn’t get the FBI to respond to evidence she offered suggesting the possibility of witness tampering by Kavanaugh and/or his team. Akin Gump’s roster of legal luminaries includes multiple former U.S. attorneys and former district attorneys.There is also growing suspicions that there is a coordinated coverup taking place involving the key, corroborating witness, Mark Judge. The Senate Judiciary Committee refused to subpoena Judge to testify at the September 27 Kavanaugh hearing; Judge has obtained a high-priced criminal defense attorney with ties to the George W. Bush administration in which Kavanaugh worked; he has deleted his entire history of social media posts which include really creepy photos of young girls lying spread eagle on a bed looking drugged. Fortunately for the public, various bloggers and media outlets have archived the videos or taken screen shots of them before Judge took them down.CNN asked Judge’s attorney, Barbara Van Gelder, about those videos yesterday. She had this to say: “Mr. Judge took down his YouTube site several weeks ago. Someone has inappropriately uploaded old Mark Judge videos without Mark Judge’s knowledge or consent. We will be reporting this matter to YouTube and we request that you do not republish these unauthorized videos.”In point of fact, a lot of the YouTube videos are not that old, ranging from 10 months ago to a few years ago.The New York Times has not succumbed to the threat from Van Gelder. It made its own YouTube video about Mark Judge’s history and included photos of the young women from Judge’s videos.

FBI Instructed To Expand Kavanaugh Probe After Trump Clashes With Reporters - The White House has instructed the FBI to expand its investigation into allegations of sexual misconduct by Supreme Court nominee Brett Kavanaugh, according to the New York Times, citing two people briefed on the matter. The new directive comes on the heels of a contentious Monday afternoon Rose Garden press conference held to discuss the new trade deal with Canada and Mexico.  “I think the FBI should interview anybody that they want, within reason,” Trump says, including Kavanaugh. "That's up to them" #tictocnews pic.twitter.com/hfBGSS6tkTEarlier in the presser, Trump became visibly annoyed at questions from CNN's Kaitlan Collins, telling her "Don't do that" when she began with Kavanaugh questions.   Trump to CNN's Kaitlan Collins when she asked about Brett Kavanaugh: "Don't do that" pic.twitter.com/D49Q4eZuum Trump came under fire over the weekend for limiting the scope of the investigation to the first two Kavanaugh accusers, while not pursuing a third - Julie Swetnick, who accused Kavanaugh of running a date-rape gang-bang scheme at 10 high school parties in which boys were "lined up" outside of rooms to rape inebriated women.   Trump said during Monday's press conference "It wouldn't bother me at all" if Swetnick were interviewed by the FBI, adding "Now I don’t know all three of the accusers. Certainly I imagine they’re going to interview two. The third one I don’t know much about." The White House, however, limited the inquisition to just four individuals; Mark Judge, P.J. Smyth and Leland Keyser - high school friends of Kavanaugh's that accuser Christine Blasey Ford says were at a party where she was groped - and who have all denied any knowledge of the incident. The fourth person to be questioned is Deborah Ramirez, another accuser who says Kavanaugh exposed himself to her at a Yale party at which she admits she was extremely inebriated.  In his Monday comments, Trump said that he would reconsider Kavanaugh's nomination if the FBI turned up any evidence that warranted it.  "Certainly if they find something I’m going to take that into consideration," said Trump, adding "Absolutely. I have a very open mind. The person that takes that position is going to be there a long time."

Kavanaugh's College Roommate: "Brett Was Frequently Incoherently Drunk" -- Another college classmate of Judge Brett Kavanaugh has come forward to accuse President Trump's SCOTUS nominee of lying about both his collegiate drinking habits and the meaning of certain phrases ("devil's triangle") during his testimony before the Senate Judiciary Committee. Jamie Roche, who was Kavanaugh's freshman-year roommate at Yale, said in an op-ed published by Slate and in an interview with CNN's Anderson Cooper that Kavanaugh was "frequently incoherently drunk" and would occasionally drink to the point of getting sick in his room. Roche, who shared a suite with Kavanaugh and another roommate, claimed that he had not been contacted by the FBI, which turned in its expanded background-check report on Kavanaugh early Thursday after also being left out of the initial investigation. That report was given to the White House and will be shared with Senators in a controlled fashion to ensure that it doesn't leak.  In the op-ed, Roche claimed that he refused to speak on the record with New Yorker reporter Ronan Farrow when he was contacted for Farrow's story about Kavanaugh's classmate (and accuser) Debbie Ramirez. Roche said he only told Farrow that there was "zero chance" that Ramirez was lying about her story (she accused Kavanaugh of pulling out his penis and shoving it in her face during a drunken form room party) and that Kavanaugh was "frequently incoherently drunk." Still, Roche said he was the anonymous college classmate who told Farrow that Kavanaugh was frequently drunk, an allegation that was raised during Kavanaugh's testimony before the Senate Judiciary Committee last week.

FBI has not contacted dozens of potential sources in Kavanaugh investigation— More than 40 people with potential information into the sexual misconduct allegations against Supreme Court nominee Brett Kavanaugh have not been contacted by the FBI, according to multiple sources that include friends of both the nominee and his accusers.The bureau is expected to wrap up its expanded background investigation as early as Wednesday into two allegations against Kavanaugh — one from Christine Blasey Ford and the other from Deborah Ramirez.But sources close to the investigation, as well as a number of people who know those involved, say the FBI has not contacted dozens of potential corroborators or character witnesses. More than 20 individuals who know either Kavanaugh or Ramirez, who has accused the nominee of exposing himself to her while the two attended Yale University, have not heard from the FBI despite attempts to contact investigators, including Kavanaugh’s roommate at the time and a former close Ramirez friend.A senior U.S. official and two other sources briefed on the details of the FBI investigation confirmed to NBC news that the FBI’s work on the Brett Kavanaugh matter remains significantly limited in scope, and that it’s unlikely agents will be allowed to interview many, if any, additional witnesses before the probe wraps up this week.One current and two former FBI officials confirmed to NBC News that dozens of witnesses have come forward to FBI field offices who say they have information on Brett Kavanaugh, but agents have not been permitted to talk to many of them. To the extent that any interviews have been done, the officials say, it’s not clear the information will be considered as part of the FBI’s limited scope inquiry.Internally, the bureau is concerned that the constraints of the investigation could damage its reputation for finding the truth, the officials said. Ramirez’s attorney, John Clune, tweeted Tuesday that the FBI "is not conducting — or not being permitted to conduct — a serious investigation." Clune added, "We are not aware of the FBI affirmatively reaching out to any of those witnesses."

The Senate, Not the FBI, Should Investigate Kavanaugh - The American Conservative - The Senate Judiciary Committee, not the FBI, should investigate the sexual assault allegations against Supreme Court nominee Judge Brett Kavanaugh. The current FBI investigation compromises the independent advise and consent role of the Senate under the Appointments Clause of the Constitution. The FBI is saddled with an institutional conflict of interest in investigating these allegations. FBI Director Christopher Wray serves at the pleasure of President Trump. The White House stipulates the terms of the investigation. That means Trump is currently investigating his own nominee in violation of the precept that no person can be a judge in his own case. Justice, like Caesar’s wife, should be above suspicion.A Senate Judiciary Committee investigation of the Kavanaugh allegations would avoid the FBI’s institutional conflict of interest. The committee’s constitutional role is not supposed to be cheerleader for the nominee, but independent evaluator of his fitness for the Supreme Court, including temperament, truthfulness, and character. (Witness Associate Justice Abe Fortas, who resigned in 1969 for accepting financial payments from convicted stock swindler Louis Wolfson and the Wolfson Foundation.)Majority and minority staff should participate in all witness interviews and document reviews to prevent investigatory bias. Key witnesses should be subpoenaed to testify publicly before the committee, as have Christine Blasey Ford and Kavanaugh. Body language and tone are worth a thousand words. And public testimony would provide a window through which voters can view committee members, as well as a needed civics lesson. Senator Jeff Flake can insist that the committee majority pursue a thorough, impartial, and public investigation of the allegations at the risk of losing his vote in favor of Kavanaugh on the Senate floor. There is no need to rush. The Supreme Court operated satisfactorily with eight justices as Barack Obama’s nomination of Merrick Garland hung in suspended animation for 293 days. Even if Democrats capture control of the Senate in November, the current Republican majority would have ample time to vote on Kavanaugh’s nomination during the lame duck session. Just as in journalism, it is more important to get it right than to publish first. And when voting on Supreme Court nominees, it is more important for the Senate to be fully informed than to act quickly.

My sinister battle with Brett Kavanaugh over the truth -  Ambrose Evans-Pritchard - Twenty-three years ago I crossed swords with a younger Brett Kavanaugh in one of the weirdest and most disturbing episodes of my career as a journalist.What happened leaves me in no doubt that he lacks judicial character and is unfit to serve on the US Supreme Court for the next thirty years or more, whatever his political ideology.He was not a teenager. It related to his duties in the mid-1990s as Assistant Independent Council for the Starr investigation, then probing Bill and Hillary Clinton in the most sensitive case in the country.To my surprise, the incident has suddenly become a second front in his nomination saga on Capitol Hill. Senator Dianne Feinstein, the top Democrat on the Senate Judiciary Committee, has accused him of violating secrecy laws by revealing the details of a federal grand jury.“Disclosing grand jury information is against the law,” she told Politico. She said it also showed he had misled the Senate by assuring categorically that he had never leaked grand jury material to journalists.Sen Feinstein released a ‘smoking gun’ document from the archive files of the Starr investigation. It shows Mr Kavanaugh’s efforts to suppress a news story about his wild cross-examination of a witness, including a wayward discussion of “genitalia” that particularly worried him. This piqued my interest since I am named in the document and the witness – Patrick Knowlton – was in a sense ‘my witness’.

In memo, outside prosecutor argues why she would not bring criminal charges against Kavanaugh -WaPo - The outside prosecutor Senate Republicans hired to lead the questioning in last week’s hearing about the sexual assault allegations against Brett M. Kavanaugh is arguing in a new memo why she would not bring criminal charges against the Supreme Court nominee. In the five-page memo, obtained by The Washington Post, Rachel Mitchell outlines more than half a dozen reasons why she thinks the testimony of Christine Blasey Ford — who has accused Kavanaugh of assaulting her at a house in suburban Maryland when they were teenagers in the early 1980s — has some key inconsistencies. “A ‘he said, she said’ case is incredibly difficult to prove. But this case is even weaker than that,” Mitchell writes in the memo, sent Sunday night to all Senate Republicans. “Dr. Ford identified other witnesses to the event, and those witnesses either refuted her allegations or failed to corroborate them.” Mitchell continued: “For the reasons discussed below, I do not think that a reasonable prosecutor would bring this case based on the evidence before the [Senate Judiciary] Committee. Nor do I believe that this evidence is sufficient to satisfy the preponderance-of-the-evidence standard.” The memo is likely to prompt significant pushback from Democratic senators, who have argued that Ford is not on trial and that Kavanaugh is merely interviewing for a job. But the memo is clearly aimed at assuaging the concerns of a handful of GOP senators who are on the fence about whether to vote to confirm Kavanaugh and are considering whose story — Ford’s or Kavanaugh’s — to believe. The FBI is now investigating Ford’s accusations, as well as those of a second woman, Deborah Ramirez.

US Senate sets first vote on Kavanaugh nomination - Senate Majority Leader Mitch McConnell filed a cloture motion late Wednesday that sets up an initial procedural vote on the Supreme Court nomination of Brett Kavanaugh on Friday morning. If the motion to limit debate is approved, this will start 30 hours of formal debate on the Senate floor, likely to go round-the-clock, with a final vote late Saturday evening or early Sunday morning.Under Senate rules, no filibuster is permitted on the Supreme Court nomination, and closing debate requires only a bare 50 votes plus the tie-breaking vote of Vice President Mike Pence, the same margin that would be sufficient to confirm Kavanaugh for the vacancy created by the resignation of Justice Anthony Kennedy.As of this writing, the outcome of both the procedural vote and the confirmation vote remained uncertain. After Senator Heidi Heitkamp of North Dakota announced her opposition, 48 Democrats will vote no, with only Joe Manchin of West Virginia yet to declare a position. On the Republican side, all 48 who have announced a position will vote yes, with three publicly undecided, Susan Collins of Maine, Jeff Flake of Arizona, and Lisa Murkowski of Alaska.Three of the four “undecided” senators would have to vote against Kavanaugh to defeat the nomination. A further FBI background check on Kavanaugh was turned over to the White House and the Senate in the early hours of Thursday morning, and senators began reading the document—apparently consisting of extracts of nine witness interviews—throughout the day on Thursday. The background check was demanded by Flake as a condition of approving the nomination on the Senate Judiciary Committee, where it passed by an 11-10 party-line vote.

Mitch McConnell Sets Friday Vote to Thwart Filibuster of Brett Kavanaugh Senate Majority Leader Mitch McConnell followed through late Wednesday in setting up a Friday vote to limit debate on Brett Kavanaugh’s Supreme Court nomination.Under Senate rules, the key vote on McConnell’s cloture motion will take place one hour after the Senate convenes Friday. The Republicans needed to get the motion to limit debate before the end of the calendar day Wednesday to allow the Friday vote.If all goes according to plan, the vote will take place one day after senators get a chance to review supplemental background information from an FBI inquiry into allegations of sexual assault against Kavanaugh.“There will be plenty of time for members to review and be briefed on this supplemental material before a Friday cloture vote,” McConnell said on the Senate floor. If McConnell musters a majority of senators to vote to limit debate on Kavanaugh, there would then be up to 30 hours of debate, meaning the final vote on confirmation would most likely come on Saturday.McConnell had said Wednesday morning that senators supporting Kavanaugh would not be deterred from voting this week by protesters in the Senate hallways. While senators were waiting for McConnell to make his widely anticipated procedural move, as well as the FBI report, they worked to finish off some of the last major legislative business before Election Day. There are plenty of Trump nominations for the coming weeks, however.

FBI Turns Over Completed Kavanaugh Report To White House -Hours after Majority Leader Mitch McConnell filed a cloture vote on the confirmation of Supreme Court nominee Brett Kavanaugh late Wednesday, a vote that would set Democrats up for an important procedural vote on Friday and a confirmation vote Saturday, the FBI has handed in to the White House its report on SCOTUS nominee Brett Kavanaugh, Reuters reported. A copy of the report has also been turned over to Capitol Hill. Senators will then have the opportunity to review a single copy of the report, which will be located in a secure room, before the vote, per Bloomberg.   "All senators will be able to review the report over the next couple of days," McConnell’s office said in a statement.The report will only include summaries of the interviews conducted by the FBI. It won't include any conclusions as to who is or isn't telling the truth. Notably, the probe excluded several of Kavanaugh's accusers, including Christine Blasey Ford, who testified before the Senate Judiciary Committee last week, and Julie Swetnick, per NBC News.What will be delivered, according to aides and senators, are the "302" forms of the FBI interviews, which summarize the contents of the interviews. The FBI, which has spent only a few days on the investigation, will not be submitting a conclusion as to who's telling the truth in the case.According to NBC News, the Senate has established a "pecking order" that will eventually allow all 100 Senators to view the report, but not their staff. All 100 Senators will have access to the new information, but not their staffs. There also are 10 Judiciary Committee staffers who have access to the secret Kavanaugh file, which is a paper report - there are no PDF's or emails of it. And it will not be made public.

FBI Clears Kavanaugh, Says White House—The White House has found no corroboration of the allegations of sexual misconduct against Supreme Court nominee Brett Kavanaugh after examining interview reports from the FBI’s latest probe into the judge’s background, according to people familiar with the matter.It was unclear whether the White House, which for weeks has raised doubts about the allegations, had completed its review of the FBI interview reports. Still, the White House’s conclusions from the report aren’t definitive at this point in the confirmation process. Senators who will decide Mr. Kavanaugh’s fate are set to review the findings on Thursday, and some of them may draw different conclusions. Sen. Chuck Grassley (R., Iowa), the Senate Judiciary Committee’s chairman, said on Twitter early Thursday that the committee had received the report.The result could leave senators in much the same position as last week—faced with two witnesses providing mutually exclusive accounts and forced to decide between them. The investigation, which concluded two days before its Friday deadline, has faced mounting criticism in recent days from Democrats who have said the probe wasn’t appropriately comprehensive. Investigators spoke to one of the three women who made accusations of sexual misconduct against Judge Kavanaugh.Raj Shah, spokesman for the White House, said in a statement early Thursday morning: “The White House has received the Federal Bureau of Investigation’s supplemental background investigation into Judge Kavanaugh, and it is being transmitted to the Senate.” He added that senators “have been given ample time to review this seventh background investigation.” Mr. Shah continued: “With this additional information, the White House is fully confident the Senate will vote to confirm Judge Kavanaugh to the Supreme Court.”  Republicans have said the extended background check by the Federal Bureau of Investigation was a concession to Democrats and wavering Republicans, who demanded it and said its completion without a major revelation should allow Judge Kavanaugh’s nomination to proceed to a Senate vote. Democratic senators on the Judiciary Committee, where Judge Kavanaugh’s nomination hearings were heard, have claimed that the White House imposed too many restrictions on who the FBI could interview—they didn’t talk to Christine Blasey Ford, Judge Kavanaugh’s accuser, for instance—to make their inquiry’s findings credible.

FBI Report Near Completion; Senators To Access Single Copy In Senate Safe -- The FBI is nearly finished with their supplemental report on sexual misconduct allegations against Supreme Court nominee Brett Kavanaugh, after which they will send a single copy to Capitol Hill where it will be held in a Senate Judiciary Committee safe, two senior Senate sources told Fox News on Wednesday. Senate Democratic Whip Dick Durbin (Il), a member of the Judiciary Committee, said that preparations are underway to review the report on Thursday, while Republicans are putting strict limits on the viewing. According to Durbin, the one copy will be taken from the safe and made available to senators - with each party taking turns viewing it in one-hour increments. “Get this — one copy! For the United States Senate,” he said. “That’s what we were told. And we were also that we would be given one hour for the Dems, one hour for the Republicans. Alternating.“We tried to reserve some time to read it. That is ridiculous,” he said. “One copy?!”“Bizarre, it doesn’t make any sense,” he added. -The HillA senior Democratic aide confirmed the restrictive viewing conditions to The Hill, which notes that if all 100 senators decide to review the document and it takes each senator 30 minutes to read it, it could take up to 50 hours for the entire chamber to examine it. "Do the math," said Durbin. "That’s a lot of time."Senator Bob Corker (R-TN) says that Senators will be able to view the FBI report in the "secure compartmented information facility" in the Capitol Visitor Center, which is large enough to hold a large group of senators. Corker has urged Senate Judiciary Committee Chairman Chuck Grassley (R-IA) to make several copies.  Republican aides, however, say that alternating a single copy of an FBI background report between parties is typical practice for judicial nominees.

The FBI reportedly interviewed only 9 people about the allegations against Brett Kavanaugh and ignored his drinking habits ReutersThe FBI interviewed nine people about the allegations of sexual misconduct against Brett Kavanaugh, the Supreme Court nominee,The New York Times reported on Wednesday, citing an official briefed on the investigation.The official added that the FBI did not closely examine Kavanaugh's drinking habits, an issue that became a prominent part of his hearing before the Senate Judiciary Committee last Thursday about Christine Blasey Ford's allegation that he sexually assaulted her at a high-school party in the 1980s. According to The Times, the people interviewed were:

  • Deborah Ramirez, who has accused Kavanaugh of exposing himself to her at a party when they were at Yale University.
  • Mark Judge, a friend of Kavanaugh's who Ford says was in the room when she was assaulted.
  • Leland Keyser, a high-school friend of Ford's who she says was at the party where Ford says Kavanaugh assaulted her.
  • PJ Smyth, another classmate of Ford and Kavanaugh's who Ford says was at the party.
  • Five other people who were not named.

The Times said the nine people interviewed did not include Kavanaugh or Ford. The official told the newspaper that the FBI contacted a 10th person but did not interview them. Democrats, classmates of Kavanaugh's, and another woman accusing Kavanaugh of sexual misconduct have criticized the investigation as being too limited in scope.The former classmates have accused him of lying under oath about his drinking habits, saying he would often drink heavily, and called for his claims to be examined. But The Times reported that the FBI focused on Ford and Ramirez's allegations and did not closely examine Kavanaugh's broader lifestyle as a young person.James Roche, Kavanaugh's former roommate at Yale, pushed back on Kavanaugh's statements under oath that he never blacked out despite sometimes drinking too much beer.Roche told CNN on Wednesday that he had seen Kavanaugh "blackout drunk," vomiting, and having "a lot of trouble getting out of bed." Of Kavanaugh's testimony, Roche said, "I knew that he knew that he wasn't telling the truth." After complaints that the scope of the investigation was too limited, President Donald Trump authorized the FBI to interview anyone it deemed necessary.The FBI has not publicly said why it only decided to interview five more people.All 100 US senators can read the FBI's report, which is classified, on Thursday — from a single copy, in one-hour shifts, under intense security. The Senate is due to vote on Kavanaugh's confirmation on Friday.

Flake to vote yes on Kavanaugh 'unless something big changed’ - Arizona Sen. Jeff Flake, a key Republican swing vote, said Friday he plans to vote in favor of Brett Kavanaugh's confirmation to the Supreme Court.  “Unless something big changed, I don't see what would, but anyway I'm glad we had a better process," Flake told reporters. Earlier Friday, he voted to advance Kavanaugh's nomination to a final vote. Flake, a member of the Senate Judiciary Committee, previously called for an FBI investigation into accusations of sexual assault against Kavanaugh after both he and Dr. Christine Blasey Ford testified in front of the Senate Judiciary Committee. Ford accused Kavanaugh of sexually assaulting her when they were both in high school, which he denies.Republicans currently hold a 51-49 majority in the Senate, with Vice President Mike Pence a potential tie-breaking vote. Fellow Republican senator and swing vote Lisa Murkowski voted to oppose Kavanaugh's advancement. When asked about Murkowski's vote, Flake said he admired her. "I admire her a lot and everybody had to make their own decision," Flake said. "I think the world of her."  Other key swing votes, Sen. Joe Manchin, D-West Virginia, and Republican Sen. Susan Collins of Maine opted on Friday to advance Kavanuaugh's nomination. Collins is expected to announce her final vote Friday afternoon.

Murkowski: Kavanaugh "Not The Right Man For The Court" - Senator Lisa Murkowski (R-AK) - the lone GOP "no" vote during Brett Kavanaugh's Friday cloture vote, told reporters Friday that she thinks Kavanaugh may be a "good man" but that he's "not the right man for the court at this time.""[I] took the very, very difficult vote that I did. I believe that Brett Kavanaugh is a good man. I believe he is a good man it just may be that in my view he's not the right man for the court at this time," said Murkowski. Her comments come shortly after the Senate voted 51-49 to end debate on Kavanaugh's Supreme Court nomination, setting up a final vote to confirm him on Saturday. Murkowski did not specifically say she would vote against confirming Kavanaugh, but Sen. John Thune (R-S.D.), the No. 3 GOP senator, said he does not expect her to flip her vote.Murkowski was the only GOP senator to vote against ending debate. She told reporters that she didn't make her decision until she walked onto the Senate floor for the vote, and that she expects to explain her thinking more fulsomely during a Senate floor speech Friday. -The HillMurkowski says that she's been "wrestling" with the Kavanaugh decision - calling it the "most difficult" she's had to make in her political career.Perhaps adding to her internal strife was a chat she had with Senator Dianne Feinstein (D-CA) in which she appeared to be crying in a hallway as Feinstein browbeat her. Perhaps the 85-year-old Feinstein was helping Murkowski wrestle. 

Murkowski says she opposes Kavanaugh’s nomination, but will vote ‘present’ - Sen. Lisa Murkowski (R-Alaska) said Friday evening that she opposed Brett Kavanaugh’s Supreme Court nomination, becoming the only Republican senator to come out against President Trump's nominee. "I will be a no tomorrow," Murkowski said in a speech on the Senate floor after describing how she had come to lean against voting to confirm Trump's second nominee to the high court in a final vote on Saturday. But Murkowski said that in the final tally she would ask that her vote be recorded as "present," saying she was doing it as a courtesy to Sen. Steve Daines (R-Mont.), who is slated to attend his daughter's wedding back home on Saturday. "I do this because a friend, a colleague of ours is in Montana this evening and ... he's going to be walking his daughter down the aisle and he won't be present to vote," Murkowski said. "I have extended this as a courtesy to my friend. It will not change the outcome of the vote."  The move described by Murkowski is known as "pairing" a vote, which will allow her to initially vote "no" on Saturday but then withdraw her vote and change it to "present." Murkowski announced her decision hours after it became clear that Kavanaugh had enough votes to be confirmed.

“Lock Her Up!!!” --  Barkley Rosser -  For several years now we have all grown accustomed to the fact that President Trump likes to go to rallies of his supporters where they relentlessly chant the subject head of this post.  It has always referred to his opponent in the presidential election of 2016, the person who got about 3 million more votes than he did, even as he managed to win in the determining electoral college.  While I recognize that Hillary Clinton has many flaws, she has been investigated more times than I can count for many alleged offenses, some of which I suspect she is guilty of, even as some of them were pretty minor (see financial shenanigans back in Arkansas).  She also was subjected to many Congressional investigations by several committees for many alleged offenses, including her notorious getting emails in her home like her three predecessors did, although none of them were ever so investigated. She even had 8, really 8, investigations of her role in the Benghazi fiasco, these costing taxpayers many millions of dollars.  A peculiar sideshow on this is that among the more bizarre investigations of her, costing millions of US taxpayer dollars, was that in 1998 by the Starr group of the chance that she had been responsible for the death of Vincent Foster, who committed suicide on the GW Parkway.  The person advocating this investigation of a conspiracy theory and engaging in it, only to find a big fat nothing, was none other than Brett Kavanaugh, apparently about to be confirmed to be the  next lifetime member of the US Supreme Court.  So now we come to why I am posting this.  This past Tuesday President Trump attended a rally in Mississippi where he mocked Dr. Christine Blasy Ford on her memory lapses in connection with her allegations about Kavanaugh sexually asssaulting her.  In fact Trump lied about certain parts of what she failed to remember, notably the year it happened and where in the house it happened, which in fact she reported under oath.  For this lying, Trump was rewarded with the chant he usually gets at his rallies, the chant usually directed at the not likely to be indicted or prosecuted or jailed Hillary Clinton, but now apparently at Dr. Ford, who even if her memory is flawed is not remotely near being guilty of any crime, that now nauseating chant of “Lock he Up!”  And even after this abysmal display by Trump and his supporters, or perhaps more disturbingly precisely because  of it, Brett Kavanaugh will be sitting on the Supreme Court of the United States for a very long time.

In Letter to Trump, House Democrats Promise to Investigate Brett Kavanaugh for Perjury If Confirmed - Even as Brett Kavanaugh inches closer toward his confirmation as a Supreme Court justice, congressional Democrats are making a last-ditch attempt to bring attention to the nominee’s potential perjury, including about his role in the warrantless surveillance programs of the post-9/11 Bush White House.  Dozens of members of the Congressional Progressive Caucus sent a letter Thursday to President Donald Trump committing to leverage subpoena power in an effort to investigate the full record of Kavanaugh’s time in the White House for evidence of perjury. House Democrats will have subpoena power if they retake the lower chamber in the midterm elections, and Rep. Jerrold Nadler, who will likely chair the House Judiciary Committee should that happen, has already promised to investigate any credible allegations of perjury if Kavanaugh is confirmed. Nadler did not sign the letter. The Senate reviewed today the FBI’s report on its six-day investigation into claims by Christine Blasey Ford that Kavanaugh sexually and physically assaulted her in the early 1980s, when they were in high school. But the CPC letter raises distinct concerns regarding Kavanaugh’s credibility that extend far beyond his time at Georgetown Prep, the suburban Maryland high school that has drawn intense scrutiny for its partying culture in recent weeks. The CPC members raised not only Kavanaugh’s involvement in the Bush administration’s widespread, secret, and illegal surveillance of Americans following the events of September 11, 2001, but also testimony he made before the Senate during his time in the Bush White House that has since been called into question.  Sen. Patrick Leahy, D-Vt., raised questions about the nominee’s Bush-era record on the second day of Kavanaugh’s nomination hearings last month, but the issue has otherwise received little of the Senate Judiciary Committee’s attention. In the lower chamber, House Minority Leader Nancy Pelosi has demurred when faced with questions of how Democrats would approach a Kavanaugh confirmation, post-midterm season. “We are not about impeachment,” she said Tuesday at the Atlantic Festival in Washington, D.C.

 Brett Kavanaugh impeachment? Here's how it might work --The countdown to the Senate vote on Supreme Court nominee Brett M. Kavanaugh is underway.A limited FBI investigation into sexual assault claims against the federal judge is done. The agency’s report was sent to the White House on Wednesday, and lawmakers began reviewing it Thursday morning. With some swing-vote senators expressing satisfaction after their initial reads of the report, the odds appear to be increasing for Kavanaugh’s confirmation to a lifetime appointment to the nation’s highest court.So what comes next?In early September, even before the recent spate of sexual misconduct allegations, murmurs among Kavanaugh opponents fixated on whether he had lied under oath before the Senate Judiciary Committee.Some Senate Democrats took to social media to air their ire and frustration. One former deputy assistant U.S. attorney general, who previously worked for a top Democrat, even called for Kavanaugh’s impeachment from the federal judiciary.“Much of Washington has spent the week focusing on whether Judge Brett Kavanaugh should be confirmed to the Supreme Court,” Lisa Graves wrote in a Slate column on Sept. 7, more than a week before the New Yorker published the then-anonymous sexual assault claims of Christine Blasey Ford. “After the revelations of his confirmation hearings, the better question is whether he should be impeached from the federal judiciary. I do not raise that question lightly, but I am certain it must be raised.” Graves wrote that Kavanaugh had misled the Judiciary Committee about the stolen documents that Graves had written as chief counsel for nominations for Sen. Patrick J. Leahy (D-Vt.) when he was the chairman of the committee.Kavanaugh, she wrote, “lied. Under oath. And he did so repeatedly.”  Therefore, she concluded, “he should not be confirmed. In fact, by his own standard, he should clearly be impeached.”

Silicon Valley’s Brett Kavanaugh problem   USA Today wrote: "When Kavanaugh gave a speech in 2015 at Catholic University's Columbus School of Law and stated, 'What happens at Georgetown Prep stays at Georgetown Prep. That's been a good thing for all of us, I think,' he summed up the culture perfectly (...) It was their job to protect each other from their misdeeds no matter how big or alcohol-fueled. The boys kept each other's secrets." It echoes what we've learned about companies like Uber, with its firing of over 20 employees for sexual harassment, its August $1.9m payout to 56 victims of sexual harassment, as well as 483 people paid out for additional claims. Uber is just one among many in Silicon Valley with bro-forward, "brilliant jerk" company cultures that keep men on top and bad behavior secret, 80% of which have forced arbitration clauses and NDAs in employee contracts. Forced arbitration is exactly what allowed serial offenders -- and forced arbitration's essential component, "Kavanaugh culture" -- to flourish at Uber. It highlights what we don't know about circles of protection and enforced silence at the companies shaping our very lives. Male-dominated companies with a culture of fairly rampant sexual predation from the top-down, should worry us. The notion of "Kavanaugh culture" casts a chilling net of questions and dread over the practice of Silicon Valley companies, like Facebook, that force arbitration clauses on their employees.

Silicon Valley’s War Against ‘White, Male Conservatives’ Is a War Against America - With the termination of a YouTube account, or simple tweak of an algorithm, the tech company monsters - Google, Facebook, YouTube and Twitter - are able to deprive millions of Americans of conservative news sources, undermining both the Constitution and the spirit of democracy. In a perfectly wired world, the gatekeepers of the Internet would limit themselves specifically to the technical aspects of their job, ensuring that a well-oiled matrix runs smoothly and effectively for the end user. But alas, we do not inhabit a perfect world. Political bias runs far and deep inside of Silicon Valley, and following the defeat of Hillary Clinton in the 2016 presidential election, the tech giants are now poised to make life very difficult for conservatives. That much was plain to see in a shocking videoof a Google meeting, chaired by the company’s founders Larry Page and Sergey Brin, just days after U.S. voters sent Donald Trump to the White House. What followed from there was one Google executive after another describing their disappointment with the election, some actually shedding tears, interspersed with bold promises to better “advocate for our values,” which is just another way of saying that Conservative values are worthless and the Democrats now have a moral duty to fulfill. There were already calls of despair coming from inside the Google fortress before this very cringe-worthy meeting. James Damore, an engineer at the tech company, made headlines with a 10-page memo he wrote entitled, “Google's Ideological Echo Chamber,” which exposed the ‘discriminatory’ hiring practices Google allegedly endorses. Damore, together with another former Google engineer, David Gudeman, followed up on the memo with a lawsuit that accused Google of cultivating a corporate culture that regularly admonishes “politically conservative white men”. “Google’s management goes to extreme — and illegal — lengths to encourage hiring managers to take protected categories such as race and/or gender into consideration as determinative hiring factors, to the detriment of Caucasian and male employees and potential employees at Google,” the suit reads. “Not only was the numerical presence of women celebrated at Google solely due to their gender, but the presence of Caucasians and males was mocked with ‘boos’ during company- wide weekly meetings."

CIA Democrats call for aggression against Russia, run pro-war campaigns in 2018 congressional races --The Democratic Party is widely favored to win control of the House of Representatives in the US midterm elections November 6, with projections that it will gain 30 to 50 seats, or even more, well above the net gain of 23 required for a majority.The last time the Democratic Party won control of the House from the Republicans was in 2006, when it captured 30 Republican seats on the basis of a limited appeal to the massive antiwar sentiment among working people after three years of disastrous and bloody warfare in Iraq, and five years after the US invasion and occupation of Afghanistan.In stark contrast, there is not a hint of an antiwar campaign by the Democratic challengers seeking Republican seats in the 2018 elections. On the contrary, the pronouncements of leading Democrats on foreign policy issues have been strongly pro-war, attacking the Trump administration from the right for its alleged softness on Russia and its hostility to traditional US-led alliances like NATO.This is particularly true of the 30 Democratic congressional nominees in competitive races who come from a national-security background. These challengers, previously identified by the World Socialist Web Site as theCIA Democrats, constitute the largest single grouping among Democratic nominees in competitive seats, more than state and local officials, lawyers or those wealthy enough to finance their own campaigns.The 30 national-security candidates include six actual CIA, FBI or military intelligence agents, six State Department or other civilian national security officials, 11 combat veterans from Iraq and Afghanistan, all but one an officer, and seven other military veterans, including pilots, naval officers and military prosecutors (JAGs). With only one exception, Jared Golden, running in the First District of Maine, the military-intelligence Democrats do not draw any negative conclusions from their experience in leading, planning or fighting in the wars of the past 25 years, including two wars against Iraq, the invasion of Afghanistan, and other military engagements in the Persian Gulf and North and East Africa.

Democrats, Republicans Unite: Populism Destroys Democracy - Caitlin Johnstone - If there’s one thing that brings a tear to my eye, it’s the inspiration I feel when watching Republican-aligned neoconservatives and Democrat-aligned neoconservatives find a way to bridge their almost nonexistent differences and come together to discuss the many, many, many, many, many, many many many things they have in common. In a conference at the Gerald R. Ford School of Public Policy, “Resistance” leader and professional left-puncher Neera Tanden met with Iraq-raping neocon Bill Kristol to discuss bipartisanship and shared values. While leprechauns held hands and danced beneath candy rainbows and gumdrop Reaper drones, the duo engaged in a friendly, playful conversation with the event’s host in a debate format which was not unlike watching the Pillsbury Doughboy have a pillow fight with himself in a padded room after drinking a bottle of NyQuil. To get the event started, the host whose name I refuse to learn asked the pair to discuss briefly what common ground such wildly different people could possibly share to make such a strange taboo-shattering dialogue possible.“Issues around national security and believing in democratic principles as they relate to foreign policy,” replied Tanden. “And opposing authoritarianism, and opposing the kind of creeping populism that undermines democracy itself.”Neera Tanden, in case you are unaware, is a longtime Clinton and Obama insider and CEO of the plutocrat-backed think tank Center for American Progress. Her emails featured prominently in the 2016 Podesta drops by WikiLeaks, which New Republic described as revealing “a pattern of freezing out those who don’t toe the line, a disturbing predilection for someone who is a kind of gatekeeper for what ideas are acceptable in Democratic politics.” Any quick glance at Tanden’s political activism and Twitter presence will render this unsurprising, as she often seems more concerned with attacking the Green Party and noncompliant progressive Democrats than she does with advancing progressive values. Her entire life is dedicated to keeping what passes for America’s political left out of the hands of the American populace. Kristol co-signed Tanden’s anti-populist rhetoric and her open endorsement of neoconservative foreign policy, and went on to say that another thing he and Tanden have in common is that they’ve both served in government, which makes you realize that nothing’s black and white and everything’s kinda nebulous and amorphous so it doesn’t really matter if you, say for example, help deceive your country into a horrific blunder that ends up killing a whole lot of people for no good reason.“I do think if you’ve served in government -this isn’t universally true but somewhat true- that you do have somewhat more of a sense of the complexity of things, and many of its decisions are not black and white, that in public policy there are plusses and minuses to most policies,” Kristol said.

50 million user accounts hacked in Facebook data breach - Facebook reported on September 28 that hackers had exploited a technical flaw in the social media platform and obtained the user information of about 50 million accounts. In this largest ever breach since the company was founded 14 years ago, the hackers found a security hole in the “View As” feature—that allows users to see what their profile looks like from other Facebook accounts—to gain access to login details. Among the hacked accounts were those of Facebook founder and CEO Mark Zuckerberg and Facebook COO Sheryl Sandberg. In a Security Update blog post on Facebook’s Newsroom page, VP of Product Development Guy Rosen wrote that the hackers had used the “View As” feature to “steal Facebook access tokens which they could then use to take over people’s accounts. Access tokens are the equivalent of digital keys that keep people logged in to Facebook so they don’t need to re-enter their password every time they use the app.” Rosen further explained that the vulnerability had been fixed, that law enforcement had been notified of the breach and that a thorough security review was being conducted to determine if the compromised accounts had been accessed or misused.  One of the more troubling aspects of the hack is that access to Facebook account details can also enable access to many other user accounts.  As in the report last spring of the harvesting of personal Facebook data by Cambridge Analytica, the Facebook “View As” hack is being seized upon as further evidence of Russian meddling and to demand government intervention and control of social media. Some news outlets immediately began raising the likelihood of “rogue state” involvement in the breach without presenting any evidence backing it up. Virginia Democratic Senator Mark Warner released a statement on the same day that Facebook made the announcement that said, “This is another sobering indicator that Congress needs to step up and take action to protect the privacy and security of social media users.” 

You Gave Facebook Your Number For Security. They Used It For Ads - Add “a phone number I never gave Facebook for targeted advertising” to the list of deceptive and invasive ways Facebook makes money off your personal information. Contrary to user expectations and Facebook representatives’ own previous statements, the company has been using contact information that users explicitly provided for security purposes—or that users never provided at all—for targeted advertising. A group of academic researchers from Northeastern University and Princeton University, along with Gizmodo reporters, have used real-world tests to demonstrate how Facebook’s latest deceptive practice works. They found that Facebook harvests user phone numbers for targeted advertising in two disturbing ways: two-factor authentication (2FA) phone numbers, and “shadow” contact information. First, when a user gives Facebook their number for security purposes—to set up 2FA, or to receive alerts about new logins to their account—that phone number can become fair game for advertisers within weeks. (This is not the first time Facebook has misused 2FA phone numbers.)But the important message for users is: this is not a reason to turn off or avoid 2FA. The problem is not with two-factor authentication. It’s not even a problem with the inherent weaknesses of SMS-based 2FA in particular. Instead, this is a problem with how Facebook has handled users’ information and violated their reasonable security and privacy expectations. There are many types of 2FA. SMS-based 2FA requires a phone number, so you can receive a text with a “second factor” code when you log in. Other types of 2FA—like authenticator apps and hardware tokens—do not require a phone number to work. However, until just four months ago, Facebook required users to enter a phone number to turn on any type of 2FA, even though it offers its authenticator as a more secure alternative. Other companies—Google notable among them—also still follow that outdated practice.

California Bans Default Passwords on Any Internet-Connected Device  In less than two years, anything that can connect to the internet will come with a unique password — that is, if it's produced or sold in California. The "Information Privacy: Connected Devices" bill that comes into effect on January 1, 2020, effectively bans pre-installed and hard-coded default passwords. It only took the authorities about two weeks to approve the proposal made by the state senate. The new regulation mandates device manufacturers to either create a unique password for each device at the time of production or require the user to create one when they interact with the device for the first time. According to the bill, it applies to any connected device, which is defined as a "physical object that is capable of connecting to the Internet, directly or indirectly, and that is assigned an Internet Protocol address or Bluetooth address." The law is clearly aimed at stopping the spread of botnets made up of compromised network devices, such as routers, smart switches or even security cameras and other IoT equipment. Malicious software could often take control of them by trying easy-to-guess or publicly disclosed default login credentials. It's not entirely clear yet as to how the new regulation will affect legacy industry hardware from the 1980s and 1990s where passwords are either hard-coded or next to impossible to change.

Trump Engaged in Suspect Tax Schemes – NYTimes -- The president has long sold himself as a self-made billionaire, but a Times investigation found that he received at least $413 million in today’s dollars from his father’s real estate empire, much of it through tax dodges in the 1990s. President Trump participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents, an investigation by The New York Times has found.Mr. Trump won the presidency proclaiming himself a self-made billionaire, and he has long insisted that his father, the legendary New York City builder Fred C. Trump, provided almost no financial help.But The Times’s investigation, based on a vast trove of confidential tax returns and financial records, reveals that Mr. Trump received the equivalent today of at least $413 million from his father’s real estate empire, starting when he was a toddler and continuing to this day.Much of this money came to Mr. Trump because he helped his parents dodge taxes. He and his siblings set up a sham corporation to disguise millions of dollars in gifts from their parents, records and interviews show. Records indicate that Mr. Trump helped his father take improper tax deductions worth millions more. He also helped formulate a strategy to undervalue his parents’ real estate holdings by hundreds of millions of dollars on tax returns, sharply reducing the tax bill when those properties were transferred to him and his siblings.These maneuvers met with little resistance from the Internal Revenue Service, The Times found. The president’s parents, Fred and Mary Trump, transferred well over $1 billion in wealth to their children, which could have produced a tax bill of at least $550 million under the 55 percent tax rate then imposed on gifts and inheritances. The Trumps paid a total of $52.2 million, or about 5 percent, tax records show.The president declined repeated requests over several weeks to comment for this article. But a lawyer for Mr. Trump, Charles J. Harder, provided a written statement on Monday, one day after The Times sent a detailed description of its findings. “The New York Times’s allegations of fraud and tax evasion are 100 percent false, and highly defamatory,” Mr. Harder said. “There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate.”

Trump taxes: New York authorities examine president’s tax affairs.  The New York State Tax Department has confirmed it is investigating claims by the New York Times that President Trump helped his parents dodge millions of dollars in taxes.The paper has alleged that the president was involved in "dubious tax schemes during the 1990s, including instances of outright fraud".White House spokeswoman Sarah Sanders called the story a "misleading attack".She said the transactions were signed off by tax authorities "decades ago".The president's lawyer Charles Harder said in a statement: "There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate." Mr Trump has repeatedly styled himself as a self-made billionaire who got little help from his wealthy father's property empire. But in a special investigation based on more than 100,000 pages of documents, the New York Times alleges that the president actually received the equivalent of $413m (£318m). "By age 3, Mr Trump was earning $200,000 a year in today's dollars from his father's empire," it states. "He was a millionaire by age 8." The report claims Mr Trump was getting the equivalent of $1m a year from his father shortly after he graduated from college.That figure had risen to more than $5m by the time he was in his 40s and 50s, it states. The Times reports: "Much of this money came to Mr Trump because he helped his parents dodge taxes. He and his siblings set up a sham corporation to disguise millions of dollars in gifts from their parents."

New York Tax Department Probes Trump Taxes From Decades Ago -- New York state tax authorities have opened an investigation into allegationsreported in the New York Times that President Donald Trump and his family created their real estate empire through “instances of outright fraud,” evading taxes on hundreds of millions of dollars. “The Tax Department is reviewing the allegations in the New York Times article and is vigorously pursuing all appropriate avenues of investigation,” said James Gazzale, spokesman for Department of Taxation and Finance. The Times reported Tuesday that Trump received vastly more from his father, Fred Trump, than he has previously stated and that his father backstopped his son’s businesses during times of financial distress. In addition, the newspaper reported that the family used a variety of schemes -- some potentially illegal -- to minimize their taxes. “The New York Times’ allegations of fraud and tax evasion are 100 percent false,” Charles J. Harder, a lawyer for President Trump, said in a statement. “There was no fraud or tax evasion by anyone. The facts upon which the Times bases its false allegations are extremely inaccurate.” The elder Trump was a successful real-estate developer active throughout the city’s boroughs of Queens and Brooklyn. The state tax department had previously opened an investigation into the president’s charity, the Trump Foundation. In a statement released Tuesday night, White House Press Secretary Sarah Huckabee Sanders said "Fred Trump has been gone for nearly twenty years and it’s sad to witness this misleading attack against the Trump family by the failing New York Times." She added that "many decades ago the IRS reviewed and signed off on these transactions." The newspaper said its findings show that Trump’s claims that he’s a self-made billionaire, who had received $1 million from his father, are false. The newspaper said it had reviewed 100,000 documents, including the elder Trump’s tax returns, to calculate that Trump and his siblings had received the equivalent in today’s dollars of $413 million worth of assets. Under New York and federal law, there’s no statute of limitations to pursuing civil tax cases if authorities suspect an intent to evade taxes. Generally, the activities described by the paper would be too old to lead to a criminal inquiry.

NY Times exposé on Trump fortune: An empire built on tax evasion and fraud - In its print edition on Wednesday, the New York Times devoted eight full pages to a 14,000 word investigative report on the financial practices that gave rise to the multibillion-dollar fortune of President Donald Trump.The article is the result of an 18-month investigation that included interviews with former employees of Trump’s real estate mogul father, Fred C. Trump, and a review of some 100,000 pages of financial records. It presents a detailed, factual case that Trump and his siblings benefited from tax fraud to the tune of at least half a billion dollars.Even within the context of inheritance tax laws that are riddled with loopholes, some, if not all, of the tax dodges used by the Trumps to evade hundreds of millions of dollars in tax payments were very likely illegal. Whatever the legal issues, however, the picture of criminality and corruption that emerges from the Times report is one that characterizes not just the Trump clan, but the corporate-financial oligarchy as a whole.The Times found that Fred and Mary Trump transferred well over $1 billion in wealth to their children, paying a total of $52.2 million in federal taxes, an effective rate of about 5 percent. The actual estate and gift tax rate at the time was 55 percent, meaning the Trumps paid less than 10 percent of the $550 billion they owed to the government.This massive tax fraud was achieved through the setting up of shell companies owned by Donald Trump and his siblings and the systematic undervaluation of the assets of Fred Trump’s real estate empire, which resulted in a sharp reduction in inheritance taxes when the properties were transferred to the children prior to Fred Trump’s death in 1999. The Internal Revenue Service (IRS) repeatedly cited Fred Trump in the 1950s and 1960s for underpaying taxes. In 1995, it audited his gift tax return and concluded that he had undervalued assets being transferred to his children by 38 percent. But it did nothing to stop the practice, exemplifying its role and that of the government as a whole in running protection for America’s financial aristocracy and facilitating its crimes.

 Trump Blast NYT Tax Fraud Story As Boring Hit Piece -- It took a few hours for the White House to regroup and respond to the New York Times' massive, 15,000 word expose on shady tax dealings within the Trump family, some of which were allegedly "outright fraudulent."As a reminder, late on Tuesday the NYT accused President Trump of participating in "questionable" and "dubious" tax strategies "including instances of outright fraud" that greatly increased the fortune he received from his parents and allowed him to accrue millions of dollars in additional wealth from his father's real estate empire "much of it through tax dodges in the 1990s."The practices allowed Trump and his siblings to gain more than $1 billion from their parents while paying a fraction of what they should have owed in gift and estate taxes, according to the Times.Then, late on Tuesday the White House posted this response to the explosive allegations:"Fred Trump has been gone for nearly twenty years and it's sad to witness this misleading attack against the Trump family by the failing New York Times.Many decades ago the IRS reviewed and signed off on these transactions.The New York Times' and other media outlets' credibility with the American people is at an all time low because they are consumed with attacking the president and his family 24/7 instead of reporting the news.The truth is the market is at an all-time high, unemployment is at a fifty year low, taxes for families and businesses have been cut, wages are up, farmers and workers are empowered from better trade deals, and America's military is stronger than ever, yet the New York Times can rarely find anything positive about the President and has tremendous record of success to report.Perhaps another apology from the New York Times, like the one they had to issue after they got the 2016 election so embarrassingly wrong, is in order." Now, moments ago, Trump personally responded to his media nemesis, and in a tweet said that "the Failing New York Times did something I have never seen done before. They used the concept of “time value of money” in doing a very old, boring and often told hit piece on me. Added up, this means that 97% of their stories on me are bad. Never recovered from bad election call!"

Mueller defends authority, hearkens back to Garfield administration Special counsel Robert Mueller cited more than a century’s worth of presidential scandal on Friday as part of a sweeping legal defense of his own authorities. The lead Russia prosecutor made the historical references — that attorney generals have needed special investigators dating back to the 1870s — in a legal brief to a federal appeals court considering the case of a reluctant witness tied to a longtime supporter of President Donald Trump who is seeking to have Mueller’s appointment thrown out on constitutional grounds. Story Continued Below ..“These instances—involving appointments by Attorneys General under Presidents Garfield, Theodore Roosevelt, Truman, Kennedy, Nixon, Carter, George H.W. Bush, and Clinton—span nearly 140 years and include some of the most notorious scandals in the Nation’s history, including Watergate,” wrote Michael Dreeben, the deputy solicitor general on loan to the Mueller team. At issue is the case of Andrew Miller, a former aide to Trump confidante Roger Stone who has so far failed in his bid to knock Mueller out of his post by challenging the legitimacy of several subpoenas seeking his documents and testimony in connection to the Russia probe. A federal district court judge rejected Miller’s bid last month to quash the string of grand jury subpoenas, and the ex-Stone aide was later held in contempt of court — a precursor to his current appeal.

 After 17 Months, The Mueller Probe Is Finally Winding Down - The Mueller probe into allegations of collusion between the Trump campaign and Russian government has continued long past its expected termination date (it was initially expected that the probe wouldn't last more than a year from Mueller's appointment in May 2017). And with the mid-term elections roughly one month away, signs that the probe is winding down are finally starting to emerge. As the Associated Press reported on Wednesday, several members of Mueller's team of prosecutors have been reassigned back to various divisions of the Department of Justice, while Mueller's increasing reliance on outside prosecutors suggests that he has been narrowing the probe's focus. While the grand jury inquiry into Roger Stone is still ongoing, Mueller is refocusing on two key threads of his probe: The original allegations of collusion, as well as allegations that President Trump obstructed justice when he fired former FBI Director James Comey.Besides the grand jury inquiry into Stone, other elements of the Mueller investigation remain active, including inquiries into whether the president took action to obstruct the probe and the central unresolved question of whether the Trump campaign coordinated with Russia during the 2016 election.But after a series of indictments and high-profile plea deals with Trump associates in recent months, Mueller's shown signs of narrowing his focus, referring cases to other offices of the Justice Department, letting other U.S. attorneys largely take over cases he brought and allowing prosecutors to leave his team without replacement.As the AP reports, two prosecutors assigned to the Russia investigation are returning to their duties at DOJ, joining two others who left the probe over the summer.

Top FBI Lawyer Flips- Russia Probe Was Handled In Abnormal Fashion And Rife With Political Bias -- James Baker, a former top FBI lawyer, told congressional investigators on Wednesday that the Russia probe was handled in an "abnormal fashion" and was rife with "political bias" according to Fox News, citing two Republican lawmakers present for the closed-door deposition. "Some of the things that were shared were explosive in nature," Rep. Mark Meadows, R-N.C., told Fox News. "This witness confirmed that things were done in an abnormal fashion. That's extremely troubling."Meadows claimed the "abnormal" handling of the probe into alleged coordination between Russian officials and the Trump presidential campaign was "a reflection of inherent bias that seems to be evident in certain circles." The FBI agent who opened the Russia case, Peter Strzok, FBI lawyer Lisa Page and others sent politically charged texts, and have since left the bureau. -Fox NewsBaker, who worked closely with former FBI Director James Comey, left the bureau earlier this year. Lawmakers did not provide any specifics about the interview, citing a confidentiality agreement signed with Baker and his attorneys, however they said that he was cooperative and forthcoming about the beginnings of the Russia probe in 2016, as well as the FISA surveillance warrant application to spy on former Trump campaign aide Carter Page.

Russian Prosecutor With Ties To Veselnitskaya Dies In Mysterious Helicopter Crash - In a development that's sure to fire up the conspiracy theory machine, a Russian official with close ties to Russian lawyer Natalia Veselnitskaya - the lawyer who had promised to deliver "dirt" on Hillary Clinton to Donald Trump Jr., Jared Kushner and Paul Manafort during a meeting at Trump Tower in 2016 - reportedly died in a helicopter crash this week, according to The Daily Beast.Russian Deputy Attorney General Saak Albertovich Karapetyan was reportedly flying on an unauthorized helicopter flight on Wednesday when it crashed near the village of Vonyshevo, outside of Moscow. Karapetyan's work for the Russian government was exposed by a Swiss court this year after it exposed a plot to flip a local official into a double-agent for the Kremlin. Karapetyan, who was 58 when he died, was reportedly familiar with some of the most high-profile clandestine operations carried out under the orders of Vladimir Putin. Not only did he work closely with Veselnitskaya, he was also running some of Moscow’s most high-profile efforts to thwart international investigations into Russia’s alleged crimes. In one instance, Karapetyan signed a letter from the Russian government telling the US that Moscow wouldn't help with a civil case pursuing more information in the death of Sergei Magnitsky, a Russian lawyer who had reportedly tried to expose a $230 million fraud before being jailed on tax-related charges that political opponents said were political retribution for his targeting of senior Russian officials. Leaked emails reported by the New York Times showed Veselnitskaya helped draft the document sent with that letter.   Karapetyan was also reportedly involved in efforts to foil international investigations for more than a decade. He was reportedly present for a meeting in Moscow where British detectives claim they were poisoned during efforts to track down the killers of Alexander Litvinenko, who died after a dose of radioactive poison in London in 2006. Despite claims that they were trying to help, the general prosecutor’s office did everything it could to block the Scotland Yard investigation.According to the Daily Beast, the wreckage of a helicopter allegedly carrying Karapetyan was discovered near the village of Vonyshevo. The metal was twisted and mangled beyond repair. Why the experienced pilot crashed isn't known.

Trump Directed Legal Action to Enforce Stormy Daniels’s Hush Agreement – WSJ - President Trump personally directed an effort in February to stop Stormy Daniels from publicly describing an alleged sexual encounter with Mr. Trump, people familiar with the events say. In a phone call, Mr. Trump instructed his then-lawyer Michael Cohen to seek a restraining order against the former adult-film actress, whose real name is Stephanie Clifford, through a confidential arbitration proceeding, one of the people said. Messrs. Trump and Cohen had learned shortly before that Ms. Clifford was considering giving a media interview about her alleged relationship with Mr. Trump, despite having signed an October 2016 nondisclosure agreement. Mr. Trump told Mr. Cohen to coordinate the legal response with Eric Trump, one of the president’s sons, and another outside lawyer who had represented Mr. Trump and the Trump Organization in other matters, the people said. Eric Trump, who is running the company with his brother in Mr. Trump’s absence, then tasked a Trump Organization staff attorney in California with signing off on the arbitration paperwork, these people said.   Direct involvement of the president and his son in this year’s effort to silence Ms. Clifford hasn’t previously been reported. The accounts of that effort recently provided to The Wall Street Journal suggest that the president’s ties to his company continued into this year and contradict public statements made at the time by the Trump Organization, the White House and Mr. Cohen.Mr. Trump on Tuesday declined to answer questions about whether he had directed his son and Mr. Cohen to pay Ms. Clifford earlier this year, telling reporters “I don’t even know what you’re talking about.”The White House referred a request for comment to the president’s outside counsel. Jay Sekulow, a lawyer for Mr. Trump, declined to comment. A person close to the situation said Eric Trump had acted as the president’s son and not in his role as a company executive. The Trump Organization declined to comment. Lanny Davis, a lawyer for Mr. Cohen, declined to comment. In March, the Trump Organization denied any role in the arbitration, saying its lawyer assisted in her “individual capacity.” At the same time, the White House issued blanket denials when asked about a hush payment to Ms. Clifford and directed questions to Mr. Cohen, who had called the deal a private transaction between himself and the former adult-film star. Mr. Trump has denied any sexual encounter with Ms. Clifford.

Uranium One- FBI Refuses To Release Three-Dozen Secret Memos Involving Clintons, Russia And Obama --The FBI has refused to declassify 37 pages of materials related to the Uranium One deal, citing national security and the privacy issues, reports The Hill's John Solomon. The documents are thought to contain information regarding then-Secretary of State Hillary Clinton's involvement, as well as the Obama administration's knowledge of the controversial deal.  The existence of the documents became known after a recent Freedom of Information Act (FOIA) release of related material contained an entry entitled "Uranium One Transaction." The publicly available portion includes benign material, such as public letters from members of Congress who demanded information on the Uranium One approval. Perhaps the FBI’s unexpected “release” — and I use that word loosely, since they gave up no public information of importance — in the FOIA vault was a warning flare designed to remind America there might be evidence worth looking at.One former U.S. official, who had access to the evidence shared with CFIUS during the Uranium One deal, said this to me: “There is definitely material that would be illuminating to the issues that have been raised. Somebody should fight to make it public.”That somebody could be President Trump, who could add these 37 pages of now-secret documents to his declassification order he is considering in the Russia case. -The Hill

Russia accuses Musk/USA of dumping space engines RT - The head of Russian space research corporation claims that the Pentagon is hiding its payments to Elon Musk’s SpaceX project to keep the declared prices artificially low and oust Russia from the space launch market. The head of Roscosmos, Dmitry Rogozin, has accused Elon Musk and the Pentagon of foul play in a televised interview. He claimed that the SpaceX founder was charging outside customers between 40 and 50 million US Dollars for one launch with a single purpose – to squeeze Russia out of the market. Rogozin added that the US Department of Defense was secretly paying Musk several times more – on average, about $150 million per launch. The Russian space chief admitted that his agency could not compete with Musk in such conditions as it simply could not charge higher prices from own Defense Ministry.At the same time, Rogozin described the controversial venture investor as a good engineer and skilled PR specialist. “He really can present his goods, he’s got the gift of the gab,” the Russian official stated.Rogozin has already mentioned Elon Musk and his company in media interviews. For example, in April this year the Russian space chief said that the former SpaceX CEO should be treated with seriousness, adding that he had discussed some of Musk’s ideas with Russian space specialists and they agreed to overcome the shame and use some of the investor’s ideas. However, also in April Rogozin said that sometimes Musk got too entangled in his own lies and in his opinion this undermined the billionaire’s reputation as an engineer.

Elon Musk agrees to pay $20 million and quit as Tesla chairman in deal with SEC -  - Elon Musk agreed Saturday to step down as chairman of Tesla and pay a $20 million fine in a deal to settle charges brought this week by the Securities and Exchange Commission. Under the settlement, which requires court approval, Musk will be allowed to stay as CEO but must leave his role as chairman of the board within 45 days. He cannot seek reelection for three years, according to court filings. He accepted the deal with the SEC "without admitting or denying the allegations of the complaint," according to a court document. Separately, Tesla agreed Saturday to pay $20 million to settle claims it failed to adequately police Musk's tweet. "The $40 million in penalties will be distributed to harmed investors under a court-approved process," the SEC said in a press release. The company also agreed to appoint two new independent directors to its board and establish a board committee to oversee Musk's communications. Tesla declined to comment. A spokesperson confirmed Musk will be permitted to remain a member of the board.  The announcement from the SEC comes two days after the agency filed a lawsuit against Musk, claiming he misled investors. The suit centers on tweets Musk sent on August 7 in which he said he had secured funding to take Tesla private at $420 a share, causing the company's stock to soar. He had not secured the funding, the SEC said.

Tesla stock soars as Musk taunts the SEC with a tweet -- Tesla's stock is up by more than 16 percent in early Monday trading after Elon Musk signed a deal with the Securities and Exchange Commission over the weekend. Monday's gains erased Friday's 14-percent plunge after the SEC filed its lawsuit late on Thursday. Musk's dispute with the SEC arose from an August 7 tweet in which Musk claimed to have "funding secured" to take the company private at $420 per share. But it quickly became clear that Musk's funding commitment—supposedly from Saudi Arabia's sovereign wealth fund—was informal at best. The SEC eventually sued Musk for securities fraud on Thursday. Musk initially vowed to fight the charges, but after Tesla's stock cratered on Friday, Musk backtracked and settled the case on Saturday.  While Musk technically capitulated to the SEC over the weekend, he signaled Monday morning that he has no intention of behaving himself in the future:Naughty by Nature https://t.co/muZdxJWjyZ— Elon Musk (@elonmusk) October 1, 2018Musk's settlement with the SEC requires him to give up his position as chairman of Tesla's board for three years. Tesla will also be required to appoint two additional board members who are independent of Elon Musk. Musk will be able to continue as CEO, but the SEC's aim is to give Tesla's board more independence from Musk—and hence to subject Musk to more vigorous oversight. Musk and Tesla must each pay $20 million in fines, which will be distributed to traders who were harmed by the tweets.

'Short-termism' isn't a thing, say Fed economists - As countless policymakers, analysts and even some executives themselves would tell it, corporate America has a disease: short-termism. The symptoms? Public companies that focus excessively on short-term results, like earnings-per-share metrics, at the expense of longer-term goals that create real, tangible value.The affliction has apparently become so acute that President Trump announced in August (via Twitter, of course) that he'd requested the US Securities and Exchange Commission to consider scrapping a decades-old requirement for public companies to file quarterly earnings, and move instead to a biannual system. JPMorgan's chief executive Jamie Dimon and famed investor Warren Buffett proposed a similar fix two months prior in a Wall Street Journal op-ed, where they argued the practice harms the economy: Companies frequently hold back on technology spending, hiring, and research and development to meet quarterly earnings forecasts that may be affected by factors outside the company’s control, such as commodity-price fluctuations, stock market volatility and even the weather. That definitely sounds harmful, but according to a new working paper published by the Federal Reserve Board of Governors, it's just not true. Economist Naomi Feldman and five co-authors find that public firms invest a lot more than private ones, especially on research and development (R&D).Using corporate tax-return files from the IRS between 2004 and 2015 for companies with between $1m-$1bn in assets and $500,000 and $1.5bn in revenue, the researchers discover that relative to physical assets, publicly listed firms invest roughly 48 percentage points more than their privately held counterparts. While public companies invest about 14 per cent more in short-term assets like inventory than private ones, when it comes to long-term assets, the difference is much starker: listed corporations out-invest private ones by more than 200 per cent. It all comes down to R&D. Publicly listed firms invest nearly 40 percentage points more in these types of expenditures than private corporations, siphoning off 11 percentage points more of their investment budgets.

GE’s $500,000,000,000 Market Wipeout Is Like Erasing Facebook - On August 28, 2000, Apple’s hottest product was a candy-colored computer, Donald Trump was a New York real estate mogul and General Electric Co. was worth some $600 billion.Apple and Trump have gone on to greater things. GE? It’s on the verge of a staggering milestone: a half-trillion dollars in market value wiped out since that all-time high 18 years ago. On Monday the company made the surprise announcement that it was replacing Chief Executive Officer John Flannery, who has been unable to stem the slide in the company’s shares after just more than a year in the job. The iconic American corporation is now worth just under $100 billion, its stock at around $11 at Friday’s close, and investors are signaling they don’t expect things to get better. While the stock surged Monday after the announcement of the change at the top, the shares -- and the company -- have a massive hole to dig out from. The collapse -- an 81 percent drop from the peak -- is all the more startling as it comes amid record-setting market gains. Apple Inc. recently became the first U.S.-based company to top $1 trillion in market value, followed shortly thereafter by Amazon.com Inc.

 Dow falls the most in 2 months on fears of rising rates as 10-year yield hits highest since 2011 -  Stocks fell sharply on Thursday as interest rates hit new multiyear highs, dampening investor sentiment.The Dow Jones Industrial Average dropped 200.91 points to 26,627.48 as Nike and Home Depot lagged. The 30-stock index dropped 356 points at its lows of the day and posted its worst decline since Aug. 10.The S&P 500 declined 0.8 percent to 2,901.61, notching its worst day since June 25, with communications and tech sectors both sliding more than 1.5 percent. The Nasdaq Composite dropped 1.8 percent — its biggest daily drop since June 25 — to 7,879.51 as Facebook, Netflix and Alphabet all dropped more than 2 percent.The benchmark 10-year Treasury note yield reached its highest level since 2011, breaking above 3.2 percent."The level of the rates does not concern us," said Steve Chiavarone, portfolio manager at Federated Investors. "That said, moving more than 10 basis points in two days is a different story. Pace matters and it bears watching." "When you move at this pace in a short amount of time, it's natural for the market to take a breather," Chiavarone said.Dividend-paying stocks sensitive to higher rates fell broadly, including Procter & Gamble, which closed 1.3 percent lower. Bank shares, meanwhile, benefited from the higher rates. J.P. Morgan Chase and Bank of America rose 0.9 percent and 1.4 percent, respectively.The yield surge started on Wednesday after new data showed private payrolls rose by 230,000 in September, which far surpassed the 168,000 jobs in August. Elsewhere on Wednesday, the ISM non-manufacturing index hit its highest level on record.Comments from the top Federal Reserve official also stoked yields higher. O n Wednesday, Fed Chair Jerome Powell said that the U.S. central bank had a long way to go before interest rates hit neutral,suggesting to markets that more hikes could be on the horizon.

Wealth of 400 richest Americans hits record $2.9 trillion --On Wednesday, the US finance magazine Forbes released its annual “Forbes 400” list of wealthiest Americans, revealing an immense increase in wealth among the top social stratum in the United States.The total net worth of the 400 people included on the list hit a record $2.9 trillion this year, up from $2.7 trillion last year. The most heavily represented sector was finance, from which 88 people on the list, including bank executives, hedge fund managers and investors, drew their wealth.  The next highest proportion comes from technology giants such as Google and Facebook. The CEO of Twitter and payments firm Square, Jack Dorsey, registered the greatest percentage growth in wealth from the previous year, an increase of 186 percent to $6.3 billion. This was due in large part to a jump in Square’s stock price.  The threshold necessary for inclusion on the list rose to $2.2 billion in 2018, up $100 billion from last year’s threshold. Fully one-third of billionaires in the United States, a record 204 individuals, failed to make this year’s Forbes 400 list. The average net worth of billionaires on the list rose to $7.2 billion, an increase of a half-billion over last year’s average of $6.7 billion. As Forbes notes, the vast increase in wealth among the very richest Americans is largely thanks to a continuing surge in US stock indexes. They have reached new record highs in part due to unprecedented levels of stock buybacks and dividend increases, which are parasitic diversions of wealth away from productive investment in areas that produce decent-paying jobs and to the detriment of pursuits such as research and development. The billionaires on the Forbes 400 list have also benefited immensely from the Trump tax cuts for corporations and the wealthy signed into law in December 2017.

Let well-capitalized small banks play in the sandbox: Panelists — Small banks are most at risk of losing market share to technology firms — from small upstarts to industry heavyweights such as Amazon and Google — but regulators could help them avoid such a fate by encouraging them to innovate. That was perhaps the key takeaway from the final panel discussion at a community banking conference here hosted by the Federal Reserve, Conference of State Bank Supervisors and the Federal Deposit Insurance Corp. Regulators could, for example, consider letting well-capitalized use a portion of their excess capital to experiment with new products and services, Kate Hao, the CEO of Happy Mango, a technology firm in New York that assists bank with credit reporting, said Thursday. Such technology sandboxes, popular in some European countries, could help banks test new products and services without adding unnecessary risk, added Trevor Dryer, co-founder and CEO of Mirador Financial in Portland, Ore. Banks, particularly smaller institutions, face constraints when it comes to adding technology that can speed up decision-making and provide more convenience for clients. That is creating concerns that banks will lose customers to technology firms that are far less bound by regulation. A recent survey sponsored by the Fed, CSBS and the FDIC of 521 community bankers found that 14.3% of respondents view fintech firms as their primary competitors in the future for mortgage originations. Only 5% currently view such firms as their chief competitors now.

‘10 miles is a long way by horse and buggy’: Fed studies rural branch closings For a regulator grappling with what is the right balance in big-bank supervision, the Federal Reserve is also trying to drill down on industry trends at the most micro levels. The Fed's top regulatory official, Vice Chairman of Supervision Randal Quarles, gave wide-ranging remarks Thursday on the central bank's efforts to gather and understand data about the community banking sector. But Quarles warned that quantitative studies don't always provide enough information about banking in the most rural areas, which lack access to technology and are not reflected in county-level research that "obscures community-level dynamics." "Some communities within a county may have lost banks or bank branches, while others may have gained," Quarles said at a community banking conference, co-hosted by the Fed, in St. Louis. "In the rural Mountain West, where I grew up, a single county can be physically larger than some Eastern states. And the demographics of the communities — for example, high- or low-income — that have lost or gained are also not visible, but important." Quarles discussed data showing how the path of urban community banks has deviated from that of rural community banks. But he also described takeaways from "listening sessions" that the Fed has conducted on a national level "to gather information from consumers and small- business owners in rural communities that have been directly affected by bank closures." "We used data to identify rural towns that have experienced bank branch closures; in some cases, these towns lost the only bank in town and now have no remaining banks," Quarles said. "Then we convened local residents and small-business owners to ask them about what the loss of a bank meant to them and their community." Technology that is taken for granted in a big city is not a given in some communities. "Technology may be perceived as a threat or an opportunity, depending for example on whether the necessary infrastructure is available,"

Fed looks to public to help define role on faster payments The Federal Reserve is seeking public input as it wrestles with the question of how forcefully it should push to build a faster payment system that links all 11,000-plus U.S. banks and credit unions. The central bank on Wednesday released a 47-page notice seeking comment on its own role in a future world of round-the-clock, immediate payments. The question is a delicate one for the Fed, in part because big banks and small institutions hold conflicting views, and because it also wants to avoid been seen as usurping authority from the private sector. The move comes at a time when the Fed is facing pressure to make decisions regarding faster payments. Real-time capabilities have long been in place in the U.K., Sweden and a host of other countries. In the U.S., payment apps like Venmo provide real-time notifications to users, but they do not provide all the benefits of a nationwide real-time system that connects every bank. Federal Reserve Board Gov. Lael Brainard In a speech Wednesday in Chicago, Fed Gov. Lael Brainard warned that small institutions could be left behind if there is insufficient coordination in the development of faster U.S. payments. “We can wait and watch how these issues evolve on their own. But this will likely result in a fragmented patchwork of systems that entails inefficiencies and risks and could leave behind many households, small businesses and smaller banks,” Brainard said, according to a transcript of her remarks. Brainard also said that a real-time settlement service provided by the Fed’s regional banks “could significantly improve the prospect that banks of all sizes will have equitable access.” In her speech, Brainard noted that the Fed has played key roles in various historical eras in the development of the U.S. payments system. “Today, Americans take the reliability and safety of their payments for granted. But that was not always the case,” she said. For several years, the Fed has been encouraging large banks, small banks, payment firms, technology companies, consumer advocacy groups and others to collaborate on the development of a modernized payment system — a relatively hands-off role compared to central banks in various other countries. In July 2017, an industry-led group that was convened by the Fed established a goal: within three years, anyone with a bank account in the United States should be able to receive payments that are highly secure and delivered in something close to real time.

Waters bill would reverse Mulvaney's deregulatory efforts at CFPB — Rep. Maxine Waters, D-Calif., unveiled a bill Tuesday to unwind Consumer Financial Protection Bureau policies instituted by acting Director Mick Mulvaney. “It is clear that President Trump and ... [Mulvaney] are doing everything in their power to roll back consumer protections, strip the Consumer Bureau of its resources and prioritize Wall Street at the expense of Consumers,” said Waters, ranking member of the House Financial Services Committee, in a press release. The bill, called the Consumers First Act, seeks to reverse Trump administration steps to soften the regulator’s aggressive approach. Waters' press release particularly called out efforts by the bureau to slow fair-lending enforcement, limit enforcement of payday lenders and hinder coordination with other agencies, among other things. In addition to moving the bureau's focus back to how it operated under the Obama administration, the bill would also require the CFPB to provide Congress with documents about the agency's allegedly having withheld data on student lending, to reinstate members of the disbanded Consumer Advisory Board, and to ensure that the bureau's consumer complaint database remains accessible to the public. “This critically important agency must get back to work fulfilling its statutory purpose and actually protect Americans from unfair, deceptive or abusive practices,” Waters said. Waters also criticized Mulvaney’s attempts to rename the agency the Bureau of Consumer Financial Protection, which she called “a petty attempt to reduce the public’s awareness of, and significant support for, the agency’s role as the top Federal consumer watchdog." The announcement of the bill comes just a day after Waters and 12 other lawmakers sent a letter to Financial Services Committee Chairman Jeb Hensarling, urging him to investigate allegations that the CFPB has failed to protect student loan borrowers. While the legislation has little chance of moving forward in the GOP-held Congress, many polls indicate the Democrats are favored to seize control of the House in the midterm elections in November. In that scenario, Waters would become the likely chair of the House Financial Services Committee, and this bill could foreshadow her priorities.

CFPB official tries to defuse furor over his ‘provocative’ writings --A top political appointee at the Consumer Financial Protection Bureau sought to defend himself Monday over his incendiary writings 14 years ago that have caused an uproar at the agency. Eric Blankenstein, the CFPB’s policy director of supervision, enforcement and fair lending, said in an email to staff that he regrets his "choice of words." Blankenstein has come under fire for blog posts in which he suggested that people who use racial slurs are not necessarily racist and that most hate crimes were “hoaxes.” “The tone and framing of my statements reflected poor judgment,” Blankenstein wrote in the email to the bureau’s staff, which was obtained by American Banker. “Do I regret some of the things I wrote when I was 25—relatively fresh out of college and not yet even thinking about applying to law school—that I wouldn’t write today? Absolutely. I recognize that many of you had a visceral, negative reaction to reading what I wrote in some of my old blog posts. I did too.” Since the blog posts were first revealed in a Washington Post report last week, two senior CFPB officials have raised objections to Blankenstein, suggesting he is no longer qualified to be the agency's top enforcer of anti-discrimination laws.  Around the same time that Blankenstein sent out his email, the CFPB’s chief of staff, Kirsten Sutton, sent a message to staff affirming the agency's commitment to diversity.  “I want to remind everyone that we have a zero tolerance policy when it comes to discrimination, harassment and retaliation,” wrote Sutton, a political appointee and a former House Financial Services Committee staff director and aide to Rep. Jeb Hensarling, R-Tex. “The Bureau values diversity in viewpoints, backgrounds, and walks of life.”  Still, while Blankenstein said his views could have been expressed better, he did not renounce them. Instead, he tried to explain that the blog, “Two Guys Chatting,” which he had founded with a friend in 2004, was intended to frame relevant issues of the day. He acknowledged that it was "provocative."  “I unfortunately used intentionally provocative language in an effort to accentuate my points.”

Senate Dems to Mulvaney: How did embattled aide get CFPB job? -- Senate Democrats on Wednesday called for acting Consumer Financial Protection Bureau Director Mick Mulvaney to explain the vetting process that led to the hiring of a political appointee whose past incendiary writings have caused upheaval at the agency. Sen. Sherrod Brown of Ohio, the lead Democrat on the Senate Banking Committee, as well as 12 other Democratic senators, including Sen. Elizabeth Warren of Massachusetts, sent a letter to Mulvaney asking him to explain how Eric Blankenstein, the CFPB’s policy director of supervision, enforcement and fair lending, was hired. Blankenstein wrote on blog posts in 2004 that people who use racial slurs are not necessarily racists and dismissed most hate crimes as “hoaxes.” After the writings were first revealed in a Washington Post report last week, three senior officials and the bureau’s union withdrew their support for him. “We are deeply concerned that you have placed a person with a history of racist writing at a senior position within the Consumer Financial Protection Bureau,” Brown wrote in the letter. “Only after an outcry from CFPB career staff did Mr. Blankenstein send a note apologizing for the 'framing' and 'tone' of his arguments — but he did not apologize for his defense of racial slurs, nor did he apologize for reflexively disbelieving victims of hate crimes.” Separately, Blankenstein canceled a previously scheduled meeting of his division for Thursday, saying many of the bureau's staff "may have questions about the events of the last few days," and that top managers "are working on next steps," he wrote in an email obtained by American Banker. "Your patience is appreciated." Blankenstein was not hired through the competitive service process, but rather chosen by Mulvaney as one of a dozen political appointees brought in to “shadow” career staff at the agency to implement President Trump’s policy agenda. Senate Democrats asked Mulvaney to respond to nearly a dozen questions about Blankenstein, including whether Mulvaney was aware of the writings before hiring Blankenstein, who recommended him for the job, and what due diligence was used to vet all of the political appointees. “Were all established guidelines related to background checks or other due diligence adhered to in evaluating Mr. Blankenstein’s appointment?” the letter stated. “Was Mr. Blankenstein asked about past statements on social media, websites, or other public forums?”

CFPB settles with group accused of delaying consumers' debt payments — The Consumer Financial Protection Bureau has settled with the Minnesota-based parent company of several e-commerce brands over allegations that the group unfairly delayed payment transfers to third-party debt buyers. The CFPB settlement will require remedial steps by Bluestem Brands and two affiliated companies, all based in Eden Prairie, Minn. The agency alleges that between 2013 and 2016, some customers made payments to the e-commerce group even though their accounts had already been sold to third-party debt buyers. As a result, the CFPB said, in 18,000 instances the payments were delayed for more than 31 days. Customers received notices that they had remaining debt even though they had paid it off. The agency said the payment delays violated legal prohibitions against unfair acts and practices that cause consumers avoidable injury, the agency said. “These delays likely subjected customers to misleading collection activity, including collection activity on accounts that they had completely paid off,” the CFPB said in a press release. The agency and Bluestem filed an administrative consent order Thursday that will require Bluestem companies to improve their processes to ensure timely customer payments on accounts that have been sold to third-party debt buyers. Under the order, Bluestem must also prevent consumers from making phone or online payments on accounts already sold to debt buyers. The Bluestem companies will also pay a civil money penalty of $200,000.

 Trepp puts CMBS exposure to Hurricane Florence at $3.9B -- Some 550 securitized mortgages on commercial properties in North Carolina and South Carolina totaling $3.9 billion are exposed to Hurricane Florence, according to Trepp. That tally, published Friday, is lower than the $10.7 billion estimate published last month by Moody’s Investors Service but lower than the $1.49 billion identified by Morningstar Credit Ratings. The loans Trepp identified as being located in the 28 counties that FEMA has declared eligible for federal disaster relief are securitized across more than 400 deals, including both private-label CMBS and agency notes from Fannie Mae, Freddie Mac and Ginnie Mae deals. Trepp noted that, because of residual flooding, the ultimate totals may not been known for weeks. The storm dropped nearly three feet of rain in parts of the Carolinas and triggered dangerous flooding, which took more than 40 lives. “As we've written before with regard to this hurricane and other large hurricanes which hit the US, these painful storms have not led to major losses for CMBS investors,” Trepp stated in its report. “Insurance proceeds have typically been sufficient enough to cover rebuilding costs, and delinquencies and write-offs have been negligible.” It added, “we can't even recall prepayments over condemned properties being an issue.” A little more than half of the loan total — with a combined $2.1 billion in outstanding balance — comes from government-sponsored enterprise (GSE) deals. These Fannie Mae/Freddie Mac/Ginnie Mae loans will not pose a credit risk for anyone other than holders of Freddie K-Series credit paper.

At U.S. Marine base, families plead for housing help after Florence -  Two weeks after Hurricane Florence deluged the U.S. East Coast’s largest Marine Corps base with raging waters and dangerous winds, some military families say they are still residing in unlivable conditions and awaiting help from the base’s private housing manager. Some, like Jennifer Maher, pregnant in her third trimester, said they feel unsafe in their Camp Lejeune homes but were told they will not be moved because assessment crews determined their houses are habitable. That did not work for Maher, living with her husband and 2-year-old son. When she returned home last Friday, she opened the door to the stench of mold, she said while showing the wreckage to a visiting reporter. Then she saw the ceiling had collapsed in their bedroom and garage. “I’m pregnant and I can smell the mold,” said Maher, whose husband is a Navy corpsman stationed at Lejeune. “There’s no way I could bring a newborn home and let her breathe this in.” Though an assessment crew noted the collapsed ceilings and standing water, Maher said, the housing manager told the family they would not be relocated. After she threatened to complain to the Inspector General’s office on base, she said her family was given temporary lodging. She is considering breaking her lease, since she does not know if her home will be repaired before she is moved out of the temporary place. “I understand they have a lot to take care of,” Maher said of the housing manager. “But it’s hard when your housing company says, ‘I don’t know what to tell you, go find a shelter.’” Other families shared similar stories this week with Reuters, as the Marine Corps and the base’s private housing companies perform triage from the fallout from Florence. A reporter visited the base, speaking with three residents in their damaged homes and interviewing two others, one off base and one by phone.  This year, Reuters has been examining safety and environmental hazards faced by U.S. military families on military bases, including cases of childhood lead poisoning. At Lejeune, some families described encountering troubles that reporters observed at other bases: lags in maintenance responses by private contractors that stir worries over health.

Florida foreclosure lawyer made nearly $5M off clients' homes - During the foreclosure crisis, thousands of Floridians turned to Mark Stopa for help in saving their homes.The 41-year-old St. Petersburg lawyer became one of the state's best-known foreclosure defense experts, quoted in national publications and portraying himself as a bulwark against heartless and conniving lenders.But even as Stopa helped many people hold on to their homes, he acquired millions of dollars worth of property from other clients through what authorities say was a years-long pattern of fraud and deception. The alleged scheme to defraud clients and mortgage lenders has had a ripple effect throughout Florida, leaving thousands of foreclosure cases in limbo and Stopa's former firm about to file for bankruptcy."It's like the Titanic going down," said Richard Mockler, a Tampa attorney who has tried unsuccessfully to salvage Stopa's law practice.On Aug. 21, agents of the Florida Department of Law Enforcement raided Stopa's offices in downtown St. Petersburg. According to the search warrant, Stopa obtained title to distressed homes throughout Florida using shell corporations, many of them registered in New Mexico. The properties were then rented out while Stopa, under the guise of representing the original owners, continued to fight the foreclosure cases.Agents subpoenaed Stopa's PayPal account and discovered deposits from individuals at approximately 20 properties controlled by his companies.Between Jan. 1, 2011 and April 1, 2018 records showed, Stopa received a total of more than $4.8 million. "Mark Stopa ... is believed to be facilitating the crime of equity skimming," a state agent wrote. A felony punishable by up to five years in prison, skimming is defined in part as failing to make mortgage payments while collecting rent for personal use.

Mortgage application activity remained flat after Fed rate hike - Mortgage application activity was relatively flat compared with the previous week, as long-term interest rates held steady following the recent Fed rate hike, according to the Mortgage Bankers Association.The MBA's Weekly Mortgage Applications Survey for the week ending Sept. 28 found that volume decreased by 0.2% from the previous week."Rates were little changed last week, following the most recent [Federal Open Market Committee] meeting where the Fed announced another rate hike based on the health of the economy and job market as expected, " Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "Short-term rates have been increasing but long-term rates have held steady, which should not pose too much of a headwind to home purchase activity, especially given the potential demand from demographic factors." Kan noted even though applications activity was essentially unchanged from the previous week, purchase applications increased by 3% from a year ago in a rising interest rate environment. "Even with the slight increase in rates, the 15-year fixed rate reached its highest level since April 2010 and the 30-year jumbo rate increased to its highest rate since July 2011," he said.The seasonally adjusted purchase index increased 0.1% from one week earlier, while the unadjusted purchase index decreased 0.2% compared with the previous week and was 3% higher than the same week one year ago.The refinance index fell by 0.1% from the previous week. Refinancings made up 39.4% of total applications, unchanged from the previous week.Adjustable-rate loan activity increased to 7.1% from 6.5% of total applications, while the share of Federal Housing Administration-guaranteed loans decreased to 10.2% from 10.4% the week prior.The share of applications for Veterans Affairs-guaranteed loans decreased to 10% from 10.1% and the U.S. Department of Agriculture/Rural Development share remained unchanged at 0.7% from the week prior.

 Mortgage credit availability falls as fewer government loans offered - Lenders offered fewer government-guaranteed mortgage programs in September, leading to an overall decline in mortgage credit availability, according to the Mortgage Bankers Association. The MBA's Mortgage Credit Availability Index fell by 0.8% in September to 182.1, compared with August's 183.5 and a post-crash high of 184.1 in July. September 2017's MCAI was 181.4. The government component of the MCAI fell by 2.5% to its lowest point since July 2015, Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. This portion of the index has been trending downward since peaking in April 2017. "The decline in government credit was driven by fewer streamline offerings as well as a decline in loan programs with lower credit requirements," Kan said. On the other hand, the conventional MCAI was up 1.2% from August, as a 2.7% increase in the jumbo component more than offset a 0.7% decline in the conforming subindex. This was the first time in six months that lenders reduced the number of conforming mortgage offerings."The jumbo subindex increased for the fifth time in six months and reached its highest level since we started tracking jumbo credit," said Kan. The MCAI is calculated by the MBA using loan program data from Ellie Mae's AllRegs Market Clarity database with a benchmark of 100 in March 2012. A lower index value indicates lenders are tightening their credit standards.

The Rental Markets in America, from Hot to Cold - Wolf Richter: In San Francisco, the most expensive of the 100 largest rental markets in the US, rents peaked in October 2015, with the median asking rent at $3,670 for a 1-bedroom apartment and $5,000 for a 2-bedroom. By the end of 2017, they were down 7% and 12% from their peaks. But in the spring 2018, rents started rising again. In September, they almost, but not quite, reclaimed their peaks: The median asking rent for 1-BR apartments rose to $3,650, and for 2-BR apartments to $4,800. These are crazy numbers. Hence our local term, “Housing Crisis” – a crisis of affordability in a hyper-inflated market.There are differences from neighborhood to neighborhood, ranging from $2,400 in Outer Sunset (in San Francisco, housing gets cheaper the closer it is to the ocean due to the incoming fog) to $3,740 in Pacific Heights. The map below by Zumper shows the median asking rents by neighborhood. Single-family houses are concentrated in the left two-thirds of the map. Multi-family buildings – hence, much of the rent data – are concentrated in the right third of the map. These rents do not include the latest increases:These are median asking rents. “Median” means half of the apartments rent for more, and half for less. “Asking rent” is the amount the landlord advertises in the listing. The apartments are in multifamily buildings, including new construction. Single-family houses for rent are not included. Rooms, efficiency apartments, and apartments with three bedrooms or more are not included. Zumper collects this data from over 1 million active listings of apartments-for-rent in the 100 largest markets. This includes 3rd party listings received from Multiple Listings Service (MLS). Zumper releases this data monthly in its National Rent Report.In New York City, the second most expensive rental market, median asking rents rose 1.8% for a 1-BR ($2,850) and 5.8% for a 2-BR ($3,280). But these rents are down from their peak in March 2016 by 15% and 17% respectively! In Chicago, rents have plunged since late 2015: By September, the 1-BR asking rent, at $1,510, was down 26% from its peak and the 2-BR rent nearly 30%!  Part of the reason is a multi-year decline in population coinciding with new construction. In the Chicago-Naperville-Elgin metro area, with 9.5 million people, 10,700 apartments are scheduled to be delivered in 2018. But since 2014, the population has dropped by 27,000 people.

Construction Spending October 1, 2018: A marginal headline gain of 0.1 percent in construction spending masks significant declines in residential spending during August. Residential spending fell 0.7 percent in the month to more than offset a 0.2 percent rise in July. Looking at sub-components, single-family spending was also down 0.7 percent in August with multi-unit spending down 1.7 percent. Home improvement spending fell 0.6 percent. Strength in the report is in highways & streets, up 1.7 percent in the month. Educational spending was also strong with a 1.0 percent gain. Government spending was very active in August, up 5.9 percent at the Federal level and up 1.7 percent for state & local. Private nonresidential spending was flat, down 0.2 percent overall with commercial, power and manufacturing subcomponents all showing declines to offset gains for transportation and offices. This report is not pointing to acceleration in business investment and is consistent with another weak quarter for residential investment which remains the economy's weak spot for 2018.

 US construction spending up slightly 0.1 percent in August - — Spending on U.S. construction projects edged up a slight 0.1 percent in August as a strong gain in government spending offset weakness in home building and nonresidential construction. The Commerce Department said Monday that the rise, which followed a 0.2 percent July increase, put total construction at a seasonally adjusted annual rate of $1.32 trillion. That was down a slight 0.4 percent from a record high set in May. Residential construction fell 0.7 percent in August while nonresidential construction edged down 0.2 percent. Those declines were offset by a strong 2 percent rise in public construction, which increased to the highest level since July 2009. Spending for federal and state and local projects increased. Construction activity is contributing to solid overall growth although home building has faced a number of challenges this year. Builders have had to deal with rising costs for land, lumber and labor. Part of the rise in lumber prices is attributed to the higher tariffs the Trump administration has imposed on Canadian softwood lumber. For August, construction of single-family homes dropped 0.7 percent while spending on multi-family projects fell 1.7 percent. In the non-residential categories, spending on commercial projects, a category that covers shopping centers, fell 0.9 percent for while spending on office buildings was up 0.8 percent. The advance in spending for government projects included a 5.9 percent increase for federal projects and a 5.9 percent surge in state and local construction, a gain which pushed this category to the highest level since March 2009.

 August Residential Construction Spending: Yet More Evidence Of A Turn In Housing -- While, as reported yesterday, construction spending as a whole rose by +0.1% in August, the long-leading part of the report is residential construction spending, and that declined -0.7%. In fact, since its high in April, it has declined -2.6%, as shown in the graph below: This is noteworthy for a variety of reasons. Let me start by restating that while residential construction spending historically lags housing permits and starts by several months, it has the advantage of being the least noisy metric of all of the housing series. Here it is, YoY (in blue), compared with the second least volatile series, single-family housing permits (red): Since single-family permits reached their most recent peak in February and have declined over -6% since then, it is really no surprise that residential construction spending has followed. But even though construction spending isn't as leading as permits and starts, it is a good leading indicator, as shown, for example, in the below graph in which it is compared with GDP (beige): Certainly not a 1:1 relationship, but a leading indicator nonetheless. In the past, when private construction spending has slowed down by this much (see 1996, 2002, and 2011), industrial production growth has decelerated sharply in the following year. So, at the very least, this adds to the evidence that a slowdown is likely sometime around summer of next year. The Q3 decline in residential private construction, in turn, is foreshadowing a decline in residential investment as a share of GDP - a major long-leading indicator There's an even more specific, and significant, relationship: residential construction spending correlates very closely with private residential fixed investment in the GDP report. Here it is, averaged quarterly and measured YoY (blue) compared with the GDP metric (red): You can easily see how closely the two compare.

“High End” Apartment Construction Totally Dominates, Creates Mismatch of Supply & Demand - Wolf Richter -- There are plenty of brand-new apartments to choose from, thanks to a multifamily construction boom in major cities. These apartments are in good locations. They’re nice and have everything you’d want. But for many people, rents are just too damn high. Here’s why: In the first half of this year, 87% of the completed apartment projects with 50 or more apartments in 130 major cities in the US are considered “high end,” according to a report by RentCafé, based on Yardi Matrix data on 80,000 large-scale apartment developments. This is up from 52% of properties completed in 2012: “High end” here means “luxurious” – a marketing position for a building. In expensive cities, projects that are not luxurious are nevertheless expensive – such as San Francisco. You have to pay a lot in rent but you might not get a lot for it. An expensive dump in San Francisco is not “high end.” It’s just expensive. In other cities, for the same amount, you can rent a luxury apartment. But that kind of “high end” in San Francisco requires princely sums of money. This is based on Yardi Matrix’s definition and classification of the apartment market of multi-family properties of 50+ units, where “high-end” or “luxury” rental properties make up the top two categories:

  • “A+” and “A” buildings: Renters by choice. Attracted to the extreme upper end of the apartment market; properties generally of resort quality, clearly appealing to households capable of owning a residence, but choosing to rent, or households with substantial incomes, but without wealth.
  • “A-” and “B+” Buildings: Lifestyle renters. The high mid-range category appeals to double-income-no-kids (“DINK”) households holding income status similar to that typically required of discretionary property positioning, but not in possession of the wealth more probably associated with the renter-by-choice rental household category..

These two categories are considered “high end.” A step down and no longer “high end” is B and B-, which is for “working professionals,” such as policemen, firemen, teachers, and technical workers. Then it goes down the scale all the way to “D.” Subsidized housing is in a separate category.These “high end” apartments are marketed to high-income people. Alas, there are not that many high-income people around. Nevertheless, in many cities, 100% of new apartment properties being complete in 2018 are “high end.”The percentage of high-end projects has soared in cities that are not among the most expensive rental markets in the US and have hit 100% in cities such as Oklahoma City, OK, Dallas-Fort Worth, TX, Kansas City, MO, Charlotte, NC, and Philadelphia, PA.

Reis: Apartment Vacancy Rate increased in Q3 to 4.8% - Reis reported that the apartment vacancy rate was at 4.8% in Q3 2018, up from 4.7% in Q2, and up from 4.4% in Q3 2017. This is the highest vacancy rate since Q3 2012. The vacancy rate peaked at 8.0% at the end of 2009, and bottomed at 4.1% in 2016. From Reis: The apartment vacancy rate increased in the quarter to 4.8% from 4.7% last quarter and 4.4% in the third quarter of 2017. The vacancy rate has now increased 70 basis points from a low of 4.1% in Q3 2016. The national average asking rent increased 1.2% in the third quarter while the average effective rent, which nets out landlord concessions, also increased 1.2%. At $1,424 per unit (market) and $1,356 per unit (effective), the average rents have increased 4.5% and 4.2%, respectively, from the third quarter of 2017. Net absorption was 35,683 units, lower than the previous quarter’s absorption of 57,988 units and below the average quarterly absorption of 2017 of 46,685 units. Construction was 50,475 units, also below the second quarter’s 67,417 units and below the 2017 quarterly average of 61,535 units. ... The apartment market had slowed at the end of 2017 and early 2018 as the housing market started to accelerate. However, the passing of the Tax Reform and Jobs Act in December that doubled the standard deduction and cut the deductibility of state and local taxes reduced the incentive to buy a home. This has helped the apartment market, especially in high-taxed localities. We expect construction to remain robust for the rest of 2018 and in the first half of 2019 before completions drop off in subsequent periods. Occupancy is expected to remain positive, although vacancy rates are expected to increase, as new supply will outpace demand growth. Still, as long as job growth holds steady, we expect rent growth to remain positive over the next few quarters. (see graph)

Reis: Office Vacancy Rate unchanged in Q3 to 16.6% -- Reis reported that the office vacancy rate was unchanged at 16.6% in Q3, from 16.6% in Q2 2018. This is up from 16.4% in Q3 2017, and down from the cycle peak of 17.6%. From Reis Economist Barbara Denham:Defying employment trends, the U.S. office market was flat in the third quarter at 16.6%. Once again, leasing activity remains tepid compared to previous expansions. Net absorption, or occupancy growth, was 3.54 million square feet, up from 3.48 million square feet last quarter, but down from an average of 5.9 million square feet absorbed per quarter in 2017. New completions fell to 5.93 million square feet, down from an average of 11.2 million square feet added per quarter in 2017.Rent growth had accelerated a bit earlier in the year but fell to 0.4% in the third quarter, down from 0.7% in the second quarter. Both the average asking rent and average effective rent (that nets out landlord concessions) grew at the same rate in the quarter as they did in the prior six quarters. This suggests that landlord concessions have seen little change over the last year. One year ago, the average asking and effective rent growth was also 0.4%. At $33.20 per square foot (asking) and $26.94 per square foot (effective), the average rents have increased 2.5% and 2.6%, respectively, since the third quarter of 2017.The sluggishness in the office market is nothing new, but the deceleration contrasts an otherwise healthy economy as office employment growth has picked up in 2018 from rates seen in 2017 (1.8% in 2018 vs. 1.6% in 2017). The recent higher rent growth had suggested that landlords were gaining confidence in leasing conditions, but net absorption has persistently trailed new completions over the last seven quarters as tenants have been hesitant to take on added space which has kept a lid on rent growth.The office market statistics still reflect the gap between the haves and the have-nots: larger markets in the West, South Atlantic and larger Northeast cities with healthy occupancy and rent growth offset by tepid growth or declines in smaller, suburban markets in the Midwest or in less densely populated areas. However, the numbers show that the gap is narrowing.

Reis: Regional Mall Vacancy Rate increased Sharply in Q3 2018 -- Reis reported that the vacancy rate for regional malls was 9.1% in Q3 2018, up from 8.6% in Q2 2018, and up from 8.3% in Q2 2017. This is down from a cycle peak of 9.4% in Q3 2011, and up from the cycle low of 7.8% in Q1 2016.For Neighborhood and Community malls (strip malls), the vacancy rate was 10.2% in Q3, unchanged from 10.2% in Q2, and up from 10.0% in Q3 2017. For strip malls, the vacancy rate peaked at 11.1% in Q3 2011, and the low was 9.8% in Q2 2016. Comments from Reis: The average rent at malls declined 0.3% to $43.25 per square foot in the third quarter. Rent growth had been sluggish over the last few quarters but had remained positive. In 10 years, the average mall rent has cumulatively grown 6.5% from $40.62 per square foot in Q3 2008, which was the peak rate in the last cycle. For the neighborhood and community shopping center sector, the vacancy was unchanged at 10.2% after climbing 20 basis points in the second quarter from 10.0% where it had held steady for four straight quarters. The national average asking rent increased 0.4% in the third quarter as did the effective rent which nets out landlord concessions. At $21.11 per square foot (asking) and $18.48 per square foot (effective), the average rents have increased 1.7% and 1.8%, respectively, since the third quarter of 2017. The third quarter saw the brunt of the big department store closings as the vacancy jumped due to Sears and Bon-Ton stores. Our numbers show that more owner-occupied Sears stores closed than for-lease stores which are accounted for in our statistics, yet more of the Bon-Ton stores that closed were leased and thus were included in our statistics. Only time will tell if the significant closings in the third quarter will affect other tenants in malls and shopping centers. Some landlords have indicated that they have redevelopment plans underway for these closed stores which could stave off further vacancies. As for the neighborhood and community shopping center numbers, we had reported last quarter that most of the Toys “R” Us stores closed in the second quarter and that things would settle this quarter which proved to be accurate. We still believe that most of the negative net absorption is behind us. Although, we do not expect the vacancy rate to improve significantly in the near future, nor do we expect rent growth to increase above the lackluster rates seen over the last few quarters.

Mall Vacancies Hit 7 Year High As Rents Plunge - The epidemic of falling rents at shopping malls across the United States has been well duly documented here over the past year. In June, we wrote about an abandoned Macy's that had been turned into a homeless shelter. Just days ago we followed up on the trend of malls falling victim to the "Amazon effect" in areas like Detroit. Today, we note the latest confirmation that the trend of dying malls across the entire U.S. isn't stopping anytime soon. According to a WSJ report, the average rent for malls in the third-quarter fell 0.3% to $43.25 a square foot. This is down from $43.36 in the second quarter and is the first time this number has fallen sequentially since 2011, according to research firm Reis, Inc.At the same time, vacancy rates are on the ascent, rising to 9.1% in the third quarter from 8.6% in the second quarter. This is the highest they've been since the third quarter of 2011, when these rates hit 9.4%. Barbara Denham, senior economist with Reis, told the Journal: "The retail sector is still correcting". It sure is, Barb. For instance, here are some photos we included in a recent article about one of the hardest hit areas, Detroit:

 Real Disposable Income Per Capita in August -- With the release of Friday's report on August Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita.At two decimal places, the nominal 0.26% month-over-month change in disposable income was trimmed to 0.15% when we adjust for inflation. This is down up from the 0.26% and 0.09% increases MoM, respectively. The year-over-year metrics are 4.48% nominal and 2.21% real.Post-recession, the trend was one of steady growth, but generally flattened out in late 2015. Things seem to have picked up slightly in 2018. The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013. It will be interesting to see how the recent tax legislation affects the trend over time.

US Consumer Credit Hits All Time High As Credit Card Usage Jumps - After a surprising slump in the use of revolving, i.e. credit card, debt when in the months of June and July US consumers "charged" only $639 million during the peak summer months, moments ago, the Fed reported that in August, consumer credit posted a significant rebound, rising by $20 billion, above the $15.0 billion expected, and bringing the total to a $3.94 trillion, a 6.2% annualized increase from a year ago, and a new all time high, largely on the back of a newfound love with credit cards.  More notably, after a two-month dormancy in using credit cards, American consumers returned to doing what they do best - spending money they don't have - with revolving credit jumping by $4.8 billion, the highest monthly increase since May, and the second highest of 2018. The monthly increase brought the total to a new all time high of $1.042 trillion. At the same time, growth in non-revolving credit, i.e. student and auto loans, was stable and in line with recent months, increasing by $15.2 billion, the same as July increase, and also bringing the total to a new all time high of $2.894 trillion.  In other words, while Americans continued to spend on cars and college, they once again rediscovered their enthusiasm to buy every day items on credit. And while the rebound in revolving credit use will silence any questions about the resilience of the US consumer during the summer, the recent dramatic upward revision to personal savings notwithstanding, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers were at fresh all time highs, with a record $1.532 trillion in student loans outstanding, an increase of $8 billion in the quarter, auto debt also hit a new all time high of $1.131 trillion, an increase of $18 billion in the quarter.

U.S. spending on food away from home continued to outpace food-at-home spending in 2017 (chart) | USDA -- U.S. consumers, businesses, and government entities spent $1.62 trillion on food and beverages in 2017. Spending at food-away-from-home establishments—restaurants, school cafeterias, sports venues, and other eating places—accounted for 53.8 percent of these expenditures, and the remaining 46.2 percent took place at grocery stores, supercenters, convenience stores, and other retailers. A 53.8-percent share of food expenditures does not equate to 53.8 percent of food quantities, as food purchased away from home is generally higher priced than food prepared at home. Food-away-from-home outlets incur costs for the workers required to prepare and serve food, as well as for buildings, equipment, and utilities. The away-from-home market, which accounted for about one-third of total food expenditures 50 years ago, saw its share grow through the decades, except in some recession years. During the 2007-09 recession, food away from home’s share of total food spending stayed at or just below 50 percent before surpassing its pre-recession share by rising to 50.2 percent in 2010 and continuing to grow to its 2017 share of 53.8 percent. The data for this chart are from the ERS report, Measuring the Value of the U.S. Food System: Revisions to the Food Expenditure Series, released on September 20, 2018.

Largest US Mattress Retailer Files For Bankruptcy --- It has long been speculated that Mattress Firm, the US mattress retailing giant, was in a solvency crisis, largely as a result of an aggressive expansion strategy in recent years coupled with the spectacular collapse of its parent, Steinhoff International Holdings NV following an accounting scandal in late 2017 and has been struggling to restructure the debt of some subsidiaries with its creditors.Well now it's all over.  With liabilities of at least $1 billion and over 50,000 creditors (including Simmons Manufacturing Co. and Serta Mattress Co.), Mattress Firm - US' largest mattress retailer - has filed for Chapter 11 bankruptcy in Delaware (along with a dozen other affiliates - including units of well-known brand names such as Sleepy’s and 1800mattress.com).As Bloomberg reports, the company plans to complete a restructuring within 45 to 60 days, closing poorer performing stores, and has a commitment of $525 million in senior secured credit to fund its turnaround, according to a Friday statement. According to Mattress Firm’s web site, it has more than 3,000 stores across 49 states, and will keep operating as usual as it moves through a restructuring."Leading up to the holiday shopping season, we will exit up to 700 stores in certain markets where we have too many locations in close proximity to each other," Steve Stagner, CEO of Mattress Firm, said in the statement.The company said the bankruptcy includes a prepackaged restructuring plan, meaning it already has the approval of key stakeholders, but will still need court approval.

Oil Is Surging... And So Are Gas Prices At The Pump - Brent Crude nears $85 as WTI tops $75 - at four year highs - as the tight oil markets continue to send gas prices at the pump to the highest in four years... WTI is up over 2.5% today - spiking from $73 to $75 intraday - despite a report from Genscape that shows an 800k barrel inventory build at Cushing.  The FT notes that analysts said that frantic deal making by Asian buyers normally reliant on Iranian imports at an annual oil conference in Singapore last week indicated how tight the physical market was.“The market is incredibly tight,” said Amrita Sen, founder of consultancy Energy Aspects, who noted that financial players were just realising the severity of the impact of Washington’s Iranian sanctions.“People are distracted by various comments from [European] governments trying to set up alternative payment mechanisms, but the refiners and other companies dealing directly on the oil markets are saying it’s not worth the risk,” she added.As AAA reports, despite gasoline demand dropping to 9.0 million b/d and inventories growing to 235.7 million bbl, according to the latest Energy Information Administration (EIA) data, the national gas price average has increased three cents on the week to land at $2.88 – a pump price not seen at the national average since mid-July.“The last quarter of the year has kicked off with gas prices that feel more like summer than fall,” said Jeanette Casselano, AAA spokesperson.“This time of year, motorists are accustomed to seeing prices drop steadily, but due to continued global supply and demand concerns as well as very expensive summertime crude oil prices, motorists are not seeing relief at the pump.”Today’s national gas price average ($2.88) is the most expensive for the beginning of October since 2014. The average is four cents more than a month ago and 32 cents more than a year ago.

US Auto Sales Fell by 4 Percent in the Third Quarter --Major automakers said Tuesday that U.S. sales fell 7 percent in September and 4 percent for the June-through-September quarter, compared with the same periods last year.Weaker numbers for September and the third quarter wiped out a 1.8 percent gain during the first half of the year, and left auto sales on pace with 2017. Some analysts had cautioned that the first-half gains were driven by incentives and low-margin sales to fleet buyers like rental car companies.”Auto makers are blaming this on the hurricanes. More likely, it is building to an inventory goal without adjustments to meet demands. Inventory costs money.

Auto Sales Sputtered in September Amid Rising Interest Rates, Trade Concerns -  Several major auto makers reported steep declines in U.S. sales for September, a slowdown that comes amid shifts in North American trade policy and the looming threat of tariffs on European and Japanese auto imports. The industry is expected to post a 7% drop in sales in September compared with the same year-ago period when full industry results are tallied later Tuesday. Analysts attribute the drop to one fewer selling day this month and a surge in sales last September as buyers rushed out to replace vehicles damaged from Hurricane Harvey and Irma. Ford’s U.S. sales were down 11.3%, while Toyota and Nissan also reported double-digit declines. General Motors, which only reports sales on a quarterly basis, said its sales in the third quarter were down 11.1% over the prior year. For September alone, analysts estimate GM’s sales were down about 15% over the prior-year period. Fiat Chrysler was one of the only major auto makers to report a gain last month, with U.S. sales up 15% compared with the same-year ago period, an increase driven by strong demand for its Jeep sport-utility brand. The increase helped Fiat Chrysler outsell Ford last month, the first time it has done so in more than a decade.The weaker sales results come as the U.S. auto industry is already facing cost pressures on a number of fronts. New U.S. tariffs on imported steel and aluminum have caused prices on those materials to climb, denting bottom lines, and a new North American trade deal could increase costs for some car makers whose cars aren’t compliant with the new duty-free rules.The new pact—officially called the U.S.-Mexico-Canada Agreement—requires auto makers build a greater portion of their cars in North America and with higher-wage workers. The new content requirements could complicate operations for auto makers building small cars in low-wage Mexico and importing parts, such as engines and transmissions, from overseas. “We might see the cost of producing a vehicle rise,”

September auto sales were the worst (economic reporting) in a long time -- I don't think I have seen as badly, or worse, outright misleading reporting in a long time as I have seen concerning September auto sales.Almost all of the stories -- and especially the Doomish punditry that dominates the clickbait econoblogosphere -- have seized on the BIG BIG DOWNTURN!!! in auto sales YoY, varying between a -5.6% decline ("So, all in all it was a lousy month") to a 7% decline ("Auto sales sputtered ... Several major auto makers reported steep declines in U.S. sales"). Or, "U.S. Auto Sales Look Shaky, Could Be Start to Rough Road Ahead."OMG, head for the hills! Then, down maybe 10 paragraphs (if at all), it's noted that the YoY comparison is with the spike in replacement sales that occurred after Hurricane Harvey dumped up to 50" of rain on east Texas, including the 6 million population Houston metro.  Oh.  And somewhere before the end of the article, it might be grudgingly conceded that the seasonally adjusted annualized rate of sales for September 2018 might be over 17 million.  In fact, the two best estimates are 17.3 million from Ward's Intelligence, and 17.4 million from AutoData. Here's the graph from Ward's: So, how does 17.3 or 17.4 million look compared to recent data?  Here are monthly light vehicle sales since 2010 (through August): There were only two months since the beginning of 2017 that exceeded 17.3 million sales annualized, one of which was last September. In fact, 17.3 million units is right in line with average sales during the best two years of this expansion And, speaking of hurricanes, Florence probably knocked out sales for the eastern halves of North and South Carolina last month. Since the population of these two states combined is about16 million (or about 4.6% of the US population), figure that Florence subtracted a little over 2% from this September's sales. Adjusting for that would bring sales to 17.6 or 17.7 million annualized. And there's not a scintilla of a hint that this report is recessionary, when we take a longer term look at auto sales: 

Annual Vehicle Sales: On Pace to decline in 2018 --The BEA released their estimate of September vehicle sales. The BEA estimated sales of 17.36 million SAAR in September 2018 (Seasonally Adjusted Annual Rate), up 4.5% from the August sales rate, and down 4.0% from September 2017 (Sales in September 2017 were strong following the hurricanes). Through September, light vehicle sales are on pace to be down slightly in 2018 compared to 2017. This would make 2018 the sixth best year on record after 2016, 2015, 2000, 2017 and 2001. This graph shows annual light vehicle sales since 1976.   Source: BEA.Sales for 2018 are estimated based on the pace of sales during the first nine months.The second graph shows light vehicle sales since the BEA started keeping data in 1967.  My guess is vehicle sales will finish the year with sales lower than in 2017 (sales in late 2017 were boosted by buying following the hurricanes), and will probably be at or below 17 million for the year (the lowest since 2014).A small decline in sales this year isn't a concern - I think sales will move mostly sideways at near record levels. As I noted last year, this means the economic boost from increasing auto sales is over (from the bottom in 2009, auto sales boosted growth every year through 2016).

GM to recall more than 3.3 million vehicles in China - General Motors' joint venture in China, Shanghai GM, will recall more than 3.3 million Buick, Chevrolet and Cadillac vehicles from Oct. 20 because of a defect with the suspension system, China's market regulator said on Saturday.The recall includes cars produced between 2013 and 2018, the State Administration for Market Regulation said in a statement. GM will contact those affected and repair the vehicles free of charge, it said.

Truck Orders Pull Back From Record Highs – WSJ -- New figures suggest the boom in trucking business may have reached a plateau. Orders for big rigs eased back last month after two record-setting months, as fleets ordered 42,800 new Class 8 trucks, the heavy-duty trucks that haul goods long distances. Demand remains strong, with the orders up about 90% from last September, but the 19% drop from August’s record of 53,069 came as other measures of trucking demand signal this year’s robust expansion is leveling off. The orders have been growing this year as strong U.S. shipping demand that has fueled a rapid increase in freight rates and a scramble to find available trucks. But shipments on trucking spot markets declined 12% from August to September. And the American Trucking Associations’ for-hire truck tonnage index slipped 1.8% from July to August, while the 4.5% year-over-year gain in that measure was the smallest increase in 13 months. September’s new truck orders extended an already-record backlog at truck manufacturers to nearly 11 months, Mr. Vieth said. Truck builders are churning out about 1,300 units a day, which translates to an annualized rate of 320,000. Fleets have ordered more than 500,000 new trucks over the last 12 months, however.

Factory orders up 2.3% in August, vs. 2.1% increase expected - New orders for U.S.-made goods recorded their biggest increase in nearly a year in August, boosted by a surge in demand for aircraft, but signs of weakness in business spending on equipment suggested that the manufacturing sector could be slowing. Factory goods orders surged 2.3 percent, the largest increase since September 2017, the Commerce Department said on Thursday. Data for July was revised up to show factory orders falling 0.5 percent instead of the previously reported 0.8 percent drop. Economists polled by Reuters had forecast factory orders rebounding 2.1 percent in August. Orders increased 8.6 percent on a year-on-year basis in August. Manufacturing, which accounts for about 12 percent of the U.S. economy, is being supported by robust domestic demand, but momentum is expected to gradually slow amid worker shortages, an increasingly bitter trade war between the United States and China, a strong dollar and moderating global growth. An Institute for Supply Management survey of manufacturers published on Tuesday showed factory activity retreated from a 14-year high in September. In August, orders for transportation equipment vaulted 13.1 percent, the largest gain since June 2017. That reflected a 69.1 percent surge in the volatile orders for civilian aircraft and parts. Orders for defense aircraft and parts soared 17.0 percent in August. Transportation orders fell 3.6 percent in July. Orders for motor vehicles rose 1.0 percent in August after increasing 1.6 percent in July. There were increases in orders for primary metals, fabricated metal products and electronic equipment, appliances and components. But orders for machinery and computers and electronic products fell. The Commerce Department also said August orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, fell 0.9 percent instead of declining 0.5 percent as reported last month. Orders for these so-called core capital goods rose 1.5 percent in July. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, dropped 0.2 percent in August instead of rising 0.1 percent as reported last month. Core capital goods shipments increased 1.2 percent in July. Business spending on equipment slowed in the second quarter after growing robustly since the first quarter of 2017.

August Trade Deficit at $53.24B - --The U.S. International Trade in Goods and Services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992. The monthly reports include revisions that go back several months. This report details U.S. exports and imports of goods and services. Here is an excerpt from the latest report:August exports were $209.4 billion, $1.7 billion less than July exports. August imports were $262.7 billion, $1.5 billion more than July imports.The August increase in the goods and services deficit reflected an increase in the goods deficit of $3.6 billion to $76.7 billion and an increase in the services surplus of $0.4 billion to $23.5 billion. Today's headline number of -50.08B was better than the Investing.com forecast of -53.24B. This series tends to be extremely volatile, so we include a six-month moving average.

Trade Deficit increased to $53.2 Billion in August --Earlier from the Department of Commerce reported: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $53.2 billion in August, up $3.2 billion from $50.0 billion in July, revised.August exports were $209.4 billion, $1.7 billion less than July exports. August imports were $262.7 billion, $1.5 billion more than July imports.  Exports decreased and imports increased in August.Exports are 27% above the pre-recession peak and up 7% compared to August 2017; imports are 13% above the pre-recession peak, and up 10% compared to August 2017.In general, trade has been picking up.The second graph shows the U.S. trade deficit, with and without petroleum. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.Oil imports averaged $62.63 in August, down from $64.63 in July, and up from $44.13 in August 2017.The trade deficit with China increased to $38.6 billion in August, from $35.0 billion in August 2017.

America’s Trade Deficit Is Continuing to Grow Despite President Trump’s Tariffs — Record imports drove the U.S. trade deficit up for the third straight month in August. The deficit in the trade of goods with China and Mexico hit records. The Commerce Department said Friday that the trade gap — the difference between what America sells and what it buys abroad — rose to $53.2 billion in August from $50 billion in July. The August reading was the highest since February. Imports rose 0.6 percent to a record $262.7 billion on higher shipments of cellphones and autos; exports slid 0.8 percent to $209.4 billion. The U.S. ran a $76.7 billion deficit in the trade of goods such as machinery and cars. That gap was partially offset by a $23.5 billion surplus in the trade of services such as banking and tourism. President Donald Trump campaigned on a pledge to bring down U.S. trade deficits and has slapped taxes on imported steel, aluminum and on many Chinese products, drawing retaliatory tariffs from U.S. trading partners. Trump’s sanctions have yet to have an impact on the deficit, which is up 8.6 percent this year to $391.1 billion. The goods deficit with China rose 4.7 percent in August to a record $38.6 billion; and the gap with Mexico widened 56.9 percent to $8.7 billion, also a record. Trump sees the lopsided trade numbers as a sign of U.S. economic weakness and as the result of bad trade deals and abusive practices by U.S. trading partners, especially China. In addition to imposing import taxes, he has pulled out of an Asia-Pacific trade deal negotiated by the Obama administration and forced a rewrite of the North American Free Trade Agreement with Canada and Mexico. 

US Trade Deficit With China Hits New All Time High - The August trade deficit - a closed watched number in a time of trade wars - came in at $53.2BN, fractionally better than the $53.6BN expected, but 6.4% worse than last month's revised print of $50.0BN ($46.8BN excluding petroleum), and just shy of a new all time high. The deficit deteriorated as a result of less exports (-0.8%) and more imports (+0.6%). Broken down, August exports were $209.4 billion, $1.7 billion less than July exports, while July imports were $262.7 billion, $1.6 billion more than July. August imports of goods (excluding services) of $215.6 billion were the highest on recordThe August increase in the goods and services deficit reflected an increase in the goods deficit of $3.6 billion to $76.7 billion and an increase in the services surplus of $0.4 billion to $23.5 billion. Year-to-date, the goods and services deficit increased $31.0 billion, or 8.6 percent, from the same period in 2017. Exports increased $129.6 billion or 8.4 percent. Imports increased $160.6 billion or 8.4 percent.Some notable highlights from the report:

  • August exports of services ($70.5 billion) were the highest on record.
  • August imports of goods and services ($262.7 billion) were the highest on record.
  • August imports of goods ($215.6 billion) were the highest on record.

Digging into the numbers, even more records were revealed:

  • August imports of industrial supplies and materials ($49.7 billion) were the highest since December 2014 ($51.8 billion).
  • August imports of automotive vehicles, parts, and engines ($31.7 billion) were the highest on record.
  • August imports of other goods ($9.1 billion) were the highest on record.
  • August petroleum imports ($20.5 billion) were the highest since December 2014 ($23.6 billion).

But what was most important is the geographic distribution of trade, and this is where Trump will be displeased because in July the trade deficit with both China ($36.8 billion)... and while the trade deficit with the EU rebounded from last month's record high ($17.6 billion), to $15.7BN, the US also posted a record trade deficit with Mexico ($8.7BN) and Ireland ($4.3BN).

AAR: September Rail Carloads Up 2.6% YoY, Intermodal Up 6.2% YoY - From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.Weakness in a few commodity categories notwithstanding, rail traffic in September 2018 was consistent with the economy we have today in which fundamentals like industrial output and consumer spending are solid. Total U.S. carloads were up 2.6%, or 26,826 carloads, in September 2018 over September 2017, their seventh straight year-over-year increase. Intermodal volume in September was up 6.2%, their 20th straight monthly increase. The last two weeks of September 2018 were the two highest-volume U.S. intermodal weeks in history.This graph from the Rail Time Indicators report shows U.S. average weekly rail carloads (NSA).  Light blue is 2018. Rail carloads have been weak over the last decade due to the decline in coal shipments.U.S. railroads originated 1,066,826 carloads in September 2018, up 2.6%, or 26,826 carloads, over September 2017 and the seventh straight year-over-year monthly increase for total carloads. Carloads averaged 266,707 per week in September 2018, the most for September since 2015. The second graph is for intermodal traffic (using intermodal or shipping containers):September 2018 was another good month for intermodal, with total container and trailer originations totaling 1,127,385 — up 6.2%, or 65,801 units, over September 2017. Average weekly intermodal volume in September 2018 was 281,846 units, easily an all-time record for September. 2018 will be another record year for intermodal traffic.

ISM Manufacturing Index: Continued Strength in September -- Today the Institute for Supply Management published its monthly Manufacturing Report for September. The latest headline Purchasing Managers Index (PMI) was 59.8 percent, a decrease of 1.5 percent from 61.3 the previous month. Today's headline number was below the Investing.com forecast of 60.1 percent. Here is the key analysis from the report: “The September PMI®registered 59.8 percent, a decrease of 1.5 percentage points from the August reading of 61.3 percent. The New Orders Index registered 61.8 percent, a decrease of 3.3 percentage points from the August reading of 65.1 percent. The Production Index registered 63.9 percent, a 0.6 percentage point increase compared to the August reading of 63.3 percent. The Employment Index registered 58.8 percent, an increase of 0.3 percentage point from the August reading of 58.5 percent. The Supplier Deliveries Index registered 61.1 percent, a 3.4-percentage point decrease from the August reading of 64.5 percent. The Inventories Index registered 53.3 percent, a decrease of 2.1 percentage points from the August reading of 55.4 percent. The Prices Index registered 66.9 percent in September, a 5.2-percentage point decrease from the August reading of 72.1 percent, indicating higher raw materials prices for the 31st consecutive month." Here is the table of PMI components.

Trump's trade war isn't hurting manufacturing . . . yet ---The Trump Administration's trade war hasn't hurt manufacturing and production yet. At least that's the message from this morning's ISM report on manufacturing. According to the ISM: The September PMI®registered 59.8 percent, a decrease of 1.5 percentage points from the August reading of 61.3 percent. The New Orders Index registered 61.8 percent, a decrease of 3.3 percentage points from the August reading of 65.1 percent.Here is what the overall index and the leading new orders index look like since the turn of the Millennium (except for this morning's report) (h/t Briefing.com):   Here are the overall and new orders readings from the preceding five months: Both the overall index, and the new orders subindex, were in the range of earlier readings this year. Industrial production, particularly in the Oil patch, has been running hot this year.  There has been some evidence of "front-running," i.e., getting orders in before the tariffs take effect, in things especially like weekly railroad carloads. Going forward, what to watch for is new orders falling below their range from earlier this year, i.e., significantly below 60. But there is no evidence yet of tariffs hurting the sector so far.

Markit Manufacturing PMI: Ongoing Confidence in September - The September US Manufacturing Purchasing Managers' Index conducted by Markit came in at 55.6, up 0.9 from the 54.7 final August figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release: September data indicated a strong improvement in operating conditions across the U.S. manufacturing sector. The overall performance was driven by sharper rises in output and new orders, though new business from abroad continued to expand at only a marginal pace. A faster increase in new orders contributed to greater capacity pressures, with backlogs accumulating at the joint-fastest rate since September 2015. [Press Release] Here is a snapshot of the series since mid-2012.

ISM Non-Manufacturing: All-Time High - The Institute of Supply Management (ISM) has now released the September Non-Manufacturing Purchasing Managers' Index (PMI), also known as the ISM Services PMI. The headline Composite Index is at 61.6 percent, up 3.1 from 58.5 last month and an all-time high. Today's number came in above the Investing.com forecast of 58.1 percent.Here is the report summary: “The NMI registered 61.6 percent, which is 3.1 percentage points higher than the August reading of 58.5 percent. This represents continued growth in the non-manufacturing sector at a faster rate and is an all-time high for the NMI® since the inception of the composite index in 2008. The Non-Manufacturing Business Activity Index increased to 65.2 percent, 4.5 percentage points higher than the August reading of 60.7 percent, reflecting growth for the 110th consecutive month, at a faster rate in September. The New Orders Index registered 61.6 percent, 1.2 percentage points higher than the reading of 60.4 percent in August. The Employment Index increased 5.7 percentage points in September to 62.4 percent from the August reading of 56.7 percent. The Prices Index increased by 1.4 percentage points from the August reading of 62.8 percent to 64.2 percent, indicating that prices increased in September for the 31st consecutive month. According to the NMI®, 17 non-manufacturing industries reported growth. The non-manufacturing sector has had two consecutive months of strong growth since the ‘cooling off’ in July. Overall, respondents remain positive about business conditions and the current and future economy. Concerns remain about capacity, logistics and the uncertainty with global trade.”[Source] Unlike its much older kin, the ISM Manufacturing Series, there is relatively little history for ISM's Non-Manufacturing data, especially for the headline Composite Index, which dates from 2008. The chart below shows Non-Manufacturing Composite. We have only a single recession to gauge is behavior as a business cycle indicator.

Markit Services PMI: "Service sector activity growth dips to eight-month low" -- The September US Services Purchasing Managers' Index conducted by Markit came in at 53.5 percent, down 1.3 from the final August estimate of 54.8. The Investing.com consensus was for 52.9 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.Here is the opening from the latest press release: September data signaled a solid expansion of business activity across the U.S. service sector, albeit with the rate of growth easing to an eightmonth low. A downturn in business optimism about the year ahead to the weakest since December 2017 was also recorded. [Press Release] Here is a snapshot of the series since mid-2012.

US Services Economy Slumps To 8-Mo Lows Or Explodes To 21-Year High - Following mixed survey data on US Manufacturing, it was even more insanely divergent in September...

  • Markit US Services PMI dropped to 53.5 - lowest since January (better than expected 53.0 and flash 52.9)
  • ISM US Services explodes to 61.6 - the highest since August 1997
  • Markit US Manufacturing rose to 55.6 - highest since May
  • ISM US Manufacturing dropped to 59.8 - lowest since July

WTF!  Despite the drop in US Services PMI to 8 month lows, they report the pace of job growth at its fastest since June 2014 and prices charged surged to a record high.ISM Services exploded to its highest since 1997 (2nd highest on record) as Bloomberg notes the reading topped all estimates in Bloomberg's survey of economists, underscoring continued strength at service companies amid solid consumer demand underpinned by tax cuts and plentiful jobs. While ISM's headline non-factory index dates to 2008, unofficial calculations based on earlier readings of components show the index is the highest since reaching 62 in August 1997. The record employment reading is a positive signal before the official U.S. jobs report Friday.

  • Gauge of new orders advanced to 61.6 from 60.4
  • Measure of export orders rose to a five-month high of 61 while import gauge increased to 55, matching highest since early 2017
  • Gauge of supplier deliveries advanced to 57 and prices paid rose to 64.2, both at four-month high

However, commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:“Service sector business growth has eased considerably since peaking back in May, but remains relatively solid. Some of the slowdown can be traced to capacity constraints, with new business once again rising at a steeper rate than firms were able to boost output.“Firms are hiring in increasing numbers to expand capacity, with the employment index from the manufacturing and services surveys rising to a level indicative of a further non-farm payroll rise in excess of 200,000.“However, despite the increase in employment, many companies are clearly still struggling to meet demand, with strong inflows of new business causing backlogs of work to accumulate across the economy at one of the fastest rates seen since 2014.“The combination of reduced spare capacity and robust domestic demand is driving prices charged for goods and services higher at a rate not seen since the global financial crisis.”Wiliamson conclude: “Combined with the manufacturing results, the September survey adds to signs that the pace of economic growth cooled to the lowest since January but continued to run close to a 3% annualised rate over the third quarter as a whole.

Steel is surging under Trump. Will workers benefit? — When President Trump imposed tariffs on steel imports in June, “There was a lot of excitement here; there were a lot of us saying, ‘It’s about time someone is looking out for us,’ ” said Lattanzi, the mayor of this town of 7,000 and a safety inspector at the U.S. Steel plant in nearby West Mifflin. “A lot of people around here were saying, ‘We’re going to be okay.’ ” Four months later, Lattanzi is less optimistic. Production at U.S. Steel’s facilities have ramped up, and the company announced this summer that, thanks in part to the tariffs, its profits will surge. But in interviews in recent weeks, Lattanzi and other steelworkers said they’re no longer confident they’ll take part in the tariff bounty. “It’s been a little like watching the air going out of a balloon,” Lattanzi said. As he has pressed his steel tariffs, Trump has declared that the industry is “being rebuilt overnight.” But the question facing the rank and file is whether the controversial policy — which has raised the price of inputs for many American companies and alienated allies — will translate into higher wages and better benefits. While the impact of recent pacts — such as an agreement struck with Canada and Mexico last week to modernize the North American Free Trade Agreement — may take years to be fully understood, the steel industry provides a more immediate testing ground. The initial anticipation of the tariffs, followed by their actual imposition, led the price of the metal to soar. Now, facing less foreign competition, domestic steel companies’ profits are ballooning. And, crediting Trump, the companies are making plans to open up new steel plants and hire more workers. Yet the trickle-down effects are far harder to predict. Steel companies, while supportive of the tariffs, have experienced wild gyrations in their business in recent years and can’t be certain the lucrative new protections will stick around. So even in this time of sudden prosperity, some analysts say, they must be disciplined with worker pay and benefits.

Weekly Initial Unemployment Claims decreased to 207,000 - The DOL reported: In the week ending September 29, the advance figure for seasonally adjusted initial claims was 207,000, a decrease of 8,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 214,000 to 215,000. The 4-week moving average was 207,000, an increase of 500 from the previous week's revised average. The previous week's average was revised up by 250 from 206,250 to 206,500. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.

First Look at September: ADP Says 230K New Nonfarm Private Jobs --  The economic mover and shaker this week is Friday's employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, the most publicized being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository). Today we have the ADP September estimate of 230K new nonfarm private employment jobs, an increase over the ADP revised August figure of 168K.  The 230K estimate came in above the Investing.com consensus of 187K for the ADP number. The Investing.com forecast for the forthcoming BLS report is for 180K nonfarm private new jobs and the unemployment rate to drop to 3.8%. Their forecast for the September full nonfarm new jobs is (the PAYEMS number) is 185K.Here is an excerpt from today's ADP report press release:“The labor market continues to impress,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Both the goods and services sectors soared. The professional and business services industry and construction served as key engines of growth. They added almost half of all new jobs this month.”Mark Zandi, chief economist of Moody’s Analytics, said, “The job market continues to power forward. Employment gains are broad-based across industries and company sizes. At the current pace of job creation, unemployment will fall into the low 3%’s by this time next year.”Here is a visualization of the two series over the previous twelve months.

ADP Employment Rebounds To 7-Month Highs In September --  Following August's slump in ADP employment growth (weakest since Oct 2017), September was expected to show a rebound and it did notably, rising 230k (vs +184k exp) against a revised +168k in August. This is the strongest monthly job gain since February... “The labor market continues to impress,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Both the goods and services sectors soared. The professional and business services industry and construction served as key engines of growth. They added almost half of all new jobs this month.” Services jobs dominated once again with Medium-sized businesses adding the most jobs. Only Information Services sector jobs fell in September... Full Inforgraphic: Despite some volatility (and a big miss in August), the average ADP print since President Trump's election has been very close to the average BLS print... Mark Zandi, chief economist of Moody’s Analytics, said, “The job market continues to power forward. Employment gains are broad-based across industries and company sizes. At the current pace of job creation, unemployment will fall into the low 3%’s by this time next year.” This data does not include the effects of Florence.

September Employment Report: 134,000 Jobs Added, 3.7% Unemployment Rate -- From the BLSThe unemployment rate declined to 3.7 percent in September, and total nonfarm payroll employment increased by 134,000, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, in health care, and in transportation and warehousing. Hurricane Florence affected parts of the East Coast during the September reference periods for the establishment and household surveys. Response rates for the two surveys were within normal ranges.... The change in total nonfarm payroll employment for July was revised up from +147,000 to +165,000, and the change for August was revised up from +201,000 to +270,000. With these revisions, employment gains in July and August combined were 87,000 more than previously reported.... In September, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $27.24. Over the year, average hourly earnings have increased by 73 cents, or 2.8 percent. The first graph shows the monthly change in payroll jobs, ex-Census (meaning the impact of the decennial Census temporary hires and layoffs is removed - mostly in 2010 - to show the underlying payroll changes). Total payrolls increased by 134 thousand in September (private payrolls increased 121 thousand). Payrolls for July and August were revised up by a combined 87 thousand.  This graph shows the year-over-year change in total non-farm employment since 1968. In September the year-over-year change was 2.537 million jobs. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate was unchanged in September at 62.7%. This is the percentage of the working age population in the labor force. A large portion of the recent decline in the participation rate is due to demographics and long term trends. The Employment-Population ratio increased to 60.4% (black line). The fourth graph shows the unemployment rate. The unemployment rate declined in September to 3.7%. This was below consensus expectations of 180,000 jobs, however the previous two months combined were revised up by 87,000. A solid report.

September jobs report: a mixed report with different implications in different timeframes  -- HEADLINES:

  • +134,000 jobs added
  • U3 unemployment rate declined -0.2% from 3.9% to 3.7%
  • U6 underemployment rate rose from 7.4% to 7.5%
  • Not in Labor Force, but Want a Job Now:  declined -152,000 from 5.379 million to 5.237 million   
  • Part time for economic reasons: rose +263,000 from 4.379 million to 4.642 million 
  • Employment/population ratio ages 25-54: unchanged at 79.3% 
  • Average Weekly Earnings for Production and Nonsupervisory Personnel: rose $.07 from  $22.74 to $22.81, up +2.7% YoY.  (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)
  • Manufacturing jobs rose +18,000 for an average of +23,000/month in the past year vs. the last seven years of Obama's presidency in which an average of 10,300 manufacturing jobs were added each month.   
  • Coal mining jobs fell -300 for an average of -16/month vs. the last seven years of Obama's presidency in which an average of -300 jobs were lost each month
  • July was revised upward by 18,000. August was also revised upward by 69,000, for a net change of 87,000.  
  • the average manufacturing workweek declined by -0.1 hours to 40.8 hours.  This is one of the 10 components of the LEI.
  • construction jobs rose by +23,000. YoY construction jobs are up +315,000. 
  • temporary jobs rose by +10,600. 
  • the number of people unemployed for 5 weeks or less decreased by -143,000 from 2,208,000 to 2,065,000.  The post-recession low was set four months ago at 2,034,000.
  • Overtime declined -0.1 hour from 3.5 hours to 3.4 hours.
  • Professional and business employment (generally higher-paying jobs) increased by +54,000 and  is up +560,000 YoY.
  • the index of aggregate hours worked for non-managerial workers rose by 0.2%.
  • the index of aggregate payrolls for non-managerial workers rose by 0.4%.    

SUMMARY: This was a mixed report with different implications over different time frames: good in the present and the near term  future, but consistent with weakness to come in a longer timeframe.  The relatively poor monthly increased was balanced by large upward revisions of the last two months, and continued good progress in aggregate hours and payrolls.  The good YoY establishment number was balanced by the poor YoY household number.

Unemployment Falls to Lowest Level Since 1969 - Dean Baker - The Bureau of Labor Statistics (BLS) reported the unemployment rate fell to 3.7 percent in September, the lowest rate since it hit 3.5 percent in December of 1969. BLS reported some slowing of job growth for the month as the establishment survey showed a gain of 134,000 jobs. This figure may have been somewhat reduced by the hurricane hitting the Carolinas. The job growth numbers for July and August were revised up by 87,000, bringing the three-month average to 190,000.Among the big gainers in this report were white women (20 years old and older), who had a 0.4 percentage point decline in their unemployment rate to 2.8 percent, the lowest on record. Black teens had a drop of 0.8 percentage points in their unemployment rate to 19.3 percent, also the lowest on record.By education level, less-educated workers appear to have been the biggest gainers. The unemployment rate for workers with less than a high school degree or just a high school degree fell by 0.2 percentage points, while the unemployment rate for workers with some college fell by 0.3 percentage points. The unemployment rate for college grads fell by just 0.1 percentage points. College grads, unlike those with generally less education, are one of the few groups with an unemployment rate that is higher than its prerecession level.Not all of the news in the household survey was positive. While the employment rate (EPOP) for prime-age women (ages 25 to 54) edged up slightly to 72.9 percent, tying its recovery high hit in July, the EPOP for prime-age men dropped 0.1 percentage points to 85.9 percent, 0.5 percentage points below the peak reached in February.There was also a rise in involuntary part-time employment of 263,000, while voluntary part-time fell by 317,000. However, these numbers are erratic and the rise in involuntary part-time may be partly due to the hurricane.Another disturbing item in the report was a drop of 1.8 percentage points in the share of unemployment due to voluntary job leavers. The 12.2 percent September rate is the lowest since February. The duration measures of unemployment also all showed increases in the month, with average duration increasing by 1.4 weeks to 24.0 weeks, the longest period since March.On the establishment side, job growth was strong in the goods producing sectors but very weak in the service sector. Construction added 23,000 jobs in September, a bit less than its average of 26,300 over the last year. Manufacturing added 18,000 jobs, while mining and logging added 5,000 jobs. Coal mining, however, lost 300 jobs. Employment in the coal industry is now 200 jobs below its year-ago levels.While employment growth was strong in these sectors, it was accompanied by a drop in hours. As a result, the index of aggregate hours fell in both construction and manufacturing, as did average weekly pay. On the service side, retail lost 20,000 jobs in September, while restaurants lost 18,200. Both drops could have been affected by the hurricane, which likely disrupted hiring in these high turnover sectors. Health care added 25,700 jobs for the month, almost exactly in line with its average for the last year. State education added 21,200, an extraordinary gain, since employment had been virtually flat over the prior year, although this may be partly a problem in seasonal adjustment. 

September labor market continues strong (7 graphs) September employment increased by 134,000 and there were significant upward revisions to July and August (18,000 in July and 69,000 in August) according to the establishment data from the BLS. The retail trade and leisure and hospitality sectors experienced declines, -20,000 and -17,000, respectively, but those were the only two with declines to speak of. While retail trade employment has largely rebounded since the depths of the Great Recession, growth has stalled over the past year or so while leisure and hospitality has been climbing at a much faster pace. In 1990 retail trade employment was about 45% higher than leisure and hospitality but has since been surpassed by leisure and hospitality. Average weekly hours remained at 34.5 for the third consecutive month. Average hourly earnings moved up slightly from $27.16 to $27.74. The number of unemployed persons fell by 270,000, the labor force increased 150,000, leading to a fall in the unemployment rate from 3.85% to 3.68%. The labor force participation rate remains low at 62.7, for reasons we have speculated about before and the employment population ratio increased slightly from 60.3 to 60.4. While many had predicted a weak employment outlook due to Florence, the overall outcome was relatively strong. The Fed will continue its planned course of action to raise the interest rate one more time this year.

U.S. Unemployment Rate Falls to Lowest Level Since 1969 —Unemployment in September hit the lowest level since the Vietnam War, with little indication it is going to shoot back up in the near term.  The jobless rate fell to 3.7%, the lowest since December 1969, the Labor Department said Friday. Employers added 134,000 jobs to payrolls, a record 96th straight month of gains. Wages rose 2.8% from a year earlier, a solid if still unspectacular rise. “This is the best job market in a generation or more,” said Andrew Chamberlain, chief economist at recruiting site Glassdoor.  Unemployment rates below 4% are extremely rare in 70 years of modern record-keeping. The two longest sustained periods came during the Korean and Vietnam Wars, when the combination of strong growth and the enlistment of young males from the civilian labor force helped to largely wring unemployment out of the economy. In 1953, the year the Korean War ended, the jobless rate got as low as 2.5%. In the 1960s, it stayed below 4% for nearly four years, until a bout of rising inflation and interest rates led to recession and rising joblessness. The Vietnam War drafted thousands of young men out of the civilian labor force, many with lower levels of education, who might otherwise have been counted as unemployed. At the same time, while the share of women working was growing, less than half had jobs or sought employment.  Today, a different factor is at play: retiring baby boomers leave fewer people to work. Both demographic factors mean a smaller share of the population is available to work in comparison to other boom times, such as the 1990s.

Payrolls Miss Due To Hurricane But Revisions Surge; Unemployment At 48 Year Low -- The BLS reported that in September only 134K jobs were added, well below the 185K expected (and certainly far lower than the 500K print implied by the latest ISM nonmfg report). This was the lowest print going back to March 2017 when only 50K jobs were added.However before traders panic, note that this number was impacted by the Hurricane: the BLS noted that 299,000 people were not at work due to bad weather, which is over 200K higher than the 85K average for September.  Another 1,489K workers who usually work full-time could only work part-time due to the weather last month. This means that next month, the September job report will be revised sharply higher.Meanwhile, offsetting the September weakness was the revision to the August jobs report, which was pushed higher from 201K to 270K, while July was revised from 147K to 165K. With these revisions, employment gains in July and August combined were 87,000 more than previously reported. Even as payrolls missed, the unemployment rate ticked lower again, sliding from 3.9% to 3.7%, below the 3.8% consensus estimate, and the lowest print in 48 years. Also of note: the Unemployment rate has now hit the Fed's year end projection of 3.7%. The central bank recently estimated that unemployment would fall to 3.7% in the fourth quarter, which is where we are now, then decline to 3.5% in 2019 and remain there in 2020.  The more important average hourly earnings print came in line, with wages rising 0.3% on the month, and 2.8% on the year, both in line with expectations. According to Bloomberg, "the tick down in average hourly earnings suggests that wage pressures remain modest, a sign that firming inflationary pressures are likely still a way off."Average hourly earnings of private-sector production and nonsupervisory employees increased by 6 cents to $22.81 in September.The average workweek for all employees on private nonfarm payrolls remained unchanged at 34.5 hours in September. In manufacturing, the workweek edged down by 0.1 hour to 40.8 hours, and overtime edged down by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.Other details from the report:

  • Broad U-6 measure of unemployment rose to 7.5% from 7.4%
  • Manufacturing payrolls added 18,000 (est. 15,000); construction added 23,000; government employment rose 13,000
  • Participation rate held at 62.7%
  • Monthly job gains averaged 190,000 over past three months
  • In September, job gains occurred in professional and business services, in health care, and in transportation and warehousing.
  • Employment in professional and business services increased by 54,000 in September and has risen by 560,000 over the year.
  • Health care employment rose by 26,000 in September. Hospitals added 12,000 jobs, and employment in ambulatory health care services continued to trend up (+10,000). Over the year, health care employment has increased by 302,000..

Unemployment hits a 49 year low as jobs/wages stay on solid, hot-but-not-too-hot, trend. by Jared Bernstein -  The nation’s payrolls grew by 134,000 jobs last month and the unemployment rate fell to a 49-year low of 3.7 percent. While the jobs number came in well below expectations, that should not be considered bad news. First, Hurricane Florence may have slightly dampened monthly payrolls (see below discussion of the impact of hurricanes on the jobs data). But more importantly, upward revisions for the prior two months’ data reveal a trend over the past three months of 190,000 jobs per month, a solid pace of job gains for this stage of the labor market recovery. Hourly pay was up 2.8 percent, just slightly off last month’s cyclical high of 2.9 percent. The decline in unemployment is “real,” meaning it occurred through fewer unemployed persons as opposed to people leaving the labor market. The black unemployment rate, at 6 percent, is only slightly higher than its all-time low of 5.9 percent earlier this year. At its peak in the depths of the last recession, black joblessness was almost 17 percent, meaning it is now down about 11 percentage points, close to twice the decline of the overall rate (about 6 points) and a critical reminder of the disproportionate benefits of full employment to less-advantaged workers.To get a cleaner take on the underlying pace of job gains, our monthly smoother takes averages of the number of jobs added over 3, 6, and 12-month periods. In all three cases, the bars are hovering around 200,000, a very solid pace of job gains for year nine of the economic expansion.In September, as noted, hourly wages for all private-sector workers grew 2.8 percent on a year-over-year basis, and 2.7 percent for lower-paid workers (the 80 percent of the workforce that’s in blue-collar or non-managerial jobs). The figures below show that the trends for both groups have slowed gained some speed as unemployment has come down. Such acceleration, which, it must be underscored, is occurring at a smooth at not at all unusually quick pace (compare it to the speed of wage growth decline in the downturn), has been long-awaited and should be welcomed, not feared as inflationary. As a figure below shows, there is no evidence that wage growth is bleeding into higher (core) inflation. Turning to the sectoral jobs data, there’s perhaps some Florence effects in the 17,000 loss of leisure/hospitality jobs (which include hotels, waitpersons, food prep) and the 20,000 jobs lost in retail trade (“brick and mortar” stores). But this a relatively small losses in noisy, monthly data, and the BLS series on those who missed work due to weather last month showed a relatively small jump, especially relative to much larger storms in the past. One data point in the report that is less positive is the flat, recent trend in the employment rate for prime age workers (25-54), a measure of labor demand and a source of “room-t0-run” claims made about the current labor market. That is, as the figure shows, the prime-age employment rate, while still not quite back to its prior peak before the recession, has been steadily climbing back, signal that the strong labor market was pulling more workers in from the sidelines, and suggesting greater labor market capacity than most economists presumed.

Here Is The Reason For Today's Big Jobs Miss - While on the surface, today's jobs report was a disappointment due to the September payrolls miss with only 134K jobs added in a month when consensus expected 185K new payrolls, a cursory look between the lines reveals the reason for this miss, and it had to do with the one non-recurring factor we highlighted previously: the impact of Hurricane Florence, which affected one job category in particular.As the BLS noted, employment in leisure and hospitality declined by -17,000 in September, whereas prior to this month, employment in the industry had been on a modest upward trend. And as the BLS explicitly states, "some of the weakness in this industry in September may reflect the impact of Hurricane Florence." This is shown visually below:Suggesting that it was indeed the weather that adversely affected September payrolls, the BLS also noted that 299,000 people were not at work due to bad weather, which is over 210K higher than the 85K average for September.  Another 1,489K workers who usually work full-time could only work part-time due to the weather last month.And confirming this, Ian Shepherdson from Pantheon Macro said that "the headline payroll number is a weather story. The 121K private payroll gain undershot the 230K ADP reading, as it always does in months affected by severe weather. ADP counts names on payroll lists, regardless of whether people were paid, but the official data only include people who were paid something - anything - in the survey period."This means that next month, the September job report will be revised sharply higher, likely coming in line with initial expectations.Also offsetting the headline September weakness was the revision to the August jobs report, which was nudged higher from 201K to 270K, while July was revised from 147K to 165K. With these revisions, employment gains in July and August combined were 87,000 more than previously reported.Finally, confirming that wage gains remain on a solid trend, we found that both monthly and annual hourly earnings rose by 0.3% and 2.8%, respectively, in line with both expectations and the recent upward trend in higher wages. To summarize: stripping away the weather distortions, the jobs report was not only not "weak", but one can make a case that it was somewhat strong.

Where The Jobs Were In June- Who's Hiring And Who Isn't -  As noted earlier, September was a hurricane-affected month for payrolls, resulting in lower than expected jobs across several categories, among which Leisure and Hospitality jobs were the hardest hit.  However, a deeper dive reveals that other industries were also severely impacted, with the 2nd worst September in contraction in Retail (-20K), Telecom (-3K), Education (-12K), Child Care (-4K) and Food Services (-23K).This, according to Southbay Research, was remarkable because while last year's layoffs surged 100K above trend due to 2 major Hurricanes that displaced millions and destroyed 10s of thousands of homes, with jobless claims across Texas, Florida and Puerto Rico soaring by 100K+, this year, one hurricane came but was very mild and had minimal impact, with Initial Jobless Claims rose a combined 12K. Yet somehow, "the impact was the same."Here's one example: Food Services. As Southbay notes, somehow a mild storm led to layoffs at a scale only seen last year when 2 major Hurricanes shut down Puerto Rico and Florida and pummeled Texas. One note here is that if one were to revise last month's data to incorporate the "missing" jobs, the impact on hourly earnings would be adverse as these are mostly lower paying jobs, and while the result would have been higher jobs, it would have also pushed down on hourly earnings. Odd BLS estimates of layoffs aside, we know the following:

  • Employment in professional and business services increased by 54,000.
  • Health care employment rose by 26,000 as hospitals added 12,000 jobs, and employment in ambulatory health care services continued to trend up (+10,000).
  • Employment in transportation and warehousing rose by 24,000. Job gains occurred in warehousing and storage (+8,000) and in couriers and messengers (+5,000).
  • Construction employment continued to trend up in September (+23,000).
  • Employment in manufacturing continued to trend up in September (+18,000)
  • Employment in mining, employment in support activities for mining rose by 6,000

Comments on September Employment Report --The headline jobs number at 134,000 for September was below consensus expectations of 180 thousand, however the previously two months were revised up by a combined 87 thousand.  The unemployment rate fell to the lowest since December 1969.  Overall this was a solid report.
Earlier: September Employment Report: 134,000 Jobs Added, 3.7% Unemployment RateIn September, the year-over-year employment change was 2.537 million jobs. This is solid year-over-year growth.Wage growth was above expectations in September. From the BLS: "In September, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $27.24. Over the year, average hourly earnings have increased by 73 cents, or 2.8 percent." The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees.  Nominal wage growth was at 2.8% YoY in September.Wage growth has generally been trending up. Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.The 25 to 54 participation rate decreased in September to 81.8%, and the 25 to 54 employment population ratio was unchanged at 79.3%. . From the BLS report:"The number of persons employed part time for economic reasons (sometimes referred to as involuntary part- time workers) increased by 263,000 to 4.6 million in September. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."The number of persons working part time for economic reasons has been generally trending down, however the number increased in September. The number working part time for economic reasons suggests there is still a little slack in the labor market. These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.5% in September. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.384 million workers who have been unemployed for more than 26 weeks and still want a job. This was up from 1.332 million in August. The headline jobs number was below expectations, however the previous two months were revised up.The headline unemployment rate declined to 3.7%,  the lowest rate since 1969.  And wage growth was slightly above expectations. Overall, this was a solid report.   For the first nine months of 2018, job growth has been solid, averaging 208 thousand per month.

1.6 million US workers rely on gig apps and websites for income As part of its monthly labor review for September, the US Department of Labor released a report on workers in the “gig economy,” such as those who worked for Uber, GrubHub, or TaskRabbit. It revealed that this work now accounts for at least 1 percent of total employment in the country. The statistics are a little old, as the Bureau of Labor Statistics is using numbers from May 2017. But given the rise in popularity of Airbnb, Uber, and the like in just the last few months, it’s likely the number is far higher now. The Bureau’s statistics show that these “electronically mediated workers” are slightly more likely to be men than women, and the vast majority are between the ages of 25 and 54 — in fact, the age distribution between the decades in that category is almost perfectly even. Just over half of them did in-person work (such as with Uber), while the rest did their work entirely online. Unfortunately, the rise in the number of workers means there’s often less money to go around.  Last month, a report from JP Morgan Chase Institute found the average monthly payment of gig drivers had dropped from $1,469 in 2013 to $783 in 2017.Meanwhile, as news looks grim for gig workers, at least one tech company has listened to its critics: Amazon revealed today it was raising its minimum wage for all of its 350,000 American workers to $15 per hour. This is in response to intense pressure from media and lawmakers on the pitiful pay and working conditions of the average company worker, especially in comparison with the obscene personal wealth of CEO Jeff Bezos. Most notably, Senator Bernie Sanders last month introduced a so-called “BEZOS bill,” which would have taxed major corporations for every dollar their employees received in food stamps. In response to Amazon’s move to raise their wage, Sen. Sanders praised Amazon and called upon other corporations to do the same.

Working While Homeless- A Tough Job For Thousands Of Californians - One of the first steps to helping people out of homelessness is getting them a steady job. But what about the thousands of homeless Californians who are already working?Pinning down exactly how many Californians are working while homeless is not easy. Many try to hide it. But recent estimates suggest that it's not uncommon.A 2017 survey of the homeless population in San Francisco found 13 percent of respondents reporting part or full-time employment. That's in a city with an estimated 7,499 people experiencing homelessness. This year, an estimated 10 percent of the 4,990 people living unsheltered in San Diego said they were currently working. Los Angeles County has more than 50,000 residents who are homeless. Eight percent of adults surveyed in 2017 said they were working to some degree, mostly in part-time, seasonal or temporary work. Among homeless adults with children, 27 percent said they were working either part or full-time.  That includes parents like Nereida, a single mother of two young daughters who works full time at a Los Angeles optometrist's office. Six days a week, she finishes her shift with a few appointment reminder calls. Then she turns off the display lights in the eyeglass cases. She sets the alarm, locks the doors and walks out to her car. Some weeks, that's where she spends the night.At $17 an hour, she earns more than minimum wage. But even if she did manage to find an apartment, the city's median rent for a two-bedroom — estimated at $1,752 by listings website Apartment List — would claim more than half of her income. "You have to really focus on work when you're at work, and try to put on a face that everything's OK," Nereida said. "Once you're done, you break down. Because you don't have a place to go." 

Tax Cuts Provide Limited Boost to Workers’ Wages - Wall Street Journal - U.S. companies are putting savings from the corporate tax cut to use, but only a fraction of it is flowing to employees’ wallets, new data show. In the months after the December tax-code overhaul that lowered the corporate rate to 21% from 35%, dozens of companies such as Walmart Inc. and FedEx Corp. announced one-time bonuses and wage increases for hourly workers. Those moves earned praise from the Trump administration as evidence the cuts were quickly reaching many Americans.Now, various surveys indicate that most companies aren’t passing the money directly to employees. A new survey of 152 companies by executive-recruitment firm Korn Ferry International revealed 14% were putting part of their tax-cut savings into base salary increases. A poll of 1,500 companies by consulting firm Mercer LLC showed 4% are redirecting tax savings to budgets for bigger paychecks in the coming year. And in a survey of more than 1,000 companies published by human-resources consulting firm Aon PLC, 99% said the tax cuts weren’t prompting them to increase minimum wages.  Companies are reluctant to grant higher-than-usual pay raises in part because it adds to their fixed labor costs, compensation experts said. “They’re doing everything they can to avoid seeing their permanent payroll go up,” said Bill Ravenscroft, senior vice president at Adecco Staffing, which recruits workers for companies. On Tuesday, Amazon.com Inc. said it was raising the minimum wage it pays all U.S. workers to $15 an hour. The move comes as the company has faced increased criticism about pay and benefits for its warehouse workers. Still, companies have been using the money for other investments. About a third of the companies surveyed by Korn Ferry said they would direct tax-cut savings toward such programs as worker training. Companies’ reluctance to funnel more tax-related savings toward lasting salary increases is one reason why U.S. workers have seen little real wage growth this year, despite the strong economy, according to economists and compensation specialists.  With a 3.9% unemployment rate, U.S. employers are grappling with one of the tightest labor markets in decades. Labor Department data show private-sector hourly wages rose 2.9% in August compared with a year earlier, but the consumer-goods prices have risen at nearly the same rate, eating most of those gains.

Bezos Bows To Pressure On $15/hr. Keep Pressuring Him. Keep Pressuring Them All. - Caitlin Johnstone --In a move that is being widely attributed to pressure from activists and Bernie Sanders’ famous Stop BEZOS Act, Amazon has announced a pay increase for all workers inside the US to $15 an hour as of next month. Which is of course a good thing. It is a good thing that the aggressively anti-union Amazon, which is owned and operated by the planet’s wealthiest man Jeff Bezos, is finally taking a step in the direction of treating its workers like human beings after the sound of sharpening guillotine blades began to echo off the walls of its warehouses. But that isn’t something people should be grateful for, let alone something that causes them to ease up the intensity of the fight against plutocracy. You don’t thank a man for ceasing to punch you in the face, especially not while he’s still stabbing you in the chest.  Institute for Local Self-Reliance co-director Stacy Mitchell has as usual provided some useful insights into this new development in Bezos’ master plan, pointing out how Amazon is now slashing stock options for some workers, how Amazon workers in Australia already make 18.26 USD per hour, how this concession is largely being made out of fear of an antitrust case which could break up the massive corporation, how this won’t pose much of a challenge for Amazon as it is steadily increasing its automation of jobs, and how this is ultimately just a small band-aid on a gaping wound because no company should ever have this much power. Mitchell described last year how Amazon is not merely working to kill off competition and dominate online product sales, but is actively working to control the underlying infrastructure of the economy itself. In an article titled “Bezos’ Decision to Raise Wages is Largely a Machiavellian Distraction“, political blogger Michael Krieger observes that Bezos is also calling for a nationwide wage hike, which Amazon would be far more capable of absorbing than its competitors. Amazon can move into automation at a speed other companies won’t be able to afford to keep up with, and can thereby use this maneuver to shore up its domination even further. “You really think Bezos is advocating for a national minimum wage increase because he’s suddenly a Bernie Sanders populist?” Krieger writes. “Don’t be stupid.”

Bernie Sanders refers to Amazon’s $15-an-hour wage as ‘shot heard round the world’ - Sen. Bernie Sanders has been one of Amazon.com Inc.’s staunchest critics. That’s why a rare instance of praise from the Vermont senator and 2016 presidential candidate is notable, following the U.S.’s second largest employer’s announcement on Tuesday that it is raising the minimum wage for all U.S. workers to $15 an hour:‘What Mr. Bezos has done today is not only enormously important for Amazon’s hundreds of thousands of employees, it could well be, and I think it will be, a shot heard around the world.’Bernie Sanders“Today, I want to give credit where credit is due,” Sanders said following Amazon’s announcement.Back in early September, Sanders rolled out legislation that would tax corporations for the federal benefits their employees receive, named Stop Bad Employers by Zeroing Out Subsidies, and nicknamed the BEZOS Act, which was a barely veiled reference to Amazon’s AMZN, +0.10% multibillionaire CEO Jeff Bezos, whom the 77-year-old senator had accused of not paying his workers a living wage.  Amazon’s shares have gained 72% this year, compared with a 9.4% rise by the broad-market S&P 500 index. Amazon’s outsized gains this year have helped to make Bezos significantly wealthier; he now boasts a net worth of $163.4 billion, according to Forbes data. Meanwhile, Amazon has been pilloried for the working conditions at some of its fulfillment centers.

What’s behind Amazon’s plan to raise its minimum wage to $15 an hour? – With great fanfare on Tuesday, Amazon announced it will raise the minimum wage it pays to 250,000 workers and 100,000 seasonal temps to $15 an hour. In the United Kingdom, the company is raising the wages of 40,000 permanent and temporary workers to £10.50 (US $13.69) an hour in London and £9.50 (US $12.39) across the rest of the country.The wage increases, which will go into effect for Amazon and Whole Foods workers on November 1, are a response to the deep opposition of Amazon workers to the poverty level wages and brutal working conditions at the giant retail and logistics company. The growing militancy of Amazon workers is, moreover, part of a wider sentiment among workers in the US and internationally, who after a decade of declining real wages since the 2008 financial crash are determined to fight for substantial improvements.The pay increase, however, is minimal and will do little to improve the living standards of Amazon workers. The median Amazon worker was paid $28,446 last year, according to company filings, which comes out to about $13.68 an hour. An increase to $15.00 an hour—$1.32 more for the median worker—would amount to a yearly wage of $30,000. This is 120 percent of the official poverty rate for a family of four and will do little to help workers keep their heads above water, particularly in urban centers with higher costs of living.Internal company documents available to Amazon workers make clear that the raise will be accompanied by the elimination of various incentive bonuses and other programs, which workers rely on to help with bills and car payments. This includes all or parts of the Variable Compensation Plan (VCP) and MyReward bonuses based on attendance and site performance goals. Also cut is the limited stock vesting program, known as the Restricted Stock Units (RSU) plan.“We are phasing out the incentive pay component and the $15 will be simple minimum with no targets required,” one message from the company to workers said. Another read, “We will be phasing out the RSU grant program for stock which would vest in 2020 and 2021 … replacing it with a direct stock purchase plan before the end of 2019.” According to Amazon, full-time workers at its US fulfillment centers already make an average hourly wage of over $15 an hour, including stock and incentive bonuses. It is not clear, therefore, if workers will see any net benefit from the much-promoted raise.

Amazon eliminates monthly bonuses and stock grants after minimum wage increase  - Amazon garnered praise for raising the minimum wage for its hourly workers to $15 yesterday, but the widely-publicized move also came at the expense of monthly bonuses and stock options. The company explained its decision to shift to a new stock purchase program in the announcement blog post yesterday, citing that hourly employees preferred the “predictability and immediacy of cash to RSUs,” or restricted stock units, but the post doesn’t mention the loss of monthly incentives, which Bloomberg reported earlier today.Several Amazon warehouse employees have criticized the move, stating they would actually be losing thousands in incentive pay. Currently, warehouse workers get two shares of Amazon stock when they’re hired ($1,952.76 per share as of writing), and an additional stock option each year. After the changes take effect, the RSU program will be phased out for stocks that vest in 2020 and 2021, and it will be replaced with a direct stock purchase plan by the end of next year.An Amazon warehouse worker told The Verge via email that the news was devastating to fulfillment employees, many of whom depend on their RSU and VCP (variable compensation pay, a performance-based monthly bonus program) incentives on top of their hourly wages. VCP incentives, which are dependent on good attendance and hitting productivity targets, could get Amazon workers an 8 percent monthly bonus, and a 16 percent bonus during the peak November and December seasons. Amazon workers have been responding to Sen. Bernie Sanders’ tweet praising the minimum wage raise, citing that on November 1st, many workers will have their paychecks cut, not raised.

Amazon’s wage hike is ‘not enough,’ says Hill.TV’s Krystal Ball  -- Well look at that! Amazon has decided to go ahead and bump starting pay for all their workers up to $15 per hour. That includes workers at their warehouses, at Whole Foods and even the seasonal workers that they heavily depend on. This is obviously fabulous news for those workers who deserve to earn enough money that they don’t have to rely on public assistance just to keep body and soul together. A couple thoughts here: First of all, Congressman Ro Khanna and Senator Bernie Sandersdeserve huge credit for pressing this issue. Their bill, dubbed the Stop BEZOS Act raised public awareness of the low pay for Amazon workers and the way that taxpayers subsidize large corporations when workers fall below the poverty line. Critics, including many I should say on the left, told them this bill was unworkable and not practical. Amazon’s decision to move forward with this wage lift is essentially an admission that Sanders and Khanna were onto something and made an important and resonant point.Second, major kudos to the workers who have been organizing behind the fight for 15 for years now. They set the goal posts at $15 per hour and would not be moved even though 15 is more than double the current minimum wage. Because of the size of Amazon, their wage hike is a win for all warehouse and service workers. Amazon has just put all companies that compete for this pool of workers on notice that they’d better up their game. And for all my friends on the right but especially for those who call themselves Democrats who have been crying about how $15 is just too high and unrealistic, Amazon’s move is powerful proof to the contrary. Finally, it’s not enough. What Amazon workers need now is a union. Serious concerns about worker safety and fair treatment have been reported at Amazon warehouses. Workers have fallen ill from extreme heat, had to urinate in bottles because they don’t have enough time to use facilities, and been unfairly terminated.

The fraud of Amazon’s $15 wage -- Amazon’s decision to raise minimum pay has been hailed by the corporate media and the political establishment as a show of generosity that proves the corporate aristocracy and working class can live in harmony.  In reality, the paltry wage hike is part of a staged publicity operation to boost Amazon’s image and pacify a growing movement among workers demanding higher wages and an end to sweatshop working conditions.  Leaders of both parties hailed Amazon, with Trump White House economic advisor Larry Kudlow calling Bezos a “good businessman” and a “smart guy” for the move, which brings wages to $15 an hour in the US and to between £9.50 ($12.39) and £10.50 ($13.69) in the United Kingdom. Ex-Hillary Clinton advisor John Podesta tweeted, “Thank you Senator Sanders,” praising Democratic Senator Bernie Sanders’ role in orchestrating the wage increase. The fact the New York Times, Washington Post, Hillary Clinton, Donald Trump, and Jeff Bezos are united in enthusiasm should give workers cause for concern. Financial analysts and investors understand that Amazon’s raise is actually a cost-saving measure directed ultimately against the workers themselves. The Wall Street Journal noted that Amazon will make up for the cost of the raises by driving-up productivity—i.e., enforcing speedups and demanding higher rates.  Amazon “will not end up spending more in wages, they will end up hiring less people,” Anthony Chukumba of Loop Capital Markets praised the move as a “public relations victory” that will reduce widespread demands to tax the company or enforce strenuous workplace safety regulations against it. The Wall Street Journal admitted, “for Amazon, paying up now may lessen the chance of regulations that pose a bigger cost down the road.”

Democrats, take note: If you want to raise wages, put pressure on employers - Matt Bruenig - When Amazon announced Tuesday that it was raising all of its employees’ wages to at least $15 per hour, it helped prove a point about labor markets that has fallen out of favor in recent years: Wage levels are determined as much by social forces as they are by market forces. Amazon’s decision came on the heels of widespread criticism of its pay practices from labor activists and lawmakers, such as Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Calif.). Sanders and Khanna had even introduced a bill, the Stop BEZOS Act, that put intense public pressure on Amazon chief executive Jeffrey P. Bezos by threatening to impose devastating — if strangely designed — penalties on the company and other low-wage employers. Bezos (who owns The Post) made clear in statements that social forces were the ultimate factor that pushed the company to raise its wages, not any particular market imperative. The fact that the pay increase took the form of establishing a $15 floor, as activists have demanded, rather than general across-the-board wage bumps as is more typical for businesses, suggests that these statements are sincere. What this shows is that wage-setting is driven not by invisible hands, but by the decisions of real people who can be affected by collective-pressure tactics and other forms of social power. This is an important lesson for Democrats as they deliberate on how best to boost the wages of the nation’s working class. For the past couple of decades, Democrats have often focused on education and skills as the solution to working-class woes. The idea was that, since workers with more education get paid higher wages, increasing the number of workers with high educations will mechanically improve overall wage levels. Instead, we saw big gains in educational attainment but also persistent wage stagnation. But the more fruitful approach, as Amazon’s wage hike suggests, is not trying to smooth out labor-market frictions on the hope that job-switching will bring up wages, but rather putting pressure on employers themselves. This calls for a new strategy that includes reforming labor laws to promote mass unionization, giving workers seats on corporate boards and establishing industry-wide wage schedules through, for example, wage boards. These policies give workers the collective power to increase wage levels and reduce wage differences where they already work rather than trying to use indirect market mechanisms to achieve the same result.

New Study: Median Uber Driver Earnings $9.73/Hour After Conservative Assumption for Costs Yves Smith - A new study by Ridester, based on a survey of over 2600 drivers, comes up with findings that are consistent with, and if anything, a bit grimmer than earlier work.A key difference between Ridester’s study and its predecessors is that Ridester asked drivers to send proof of their earnings, in the form of screenshots, which they got from 719 participants. The earnings data is for UberX drivers only, who represent 3/4 of all Uber drivers.One interesting finding is that despite structuring their questions so as to help assure accurate responses about income, they found drivers overestimated their earnings. Getting the screenshots also allowed them to include tips, which averaged a bit over 7%.Some of the highlights (emphasis original):

  • Uber paid our uberX-driver respondents a median net income of just $13.70 per hour.When rider tips are added to what Uber pays, the median rises only to $14.73 per hour.
  • Drivers self-report income that is 37.40% higher than they were able to show with screenshots of their earnings.
  • 58.3% of our driver respondents are over 50 years old.
  • 55.1% of our respondents reported having a college education. 10.7% reported having post-graduate degrees.

PA’s $19 minimum wage at airports is another reason for folks to shun NY -  Govs. Andrew Cuomo and New Jersey’s Phil Murphy won’t be happy until they discourage everyone from coming to their states. The $19-an-hour minimum wage at the area’s main airports — OK’d Thursday with their blessing — will help bring that day closer.As of Nov. 1, just days before Cuomo stands for reelection, 40,000 workers will see a hefty bump in pay — to $13.60 an hour at La Guardia and Kennedy, and $12.45 at Newark. That’s to be followed by annual raises for the next four years, when the rate finally hits $19. It’s the highest minimum set by any government or public agency in America — “a significant breakthrough,” brags 32BJ SEIU president Hector Figueroa, who represents many of the lucky workers. They win. As do Cuomo and Murphy, who are sure to be rewarded with additional union support for pushing the Port Authority to OK the hike. But everyone else will suffer, as the higher costs are passed on to airline passengers.  The new rates will “have a direct impact on air-carrier prices and services,” warns Airlines for America, a trade group. It blasts the new plans as “social welfare policies.”  Former NJ Gov. Chris Christie had blocked his appointees to the Port Authority’s Board of Commissioners from OKing the pay bump, but Murphy has called for higher state minimum wages.  As for Cuomo, he actually crashed the board’s meeting in Jersey City on Thursday to push it: “It’s smart, it’s right, it’s fair,” he said. Then again, it’s not his money that will go into workers’ pockets. Those who do pay will now have yet another reason to avoid New York. Frankly, so will anyone turned off by the area’s already high taxes and other costs, further fueling the state’s population hemorrhage. Last one out, shut the door.

Devin Nunes’ Family Farm Moved to Iowa, Employs Undocumented Workers -- Nunes grew up in a family of dairy farmers in Tulare, California, and as long as he has been in politics, his family dairy has been central to his identity and a feature of every major political profile written about him.  The soil of the Central Valley is depicted as almost sacred in these articles. National Review quotes a 1912 Portuguese immigrant farmer who wrote that when he grabs a clump of dirt, “I feel as if I had just shaken hands with all my ancestors.” As recently as July 27, the lead of a Wall Street Journal editorial-page piece about Nunes, which featured a Tulare dateline, emphasized the dairy: “It’s 105 degrees as I stand with Rep. Devin Nunes on his family’s dairy farm.” Last year, Nunes noted in an interview with the Daily Beast—headline: “The Dairy Farmer Overseeing U. S. Spies and the Russia Hack Investigation”—“I’m pretty simple. I like agriculture.” The Daily Beast noted, “The cows are not far from his mind. He keeps in regular contact with his brother and father about their dairy farm.” So here’s the secret: The Nunes family dairy of political lore—the one where his brother and parents work—isn’t in California. It’s in Iowa. Devin; his brother, Anthony III; and his parents, Anthony Jr. and Toni Dian, sold their California farmland in 2006. Anthony Jr. and Toni Dian, who has also been the treasurer of every one of Devin’s campaigns since 2001, used their cash from the sale to buy a dairy eighteen hundred miles away in Sibley, a small town in northwest Iowa where they—as well as Anthony III, Devin’s only sibling, and his wife, Lori—have lived since 2007. Devin’s uncle Gerald still owns a dairy back in Tulare, which is presumably where The Wall Street Journal’s reporter talked to Devin, and Devin is an investor in a Napa Valley winery, Alpha Omega, but his immediate family’s farm—as well as his family—is long gone. There’s nothing particularly strange about a congressman’s family moving. But what is strange is that the family has apparently tried to conceal the move from the public—for more than a decade. As far as I could tell, until late August, neither Nunes nor the local California press that covers him had ever publicly mentioned that his family dairy is no longer in Tulare.

48% Of US Residents In Top 5 Cities Don't Speak English At Home; 67 Million Overall -- Almost half of all US residents in the top five largest cities, or 48%, do not speak English at home according to the latest Census Bureau data.  The Washington Examiner reports that the new report, conducted by the Center for Immigration Studies (CIS), also reveals that "As a share of the population, 21.8 percent of U.S. residents speak a foreign language at home — roughly double the 11 percent in 1980." Overall, roughly 67 million residents don't speak English at home. In New York City and Houston it is 49 percent; in Los Angeles it is 59 percent; in Chicago it is 36 percent; and in Phoenix it is 38 percent. –CIS In terms of population, Spanish is the most commonly spoken language at home at 41 million residents in 2017, up from 37 million in 2010. Chinese is the next most common language at 3.4 million using it primarily at home. In terms of the fastest growing non-English languages spoken at home, Telugu experienced the most rapid growth, followed by Bengali, Tamil, Arabic, Hindi, Urdu and Punjabi.  Ranking non-English speakers by state, California leads the pack, followed by Texas, New Mexico, New Jersey, Nevada and New York.In terms of percentage growth by state, Washington D.C. experienced the largest percent growth in non-English speaking homes between 2010 and 2017, followed by Wyoming, North Dakota, Utah, Delaware, Nevada, Maryland and Nebraska. 

Horrors at ICE prison in California: nooses found hanging in majority of cells  --The Department of Homeland Security (DHS) inspector general’s office released a report this week detailing the inhumane conditions prevailing at the Adelanto Immigration and Customs Enforcement (ICE) Processing Center in California’s Mojave Desert. The report was the product of an unannounced visit by inspectors this past May, nearly one year after three deaths occurred within a three-month period at the facility.  The report outlined numerous horrors, including denial of medical and dental care, the use of punishing confinement prior to conclusive rulings on allegations of inmate infractions and the terrible revelation that nooses fashioned out of bed sheets hung in at least 15 of the 20 inspected cells. Inspectors were met with lackadaisical responses from guards, “When we [DHS] asked two contract guards who oversaw the housing units why they did not remove the bed sheets, they echoed it was not a high priority,” the report states. The report noted that the guard escorting the inspectors through the facility had initially attempted to remove the nooses, but eventually stopped upon realizing how many there were. At least seven suicide attempts were reported at the Adelanto Center from December 2016 to October 2017, but the number is believed to be far higher. Guards told investigators “the nooses are a daily issue and very widespread.” In March 2017, Osmar Epifanio Gonzalez-Gadba, 32, a Nicaraguan, was found hanging from bed sheets in his cell and later died on life support. Gonzalez-Gadba was facing his second deportation and had previously been deported in April 2016 to Nicaragua, the poorest country in Central America.  Just days before Gonzalez-Gadba’s suicide, he reported having been sexually assaulted, but medical staff ignored his claim and never bothered examining him. At the ICE facility, inmates are subjected to daily physical, mental and sexual violence.

Deputies joke as they videotape inmate suffering from drug overdose, suit says - Sheriff's deputies laughed as their colleague took two cellphone videos of a 31-year-old inmate in a padded cell at the Clackamas County Jail as he moved uncontrollably and made unintelligible noises due to an apparent drug overdose."Look what I got for show-and-tell today," Deputy Ricky Paurus says on one video. He suggests they could put inmate Bryan Perry in a cage and wheel him into a school to impress on kids "don't do drugs," according to a new federal lawsuit. Another deputy calls the idea "fantastic."What the deputies and the jail's medical provider failed to do, the suit alleges, is ensure Perry got appropriate medical treatment, resulting in his death by cardiac arrest early Nov. 4, 2016, about five hours after he was booked into jail.  The suit, filed this week in U.S. District Court in Portland, alleges the county deputies and medical staff from Corizon Health Inc., the jail's medical contractor, violated Perry's civil rights when they failed to properly screen Perry, get him prompt medical attention, adequately check on him or send him to a hospital. It also contends Corizon Health has displayed a pattern of misconduct at other jails across the country, with similar wrongful death lawsuits filed against the company since 2006 elsewhere in Oregon, Michigan, Missouri, California, Florida and Pennsylvania.

 Detailed New National Maps Show How Neighborhoods Shape Children for Life — The part of this city east of Northgate Mall looks like many of the neighborhoods that surround it, with its modest midcentury homes beneath dogwood and Douglas fir trees.Whatever distinguishes this place is invisible from the street. But it appears that poor children who grow up here — to a greater degree than children living even a mile away — have good odds of escaping poverty over the course of their lives. The research has shown that where children live matters deeply in whether they prosper as adults. On Monday the Census Bureau, in collaboration with researchers at Harvard and Brown, published nationwide data that will make it possible to pinpoint — down to the census tract, a level relevant to individual families — where children of all backgrounds have the best shot at getting ahead.This work, years in the making, seeks to bring the abstract promise of big data to the real lives of children. Across the country, city officials and philanthropists who have dreamed of such a map are planning how to use it. They’re hoping it can help crack open a problem, the persistence of neighborhood disadvantage, that has been resistant to government interventions and good intentions for years. Nationwide, the variation is striking. Children raised in poor families in some neighborhoods of Memphis went on to make just $16,000 a year in their adult households; children from families of similar means living in parts of the Minneapolis suburbs ended up making four times as much.The local disparities, however, are the most curious, and the most compelling to policymakers. In one of the tracts just north of Seattle’s 115th Street — a place that looks similarly leafy, with access to the same middle school — poor children went on to households earning about $5,000 less per year than children raised in Northgate. They were more likely to be incarcerated and less likely to be employed. The researchers believe much of this variation is driven by the neighborhoods themselves, not by differences in what brings people to live in them. The more years children spend in a good neighborhood, the greater the benefits they receive. And what matters, the researchers find, is a hyper-local setting: the environment within about half a mile of a child’s home.

Family Income Affects Kids’ Success More Than Public Vs. Private School, Study Finds On the notion there are advantages to private schools, and that those advantages disappear when controlling for certain factors "We look at these kids when we assess them in ninth grade, and if you just simply look at private school versus public school — don't consider any other factor in the kids' history — you see huge benefits to being in private school. They're about a standard deviation of like 15 points higher on test scores, they're more motivated and the like. And then as soon as you put into the equation that you're using to predict, as soon as you put in family income, those differences disappear — and they never reappear again, no matter how many other variables that you put in. "So the idea basically being, that it's what's happening in kids' families and the kinds of conditions that they're able to purchase for their kids and the circumstances that they're able to provide for their kids over the long haul that really matter in adding up to the kinds of things that we assessed in ninth grade." On the difference it makes when parents provided their young children with educational resources and stimulation "That is a very big difference. Importantly, those families continue to give those kids advantages from kindergarten all the way through ninth grade. So it is important what happens in that birth-to-5 [years old] period for sure, it sets kids up on a trajectory of success or not. Those families that give those advantages tend to also be families that will place their kids in private schools. "If you want to predict children's outcomes — achievement test scores, the things we care about socially — in high school, the best thing that you can use to predict that is going to be family income. Regardless of what high school you go to, the best predictor is going to be family background. And in this case, it's family background before the child even goes to school in kindergarten. There will be individual cases of poor kids who went to private schools that are tremendous success stories. But we make policy not on the basis of individual cases, hopefully, we make it on the basis of larger data sets and patterns of information." 

Thousands of North Carolina students are still missing school weeks after Hurricane Florence --For some kids in North Carolina, the school year started only to be abruptly halted. Hurricane Florence tore through their communities three weeks ago, but the situation has yet to return to normal.Many schools remain closed due to a lack of access, as roads are impassable due to floodwaters or lingering damage. In some cases, schools themselves are too badly damaged for students to return. Across North Carolina, closures continue to affect more than 50,000 students. While some return to school Monday, the wait continues indefinitely for plenty of others.These kids have not only lost seemingly endless days of school, but they also might’ve lost their homes and the sense of stability that accompanies their daily trips on the school bus. Two schools in hard-hit eastern North Carolina’s Onslow and Pender counties are currently closed for classes and functioning as shelters for now-homeless families.“School is a place where [kids] can go back to find normalcy, to see friends, to get the support of teachers and other school staff, so it’s a really critical piece of the puzzle when it comes to just bringing life back to normal,” said Rob Thompson, the director of the child advocacy group NC Child, to Earther.“They need to be back in school.”Counties like Robeson and Jones, which are among the poorest in the state,as well as better-off Onslow, have all suffered from school closures. In Robeson, public schools remain shut down until Friday. In Jones, which saw record-level flooding in wake of Florence, an elementary school and high school will be closed for the rest of the school year. Mold and mildew are to blame.Officials still have to figure out where they’ll send all those students, but it’s clear other nearby schools will have to prepare for an influx of new classmates. The kids who’re transferring, meanwhile, have to deal with navigating a new school and making new friends. Transfers have already begun for some students in nearby New Hanover County.  Even schools that are back in session must deal with the consequences of all those missed days. Losing just 10 percent of school days in a given year can lead to lower numeracy and literacy levels, class failure later on, and a higher likelihood of future suspensions or dropouts, according to a number of studies.

Iowa company donates AR-15s to be placed in Bismarck schools - A company out of Iowa is donating AR-15s to Bismarck school resource officers. Last month, KX News was the first to tell you about a plan to buy AR-15s, gun safes and other gear to keep in some Bismarck schools. Earlier this week, the city approved more than $25,000 in spending for the plan. However, that won't be needed anymore.Brownells, a gun distributor out of Iowa, saw the news and decided to donate 9 AR-15s to the police department. We certainly think that schools should have increased security, so if that is something we can do to help, then we are happy to do it," Brownells Director of Communications Ryan Repp said. We wanted to know what the Bismarck Police Department will do with the money it will save because of this. So we reached out, but have not heard back.

Los Angeles teachers union continues to delay strike action as negotiations proceed - More than one month after Los Angeles teachers voted in favor of strike action the United Teachers of Los Angeles (UTLA) union is dragging out negotiations with the district. Teachers are watching this latest contract battle with great interest across the country. A walkout by Los Angeles teachers would become a significant focal point of resistance in the midst of a series of ongoing strikes and protests by teachers and school employees across the country. Moreover, it would represent a major counterattack against the billionaire-led school privatization movement, especially given that Los Angeles has the most charter schools of any district in the country. The UTLA, however, is doing everything in its power, including utilizing the deliberately constrictive nature of public employee bargaining laws, to either stop such a strike from occurring or at least to delay it as long as possible. This only ensures that any strike will be conducted entirely on the management’s terms and will be kept isolated and contained.On September 1, more than 83 percent of the 33,000 teachers working in the Los Angeles Unified School District participated in the UTLA’s strike authorization vote, handing down a 98 percent strike mandate. The vote came after the union had already been in negotiation with the district for more than 17 months. The teachers themselves had, at that time, been working without a contract for more than 13 months. Although the strike authorization vote passed, an actual strike would occur entirely at the discretion of the UTLA itself rather than rank-and-file teachers.The strike authorization vote had been preceded by the appointment of a state mediator from the California Public Employment Relations Board on August 9. Under the terms of California Labor Statutes, a state mediator can be designated after the declaration of an impasse between the union and the district. T he first mediation session, however, did not take place until September 30. A second mediation session took place October 3.

New Draconian Policy Affects Books & Mail in PA Prisons  In a convoluted attempt to eliminate drug use in prisons, Pennsylvania Department of Corrections (DOC) has concocted a $15,000,000 plan that will censor books, alienate prisoners, increase recidivism, and not eliminate drug use in prisons. All of this began because of an incident involving 57 members of staff made ill by exposure to K2, a synthetic cannabinoid. And while no one would disagree that keeping people safe is crucial, toxicologists have told local Pennsylvania papers, they don’t believe that most exposed were experiencing anything more than mass hysteria. …”The symptoms are much more consistent with anxiety.”  Some staff members were administered naloxone, also known by its brand name Narcan, in the field after exposure, a medication which reverses opiate overdoses.   Naloxone has no benefit to those under the influence of artificial cannabinoids.  So the DOC crafted a plan to eliminate books and magazines being sent to inmates from donation groups, like Books Through Bars, and booksellers like Amazon and Barnes & Noble to avoid drugs being smuggled in the books. Instead the prisons will shift to ebooks and digital magazines. The ebooks range in price from $2.99 to $24.99 and can be read on tablets that cost $149. Prisoners can make as little as $0.19 an hour. The library of ebooks available contains 8,500 titles and consists largely of material that exists in the public domain and could be read freely through Project Guttenberg, “but that cost anywhere from $2.99 (Moby-Dick) to $11.99 (The Federalist Papers), all the way up to $14.99 (Joseph Conrad’s The Rescue). Many more recent titles also are priced far higher than the same Kindle e-books. For instance, Stephen King’s prison tome, The Green Mile, costs 66 percent more on prison tablets than out in the free world.”

State Cuts to Higher Education Threaten Access and Equity – CBPP  - A decade since the Great Recession hit, state spending on public colleges and universities remains well below historical levels. Overall state funding for public two- and four-year colleges in the school year ending in 2018 was more than $7 billion below its 2008 level, after adjusting for inflation. (See Figure 1.) In the most difficult years after the recession, colleges responded to significant funding cuts by increasing tuition, reducing faculty, limiting course offerings, and in some cases closing campuses. Overall state funding for public two- and four-year colleges in the school year ending in 2018 was more than $7 billion below its 2008 level.Funding has rebounded slightly since then, but costs remain high and services in some places have not returned.The promise to past generations of students in America has been that if you work hard and strive, public colleges and universities will serve as an avenue to greater economic opportunity and upward mobility. For today’s students — a cohort more racially and economically diverse than any before it — that promise is fading. Rising tuition threatens affordability and access leaving students and their families –– including those whose annual wages have stagnated or fallen over recent decades — either saddled with onerous debt or unable to afford college altogether. This is especially true for students of color (who have historically faced large barriers to attending college), low-income students, and students from non-traditional backgrounds. Higher costs jeopardize not only the prospects of those individual students but also the outlook for whole communities and states, which are increasingly reliant on highly educated workforces to grow and thrive. To build a prosperous economy — one in which the benefits of higher education are broadly shared and felt by every community regardless of race or class — lawmakers will need to invest in high-quality, affordable, and accessible public higher education by increasing funding for public two- and four-year colleges and by pursuing policies that allow more students to pursue affordable postsecondary education. By doing so, they can help build a stronger middle class and develop the entrepreneurs and skilled workers a strong state economy needs.

Moats: As higher education shifts to worker training, is there room for the humanities?  - In 1967 a turning point had arrived. The public universities in most states were settings of grandeur far exceeding anything found in the farm towns, suburbs and industrial centers where most people lived. The exquisite brick buildings surrounding the green at the University of Vermont are probably the grandest buildings in the state. The great halls in Berkeley, overseen by the elegant towering Campanile, visibly express an earlier generation’s veneration of learning. Now institutions that had lifted up returning GIs by providing them with a college education had become, in Reagan’s view, an outpost of privilege for the GIs’ pampered offspring. Marilynne Robinson, novelist and essayist, has called it the “democratization of privilege” — education previously the province of the few becoming available to young men and women of scant or moderate means from Burlington to Berkeley to the Bronx. The grandeur of those campuses was an expression of the grandeur of the project. For returning veterans of World War II, college was a pathway toward the middle class. What a cruel trick it was for Reagan and his followers to turn around and declare that the children of those GIs had become part of a scorned elite. Reagan’s war on the university was grounded in a familiar strain of American anti-intellectualism that promotes distrust of “experts” or “intellectuals.” But Reagan was up to something more insidious than run-of-the-mill populist politics. He was engaged in a years-long partnership with J. Edgar Hoover and the FBI, going back to Reagan’s career in Hollywood. Seth Rosenfeld’s book, “Subversives: The FBI’s War on Student Radicals, and Reagan’s Rise to Power,” tells the story in detail of Reagan’s career as an informer who benefited for many years from his alliance with Hoover and who became a willing participant in Hoover’s war on “subversives.”Reagan’s attacks on the university foreshadowed a decades-long battle that is still with us about how we value education and the humanities. Recent assaults on facts, science, media and truth are the latest iteration of that battle.

Make Them Scared -Website Posts Uncorroborated Sexual Assault Claims Against Male Students -  A website allegedly run by University of Washington students allows individuals to publicly accuse people of sexual assault with no evidence.The website, titled “Make them scared UW,” was first registered in November of last year but reportedly launched in late September of this year by University of Washington students, the Daily UW campus newspaper reports.It appears that the list of accused rapists and sexual assault perpetrators has grown substantially on the site in recent weeks in the wake of the rape claims made against U.S. Supreme Court justice nominee Brett Kavanaugh.  Meanwhile, one student named on “Make them scared UW” told The College Fix that the allegation is false, that the University of Washington has dismissed the allegations against him as completely uncorroborated and cleared him of any wrongdoing. Thus far, every person named on the list is male, and their names include the school they attend. Many listed on the site appear to be University of Washington students, but as apparent word of this site has spread, students from many other colleges are now listed, too. The site does not employ any mechanisms to verify the truth of any accusations it publishes, and the website’s moderators attempt to protect themselves from liability or criticism by stating atop the list of the accused: “Please remember, just because a name is on this list does not mean the individual is guilty. All it means is that we have received an accusation against them.”The moderators of the website did not respond to The College Fix‘s repeated requests for comment. The Fix sought to learn if the site’s moderators had any concerns about accusations being directed at innocent people, and whether or not the website has received any legal challenges for publishing unverified allegations.According to the FAQ page of the website, “Make them scared UW” is a “communal rape list.”It is “intended to be an online hub for anyone who wants to expose the names of their attackers and harassers, and to fill a gap left by inadequate treatment of these cases by formal institutions.”“One of our site’s moderators will review your submission, verify your contact information, and after receiving your confirmation, publish the information you provided us (minus any personally identifying info) on the list page on our site,” the FAQ page tells individuals who wish to submit an accusation.“We do not have the ability to determine whether any accused party is guilty or innocent of the accused acts, so take all names listed with a grain of salt,” the site’s front page states.

‘Sokal Squared’: Is Huge Publishing Hoax ‘Hilarious and Delightful’ or an Ugly Example of Dishonesty and Bad Faith? Chronicle of Higher Education. Reactions to an elaborate academic-journal hoax, dubbed "Sokal Squared" by one observer, came fast and furious on Wednesday. Some scholars applauded the hoax for unmasking what they called academe’s leftist, victim-obsessed ideological slant and low publishing standards. Others said it had proved nothing beyond the bad faith and dishonesty of its authors. Three scholars — Helen Pluckrose, a self-described "exile from the humanities" who studies medieval religious writings about women; James A. Lindsay, an author and mathematician; and Peter Boghossian, an assistant professor of philosophy at Portland State University — spent 10 months writing 20 hoax papers that illustrate and parody what they call "grievance studies," and submitted them to "the best journals in the relevant fields." Of the 20, seven papers were accepted, four were published online, and three were in process when the authors "had to take the project public prematurely and thus stop the study, before it could be properly concluded." A skeptical Wall Street Journal editorial writer, Jillian Kay Melchior, began raising questions about some of the papers over the summer. Beyond the acceptances, the authors said, they also received four requests to peer-review other papers "as a result of our own exemplary scholarship." And one paper — about canine rape culture in dog parks in Portland, Ore. — "gained special recognition for excellence from its journal, Gender, Place, and Culture … as one of 12 leading pieces in feminist geography as a part of the journal’s 25th anniversary celebration."

Betsy DeVos Loses Student Loan Lawsuit Brought by 19 States - U.S. Secretary of Education Betsy DeVos lost a lawsuit brought by 19 states and the District of Columbia, accusing her department of wrongly delaying implementation of Obama-era regulations meant to protect students who took out loans to attend college from predatory practices. A Washington federal court judge on Wednesday ruled the department’s postponement of the so-called Borrower Defense rule was procedurally improper. The Obama administration created the rule in the wake of revelations that some for-profit colleges enticed students with promises of an education and diplomas that would allow them to get jobs in their chosen fields. In reality, many of those certifications weren’t recognized by prospective employers, leaving graduates saddled with student loans they couldn’t repay. The Borrower Defense regulations changed the rules for forgiving student loans in cases of school misconduct and required "financially risky institutions" to be prepared to cover government losses in those instances, according to U.S. District Judge Randolph Moss’s 57-page ruling. By postponing the effective date of those regulations, the Education Department deprived students "of several concrete benefits that they would have otherwise accrued," Moss said. "The relief they seek in this action -- immediate implementation of the Borrower Defense regulations -- would restore those benefits." Writing that he didn’t want to delay matters further, Moss -- a 2014 appointee of President Barack Obama -- said he will hold a hearing Friday to consider remedies.

Chasing ‘likes’ on Instagram, hikers break limbs — and need rescuing -- Wilson Guarin and his children had hiked to Hermit Falls in Angeles National Forest, one of the most popular waterfalls in the Los Angeles area. Soon after they arrived, they saw a man dislocate his shoulder when he jumped into the rock pool at the base of Hermit Falls. Less than a minute later, another man jumped and appeared to break both his legs. Guarin, 40, of Long Beach said the cliff jumpers' intentions were obvious: They wanted to get a video of themselves and post it to social media.A thirst among hikers, often inexperienced and under-prepared, to gobble up "likes" and shares on Instagram and other social media sites has led to a significant increase in rescue missions by first responders.  The Los Angeles County Sheriff's Department's Search and Rescue teams conducted 681 missions in 2017, the largest number in five years.  The team's leaders say the single largest factor for that increase is people posting videos of extreme activities online. Then, without any thought about the difficulty, others try to re-create their own 15-second version of glory. Rescue teams in Santa Barbara and San Bernardino counties have seen similar increases."

 How Inequality Harms Mental Health - In early June of this year, the back-to-back suicides of celebrities Anthony Bourdain and Kate Spade, coupled with a new report revealing a more than 25 percent rise in U.S. suicides since 2000, prompted—again—a national discussion on suicide prevention, depression, and the need for improved treatment. Some have called for the development of new antidepressants, noting the lack of efficacy in current medical therapies. But developing better drugs buys into the mainstream notion that the collection of human experiences called “mental illness” is primarily physiological in nature, caused by a “broken” brain.This notion is misguided and distracting at best, deadly at worst. Research has shown that, to the contrary, economic inequality could be a significant contributor to mental illness. Greater disparities in wealth and income are associated with increased status anxiety and stress at all levels of the socioeconomic ladder. In the United States, poverty has a negative impact on children’s development and can contribute to social, emotional, and cognitive impairment. A society designed to meet everyone’s needs could help prevent many of these problems before they start. To address the dramatic increase in mental and emotional distress in the U.S., we must move beyond a focus on the individual and think of well-being as a social issue. Both the World Health Organization and the United Nations have made statements in the past decade that mental health is a social indicator, requiring “social, as well as individual, solutions.” Indeed, WHO Europe stated in 2009 that “[a] focus on social justice may provide an important corrective to what has been seen as a growing overemphasis on individual pathology.”

270 Painkillers Per Person- DEA Investigates Pill Mills in Small Tennessee Town -- DEA agents discover another small town in America's Rust Belt with an overabundance of opioidsThe Drug Enforcement Administration (DEA) last week conducted inspections at several pharmacy locations in the Clay County, Tennessee town of Celina, following a massive spike of painkiller purchases from drug distribution companies.  According to the sales data, obtained by the DEA, several pharmacies purchased nearly 1.5 million pills in 2017, a number that is considered an anomaly of a rural area in America's Rust Belt region.Home to just 7,800 people, the pharmacies last year purchased enough opioids to provide 270 pain pills for every man, woman, and child living in the small Tennessee town.In response to the opioid crisis, the DEA is now aggressively monitoring supply chains of pill distributors that primarily feed into hard-hit states. "DEA's action today is one of many proactive measures we are taking to help prevent drug diversion, abuse, and trafficking that end lives and destroy families and communities," said Louisville Division Special Agent in Charge Chris Evans, who runs DEA operations in Tennessee, West Virginia, and Kentucky.

Big Pharma takes rare price cut on hepatitis C drugs, but other drug prices continue to march north  Big Pharma has given baby boomers, members of under-represented communities, and American taxpayers rare and promising good news about a product price cut: A drug used in a highly effective multi-course treatment for hepatitis C will see its sky-high price continue to plunge.  Gilead Sciences Inc., facing steep competition from other makers and innovations from non-profits, has decided to sell cheaper, just as potent versions of its hep C fighting drugs Epclusa and Harvoni. The company’s “authorized generics” will be sold for $24,000 for a regimen of care that has been shown to  clear the once lethal hepatitis virus in patients. The new medications’ costs also compare to launch list prices of their branded predecessors: $94,500 for Harvoni and $74,760 for Epclusa. Those drugs had generated huge profits for Gilead, boosting its market valuation to almost $100 billion. At the same time, critics assailed the company for profiteering, leading to congressional hearings. Gilead also found itself embroiled in a market competition, with drug makers AbbieVie and Merck introducing alternative and cheaper products that slashed into profits of the Foster City, Calif., company that broke ground in hep C treatment. In the developing world, a nonprofit also has said it was working with an Egyptian manufacturer to market an even cheaper hep C treatment, using a generic version of a Gilead drug and costing as little as $300 for a 12-week treatment.

Avoiding Sepsis Death Traps: Nursing Homes and Hospitals -  Lambert Strether  -- I encountered a new KHN article with the eye-catching title “Avoidable Sepsis Infections Send Thousands Of Seniors To Gruesome Deaths,” but discovered it was both what, and less than, it seemed. The article was quite strong on sepsis[1] horror stories in nursing homes, but less strong on epidemiological data. So I’ll present extracts from KHN, and then broaden the scope of the article to sepsis generally, for which we have a wealth of information. (Kaiser also has this handy interactive map, “Pinpointing Sepsis Risk, By Site,” that allows you to search for nursing homes — although not hospitals — by state and city, in case the combination of my headline and KHN’s headline has given you apprehension. All nursing homes aren’t death traps, fortunately.) First, the KHN article. Skipping the horror stories, the numbers: Year after year, nursing homes around the country have failed to prevent bedsores and other infections that can lead to sepsis, an investigation by Kaiser Health News and the Chicago Tribune has found….  A special analysis conducted for KHN by Definitive Healthcare, a private health care data firm, also suggests that the toll — human and financial — from such cases is huge. Examining data related to nursing home residents who were transferred to hospitals and later died, the firm found that 25,000 a year suffered from sepsis, among other conditions. Their treatment costs Medicare more than $2 billion annually, according to Medicare billings from 2012 through 2016 analyzed by Definitive Healthcare.  In Illinois, about 6,000 nursing home residents a year who were hospitalized had sepsis, and 1 in 5 didn’t survive, according to Definitive’s analysis. Understaffing is one possible cause of sepsis:  Nevertheless: There is little agreement over how much staff should be required in nursing homes. Federal regulations simply mandate that a registered nurse must be on duty eight hours per day, every day.  A second cause of sepsis, no doubt related to staffing, is poor infection control: Poor infection control ranks among the most common citations in nursing homes. Since 2015, inspectors have cited 72 percent of homes nationally for not having or following an infection-control program. In Illinois, that figure stands at 88 percent of homes. Finally, sepsis often leads to hospitalization, stressful for patients and expensive: Examining data related to nursing home residents who were transferred to hospitals and later died, the firm found that 25,000 a year suffered from sepsis, among other conditions.

Typhus reaches ‘epidemic levels’ in parts of Los Angeles area - NBC — Health officials on Friday reported a typhus outbreak in Los Angeles County and say it has reached "epidemic levels" in the city of Pasadena. Twenty cases have been reported in Pasadena, mostly in the last two months, health officials told NBC News, noting that a normal year would typically only see five infections. The city of Long Beach, California, has 12 cases so far in 2018 — double the normal annual number, said Emily Holman, the city's infectious disease response coordinator. The number of cases in the rest of the county since July is nine, which counts as an "outbreak," Los Angeles County Department of Public Health officials said in a statement. Pasadena and Long Beach have their own health departments even though they exist within the county. “The Pasadena Public Health Department is reporting epidemic levels of typhus fever this year," read a statement from that city on Friday. The official source of the outbreak is said to be fleas from domestic and wild animals. "Infection happens when the feces from infected fleas are rubbed into cuts or scrapes in the skin or rubbed into the eyes," the county health department states on its website. Some experts, however, say the true culprit is the inhumane conditions the county's expanding homeless population lives in. "All of the cases have a history of living or working in the downtown Los Angeles area," a county health spokeswoman said via email. Andy Bales, the CEO of the Union Rescue Mission, which has nearly 1,400 beds for those fleeing or avoiding downtown's Dickensian streets, said, "The conditions on Skid Row are ripe for even more serious issues than this." In 2014, Bales had a leg amputated after he was exposed to flesh-eating bacteria downtown.

The Next Pandemic Will Be Arriving Shortly  -- Pandemic disease is arguably one of the greatest threats to global stability and security. But investments to contend with such outbreaks have declined to their lowest levels since the height of the Ebola response in 2014, with U.S. federal dollars cut by over 50 percent from those peak levels.The prevailing laissez-faire attitude toward funding pandemic preparedness within President Donald Trump’s White House is creating new vulnerabilities in the health infrastructure of the United States and leaving the world with critical gaps to contend with when the next global outbreak of infectious disease hits.The investments made after the 2014 Ebola crisis have been slashed in recent proposed federal budgets from the Centers for Disease Control, the agency that works to stop deadly diseases in their tracks, and the U.S. Agency for International Development, which responds to international disasters, including the Ebola outbreak. Moreover, Timothy Ziemer, the top White House official in charge of pandemic preparedness, has left his job, and the biosecurity office he ran was summarily disbanded. This lack of focus and relative decline in funding is dangerous, given the steady stream of global reports suggesting that transmission of potentially deadly zoonotic diseases, where pathogens move from animals to humans, is rising at an alarming rate. Some attribute this to climate change, with warmer climates everywhere extending the life cycles of mosquito-borne diseases and allowing them to reach higher altitudes and more temperate latitudes. This means that viral diseases such as Zika, dengue fever, and the West Nile virus are transmittable across a larger geographical area later into the year.

Rat hepatitis E virus can cause disease in humans: Hong Kong researchers  -- Rat hepatitis E virus (rat HEV) was first discovered in 2010 and circulates in house rats (Rattus rattus) and sewer rats (Rattus norvegicus). It is very distantly related to human hepatitis E virus variants. Human infection by rat HEV has never been documented previously. While investigating the impact of hepatitis E infection among immunocompromised transplant recipients in Hong Kong, the researchers identified a 56-year-old man who was taking immunosuppressive drugs after deceased-donor liver transplantation. He presented with persistently abnormal liver function tests indicating dysfunction of the liver graft.Rat HEV was identified in several of his clinical samples including stool, blood, and liver tissue. Complete genome sequencing of the virus isolate showed that it was closely related to a rat HEV strain previously identified in Vietnam. Epidemiological investigation could not find any evidence of rat HEV infection in the organ donor or blood product donors excluding these individuals as sources of infection. However, evidence of rodent infestation was noted in the patient’s housing estate. Rat HEV could not be detected in rodent fecal samples collected from the housing estate, but screening of archived rodent samples from the patient’s residential district shows that rat HEV circulates in rats in Hong Kong. The patient was given oral ribavirin, an effective antiviral for chronic hepatitis E infections, and the infection has been cured. His liver function has returned to normal.

Bioweapon - Scientists Sound Alarm Over DARPA Plans To Spread Viruses Using Insects  - A team of scientist sounds the alarm in a new Science Policy Forum report about a mysterious US government program that is developing genetically modified viruses that would be dispersed into the environment using insects. The virus-infected or 'Frankenstein' insects are being developed as countermeasures against potential natural and engineered threats to the US food supply. The program is operated by the Pentagon’s Defense Advanced Research Project Agency (DARPA) could be viewed as an attempt to develop an entirely new class of bioweapons that would prompt other nations to seek similar weapons, they cautioned. The researchers from the Max Planck Institute for Evolutionary Biology and the University of Freiburg both in Germany, and the University of Montpellier in France suggest DARPA's program could likely breach the Biological Weapons Convention, the first multilateral disarmament treaty banning the development, production, and stockpiling of biological and toxin weapons.  Dubbed the "Insect Allies" program, DARPA began modifying insects in 2017, with the plan to produce more resilient crops to help farmers deal with climate change, drought, frost, floods, salinity, and disease, said Gizmodo. The technology at the center of the program is an entirely new method of genetically modifying crops. Instead of modifying seeds in a lab, farmers would send swarms of insects into their crops, where the genetically modified bugs would infect plants with a virus that passes along the new resilience genes, a process known as horizontal genetic alteration. Hence the technology’s name—Horizontal Environmental Genetic Alteration Agents (HEGAA). For HEGAA to work, Gizmodo explains that DARPA labs develop a virus that is inserted into the chromosome of a target organism. Scientists would use leafhoppers, whiteflies, and aphids genetically altered in the lab using CRISPR, or a variant of a gene-editing system, to carry the virus into crops. Each plant would then be infected by the insect, triggering the intended effects of protecting crops from natural and or human-made threats.However, the lead author of the report, Richard Guy Reeves from the Department of Evolutionary Genetics at the Max Planck Institute for Evolutionary Biology, says DARPA's Insect Allies program is disturbing and an example of dual-use research in which the US government, in addition to aiding farmers' crops, is also developing a biological weapon. Insect Allies is reportedly backed by $27 million of funding. According to Gizmodo, there are four academic research teams currently working on the project, including researchers at the Boyce Thompson Institute in New York, Pennsylvania State University, Ohio State University and the University of Texas at Austin. DARPA maintains that "all work is conducted inside closed laboratories, greenhouses, or other secured facilities," and that the insects have built-in lifespans to limit their spread. By 2020 or 2021, DARPA is planning on testing the virus-infected insects on crops inside greenhouses at undisclosed locations.

FDA Finds Weed Killer in Most Corn, Soy at 'Non-Violative Levels' - The U.S. Food and Drug Administration (FDA) released on Monday the final results of a "special assignment" that examined the residue levels of glyphosate and a competing herbicide glufosinate in corn, soy, eggs and milk during the fiscal year 2016.Their labs detected glyphosate in 63 percent of the corn samples and 67 percent of the soybean samples at "non-violative levels," or in compliance with the U.S. Environmental Protection Agency's (EPA) pesticide tolerances. Glufosinate was found in 1.4 percent of the corn samples and 1.1 percent of soybean samples, also within legal limits. No residues of either pesticide were found in the milk and egg samples.The special assignment was part of the FDA's yearly monitoring report that reviewed 7,413 samples, including 6,946 human foods and 467 animal foods, for residues of 711 pesticides and industrial chemicals. This is the first year the agency tested glyphosate and glufosinate.FDA commissioner Scott Gottlieb was pleased with the report's results."Like other recent reports, the results show that overall levels of pesticide chemical residues are below the Environmental Protection Agency's tolerances, and therefore don't pose a risk to consumers," Gottlieb said in a press release.

Farmers can now buy designer microbes to replace fertilizer - JAKE MISCH’S FAMILY has been growing corn in the sandy soils of northwestern Indiana for four generations. Like other farmers in the area, the Misches spray their fields with a nitrogen-rich fertilizer once in the spring when the seeds are planted, and once later in the year, when the corn is going through its growth spurt. Fertilizing is essential to yielding a healthy harvest, but it’s expensive enough that he stresses about it, and, as he’s well aware, it’s not great for the planet. Which is why next year, Misch is trying something new. In the spring he’ll douse his freshly furrowed corn seeds with a liquid probiotic for plants. As the seedlings grow, these special microbes will colonize their roots, forming hairy nodes and converting atmospheric nitrogen into a form that plants can use to turn sunlight into sugar. If all goes as planned, those little critters will produce 25 pounds of usable nitrogen for every acre of corn. At least, that’s what Pivot Bio is promising. The Berkeley, California, biotech startup announced today its commercial launch of the first and only nitrogen-producing microbial treatment for US corn farmers. It’s not a complete and total replacement for fertilizer, but the product aims to reduce farmer’s reliance on it. Fertilizer production is a huge contributor to greenhouse gases. Once it’s on fields, it can leach into aquifers or run off into rivers, leading totoxic algae blooms. According to Pivot, if every corn farmer in the US followed Misch’s lead, it would be the environmental equivalent of removing one million cars from the road.

'We've bred them to their limit': death rates surge for female pigs in the US -  Death rates for female pigs in the US are rising fast, sending alarm bells ringing throughout the farming industry.The mortality rate rose from 5.8% to 10.2% on farms owning more than 125 sows between 2013-2016, according to one organisation that collects data across 800 companies.The numbers have been linked to a troubling rise in prolapse – the collapse of the animal’s rectum, vagina, or uterus. In some cases the prolapse itself is fatal. In others the pig is euthanised as a result. Some farms have seen no rise, or much smaller rises, but a separate report last year found that some farms were seeing prolapse causing as many as 25%-50% of sow deaths.The American Association of Swine Veterinarians has created a sow prolapse working group, but their findings so far have been inconclusive. In April, the National Pork Board announced a multi-year research collaboration with Iowa State University’s Iowa Pork Industry Center designed to get a broad overview of the problem. Iowa is the nation’s top pork producer. The study, which is still under way, aims to collect detailed data from 400,000 sows – or about 13% of the nation’s 3 million working sows – on more than 100 farms across 16 states. A number of possible causes have been suggested, including vitamin deficiency, mycotoxins in the feed, high density diets or abdominal issues. Some experts blame confinement systems in intensive farming – sows will spend a large percentage of their lives in gestation and farrowing crates that don’t allow them to move around. Modern breeding practices have also been suggested as a causal factor. Industry figures largely declined to comment but some acknowledged that they are grappling with the issue. “It’s a topic in our meetings, both in the hallways and the meeting spaces,” said Dr Tom Burkgren, executive director of American Association of Swine Veterinarians, a group that educates vets around the country.

Farm worker who poisoned 406 wedge-tailed eagles in east Gippsland jailed and fined - A New Zealand man has been jailed for 14 days and fined $2,500 for poisoning 406 wedge-tailed eagles at three remote properties in Victoria's east. Farm worker Murray James Silvester, 59, pleaded guilty to killing the protected birds at Tubbut in east Gippsland between October 2016 and April 2018.The eagle carcasses were found hidden in bush and scrub on three separate farms spanning 2,000 hectares.Other protected species including a kookaburra, ravens and a raptor were also found dead.Department of Environment, Land, Water and Planning (DELWP) prosecutor Chrisanthi Paganis told the Sale Magistrates' Court that Silvester alerted authorities to the deaths in May 2018, one month after he stopped working at the farm due to an argument with his boss, landowner John Auer.Silvester provided investigators with two diaries detailing the methods used and a hand-drawn map showing where the eagle carcasses were hidden and where the chemicals were stored.Silvester also named others involved. The prosecutor told the court other people were being investigated over the killings but had not been charged.

Randgold CEO Mark Bristow has shot a lot of animals-- There's a debate to be had about whether developing countries should use legal big-game hunting to fund their nature conservation programmes. Wildlife management can require the culling of large mammals, and some people will pay to pull the trigger. To help inform your opinion on this complex moral issue, here are some photos of Mark Bristow, Randgold's chief executive officer. Mr Bristow (top left) is the FTSE 100's longest serving CEO having founded Randgold, the £5bn London-listed mining group, in 1995. The company last week agreed to be bought by Canada's Barrick Gold in an all-share deal that stands to make Mr Bristow CEO of the world's largest gold miner by market capitalisation. The picture of him above, and those below, appear in annual newsletters dated 2005 to 2014 from the website of Hunters & Guides Africa, a South Africa-based specialist tour operator.

 In about-face, Gov. Bruce Rauner calls for Sterigenics shutdown after weeks of downplaying cancer risks - After spending the past month downplaying cancer risks from toxic air pollution in west suburban Willowbrook, Gov. Bruce Rauner on Tuesday joined a chorus of elected officials calling for the shutdown of a Sterigenics International facility co-owned by his former private equity firm.  Fellow Republicans from DuPage County have been clamoring for Rauner to take more aggressive action against the company, which for more than three decades has used highly potent ethylene oxide gas to sterilize medical instruments, pharmaceutical drugs and food near densely populated neighborhoods and several schools.As recently as Friday, the most the Republican governor would say about Sterigenics was that he had instructed the Illinois Environmental Protection Agency to launch an investigation. But Rauner changed course after the weekend, ordered his staff to refer the case to Illinois Attorney General Lisa Madigan, the state’s chief lawyer, then urged the Democrat to seek a court order that would close the Willowbrook facility until a separate federal investigation “assures the community that resumed operations would not present an elevated health risk.” Rauner’s sudden reversal comes as local politicians, many of whom like the governor are on the Nov. 6 ballot, face a fury of complaints about a federal report that revealed unusually high cancer risks from ethylene oxide pollution in traditionally Republican communities near Sterigenics.

Air pollution is killing 1 million people and costing Chinese economy 267 billion yuan a year, research from CUHK shows -Two pollutants were found to cause an average 1.1 million premature deaths in the country each year and are destroying 20 million tonnes of rice, wheat, maize and soybean.Air pollution from smog-inducing ozone and fine particles may be shaving an estimated 267 billion yuan (US$38 billion) off the Chinese economy each year in the form of early deaths and lost food production, a new study has found. Researchers from the Chinese University of Hong Kong derived the figure by calculating the social costs of air pollution attributed to the impact on public health and reduced crop yields. “This is a fairly large and significant figure considering that it amounts to about 0.7 per cent of national GDP,” lead investigator Steve Yim Hung-lam, an assistant professor in the geography and resources management department, said. The report, published in the scientific journal Environmental Research Letters, came as China recently tightened targets for ozone-forming pollutants and fine particles for cities as part of a long-awaited three-year action plan for “winning the war for blue skies” for 2018 to 2020. Yim’s team analysed 2010 contributions to ground-level ozone (O3) and fine respirable particulate (PM2.5) pollution from six sectors of the economy – industrial, commercial and residential, agriculture, power generation, ground transport and “others”, such as aviation and fires. The data analysed came from air quality and meteorological modelling, emissions inventories and 150 types of pollutants and chemical reaction mechanisms. PM2.5, typically produced in combustion, are microscopic airborne particles small enough to lodge deep in the lungs and cause damage.

New study finds incredibly high carbon pollution costs – especially for the US and India -- The social cost of carbon is a measure of the economic damages caused (via climate change) by each ton of carbon pollution that we produce today.  It’s difficult to estimate because of physical, economic, and ethical uncertainties.  For example, it’s difficult to predict exactly when various climate tipping points will be triggered, how much their damages will cost, and there’s also a question about how much we value the welfare of future generations (which is incorporated in the choice of ‘discount rate’). In 2013, the Obama administration set the federal social cost of carbon estimate at $37 per ton of carbon dioxide (up from the previous estimate of $22).  That was a conservative estimate.  A majority of economists in a 2015 survey believed the federal estimate was too low, but Republicans have recently been trying to dramatically lower it anyway.The Republican argument is twofold.  First, that we should only consider domestic climate costs (the federal estimate is of global costs, because our carbon pollution doesn’t just hover in the air above America).  Second, that instead of trying to stop climate change now, we should just save our money and let future generations pay for its costs (by using a high discount rate).A new study led by UC San Diego’s Katharine Ricke published in Nature Climate Change found that not only is the global social cost of carbon dramatically higher than the federal estimate – probably between $177 and $805 per ton, most likely $417 – but that the cost to America is around $50 per ton.  That’s the second-highest in the world behind India’s $90, and is also higher than the current federal estimate for the global social cost of carbon. That’s a remarkable conclusion worth repeating.  Ricke’s team found that the cost of carbon pollution to just the United States is probably higher than its government’s current estimate of costs to the entire world.  And the actual global cost is more than 10 times higher than the federal estimate.  And yet Republican politicians think that estimate should be much lower.

When Big Polluters Come To Small Towns, Black Residents Lose Out --Uniontown has an inordinate number of polluters for a town of 2,300, and residents say city leaders often dodge their attempts to air their grievances. There’s the landfill next to the historic black cemetery that residents opposed from the beginning but went apoplectic over when it started accepting coal ash after a spill of the waste in Tennessee. There’s the pungent odor from a cheese plant that has released its waste into a local creek, according to an environmental group’s hidden cameras. And then there’s the waste water from the catfish processing plant, which contributes to an overwhelmed sewage system that spills fecal matter into local waterways.Many residents feel all this pollution has been dumped in their backyard — and allowed to continue — because for the most part, they are black, poor and uneducated.“Look at every black community or poor community,” said Esther Calhoun, a resident who has been involved in numerous lawsuits against the town’s polluters. “The EPA is supposed to be the Environmental Protection Agency, but they’re protecting the rich. What do they do for us? Nothing.”It’s a similar story across Alabama and much of the country. Many minority communities say their towns have been targeted by polluting industries because residents have few resources to put up a fight, and state and federal agencies have largely sided with industry when locals have challenged polluters. Black residents in Union Hill, Virginia; North Birmingham, Alabama; Braddock, Pennsylvania; Burke County and Jessup, Georgia; Waukegan, Illinois, and many others have made similar accusations over the past several years.

Environmental Negligence vs. Civil Rights: Black and Hispanic Communities Get More Pollution, Fewer Jobs --One of President Donald Trump's stated justifications for rolling back environmental regulations has been tobring back jobs in highly-polluting industries like coal.  But a study published in the Proceedings of the National Academy of Sciences Monday found that, for "communities of racial/ethnic minorities," welcoming polluting industries for the sake of employment is a tradeoff that doesn't make any sense. Blacks and Hispanics in the U.S. are both less frequently employed at industrial facilities and more likely to be exposed to toxic air pollution from these sites.  "The share of pollution risk accruing to minority groups generally exceeds their share of employment and greatly exceeds their share of higher paying jobs. In aggregate, we find no evidence that facilities that create higher pollution risk for surrounding communities provide more jobs," the study concluded. By the numbers, black Americans hold 10.8 percent of the jobs at industrial facilities, but suffer 17.4 percent of the exposure to air pollution. Hispanics hold 9.8 percent of the jobs, but suffer 15 percent of the pollution exposure. Both populations have less than seven percent of the high-paying jobs offered at industrial sites,U.S. News & World Report reported.  The fossil fuel industry was the worst offender. At petroleum industry and coal-product facilities, blacks and Hispanics suffered 48 percent of the pollution exposure and only received around a fifth of the jobs. Monday's study comes a little more than six months after a U.S. Environmental Protection Agency (EPA) study found that race and not poverty was the greatest predictor of exposure to certain air pollutants from the oil industry. Despite such findings, the EPA has severely reduced the size of its Office of Environmental Justice under the Trump administration. Monday's study was also published the same day as an in-depth report by Stateline for the Huffington Post looking at the individual consequences of this kind of environmental racism.

Life at the Fenceline: Understanding Cumulative Health Hazards in Environmental Justice Communities - Across the United States, almost 12,500 high-risk chemical facilities put 39% of the US population (124 million people) who live within three miles of these facilities at constant risk of chemical disaster. The full vulnerability zones for these industrial and commercial sites can extend up to twenty-five miles in radius.Many communities of color and low-income communities face disproportionate risk from these facilities, which are loosely regulated under the U.S. Environmental Protection Agency’s Risk Management Plan (RMP) program. The health and safety of these communities is also at risk from many other threats, including potential chemical releases or explosions, but also daily exposure to toxic air pollution (from these facilities and other sources) and lack of access to healthy foods. Many of these communities also rely on dollar stores for household necessities and even food, making these retailers potential sources of either additional toxic exposures or safer products and healthier foods.Life at the Fenceline: Understanding Cumulative Health Hazards in Environmental Justice Communities sought to identify and understand several interconnected health and environmental impacts in Environmental Justice communities and identify solutions. We looked at key data nationally and additional data for nine EJ communities: Los Angeles, as well as Kern, Fresno, and Madera counties, CA; Houston and Dallas, TX; Louisville, KY; Albuquerque, NM; and Charleston, WV. We studied:  Analysis of the 9 areas studied for this report clearly shows that:

  • In most of the areas researched, large majorities of the population live in fenceline zones around highly hazardous facilities, and most schools and medical institutions are located in these zones, at much greater rates than nationally.
  • Fenceline zones around hazardous facilities are disproportionately Black, Latino, and impoverished.
  • People living in hazardous facility fenceline zones face multiple health hazards and risks.
  • The most vulnerable neighborhoods—areas that are both low-income and have low access to healthy foods—are even more heavily and disproportionately impacted.

76 Environmental Rules on the Way Out Under Trump - NYTimes - Since taking office last year, President Trump has made eliminating federal regulations a priority. His administration, with help from Republicans in Congress, has often targeted environmental rules it sees as overly burdensome to the fossil fuel industry, including major Obama-era policies aimed at fighting climate change.To date, the Trump administration has sought to reverse more than 70 environmental rules, according to a New York Times analysis, based on research from Harvard Law School’s Environmental Regulation Rollback Tracker, Columbia Law School’s Climate Tracker and other sources. The Environmental Protection Agency has been involved in more than a third of the policy reversals identified by The Times. Scott Pruitt, the head of the E.P.A. who spearheaded the administration’s agenda of environmental deregulation,resigned after facing a number of ethics scandals. Andrew Wheeler, the new acting chief of the agency, is a former coal lobbyist who also wants to roll back environmental regulations. Rules targeted for reversal so far include key Obama-era efforts to curb planet-warming greenhouse gas emissions, as well as broader air and water pollution controls and protections for threatened animals and habitats. The Trump administration has, in many instances, pared back these regulations in favor of more expansive energy extraction policies — often as a direct response to petitions from oil, gas and coal companies. Mr. Trump has argued that supporting the fossil fuel industry strengthens the economy.The list above represents two types of policy changes: rules that have been officially reversed and those still in progress. Other rules, summarized at the bottom of this page, were undone but later reinstated after legal challenges.The process of rolling back regulations has not always been smooth, in part because the administration has in some cases skipped steps like notifying the public and asking for comment. In several cases, courts have been asked to intervene to get agencies to follow their own policies. All told, the Trump administration’s environmental rollbacks could lead to at least 80,000 extra deaths per decade and cause respiratory problems for more than one million people, according to a recent analysis conducted by researchers from Harvard University. That number, however, is likely to be “a major underestimate of the global public health impact,”

Multi-state panel might scrap its water-quality standards for Ohio River -  Environmental advocates fear that water standards for the Ohio River could soon be decimated by a river commission made up of eight states in the watershed.They argue that those standards are needed because the river supplies drinking water to 5 million people.The Ohio River Valley Water Sanitation Commission will meet this week beginning Tuesday in Lansing, West Virginia, to possibly vote on a proposal to eradicate 122 standards for pollutants the panel tracks. The measure could be approved, voted down or tabled for later reconsideration.The Dispatch spoke to the three commissioners who represent Ohio on ORSANCO, plus a federal commissioner who is an Ohio resident. George Elmaraghy, a federal commissioner by presidential appointment, expressed concern that the measure would create standards that differ among the states on the Ohio River. (Virginia and New York are included in ORSANCO because they are part of the river’s watershed.) “The state which protects the water will be punished because industry will be attracted to a state with more lax standards,” said Elmaraghy, a former chief of the Division of Surface Water at the Ohio Environmental Protection Agency. “My feeling is it’s better for them to have one set of regulations throughout the whole river.” Nearly 6,000 pages of comments have been submitted on the proposal. All three of Ohio’s commissioners voted in June for the process to continue, leading to this week’s vote to eliminate the standards. Each of Ohio’s commissioners told The Dispatch they were still weighing how they would vote this week. “If those (standards) go away, they still have to comply with federal and state criteria.”

Protecting our river: Scheme to deregulate protection cannot be justified --Pittsburgh Post-Gazette editorial - From Pittsburgh to Cairo, Illinois, the Ohio River flows through or along the border of six states. It is the largest tributary of the Mississippi River and it is the source of drinking water for more than 3 million people. But the health and safety of the water that flows through the Ohio River could be at risk if the members of the Ohio River Valley Water Sanitation Commission, known as ORSANCO, go through with a vote to end the organization’s pollution control standards. The eight-state regional commission — Illinois, Indiana, Kentucky, New York, Ohio, Pennsylvania, Virginia and West Virginia — has 27 commissioners who, historically, have recommended water quality standards for the states whose water supplies are affected in some way by the Ohio River. ORSANCO was founded in 1948 to undo the damage done to the Ohio River by industrial pollution. Setting regional standards for the quality of the Ohio’s water has been a critical part of that mission. The role is advisory, but it looks bad when states ignore the commission’s recommendations. But the current commissioners want to do away with this process, arguing that each state should be free to set its own pollution standards. This short-sighted strategy, however, could produce disastrous results for the Ohio River. Forcing each state to come up with its own set of standards would be costly, time-consuming and ineffective. And because the river flows through so many states, a greater allowance for pollution in one state will likely be felt throughout all the others. It is likely that no resource will be more important to the long-term survival of our species and the planet than water. In this section of the United States, the Ohio River is one of the most critical sources of water. It would be foolish for ORSANCO to relinquish its guardianship of the Ohio, a role which it had assumed for the common good. Without clean and safe water throughout all 981 miles of the Ohio, decades worth of progress will be undone.

ORSANCO Punts on Decision to Eliminate Water Quality Standards for the Ohio River - A multi-state commission charged with protecting the Ohio River decided Thursday to postpone a decision to dramatically alter pollution controls.The Ohio River Valley Water Sanitation Commission, or ORSANCO, has been considering a proposal that would reduce its oversight of water pollution control standards along the Ohio River. The proposal, called "option 2" would eliminate the body's water pollution control standards for industrial and municipal wastewater discharges into the river.The eight state body was created before the passage of the Clean Water Act, with a mission to collaboratively protect the river and set limits on industrial pollution through water quality standards. ORSANCO Director Richard Harrison said the new proposal is about balancing where to put the body's limited resources."This review was really about determining what is the proper role for ORSANCO going forward," he said. "Is it in pollution control standards? Or is it in other areas such as scientific research."The commission argues that water pollution control standards set by member states will protect water quality and the U.S. Environmental Protection Agency will provide adequate oversight."The pollution control standards of the commission actually represent a third layer of standards for the Ohio River," Harrison said. "Each member state has criteria and it's actually the member states that implement standards through their permitting program.”The commission was expected to vote Thursday on the proposal, but the committee tasked with making recommendations to the commission said it needed more time. Harrison said thousands of people have weighed in on the proposal."Really the amount of comment is the reason the committee is taking some more time to deliberate and really make sure we continue our thorough review," he added.Conservation groups cheered the decision. Robin Blakeman, with the Ohio Valley Environmental Coalition, said the proposal, if passed as is, will diminish the river's water quality. That could affect ecosystems and jeopardize the river, which is a source of drinking water for 5 million people.  "Essentially they backed away from making a decision at this meeting and they say they're going to engage in further dialogue with those of us in the environmental communities," 

Decades-old chemicals, new angst over drinking water -In some parts of the country people are learning their drinking water contains pollution from a group of chemicals called Per- and Polyfluoroalkyl Substances (PFAS). These chemicals have been linked to illnesses, including cancer. But a lot of questions remain including how exactly they affect people's health and in what doses.These chemicals have been around for decades but the issue gained urgency in recent years as water suppliers tested for and found PFAS pollution as part of an Environmental Protection Agency program.  The EPA is working on a plan to manage PFAS but members of Congress are pushing the EPA to move faster. A few states already have established strict new standards to limit the compounds in drinking water. And in some places, such as the Philadelphia suburbs, PFAS pollution has become an issue in mid-term election races. PFAS chemicals are used in a lot of products including non-stick cookware, fast food wrappers, pizza boxes, water-repellent fabrics and fire-fighting foam. It's difficult to pin down exactly how harmful these chemicals are because research is limited. There was a big health study involving one form of PFAS in the Mid-Ohio Valley. From that and other studies scientists are comfortable saying certain diseases are linked to PFAS exposure but they won't be more definitive than that. "PFAS chemicals have been linked to a wide range of health effects, including cancer, low birth weight, thyroid disease, elevated cholesterol and effects on the immune system," says Laurel Schaider, research scientist at Silent Spring Institute. Manufacturers have agreed to stop using two forms of PFAS in the U.S. These chemicals take a long time to break down in the environment, which is why they remain a problem now. Among the places with PFAS pollution is Michigan where the some residents were warned not to drink the water for a month. In New Hampshire there are concerns a landfill may be polluting water. A case in New York came to regulators' attention after a resident tested his own water. And in North Carolina high levels of a PFAS chemical were found in drinking water downstream from a manufacturing plant.

In the Heart of the Corn Belt, an Uphill Battle for Clean Water -- Iowa State Senator David Johnson had been one of the longest-serving Republicans in Iowa until he left the party to become an independent in 2016 after defying it repeatedly on one of the most divisive issues in Iowa — the integrity of the state’s water. Iowa’s nitrogen load has been accelerating despite more than $100 million spent by the federal and state governments to rein it in. Starting in 1999, the concentration of nitrogen in the state’s major waterways has increased almost 50 percent, according to a study from the University of Iowa, published last spring in PLOS One. The battle over Iowa’s water had long been posed as one between rural and urban interests, until Johnson, whose district is one of the most thinly populated and heavily farmed in the state, came along. In 2002, Senator Johnson co-authored one of the state’s key water statutes, the “Master Matrix,” which was supposed to establish health and safety guidelines for CAFOs and industrial farms in Iowa. By 2012 he was seeing how the relatively lax controls he had authored were being exploited, leaving his constituents vulnerable to the health consequences of escalating pollution from agricultural runoff. Nitrate pollution increased from about 200 million pounds in 2002 to more than a billion pounds in 2016. “I helped write this law in 2002,” he says, “and it’s terribly outdated with the current conditions that we’re seeing right now.” More than 750, or 58 percent, of the state’s rivers and streams do not meet federal water quality standards and are designated by the Iowa Department of Natural Resources (DNR) as too contaminated for swimming or consuming fish caught there — making a state once renowned for its lattice of waterways into a mess of inaccessible creeks, streams and lakes. Another 23 percent fall into a category of being “potentially impaired,” which the state defines as, “waters in need of further investigation.” Ninety-two percent of the nitrogen and 80 percent of phosphates in the state’s waterways, says the DNR, come from farms and animal feedlots.

Will World War Three Be Fought Over Water? (22 minutes podcast) | Science Friday

China Is Winning the Race for Water Security in Asia - Development experts continue to push transboundary water frameworks as the solution to Asia’s water disputes. They are right to do so, but China is unlikely to be ever willing to be yoked to any type of formal agreement. That leaves downstream countries with little choice but to embrace the status quo, and to continue their current strategies of courting Chinese investment and increasing their economic interdependence.For the United States, it makes the management of Sino-American relations even more urgent. The Director of National Intelligence has already identified South Asia as particularly vulnerable to water insecurity. But America has taken little action to mitigate these threats.  The effects of climate change on Asia's water security could drive China's neighbors to align more closely with the country with its hands on the tap. This alignment could undermine U.S. influence, and drive the region toward a multipolar leadership structure that favors China. The efforts of defense and security policymakers to counterbalance a rising China ignore the implications of water security at their peril.

Red tide makes rare turn up Florida’s east coast, sickening beachgoers - A toxic red tide algae bloom that has killed tons of marine life along Florida’s southwest coast ― including manatees, sea turtles and dolphins ― has now spread to the state’s eastern shores, state wildlife officials confirmed. The extremely rare development was discovered after multiple people in Palm Beach County complained of respiratory, skin and eye irritations on Saturday, prompting officials to test the water for the algae bloom, the Palm Beach Post reported. Preliminary test results were positive for the algae, local officials said, prompting Palm Beach County to issue a health advisory and shut down its local beaches, including the Lake Worth Municipal Beach and those in Jupiter. “Everyone was coughing this morning,” Maggie Scanlon, who was visiting Jupiter, told the Post. Another beachgoer described herself and others as “wheezing and coughing” while lounging around a beachside pool. “It felt like something was burning in my nose and there was a tingling in my throat. It was really bad,” Palm Beach County initially said its closed beaches would reopen on Wednesday but instead it shut down all of its beaches on Thursday. . Beaches in Miami-Dade County, north of Haulover Inlet, were also ordered closed on Thursday following the positive test results, Miami Dade County Mayor Carlos Gimenez announced. The area is about 15 miles north of downtown Miami. “Although results for three sampling areas off Miami Beach and Crandon Park were reported in the very-low to low range, results for samples collected off Haulover Park were reported in the medium concentration range,” he stated. “Red tides produce toxic chemicals that can affect marine organisms as well as humans. The Florida Department of Health advises people with severe or chronic respiratory conditions to avoid red tide areas.”

Red Tide Plagues Both of Florida's Coasts For First Time in Decades --The same red tide choking Florida's Gulf coast has spread to waters off Miami-Dade and Palm Beach counties, forcing the closure of many popular beaches on Thursday and leaving hundreds of dead fish in its wake, according to local reports.This is the first time in decades the toxic algae has affected both of Florida's coasts at the same time, the Associated Press reported."Florida's environment is now enduring a full-peninsula assault," Eve Samples wrote for Treasure Coast Newspapers, noting that it's only the eighth time since the 1950s that red tide has been documented on the East Coast of Florida. Toxic red tide poses threat to residents near Florida's Atlantic coast – YouTube  Several South Florida beaches reopened on Friday, the The Sun Sentinel reported, but noted that a new forecast said "moderate" red tide conditions can be expected in the area at least through Tuesday.The outbreak of the Karenia brevis organism first appeared last fall and has become one of the state's longest-lasting red tides on record. It has devastated Florida's marine life all summer, killing countless crabs, eels, fish, dozens of manatees and hundreds of endangered sea turtles. The bloom has also been costly for the state's tourism industry and become a public health issue because it can irritate skin and cause respiratory problems.The bloom now stretches roughly 135 miles along Florida's southwest coast.In August, Gov. Rick Scott issued an executive order declaring a state of emergency in seven southwestern counties and offered $1.5 million in aid. On Thursday, Gov. Scott announced $3 million in grants to St. Lucie, Martin, Palm Beach, Broward and Miami-Dade counties to help mitigate the effects of red tide.  "So far, the state has provided more than $16 million to help minimize the impacts of harmful algal blooms and expand our research and understanding of red tide, including funding to help scientists test innovative solutions for this phenomenon,” he said in a press release.

Wetlands disappearing three times faster than forests --  Wetlands, among the world's most valuable and biodiverse ecosystems, are disappearing at alarming speed amid urbanisation and agriculture shifts, conservationists said Thursday (Sep 27), calling for urgent action to halt the erosion. The convention, adopted in the Iranian city of Ramsar nearly a half-century ago, on Thursday issued its first-ever global report on the state of the world's wetlands. The 88-page report found that around 35 per cent of wetlands - which include lakes, rivers, marshes and peatlands, as well as coastal and marine areas like lagoons, mangroves and coral reefs - were lost between 1970 and 2015. Today, wetlands cover more than 12 million sq km (4.6 million square miles), the report said, warning that the annual rates of loss had accelerated since 2000. "We are losing wetlands three times faster than forests," Rojas Urrego said, describing the Global Wetland Outlook report as a "red flag". While the world has been increasingly focused on global warming and its impact on oceans and forests, the Ramsar Convention said wetlands remain "dangerously undervalued". Thursday's report, released in advance of a meeting of the parties to the convention in Dubai next month, stressed the importance of wetlands to all life on Earth. Directly or indirectly, they provide almost all of the world's consumption of freshwater and more than 40 per cent of all species live and breed in wetlands. Animals and plants who call wetlands home are particularly vulnerable, with a quarter at risk of extinction, the report said.  

As sand mining grows, Asia’s deltas are sinking, water experts warn  (Thomson Reuters) - Sand mining from rivers is depriving many low-lying Asian deltas of the sediment they need to maintain themselves, raising the risk of worsening land loss to sea level rise, researchers say. Combined with losses of soil-holding mangroves and accelerating groundwater extraction, which can lead to land sinking, the mining is increasing climate-related threats for those living in low-lying coastal areas, they said.   Deltas dependent on the Ganges-Brahmaputra-Meghna, Mekong and Yangtze rivers are now sinking and shrinking, according to research carried out by WWF – a situation worsened by climate-related warming and rising sea level. That is a problem not only because the deltas are home to millions of people but because they produce a significant share of the region's food. The Mekong delta, for instance, home to 17 million people, is a major source of rice for the region and underpins a quarter of Vietnam's GDP, Goichot said. "It is 40,000 square kilometres – larger than many countries - and most of it is sinking," he said. At the heart of the problem, Goichot said, is a lack of enough sediment moving down the rivers – and much of that is the result of mining of sand as a construction material and for other uses, he said. In some major rivers in Asia, such as the Mekong, Yangtze and Ganges-Brahmaputra-Meghna, as much as 90 percent of the sediment that once traveled down the system is now collecting in reservoirs or being mined, WWF's research showed. That means much less material is arriving in delta areas to replace soil lost to coastal erosion and other natural processes. For those living in the deltas, it can mean growing risk of floods, inundation from coastal storm surges and worsening salt contamination in drinking water. 

China’s super trawlers are stripping the ocean bare as its hunger for seafood grows The world's fisheries are in crisis. The United Nations' Food and Agriculture Organisation estimates 90 per cent of them have collapsed and China is the major player in their demise. By a long way, China has the world's biggest deep sea fishing fleet that strip mines the world's oceans. The Chinese government heavily subsidises the fleet in an attempt to satisfy the country's insatiable appetite for seafood, which accounts for a third of world consumption. In the port city of Zhoushan on China's east coast, 500 trawlers raced out to sea on the first day of the season. Every season is harder than the last. The fleet have to head deeper into the ocean and stay for longer for a decent catch. The seas around China have virtually no fish left but the commercial fishing fleet is still huge. With an estimated 200,000 boats, it accounts for nearly half of the world's fishing activity. A dozen trawlers returned to Zhoushan with their first catch of the season — crab. The hauls were good but well under half of previous years. These days the smaller trawlers and boats mostly catch "trash fish" — tiny fish with little value, used as feed for animals and in aqua farms.

 Rosa dumps record rain on Phoenix area -- Record rainfall hit the Valley Tuesday, bringing flooded washes, hubcap-high water in the streets, school closures and multiple rescues. By noon, the National Weather Service said that 2.24" of rain had fallen on Phoenix since midnight. Tuesday has now officially become the ninth wettest day in Arizona ever. Rosa broke an over three-decade-old record for daily rainfall with 2.20" of rain by 10:50 a.m. The record was set in 1981 with .60" of rain. The National Weather Service said in just two days, Phoenix Sky Harbor is already sitting at the second wettest October day on record. Rosa, which was downgraded early Tuesday from a tropical storm, already has pounded the Northern Baja and Southern California desert regions, and the Mexican state of Sonora just south of the Arizona border. Around 5 a.m., Rosa had maximum sustained winds of 35 mph and was about 105 miles north of Punta Eugenia, Mexico. As it moves northeast, the storm will dump 2 to 4 inches of rain on much of Arizona, with up to 6 inches in the mountains. Flash flood watches are in effect for parts of Arizona, far southern California, Nevada, Utah, Colorado and far southern Idaho, with the storm's remnants moving inland, the National Weather Service said. "These rainfall amounts may produce life-threatening flash flooding," the hurricane center said. "Dangerous debris flows and landslides are also possible in mountainous terrain."

Witnessing the environmental horrors of Hurricane Florence –(photo essays) As Hurricane Florence's floodwaters began receding, environmental watchdogs affiliated with the Waterkeeper Alliance took to airplanes and boats to document the pollution released as a result of storm.What they found is disturbing. The widespread, prolonged flooding brought by Florence — the second 500-year storm to hit the Carolinas in the past two years— took a heavy toll on southeastern North Carolina's industrial infrastructure and led to the release of massive quantities of pollution. NASA satellite imagery showed the state's discolored rivers pouring organic matter and pollution into the Atlantic.The disaster-stricken region is a center of North Carolina's hog and poultry industries. The state currently permits hog farmers to store the animals' waste in massive, open-air cesspools known as "lagoons." The N.C. Department of Environmental Quality reports that at least 32 hog waste lagoons were inundated and another five experienced structural damage in the storm, sending waste into the floodwaters.  The Waterkeepers extensively documented the flood's i mpact on livestock operations and waste lagoons, taking numerous photos and videos. These are a few:Animal waste isn't the only significant pollution threat in Florence's floodwaters. North Carolina also currently permits coal-fired power plants to store toxic coal ash waste in wet pits and dry landfills next to the plants, which for cooling purposes are located along rivers and lakes.Two coal plants owned by Duke Energy and their ash storage facilities flooded during Florence. At the shuttered H.F. Lee plant along the Neuse River near Goldsboro, a million gallons of toxic coal ash was completely submerged in the flooding and ash was described as "flowing like pudding." And at the still-active L.V. Sutton plant near Wilmington, a massive structural failure at a landfill sent coal ash spilling into the Cape Fear River. The Waterkeepers captured the aftermath of the flooding at the coal ash waste facilities:

NC river swirls with gray muck near flooded coal ash dump (AP) — Gray muck is flowing into the Cape Fear River from the site of a dam breach at a Wilmington power plant where an old coal ash dump had been covered over by Florence's floodwaters.Forecasters predicted the water will continue to rise through the weekend at the L.V. Sutton Power Station. Duke Energy spokeswoman Paige Sheehan said the utility doesn't believe the breach poses a significant threat of increased flooding to nearby communities.Sheehan said the company can't rule out that ash might be escaping the flooded dump and flowing through the lake into the river.Inspectors with the state Department of Environmental Quality travelled to the plant by boat on Sunday to collect water quality samples. Environmental Secretary Mike Regan said aerial video of the site show "potential coal ash" flowing into the river."When the environment is conducive, we will put people on the ground to verify the amount of potential coal ash that could have left and entered those flood waters," Regan said. Floodwaters breached several points early Friday in the earthen dam at Sutton Lake, the plant's 1,100-acre (445-hectare) reservoir. Lake water then flooded one of three large coal ash dumps lining the lakeshore.

Giant Mosquitos Swarm North Carolina --Flooding from Hurricane Florence has activated dormant "gallnipper" (Psorophora ciliata) eggs, among others, leading to the hatching of billions of unusually large mosquitoes.  Gallnippers lay their eggs in moist, low-elevation areas, where heavy rains or flooding trigger eventual hatching. In less than a week, larvae grow to adult size, which is about three times that of normal mosquitoes. The insects are so big that they've been mistaken for wasps and jokingly called the new state bird.  According to entomology Prof. Michael Reiskind of North Carolina State University, disease transmission isn't a leading concern with gallnippers and other post-Florence mosquito species. Nevertheless, the outbreak is a public health issue as it drives people to stay indoors and slows the storm recovery process. Last Wednesday, Gov. Roy Cooper directed $4 million toward mosquito control efforts in 27 counties.  For a deeper dive:   CBS, Huffington Post, AP

'A bad science fiction movie': large, aggressive mosquitoes swarm NC city after Florence  -- A North Carolina city dealing with fallout from Hurricane Florence has been swarmed by aggressive mosquitoes nearly three times larger than regular mosquitoes. One resident, Robert Phillips, describes their rise as "a bad science fiction movie." North Carolina State University entomology professor Michael Reiskind told The Fayetteville Observer that Florence's floodwater has caused eggs for mosquito species such as the Psorophora ciliata to hatch. These mosquitoes, often called "gallinippers," are known for their painful bite and often lay eggs in low-lying damp areas. The eggs lie dormant in dry weather and hatch as adults following heavy rains. Reiskind said the state has 61 mosquito species, and "when the flood comes, we get many, many billions of them."   . North Carolina Gov. Roy Cooper has ordered $4 million to fund mosquito control efforts in 27 counties that are under a major disaster declaration, his office said Wednesday in a news release. "Increased mosquito populations often follow a hurricane or any weather event that results in large-scale flooding," the release said. 'While most mosquitoes that emerge after flooding do not transmit human disease, they still pose a public health problem by discouraging people from going outside and hindering recovery efforts."

Environmentalists say Cape Fear ‘insanely toxic’; Duke Energy calls claim ‘outrageous' -   Environmental organizations said Wednesday they have measured “insanely toxic” contamination near Duke Energy’s flooded ash ponds in Wilmington. Waterkeeper Alliance and Earthjustice said they measured levels of arsenic 71 times higher than the state’s drinking water standard.  Charlotte-based Duke dismissed the announcement as an “outrageous claim” designed to promote an “extreme agenda.” Duke Energy said it has been testing water quality in the Cape Fear River and nearby Sutton Lake, where its ash pond flooded, for the past two weeks and that its measurements are well below safe drinking standards, posing no danger to the the public.The N.C. Department of Environmental Quality, which monitors coal ash safety standards, is expected to issue its lab results Thursday. The agency on Tuesday issued lab results for water quality at another flooded ash pond, at Duke’s H.F. Lee plant in Goldsboro, and its findings for that facility corroborated Duke’s lab results that the Neuse River is not contaminated by coal ash. The Waterkeeper Alliance had said that its testing of the Neuse showed arsenic levels nearly 18 times higher than the state safety standard for drinking water. The Waterkeeper Alliance took three samples on Sept. 21 at Duke’s Sutton plant on the Cape Fear River, where it said coal ash was flowing out of a storage pond due to flooding from Hurricane Florence. In their announcement, the environmental groups described one of the dam breaches as comparable to a Class II whitewater rapid, where “entire rootballs from trees were tumbling down with the current.”One lab result showed that arsenic levels were at 710 micrograms per liter; the state safety standard is 10 micrograms per liter. At two other sites the Waterkeeper Alliance samples tested at 32.8 micrograms per liter and 2.8 micrograms per liter. The organization’s lab results for barium and selenium also varied widely, from 24.8 micrograms per liter to 3,370 micrograms per liter. The Waterkeeper Alliance said that five heavy metals commonly found in coal ash were measured at elevated l evels in the Cape Fear River that exceeded contamination found in the Dan River in 2014 when a Duke coal ash pond failed and released 39,000 tons of coal ash slurry.

Man dies from bacterial infection after Hurricane Florence -- A North Carolina man died after contracting a bacterial infection while doing yard work related to Hurricane Florence, according to CNN affiliate WECT. Ron Phelps of Wilmington scraped his leg and it became infected, prompting doctors to amputate it, the station reported. But that wasn't enough to save him.    North Carolina has recorded 37 deaths related to Hurricane Florence, according to a statement Thursday from Gov. Roy Cooper's office. Most of these were due to vehicles caught in floodwater, but some have been cleanup-related. At least eight deaths in South Carolina and three in Virginia have also been linked to the storm."We have seen some bacterial infections from cuts and scrapes" among those doing cleanup work, said David Howard, deputy director of public health in New Hanover County, where Wilmington is located."It really comes down to bacterial infections that are common in the environment that end up in floodwaters that people are not normally exposed to in a great quantity," he said.The New Hanover Regional Medical Center said in an email that it has seen people for bug bites and stings, lacerations and puncture wounds, home oxygen issues, dialysis and stress- and anxiety-related issues. Dr. De Winter, an emergency doctor at the hospital, told WECT, "We've seen a lot of heat-related illnesses associated with people working outside for long hours, getting tired and then potentially falling off roofs as well." People with weakened immune systems, such as the elderly, are at particular risk for bacterial infections, Howard said. The health department has administered tetanus vaccinations to some involved in the cleanup efforts, who may also be at increased risk. Authorities have warned residents to stay out of the water to avoid harmful bacteria and other infections. Officials from North and South Carolina have also warned about hazards such as mosquitoes, mold and snakes in the aftermath of the storm, which made landfall September 14 near Wrightsville Beach, North Carolina.

Could Smithfield foods have prevented the “rivers of hog waste” in North Carolina after Florence?- Just over a week ago, more than seven million gallons of hog waste escaped two lagoons in Duplin and Sampson Counties, in North Carolina, and entered the tributaries to the South River and the Northeast Cape Fear River. Kemp Burdette, who works as a riverkeeper—a citizen watchdog and advocate, who, along with a small staff, patrols the Cape Fear River Basin—saw it happening during a flight in a small Cessna propeller plane. He was surveying the coastal damage wrought by Hurricane Florence, which continues to flood farming communities many miles inland. As of last week, more than a hundred and thirty of the state’s roughly four thousand hog-waste lagoons were compromised, or close to being compromised, by the historic floodwaters. On Saturday morning, according to North Carolina’s Department of Environmental Quality, the number of currently problematic lagoons had been reduced to eighty-five. “I know what hog shit smells like and my house smells like hog shit,” Burdette, who lives on the flooding Black River, twenty miles northwest of Wilmington, told me. “The water beside it is full of hog shit.” As soon as he’s done surveying Florence’s broader environmental damage, he said, “I’ll be home with bottles of bleach trying to clean up, so my kids don’t get sick when we move back in.”  The pinkish, putrescent, rurally located lagoons have been a source of concern for decades. Their neighbors—who, studies show, tend to be minorities—live with what they describe as nauseating odors and even “fecal mists.” Flooding takes a largely airborne issue and makes it tangible: whether due to structural damage, inundation, or overtopping from periodic floods, lagoons fail, and their contents, which in some cases have been accumulating for decades, containing untold disease pathogens and bacteria, are sent into neighboring lands and waterways—and even, potentially, drinking water. “Smithfield has the money to fill in all of these pits and put this waste into a waste-treatment system,” Rick Dove, a senior adviser to the Waterkeeper Alliance, told me.

Weathering the Next Florence -- As the country watched floodwaters rise across the Carolinas in the wake of Hurricane Florence this month, Puerto Ricans were still reeling from a storm that tore through the island a year ago. The grim statistics from Hurricane Maria are well known: thousands of deaths, the largest power outage in U.S. history, and $90 billion in damages — a heavy toll for an island already in dire financial straits. But we still don’t know the extent of the wreckage from Hurricane Florence’s record-shattering rainfall.Increasingly, there’s little space to breathe between catastrophes. And as climate change brings higher sea-level rise, more punishing winds, and heavier rains, super-charged storms are likely to get worse. But these natural disasters are partly human-made, which means that humans can also work to avoid future disasters.How do we prepare for a future filled with Florences and Marias? And when the next big hurricane does inevitably hit, how do we rebuild, not just our houses, but also our sense of community?Grist surveyed experts in hurricane preparedness and relief efforts for their suggestions on making our coastal towns more resilient. Here’s how they responded, edited for length and clarity.

House passes bill to improve casualty count in natural disasters -- The House passed a bill Wednesday that would set a standard for tallying the death toll in natural disasters in an attempt to prevent the types of inaccuracies that followed last year’s Hurricane Maria in Puerto Rico. The Count Victims Act, introduced by Rep. Nydia Velázquez (D-N.Y.), would direct the Federal Emergency Management Agency and the National Academy of Medicine to conduct a two-year study of the best ways to count mortality. The official Maria death toll stood at 64 for almost a year after the hurricane pummelled Puerto Rico, until Gov. Ricardo Rosselló, acting on a report commissioned by his government, raised it last month from 64 to 2,975. “For months, after Maria devastated Puerto Rico, the local government claimed the death toll was only 64, while anecdotal evidence suggested it was tragically higher,” Velázquez said in a statement. “We also watched as Donald Trump pointed to the artificially low death toll as evidence that his Administration was responding appropriately, when, in reality, a humanitarian catastrophe was befalling our fellow American citizens.” 

Fatalities in Indonesia could reach thousands, officials say --The confirmed death toll from the earthquake and tsunami that struck the Indonesian island of Sulawesi has risen to 832, and the vice-president, Jusuf Kalla, has warned it could reach into the thousands. More than 150 aftershocks followed the 7.5-magnitude earthquake and subsequent tsunami that hit Sulawesi on Friday, causing thousands of homes, hotels, shopping malls and several mosques to collapse. Of the fatalities, 821 were in the city of Palu, with 11 casualties so far recorded in Donggala, the worst-hit area, which is home to 300,000 people. Hundreds of bodies have been found on beaches and authorities fear many may have been washed out to sea. Speaking at a press conference, Sutopo Purwo Nugroho, the spokesman for the BNBP disaster agency, said the area affected was much bigger than originally thought. Earthquake map “The deaths are believed to be still increasing since many bodies were still under the wreckage while many have not able to be reached,” said Sutopo, emphasising that access to Donggala, as well as the towns of Sigi and Boutong, was very limited so the final death toll was impossible to predict. The city of Palu has been completely devastated by the earthquake and tsunami waves, which reached as high as six metres in some areas. In the city, partially covered bodies lay near the shore and survivors sifted through a tangled mess of corrugated steel roofing, timber, rubble and flotsam. One man was seen carrying the muddy corpse of a small child. “Many corpses are scattered on the beach and floating on the surface of the sea,” one local resident, Nining, told local media. The identified bodies are being buried in mass graves, Sutopo said. Sutopo confirmed there was no electricity in Palu and Donggala, while drinking water and fuel were running out. There was limited access to heavy equipment needed to help rescue efforts, so the search for people trapped in the rubble was mostly being carried out by hand. Rescue efforts are continuing for dozens of people still trapped in the collapsed ruins of the eight-storey Roa Roa hotel in Palu, with voices heard screaming from the wreckage. There were concerns about the whereabouts of hundreds of people preparing for a beach festival that had been due to start on Friday, a spokesman for the BNBP said. 

Indonesia quake, tsunami death toll climbs to 1,347 -  The death toll from an earthquake and tsunami on the island of Sulawesi in Indonesia has climbed to 1,347, according to the country's disaster management agency, as rescue teams scramble to search for survivors buried in the rubble from the deadly disaster.  Authorities and aid workers struggled to reach the affected areas made inaccessible by damaged infrastructure on Tuesday, four days after the disaster hit Palu, a small city about 1,500km northeast of the capital, Jakarta, and other parts of Sulawesi Island.   Some remote areas have been largely cut off after Friday's magnitude 7.5 quake triggered massive tsunami waves, destroying roads and bridges; their losses have yet to be determined. "The team is racing against time because it's already D+four," Sutopo Purwo Nugroho, spokesperson for the National Disaster Mitigation Agency, told reporters in Jakarta on Tuesday, referring to four days since the quake.More than 65,000 homes have been damaged and at least 60,000 people have been displaced and are in need of emergency help, according to the government. "Experts here say that just by looking at the devastation, one must expect the number of those dead to rise in the coming days because many areas remain unreachable and the full extent of the devastation has yet to be realised,"

'The car is on top of the house' footage emerges from quake-ravaged Donggala – video -- Footage of devastation has emerged from the hills outside of the Indonesian town of Donggala. Donggala, located on the island of Sulawesi was hit by a 7.5 earthquake on Friday

Volcano erupts in Indonesia’s quake-hit Sulawesi A volcano on Indonesia's Sulawesi erupted on Wednesday morning (Oct 3), just days after the island was struck by a devastating earthquake and tsunami. Mount Soputan spewed volcanic ash up to 4,000m above the crater, prompting authorities to raise the alert to level three on the four-level volcano alert system, reported Jakarta Post.  The state disaster agency warned people to stay at least 4km away from the volcano.  However, there was no need to evacuate for the time being, said national disaster agency spokesman Sutopo Purwo Nugroho.  There were no reports of any casualties or damage. The volcanic ash was also not expected to disrupt flights because of the wind direction currently.

1,400 Dead, 70,000 Homeless After Earthquake and Tsunami in Indonesia -- Indonesia's devastating earthquake-tsunami combo last week has left 70,000 people homeless in the city of Palu, CBS News reported Thursday.The death toll has climbed to more than 1,420 people since Friday, when the 7.5 magnitude earthquake and the 18-foot tsunami it triggered struck the island of Sulawesi.Amid the widespread ruin, survivors are struggling with no power, as well as dwindling food and drinking water supplies. But the Indonesian military arrived Thursday with supplies and to aid with recovery efforts, CBS News said.Search and rescue efforts to recover dead bodies and survivors are ongoing. The International Federation of Red Cross and Red Crescent Societies said Monday it is appealing for $22 million to help Indonesia. Roughly 20 countries have offered help, with aid from the UK and Australia arriving Thursday, according to Al Jazeera. The disasters were particularly dangerous due "a combination of plate tectonic in the region, the shape of the coastline, vulnerable communities and a less-than-robust early warning system," geologist Anja Scheffers of Southern Cross University explained in The Conversation.In Petobo, a village of roughly 500 people, the massive earthquake "turned the ground to quicksand and literally swallowed the village," NBC's Janis Mackey Frayer reported.This phenomenon, called "liquefaction," is when soil loses strength and stiffness in response to an earthquake, thus losing its ability to support homes and other structures.The sheer force of the temblor literally shifted the landscape.  "I was swept away, holding onto a palm tree. When it finally stopped, I found myself 3 kilometers away in the next village," a survivor told ABC.

 Border patrol agent’s gender reveal party ignited a 47,000-acre wildfire CNN - An off-duty border patrol agent wanted an explosive gender reveal party for his family and friends, but he ended up igniting a wildfire that spread to Coronado National Forest in Arizona. Dennis Dickey, 37, of Tucson, Arizona, has to pay more than $8 million in restitution, starting with a $100,000 initial payment and monthly payments thereafter, the Department of Justice said in a statement. Dickey pleaded guilty Friday to a misdemeanor violation of US Forest Service regulations for igniting the Sawmill Fire, the statement said. He agreed to a sentence of five years of probation and will make a public service announcement with the Forest Service about the cause of the blaze. His gender reveal party was on April 23, 2017, according to CNN affiliate KGUN-TV. Expectant parents throw such parties to tell family and friends the gender of their baby. In this case, Dickey's plan was to shoot a rifle at a target containing Tannerite, a highly explosive substance that would have exploded to reveal either blue powder for a boy or pink powder for a girl. Dickey shot the target, causing it to explode and start a fire that spread and resulted in what was known as the Sawmill Fire, the Department of Justice said. The Sawmill Fire burned nearly 47,000 acres owned by the state of Arizona and various federal agencies. The Coronado National Forest is federal land operated by the US Forest Service.

The Gulf of St. Lawrence is Losing Oxygen Faster Than Almost Any Other Marine Environment  -  The Gulf of St. Lawrence in eastern Canada is rapidly losing oxygen, declining by as much as 55 percent in some spots since the 1930s — compared to a 2 percent drop globally. Now, new research has found that the region’s dramatic oxygen decline is due largely to climate change and shifts in the major ocean currents that feed the gulf.  The study, published this month in the journal Nature Climate Change, found that the Labrador Current, which carries water from the Arctic south along the North American East Coast, has weakened in recent decades. Meanwhile, the Gulf Stream has shifted northward, transporting more warm, salty, and oxygen-poor water from the Caribbean into the Gulf of St. Lawrence. While water in the Labrador Current is typically well-churned by storms in the Labrador Sea, which pushes oxygen to lower ocean depths, the Gulf Stream is more stratified, with its deeper layers very oxygen-deprived.“Observations in the very inner Gulf of St. Lawrence show a dramatic oxygen decline,” Mariona Claret, an ocean modeler at the University of Washington and lead author of the new study, said in a statement. The area is “reaching hypoxic conditions, meaning it can’t fully support marine life.”

Trump administration sees a 7-degree rise in global temperatures by 2100 --Last month, deep in a 500-page environmental impact statement, the Trump administration made a startling assumption: On its current course, the planet will warm a disastrous seven degrees by the end of this century.  A rise of seven degrees Fahrenheit, or about four degrees Celsius, compared with preindustrial levels would be catastrophic, according to scientists. Many coral reefs would dissolve in increasingly acidic oceans. Parts of Manhattan and Miami would be underwater without costly coastal defenses. Extreme heat waves would routinely smother large parts of the globe.  But the administration did not offer this dire forecast, premised on the idea that the world will fail to cut its greenhouse gas emissions, as part of an argument to combat climate change. Just the opposite: The analysis assumes the planet’s fate is already sealed.  The draft statement, issued by the National Highway Traffic Safety Administration (NHTSA), was written to justify President Trump’s decision to freeze federal fuel-efficiency standards for cars and light trucks built after 2020. While the proposal would increase greenhouse gas emissions, the impact statement says, that policy would add just a very small drop to a very big, hot bucket. The document projects that global temperature will rise by nearly 3.5 degrees Celsius above the average temperature between 1986 and 2005 regardless of whether Obama-era tailpipe standards take effect or are frozen for six years, as the Trump administration has proposed. The global average temperature rose more than 0.5 degrees Celsius between 1880, the start of industrialization, and 1986, so the analysis assumes a roughly four degree Celsius or seven degree Fahrenheit increase from preindustrial levels.

Trump Admin Says 7 Degrees Fahrenheit of Warming Inevitable by 2100 -- The Trump administration acknowledged the existence of climate change in an environmental impact statement released last month, The Washington Post reported Friday, but then used that acknowledgement to draw a surprising conclusion.The statement, written by the National Highway Traffic Safety Administration (NHTSA), said that global warming would reach a disastrous seven degrees Fahrenheit (around four degrees Celsius) by 2100. It then went on to argue that an administration proposal to rollback Obama-era fuel efficiency standards for cars and light trucks built after 2020 was justifiable because the greenhouse gas emissions prevented by the Obama standards would have been negligible in the grand scheme of total emissions. The statement writes off the changes necessary to avoid this future as impossible, saying doing so "would require substantial increases in technology innovation and adoption compared to today's levels and would require the economy and the vehicle fleet to move away from the use of fossil fuels, which is not currently technologically feasible or economically feasible."  While Trump has opted to deny climate change in the past, famously calling it a Chinese hoax, Eillie Anzilotti wrote for Fast Company that the statement's findings are in keeping with his past business and policy decisions. "The president, whether in his business dealings or throughout his tenure in office so far, has demonstrated a consistent strategy of prioritizing immediate profit over long-term sustainability.

2018 Arctic sea ice minimum - One of the web sites I watch is NSIDC’s site tracking arctic sea ice.  To be honest, I’m a little surprised that it is still functioning, since the Trump Administration believes that climate change is just a Chinese hoax, so I thought they would take it down almost immediately after coming into office.  Guess they haven’t found it yet!Anyway, if climate change is just a Chinese hoax, they sure are going to extremes to perpetrate it.  Because arctic sea ice hit its 2018 minimum on September 23.  Here’s what it looked like on that date: All that was left was a rectangular shaped piece in the middle of the ocean into the Canadian archipelago, and a narrow salient reaching towards eastern Siberia. While the “Northwest passage” on the American side never quite opened up this year, the “North sea” route on the Asian side was open for several months. This was tied for the sixth lowest minimum sea ice extent in the last 40 years. Perhaps more interesting is how this year’s minimum compared with prior years, as shown on the graph below:  Not only did the amount of sea ice remain in the bottom 10% of all seasons in the last 38 years — in fact, while not shown, it was in that bottom 10% all last autumn and winter as well, i.e., for the entire year — but note on the graph the time during September that sea ice has reached its minimum previously.  At all levels the minimum was reached earlier in September than it was this year. The NSIDC confirmed this in its report on the minimum, saying: The minimum extent was reached 5 and 9 days later than the 1981 to 2010 median minimum date of September 14. The interquartile range of minimum dates is September 11 to September 19. This year’s minimum date of September 23 is one of the latest dates to reach the minimum in the satellite record, tying with 1997.It makes sense that, if the arctic is warming, sea ice would reach its minimum later and its winter maximum earlier., since average temperatures above freezing would be the case for more of the year.  Man, those Chinese hoaxers sure are going to massive extremes to create fake evidence!

How Feedback Loops Are Driving Runaway Climate Change --According to the US National Oceanic and Atmospheric Administration (NOAA), air temperatures in the Arctic are increasing at an “unprecedented rate” — twice as fast as they are around the rest of the globe. NOAA’s 2017 Arctic Report Card states unequivocally that the Arctic “shows no sign of returning to reliably frozen region of recent past decades.”  The Executive Summary of the report also adds, “Arctic paleo-reconstructions, which extend back millions of years, indicate that the magnitude and pace of the 21st century sea-ice decline and surface ocean warming is unprecedented in at least the last 1,500 years and likely much longer.” A recent report from National Geographic revealed that some of the ground in the Arctic is no longer freezing, even during the winter. Along with causing other problems, this will become yet another feedback loop in the Arctic, causing yet more greenhouse gasses to be released from permafrost than are already being released and impacting the entire planet.The simplest explanation for a positive climate feedback loop is this: The more something happens, the more it happens. One of the most well-known examples is the melting of sea ice in the Arctic during the summer, which is accelerating. As greater amounts of Arctic summer sea ice melt away, less sunlight is reflected back into space. Hence, more light is absorbed into the ocean, which warms it and causes more ice to melt, and on and on.

Climate Change Is Forcing the Insurance Industry to Recalculate  - When a wildfire engulfed the Canadian oil-sands boomtown of Fort McMurray two years ago, it hit insurance company Aviva PLC out of nowhere.The British firm had been active in Canada since 1835. Its actuaries long believed wildfire risk to homes in the area was almost nonexistent, it says. Yet flames on the town’s outskirts roared across an area larger than Delaware, forcing 100,000 people to evacuate and leaving insurers with $3 billion in damages to cover.“That is not a type of loss we have experienced in that part of the world, ever,” says Maurice Tulloch, the Toronto-based chief executive of Aviva’s international insurance division. “The previous models wouldn’t have envisioned it.”  Aviva studied the incident and concluded the wildfire was an example of how the earth’s gradually warming temperature is changing the behavior of natural catastrophes. Aviva increased premiums in Canada as a result. The effects of the planet’s slow heating are diffuse. Predictions of the fallout are imprecise, and the drivers are debated. But faced with the prospect of a warming planet, the world of business and finance is starting to put a price on climate change. The price of homes on the U.S.’s eastern seaboard battered by fiercer storms and higher seas is lagging behind those inland. The price of farmland is rising in North America’s once-frigid reaches, partly because of bets it will become more temperate. Investors are turning fresh water into an asset, a wager in part that climate change will make it scarcer.Insurers are at the forefront of calculating the impact. “We don’t discuss the question anymore of, ‘Is there climate change,’” says Torsten Jeworrek, chief executive for reinsurance at Munich Re, the world’s largest seller of reinsurance—insurance for insurers. “For us, it’s a question now for our own underwriting.” For the most part, insurers are acting on climate change by building models that aim to better estimate the impact. That leaves the industry with the tough question of how to reflect in premiums the new understandings of the underlying risk.

UN report spotlights government inaction on climate -- Diplomats gathering in South Korea Monday will find themselves in the awkward position of vetting and validating a major UN scientific report that underscores the failure of their governments to take stronger action on climate. The UN special report on global warming of 1.5 degrees Celsius (2.7 degrees Fahrenheit) above preindustrial levels began as a request from the 195 nations that inked the Paris Agreement in 2015. That landmark pact called for capping the rise in global temperature to "well-below" 2C, and invited countries to submit voluntary national plans for reducing greenhouse gas emissions. To the surprise of many -- especially scientists, who had based nearly a decade of research on the assumption that 2C was the politically acceptable guardrail for a climate-safe world -- the treaty also called for a good-faith effort to cap warming at the lower threshold. At the same time, countries asked the UN's climate science authority, the Intergovernmental Panel on Climate Change (IPCC), to detail what a 1.5C world would look like, and how hard it might be to prevent a further rise in temperature. Three years and many drafts later, the answer has come in the form of a 400-page report -- grounded in an assessment of 6,000 peer-reviewed studies -- that delivers a stark, double-barrelled message: 1.5C is enough to unleash climate mayhem, and the pathways to avoiding an even hotter world require a swift and complete transformation not just of the global economy, but of society too.

Saudi Arabia Shelves Work on SoftBank’s $200 Billion Solar Project   —Saudi Arabia has put on hold a $200 billion plan with SoftBank Group Corp. 9984 -0.31% to build the world’s biggest solar-power-generation project, Saudi government officials said, in a complication for another eye-catching transformation project in the kingdom. The stalled project marks a setback for a partnership between Saudi Arabia and SoftBank that has pursued ambitious ideas. Together, they have created a $100 billion fund for technology company investments that has resulted in a rush of new money flooding into startups.  The project would have turned the world’s most important oil producer into a giant in solar power, ultimately generating about 200 gigawatts of energy—more than three times what the country needs every day. The plan was announced by SoftBank Chief Executive Masayoshi Son and Crown Prince Mohammed bin Salman in New York last March and was meant to be an extension of their partnership.  Now, officials and a Saudi government adviser said, no one is actively working on the project. Instead, the officials and the adviser said the Saudi kingdom is working up a broader, more practical strategy to boost renewable energy, to be announced in late October around the time of an investment conference in Riyadh.  The announcement will help clarify the kingdom’s renewable energy goals, a Saudi official said.The development is the latest high-profile project that Saudi Arabia has reconsidered after further consultation. Riyadh in 2016 announced it would raise as much as $100 billion by publicly listing Saudi Arabian Oil Co., known as Aramco, but later put off the IPO. The solar project was meant to be part of the once-in-a-generation economic and societal transformation under way in Saudi Arabia.

Clean Energy Boom Could Fuel One of the World's Dirtiest Industries -The irony of transitioning to clean energy is we’re going to have to mine the shit out of the Earth to do it. Much like our computers and smartphones, wind turbines and solar panels are high-tech devices whose production demands a smattering of metals and minerals from across the periodic table and the planet.  That includes metals and minerals which, today, are sourced from parts of the world with unstable governments or where poor oversight leads to worker exploitation and violence. A recent report warns that the clean energy transition could fuel the emergence of new conflicts over the mining of rare earths, cobalt, lithium, and a host of other much-needed raw materials—unless companies and governments take proactive steps to prevent that from happening.  Many of these materials are going to be hard to replace wholesale. We need rare earths, for instance, to produce the powerful magnets that drive modern wind turbines, while the high energy density of lithium for batteries makes it a favorite choice for electric vehicle manufacturers. And until we get a lot better at recycling these metals, our main option is going to be mining them.  “This report was spurred on by conversations going on about the role of mining in a transition to a low carbon economy,”  To start to fill that gap the report identifies 23 key metals and minerals needed to build the green infrastructure of tomorrow, including wind turbines, solar panels, electric vehicles, and batteries, all of which “are projected to increase in demand exponentially through 2050.” The authors mapped established mining reserves for critical metals onto information about a state’s fragility and corruption to identify potential conflicts hotspots. “Conflict” can range from mining operations that finance militias to those using forced labor, exploiting workers, polluting communities, or fueling local tensions over resources.

Wide-scale US wind power could cause significant warming - MIT Technology Review - Wind power is booming in the United States. It’s expanded 35-fold since 2000 and now provides 8% of the nation’s electricity. The US Department of Energy expects wind turbine capacity to more than quadruple again by 2050.But a new study by a pair of Harvard researchers finds that a high amount of wind power could mean more climate warming, at least regionally and in the immediate decades ahead. The paper raises serious questions about just how much the United States or other nations should look to wind power to clean up electricity systems.The study, published in the journal Joule, found that if wind power supplied all US electricity demands, it would warm the surface of the continental United States by 0.24 ˚C. That could significantly exceed the reduction in US warming achieved by decarbonizing the nation’s electricity sector this century, which would be around 0.1 ˚C.“If your perspective is the next 10 years, wind power actually has—in some respects—more climate impact than coal or gas,” coauthor David Keith, a professor of applied physics and public policy at Harvard, said in a statement. “If your perspective is the next thousand years, then wind power is enormously cleaner than coal or gas.” Specifically, the “avoided warming” achieved by eliminating fossil-fuel sources could surpasses any warming from wind in about a century in the studied scenario, as emissions reductions accumulate. Notably, the warming effect from wind in the studied scenario was 10 times greater than the climate effect from solar farms, which can also have a tiny warming effect. The core problem is that wind turbines generate electricity by extracting energy out of the air, slowing down wind and otherwise altering “the exchange of heat, moisture, and momentum between the surface and the atmosphere,” the study explains. That can produce some level of warming.

Wind Power Isn’t as Clean as We Thought It Was - Any solution to global warming will almost certainly rely on an expansion of renewable energy, reducing carbon dioxide emissions with clean solar or wind energy and related technologies. It’s still far from clear, however, which technologies might deliver copious amounts of energy when we need it while avoiding negative environmental consequences. Research published today may help clarify the situation — and it’s not encouraging for wind-power enthusiasts. It suggests that the power available from wind is much more limited than many experts thought, and that deployment on a larger scale could significantly raise temperatures over the Earth’s surface, as turbines alter atmospheric flows. The research highlights a painful but not altogether surprising reality: Even the cleanest renewable technologies come with environmental costs.  Questions remain about how much energy we might expect any one technology to supply and what the consequences of significantly scaled-up use might be. For wind power, researchers have debated how much energy might ultimately be harvested, with estimates of the available energy density — how much we might gather per unit of surface area — ranging all the way from 0.5 to 200 watts per square meter. The higher figures tend to come from studies of single turbines in isolation, and lower numbers when considering how, in larger wind farms, one turbine can disrupt wind flows and reduce the energy-gathering efficiency of other turbines nearby.  The new study comes down firmly on the lower end of the range.  Removing energy from atmospheric winds means those winds carry less energy afterward, moving more slowly, among other things. The simulations revealed that interactions of the turbines with the atmosphere would likely lead to a redistribution of heat in the lower atmosphere, resulting in a 0.54 degrees Celsius (0.97 degrees Fahrenheit) warming within the wind farms’ region itself, and an increase of 0.24 degrees Celsius (0.43 degrees Fahrenheit) over the continental U.S.   They also found that an expansive wind farm would need to operate for more than a century or so before the reduction of global carbon dioxide emissions would offset the local warming effect.

Trump’s EPA Considers Merger That Could Muffle Scientists’ Voices - The Environmental Protection Agency is actively weighing a plan to merge two science offices in a bid to pare redundancies -- an effort that is feeding criticism that the agency is diminishing the stature of scientists. Under the reorganization plan, the Office of Science Advisor and the Office of Science Policy would merge. The offices are currently located within the Office of Research and Development, and the shift would effectively downgrade the science adviser within the agency. Jennifer Orme-Zavaleta, EPA’s principal deputy assistant administrator for science said the reorganization was developed by the EPA’s Office of Research and Development “in order to reduce redundancies.” Critics say the move could diminish the role and stature of scientists at the EPA, muffling their voice in the agency’s regulatory decision making. The shift, which was described to EPA staff in a meeting Wednesday, follows other moves under President Donald Trump to alter the status of agency scientists and their outside advisers. It also comes one day after the EPA put its children’s health chief on administrative leave. Ruth Etzel, head of the EPA’s Office of Children’s Health Protection, told colleagues that her removal wasn’t for disciplinary reasons, Bloomberg Environment reported Wednesday. The EPA Office of Science Advisor helps coordinate scientific standards across the agency and is tasked with providing unfiltered advice to the administrator. “By dissolving the science adviser’s office and putting it several layers down in ORD, that greatly accelerates the decay of science advice within the EPA administrator’s office,” said Michael Halpern, deputy director of the Center for Science and Democracy at the Union of Concerned Scientists. “That kind of coordination is much more difficult to do if they’re buried down inside an office.”   EPA staff briefed on the effort Wednesday said it was cast as a done deal, with the reorganization definitely taking place, according to two people familiar with the meeting who asked for anonymity because the session wasn’t public.

How Germany quietly turned against action on climate change - The European Commission has  given up on plans to raise the EU’s 2030 carbon emissions target — and critics blame the German government for ‘torpedoing’ the move.It comes as Germany is refusing to clarify its stance on proposals by other EU states to phase out subsidies for coal power plants and force them to meet tougher pollution rules.That EU posturing is the latest in a series of actions taken by Berlin to stifle higher climate ambition where it threatens key industries, including pushing for weaker car emission standards and renewable energy targets.  And then there’s Hambach forest, where the energy ministry has backed coal giant RWE in its attempt to clear ancient woodland to make room for the expansion of the country’s biggest lignite mine. [Update: a German court hard ordered a moratorium on clearing the forest]The widely-reported fight for the forest may be the German government’s most visible move to defend fossil fuels, but behind the scenes the it has quietly been taking a number of positions at odds with the country’s Energiewende-inspired green rhetoric. Earlier this year the EU was looking to increase its renewable energy and energy efficiency targets in light of the Paris Agreement, and Germany used its substantial clout to weaken the end result.As much of western and northern Europe called for a 35% target for renewables by 2030,Germany (alongside the UK) backed a much-weaker 30% goal — which led to a compromise of 32%.Then, as the EU climate commissioner tried to formally raise the body’s carbon emission targets to reflect its higher RES and efficiency aims, the Germans once again tried – and in this case succeeded – to derail the push for greater ambition.

International Solar Alliance can replace OPEC as key energy supplier - An India-led coalition of nations aims to harness solar energy, which it says will eventually replace the Organisation of Petroleum Exporting Countries (OPEC) oil cartel. “The role of the oil wells today will be that of the sun’s rays tomorrow,” India’s Prime Minister Narendra Modi said in capital New Delhi on Tuesday. “In the coming years, when the world discusses initiatives for the welfare of humanity in the 21st century, ISA’s name will be at the top,” Modi said. The ISA, launched by Modi and then-French President Francois Hollande in 2015 and based in India, is an alliance of countries mostly between the Tropics of Cancer and Capricorn that receive plentiful sunshine. It aims to reduce the costs of financing solar power and its required technology and to mobilise more than a trillion dollars to build solar facilities and infrastructure by 2030.

Coal binge puts Paris climate targets further out of reach - The capacity of the world’s coal-fired power stations would increase by a third if all 1380 plants planned or under development are built, making it tougher to meet Paris climate goals, a leading German non-profit group says. All up, the projects would add more than 672 gigawatts of capacity. In a sign national promises to cut greenhouse gas emissions aren’t being matched by action, a net 92 gigawatts in new coal plant capacity has been added since the Paris climate accord was signed in 2015. That’s an increase equivalent to the combined fleets of Russia and Japan, or about four times Australia’s total. The coal boom is underway despite a growing number of financial groups and investors ditching the sector. The void, though, is partly being filled by Chinese state-owned developers such as the National Energy Investment Group and China Huadian group, which are being backed export finance banks. Those two alone account for about 63 gigawatts, while India’s National Thermal Power Corp is the third-largest developer with about 25 gigawatts in the pipeline

German energy secretary backs forest clearance to build coal mine -  Controversial plans to chop down a German forest to build a vast coal mine should proceed because Germany needs the polluting fuel to keep the lights on, according to the chief of the country’s state secretary for energy.Dozens of treehouses built and occupied by campaigners for years have been recently cleared by police to make way for plans by energy firm RWE, which owns Hambach forest near Cologne, to expand its nearby opencast coal mine.Environmental groups have rallied against the project, which they argue would lock the country into higher carbon emissions, just as a government-appointed commission simultaneously debates a timeline for Germany to phase out coal.“It should go ahead,” said Thomas Bareiß when asked by the Guardian if the Hambach clearance should proceed when the “coal exit commission” is still deliberating.Bareiß said RWE had “a right to do this”, noted that the regional government had already agreed the clearance and said Germany needed the mine to maintain its energy supplies in the short term. “We still need lignite [brown coal] for our reliable coal supply.”He conceded the highly polluting form of coal was disliked by most of the German public but said extracting lignite had a long tradition in some regions. “In general lignite is unpopular. People think it is dirty.” But Bareiß said Germany, which sources nearly 40% of power from coal, would still need its coal plants in the early 2020s. That is partly because Germany is also due to shut its last nuclear power station in 2022. “At end of the decade there is more possibility to shut coal [plants],” he said.

Lawsuit challenges EPA approval of Oklahoma's coal ash program -- Three environmental groups have asked a federal court to vacate the Environmental Protection Agency’s approval of a state-run coal ash permit program in Oklahoma, arguing that the state’s program will not adequately protect the environment.  States are entitled under a 2016 federal law to create their own coal ash regulation programs in lieu of operating under federal rules, but Oklahoma’s program would allow unsafe coal ash pits to continue operating, Waterkeeper Alliance and two other groups said in a lawsuit filed on Wednesday in Washington, D.C. federal court.   To read the full story on Westlaw Practitioner Insights, click here: bit.ly/2OSh3SV.

Trump Administration Prepares a Major Weakening of Mercury Emissions Rules -The Trump administration has completed a detailed legal proposal to dramatically weaken a major environmental regulation covering mercury, a toxic chemical emitted from coal-burning power plants, according to a person who has seen the document but is not authorized to speak publicly about it. The proposal would not eliminate the mercury regulation entirely, but it is designed to put in place the legal justification for the Trump administration to weaken it and several other pollution rules, while setting the stage for a possible full repeal of the rule. Andrew Wheeler, a former coal lobbyist who is now the acting administrator of the Environmental Protection Agency, is expected in the coming days to send the proposal to the White House for approval. The move is the latest, and one of the most significant, in the Trump administration’s steady march of rollbacks of Obama-era health and environmental regulations on polluting industries, particularly coal. The weakening of the mercury rule — which the E.P.A. considers the most expensive clean air regulation ever put forth in terms of annual cost to industry — would represent a major victory for the coal industry. Mercury is known to damage the nervous systems of children and fetuses. 

EPA Wants Coal Plants to Emit More Toxic Mercury - The Trump administration is proposing to significantly weaken a rule that limits the amount of mercury and other toxic emissions from coal plants, the New York Times reported on Sunday. Andrew Wheeler, a former coal lobbyist and acting administrator of the U.S. Environmental Protection Agency (EPA), has drafted a plan that would undermine the 2011 Mercury and Air Toxics Standards (MATS) and has sent the proposal to the White House Office of Management and Budget, according to the Washington Post. Burning coal releases harmful byproducts such as mercury, which can pollute the environment and harm the nervous systems of children and fetuses. The Obama-era standard found between $4 million to $6 million in health benefits from mercury reduction alone, but also justified the regulation for its "co-benefits" of reducing pollution of soot and nitrogen oxide from power plants. In all, the rule's total value was estimated to save between $37 billion to $90 billion each year due to air quality improvements, as well as preventing up to 11,000 premature deaths, 4,700 heart attacks and 130,000 asthma attacks every year, the previous administration said then.The regulation has had a contentious and litigious history, but in 2015 the Supreme Court upheld the rule and the utility industry has complied with the standards ever since. However, installing mercury pollution scrubbers has cost the sector $9.6 billion a year, "making it the most expensive clean air regulation ever put forth by the federal government," the New York Times wrote.Wheeler's proposal, according to the Times, does not eliminate MATS but would direct the EPA to exclude the "co-benefits" when considering the economic impact of a regulation. EPA spokesman John Konkus explained to the Post that "the MATS Rule was an egregious example of the Obama administration's indifference toward required cost benefit analysis." But John Walke, Clean Air director at the Natural Resources Defense Council called the move a "sweeping attack on considering the benefits of cutting hazardous pollution from coal plants.""It's the first legal step toward eliminating mercury, lead and other dangerous pollution standards entirely," he said in a statement received by EcoWatch. "And what the Trump EPA is pursuing—the fraudulent denial of real-world benefits from clean air and climate safeguards—is the unholy grail of the polluting industry and its lobbyists for decades."

EPA Moves to Scale Back Methane Rules - Regulatory Review - U.S. oil and natural gas companies emit significant amounts of methane, “a potent greenhouse gas” that the Obama Administration sought to regulate in 2016. Fewer than two years into his presidency, however, President Donald J. Trump—who applauded the energy industry for surviving the last “eight years of hell”—has overseen a comprehensive about-face by federal environmental regulators.In September 2018, the U.S. Environmental Protection Agency (EPA) proposed changes toObama-era methane regulations, seeking to reduce regulatory burdens and harmonize federal and state requirements. EPA’s recently proposed rule would reduce the frequency for monitoring methane leaks and increase the time allowed for their repair. The proposed rule would alsoallow companies to meet certain state requirements for leaks as an alternative to EPA standards, finding that state regulations such as Texas’s “are at least equivalent” to EPA’s leak requirements. EPA’s proposed rule would additionally streamline the process by which companies request to limit emissions through “alternative means” not contained in federal regulations, such as compliance with state emissions programs or through the private development of new technologies.Although EPA estimated that the proposal would save the industry $484 million from 2019 to 2025, the agency also acknowledged that the rule “is expected to lead to an increase in emissions”—emissions that the agency predicted will “degrade air quality and adversely affect health and welfare.” Nonetheless, EPA Acting Administrator Andrew Wheeler touted the proposal’s elimination of “unnecessary and duplicative red tape,” which he expects to generate large savings for the industry and “support increased domestic energy production—a top priority of President Trump.” The American Petroleum Institute (API) likewise applauded the proposal, suggesting that “the proposed changes could ensure that the rule is based on best engineering practices and cost-effective.” API writer Mark Green rejected claims by media outlets that the proposed rule would facilitate releasing methane into the atmosphere and that it represents a broader assault on environmental regulations. Rather, Green argues that because methane is a key ingredient in the production of natural gas, energy companies are already highly motivated to prevent as much of it from escaping as possible—in other words, lost methane translates into lost earnings.

EPA orders extensive cleanup of radioactive waste site near St. Louis - The Environmental Protection Agency on Thursday ordered an aggressive cleanup of a long-controversial landfill contaminated with radioactive waste near St. Louis, delighting community activists who have fought for such an outcome but angering companies who argue that the agency’s own science called for a more modest cleanup. “This action reflects President Trump’s commitment to return EPA to its core responsibility — clean air, clean water and clean land,” EPA Acting Administrator Andrew Wheeler said at a morning news conference of the West Lake Landfill in Bridgeton, Mo., which has lingered on the agency’s Superfund list since 1990.   The EPA’s order, which caps decades of bureaucratic delay, intense debates and public protests, is expected to take fewer than five years and cost those responsible for the site an estimated $205 million. The West Lake Landfill contains thousands of tons of radioactive material from the World War II-era Manhattan Project that was dumped at the site in the 1970s, where it has languished ever since amid other waste. The latest plan calls for excavating 70 percent of the radioactive waste from the site — a far cry from a 2008 solution proposed by the George W. Bush administration to cover and monitor the waste. Thursday’s final decision triggered a wave of texts and tearful phone calls among a collection of community members who had been fretting about the radioactive material near their neighborhoods and lobbied for the government to finally remove it. “I’m angry it took so long, but I’m relieved.” Thursday’s decision hardly brought such relief to Republic Services and Exelon, whose subsidiaries are responsible for the cleanup at West Lake, along with the Energy Department. In a statement, the subsidiary of Republic that oversees the site called the order “arbitrary and capricious.” The firm is “opposed to the selected excavation because it creates unacceptable risk with no proportional benefit, will greatly increase the time needed to remediate the site, and is contrary to EPA’s own findings regarding the risks posed by the site,” the firm said in a statement. It added that the 2008 recommendation to “cap and monitor” the waste wouldn’t have risked exposing workers and community members to waste as it is excavated and moved elsewhere.

Hidden danger: radioactive dust is found in communities around nuclear weapons sites - At the dawn of the nuclear age, the Franklin D. Roosevelt administration placed the nation’s major nuclear weapons production and research facilities in large, isolated reservations to shield them from foreign spies — and to protect the American public from the still unknown risks of radioactivity. By the late 1980s, near the end of the Cold War, federal lands in South Carolina, Tennessee, New Mexico, Colorado, Ohio and Washington, among other places, were so badly polluted with radionuclides that the land was deemed permanently unsuitable for human habitation. That much has long been accepted as a price for the nation’s nuclear deterrent. But a far more complex problem could emerge if recent research is correct. Studies by a Massachusetts scientist say that invisible radioactive particles of plutonium, thorium and uranium are showing up in household dust, automotive air cleaners and along hiking trails outside the factories and laboratories that for half a century contributed to the nation’s stockpile of nuclear weapons.  The findings provide troubling new evidence that the federal government is losing control of at least some of the radioactive byproducts of the country’s weapons program. Marco Kaltofen, a nuclear forensics expert and a professor at Worcester Polytechnic Institute, said he collected samples from communities outside three lab sites across the nation and found a wide variation of particle sizes. He said they could deliver lifelong doses that exceed allowable federal standards if inhaled. “If you inhale two particles, you will exceed your lifetime dose under occupational standards, and there is a low probability of detecting it,” he said.

Treated water at Fukushima nuclear plant still radioactive — The operator of Japan’s wrecked Fukushima nuclear plant said Friday that much of the radioactive water stored at the plant isn’t clean enough and needs further treatment if it is to be released into the ocean. Tokyo Electric Power Co. and the government had said that treatment of the water had removed all radioactive elements except tritium, which experts say is safe in small amounts. They called it “tritium water,” but it actually wasn’t. TEPCO said Friday that studies found the water still contains other elements, including radioactive iodine, cesium and strontium. It said more than 80 percent of the 900,000 tons of water stored in large, densely packed tanks contains radioactivity exceeding limits for release into the environment. TEPCO general manager Junichi Matsumoto said radioactive elements remained, especially earlier in the crisis when plant workers had to deal with large amounts of contaminated water leaking from the wrecked reactors and could not afford time to stop the treatment machines to change filters frequently. “We had to prioritize processing large amounts of water as quickly as possible to reduce the overall risk,” Matsumoto said. About 161,000 tons of the treated water has 10 to 100 times the limit for release into the environment, and another 65,200 tons has up to nearly 20,000 times the limit, TEPCO said. More than 7 ½ years since a massive March 2011 earthquake and tsunami destroyed three reactors at the plant, Japan has yet to reach a consensus on what to do with the radioactive water. Fishermen and residents oppose its release into the ocean. Nuclear experts have recommended the controlled release of the water into the Pacific as the only realistic option. The release option faced harsh criticism at town meetings in Fukushima and Tokyo in late August, when TEPCO and government officials provided little explanation of the water contamination, which had been reported in local media days earlier. TEPCO only says it has the capacity to store up to 1.37 million tons of water through 2020 and that it cannot stay at the plant forever.

Renowned Cosmologist Warns- Earth Could Be Crushed By Particle Accelerator - Martin Rees, a well-respected British cosmologist, has a warning about particle accelerators. There is a small, but very real possibility of disaster.  Rees claims Earth could be crushed to the size of a soccer field by particle accelerators. The Large Hadron Collider, which is a particle accelerator, shoots particles at incredibly high speeds, smashes them together, and scientists observe the fallout. According toScience Alert, these high-speed collisions have helped us discover a lot of new particles, but according to Rees, these discoveries come with several risks to humanity. In a new book, called On The Future: Prospects for Humanity, he gives some pretty dire possible outcomes of this type of advancement in science.“Maybe a black hole could form, and then suck in everything around it,” he writes, as Sarah Knapton reported over at the Telegraph.“The second scary possibility is that the quarks would reassemble themselves into compressed objects called strangelets. That in itself would be harmless. However, under some hypotheses, a strangelet could, by contagion, convert anything else it encounters into a new form of matter, transforming the entire earth in a hyperdense sphere about one hundred meters across.” That’s about the length of one soccer field or 330 feet.But there’s an even more sinister way that Earth could be destroyed by the particle accelerators built on it. According to Rees, this would be a “catastrophe that engulfs space itself.”“Empty space – what physicists call the vacuum – is more than just nothingness. It is the arena for everything that happens. It has, latent in it, all the forces and particles that govern the physical world. The present vacuum could be fragile and unstable,” Ress said.   “Some have speculated that the concentrated energy created when particles crash together could trigger a ‘phase transition’ that would rip the fabric of space. This would be a cosmic calamity, not just a terrestrial one.”

FirstEnergy Solutions can retire 4,004 MW of fossil generation without reliability impact: PJM -- Retirement of FirstEnergy Solutions' 4,004 MW of coal and diesel generating units in Ohio and Pennsylvania by June 2021 and June 2022 will not adversely impact reliability, PJM Interconnection said Monday in revealing the results of a new study.  PJM completed its 30-day reliability analysis of the units Friday, according to an emailed statement. While the report is not public, it will be discussed at an October 11 Transmission Expansion Advisory Committee meeting and the presentation slides will be posted to the grid operator's website October 8, spokesman Jeff Shields confirmed in an email Monday."The planned deactivations can proceed as scheduled without compromising reliability in the PJM transmission grid, according to the study," the statement said. "Any potential reliability impacts will be addressed by a combination of already planned baseline transmission upgrades and the completion of new baseline upgrades."Akron, Ohio-based FES, formerly a subsidiary of FirstEnergy, has said it will continue normal operations at the facilities until the announced retirement dates. FES announced the power-plant retirements in an August 29 statement.In March, FES said it would deactivate three nuclear power plants with combined capacity of 4,001 MW between May 2020 and October 2021, which brings the total potential deactivations to roughly 8,000 MW of coal-fired, oil-fired and nuclear generation.On March 29, FES sent a letter asking Energy Secretary Rick Perry to issue an emergency order directing PJM to take steps to forestall nuclear and coal-fired retirements. Two days later, FES and FENOC, the FirstEnergy Nuclear Operating Company, and six other subsidiaries filed for bankruptcy. The Trump administration is considering policy action to prevent the retirement of coal and nuclear plants that have been challenged by historically low wholesale power prices pulled down by abundant low-priced natural gas. These market dynamics have made it more economical over the past few years in multiple US markets to run natural gas-fired plants and other power generation resources than coal oil or nuclear plants.

 Four Permits Issued in Ohio's Utica – The Ohio Department of Natural Resources issued four permits for horizontal wells in eastern Ohio’s Utica shale during the week ended Sept. 22, the agency reported. Eclipse Resources obtained three permits for horizontal wells in Monroe County, while XTO Energy secured a single permit for a new well in Belmont County, according to ODNR. There were 18 active oil and gas rigs operating in the Utica during the week, ODNR reported. As of Sept. 22, ODNR has issued 2,889 permits in Ohio’s Utica and 2,421 of those wells are drilled. Of that number, 2,205 wells are in production. There were no new permits issued in the northern tier of the Utica, which encompasses Mahoning, Trumbull and Columbiana counties. Nor were there new permits issued to energy companies in neighboring Lawrence and Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.

Ohio shale gas production spikes as driller Ascent pushes expansion - Utica Shale gas from three counties and five producers led Ohio's 50% year-on-year increase in production to 6.4 Bcf/d in the second quarter.The three counties -- Jefferson, Monroe and Belmont -- all directly across the Ohio River from West Virginia, accounted for 75% of the total second-quarter production reported to the Ohio Department of Natural Resources by Wednesday. Likewise, the state's top five producers, led by Ascent Resources, accounted for 75% of the state's shale gas production.Jefferson County wells, which tripled production from the 2017 second quarter, are split almost exactly in half between two drillers, Ascent and Chesapeake Energy. Ascent was formed around a core of the same executives who pioneered the Utica play for Chesapeake and is now backed by private equity investors First Reserve Management and Energy & Minerals Group.  Ascent more than doubled production in a year and continued to widen its lead over rival Gulfport Energy as Ohio's top Utica Shale producer by volume. The company looks to expand in the play, having struck deals to buy $1.5 billion of Utica wells and leases from Hess and CNX Resources as the second quarter was ending.  Gulfport, the state's previous production leader, increased production 17% compared with the same period of 2017. Gulfport is in the process of milking its Utica dry gas operations, which do not require much new spending, for cash to fund what it says are higher-margin oily wells in the Woodford Shale of Oklahoma's SCOOP play.Gulfport is cutting back from two drilling rigs to one in the Utica after operating as many as six rigs in Ohio and will turn its attention to completing the 50 to 60 Utica wells it has drilled but not yet fracked and placed online."At current crude oil and natural gas prices, the SCOOP offers higher returns (71% for Woodford wet gas) than the Utica (57% Utica dry gas east) and commands a higher allocation of capital,"   Judging by the number of drilling permits pulled by Ohio's producers, the three river counties can expect a mild slackening of activity as drillers start to chase wetter wells with higher proportions on NGLs in interior counties such as Harrison and Guernsey as gas prices stay flat and NGL prices increase.

ODNR Issues 14 Permits in Utica Shale – The Ohio Department of Natural Resources last week issued 14 new permits for horizontal wells in eastern Ohio’s Utica shale to two energy companies. Ascent Resources, fast becoming the most aggressive oil and gas exploration company in the Utica, secured 10 of the 14 new permits, according to the latest update from ODNR dated Sept. 29. Seven of the permits are for wells in Jefferson County, while three are targeted for Belmont County, according to the agency. ODNR approved four permits for Triad Hunter LLC, which plans to drill new wells in Monroe County. The rig count in the Utica remained unchanged at 18 from the previous week. As of Sept. 29, ODNR had issued 2,892 permits in the Utica, of which 2,420 are drilled and 2,029 are in production. There were no new well permits issued in Mahoning, Trumbull or Columbiana counties during the week. Nor were there new permits issued in neighboring Lawrence and Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.

Organizers make last-ditch effort to get anti-fracking initiative on ballot - The Columbus Dispatch - The Ohio Supreme Court is being asked to reconsider whether a proposal to ban oil and natural gas extraction and waste disposal in Columbus should go on the Nov. 6 ballot.Last month, the Franklin County Board of Elections denied the environmental group Columbus Community Bill of Rights' effort to get the measure on the ballot, questioning its legality. The group filed a complaint with the Ohio Supreme Court, which ruled with the Board of Elections."(The Board of Elections members) are limited to counting signatures and making sure the forms are filled out right. They're not allowed to consider the substance of the proposal," said Terry Lodge, a Toledo-based attorney who is representing the Community Environmental Legal Defense Fund.  Last week, in a last-ditch effort, the group filed its motion for reconsideration with the state Supreme Court."They're looking for every reason to keep us off the ballot. This is our only recourse," said Carolyn Harding, a co-organizer for Columbus Community Bill of Rights.Meanwhile, the clock is ticking. Military and overseas absentee voting began Sept. 22. Early in-person voting and absentee voting will begin Oct. 10. With each passing day, there’s less time to launch a public-awareness campaign about the issue, Lodge said."The group is sort of in suspended animation," he said. "They don’t know whether to campaign or put up signs or what."The proposed ballot initiative would make it illegal to drill for oil and natural gas in Columbus, as well as store or dump drilling waste in the city or transport waste across the city. A "bill of rights" also would assert that residents should have clean water, air and soil that are free from fracking waste in central Ohio. The Ohio Department of Natural Resources regulates oil and natural gas exploration and operation at the state level.The Ohio Supreme Court can uphold its initial ruling or decide to place the measure on the ballot, but there’s no timeline for that to happen. If history is any indication, the court could rule in favor of the group, but just days shy of Election Day:

'Regulatory issues’ delay opening of Sunoco’s Mariner East 2 pipeline - The Mariner East 2 pipeline, previously scheduled to be in operation by the end of September, is delayed again.Sunoco said it is still working to overcome “regulatory issues.” The company missed its own target of starting to operate the troubled natural gas liquids pipeline by the end of September.“ME2 is not in service at this time due to regulatory issues we continue to work through. These issues have slowed our construction in a few areas along the route. We will put the line in service once it is mechanically complete,” Vicki Granado, a spokeswoman for Sunoco’s parent, Energy Transfer Partners said in a statement.Granado did not specify the issues, but Nils Hagen-Frederiksen, a spokesman for Pennsylvania’s Public Utility Commission, said there are “numerous ongoing matters” regarding the project that are before the PUC and have yet to be resolved. They are:

  • A PUC injunction that blocks construction at two sites in Chester County’s West Whiteland Township;
  • A complaint to the PUC by state Sen. Andy Dinniman (D-Chester) and others, seeking to stop construction in West Whiteland;
  • An investigation into the June spill of 33,000 gallons of gasoline into Darby Creek near Philadelphia from an existing ETP pipeline that the company plans to use temporarily as part of ME2 while the new pipeline is being completed;
  • An investigation into a strike on a section of ME2 by a water contractor at Middletown, Delaware County, in May;
  • A joint federal-state investigation into “allegations concerning weld inspections.”

In late August, the PUC said it was looking into reports of “improper” weld inspections. At the federal level, the Pipeline and Hazardous Material Safety Administration said it too was investigating concerns about welds, but said it was focused on how weld x-rays had been taken rather than on the welds themselves.

Zinke talks LNG exports, pipeline constraints, offshore wind in Pa. visit  - Interior Secretary Ryan Zinke stopped in Pittsburgh on Friday to say that natural gas from places like Pennsylvania plays a key role in helping the United States deal with foreign adversaries. If an energy-rich nation like Russia or Iran were to act aggressively toward the United States, he said having an abundance of natural gas would help counter that move. “We can make sure their energy does not go to markets if we need to, and place great economic leverage,” he said. The U.S. can do that because it’s the world’s largest producer of oil and natural gas, he said. Zinke said he foresees the United States helping supply places like Japan and South Korea that rely on energy imports. “I think the big gun is probably liquid natural gas because the market overseas is liquid natural gas, and the U.S. has a lot of it,” he said. Liquefied natural gas terminals such as Maryland’s Cove Point recently began shipping Marcellus Shale gas to Asian nations. The CEO of pipeline developer Williams, who also spoke at the conference, said Pennsylvania continues to be constrained by a lack of pipelines that can carry gas out of the state. “The problem is you’ve got to get it where there is new market,” Alan Armstrong said. “Most of the new market is developing in the southeast states and in the Gulf Coast.” Work on several new liquefied natural gas export terminals is underway in Texas and Georgia.  The company ran into an obstacle constructing its Constitution Pipeline, which would carry Marcellus Shale gas north out of Pennsylvania. New York denied the project a key permit in 2016.  Williams challenged that decision, but the U.S. Supreme Court this year opted to leave in place a lower court ruling that sided with New York. Zinke added that other states have blocked energy-related infrastructure projects, including Washington, which has held up proposals to build a coal export and an oil-by-rail facility. “We’re going to have to have a discussion on whether a state has the right to diminish the economic livelihood of another state, of an adjacent state,” he said.

After the gas explosions, a community looks for alternatives to natural gas -  Nearly 9,000 households in eastern Massachusetts have had to make do without natural gas since mid-September, when an aging natural gas pipeline failed and set off a series of explosions and fires across the cities of Lawrence, Andover and North Andover.Residents who relied on gas to heat their homes and cook their food won't have service again until mid-November at the earliest, according to Columbia Gas of Massachusetts. The company has 48 miles of pipeline to replace, and industry experts question whether it can meet even that timeline.Environmental advocates say it's time to completely rethink the communities' energy systems. They are calling for a "green new deal" that would shift thousands of homes off natural gas and onto electric heating.Columbia Gas has offered to reimburse "reasonable costs" for residents who lost gas service and want to permanently shift to another heating source. Some area residents, rocked by damage to dozens of homes and the death of one person from the gas explosions, have expressed concerns about ever returning to natural gas.But environmentalists will have to work quickly. Columbia's offer to pay residents to cut ties with natural gas could also result in households moving backward—to high-polluting fuel oil. "The choice is open to the customer whether they want to go back to the 19th century or go into the 21st century,"

Orphan Wells: States Wrestle With Soaring Costs For Oil & Gas Industry Mess - On a recent rainy Monday, William Suan treks down a muddy hill on the backside of his property. Hidden in the wooded thicket is a three-foot-tall rusted tube jutting out of the ground. A soft bubbling sound emanates from the well. “See the gas bubbling out of it?” he said. “Sometimes there’s oil. There’s where they had one of those pads to soak up the oil last time I complained about it.”Having enough resources to plug old, inactive wells is a challenge not unique to West Virginia. Across the country, many state regulators have few resources to deal with an ever expanding list of abandoned wells. “The states are pretty good at regulating wells that are being explored, are being fracked, are in production, but they kind of lose interest once that happens,” said Alan Krupnick, a senior fellow with the nonpartisan environmental think tank, Resources For the Future. “There’s not enough attention being paid to reducing the risk from these abandoned wells.” Across the Ohio Valley, thousands of oil and gas wells sit idle. An analysis of state data by the Ohio Valley ReSource estimates more than 8,000 oil and gas wells are considered “orphan.” Definitions of orphan and abandoned wells vary by state, but in general, orphan wells lack an operator or company that can pay to plug them. That responsibility then falls to state regulators who are frequently struggling to keep up with demand and scrambling to find money to clean up the mess.

Mountain Valley Pipeline is Damaging & Very Expensive - Mountain Valley Pipeline never sufficiently showed that it would face harm without access to landowners’ properties, lawyers for those landowners told the 4th Circuit Court of Appeals in Richmond, Virginia, on Tuesday.They also said that, as court battles over the pipeline continue to play out, the landowners are facing irreparable harm. Oral arguments were available on audio recording Wednesday.The case challenges the preliminary injunctions issued by three district judges that granted Mountain Valley Pipeline immediate possession in condemnation proceedings. It’s the first of five pipeline hearings playing out in Richmond this week. On Friday, a panel of judges will hear arguments in two cases challenging permits issued to the Mountain Valley Pipeline, and two challenging the Atlantic Coast Pipeline.On Tuesday, though, lawyers challenged the injunction granted to developers, and their ability to take property without immediately compensating landowners. “You’d better believe losing possession is important to these landowners,” Christopher Johns, a lawyer for the landowners, said. “It’s substantive to them, and it makes a difference to them.” Allowing early possession through a preliminary injunction through condemnation under the Natural Gas Act is far-reaching and unconstitutional, Johns argued. And Mountain Valley Pipeline’s claims of irreparable harm without access to land were only possible, not inevitable, said Derek Teaney, an Appalachian Mountain Advocates lawyer.Mountain Valley Pipeline had said it would face economic loss and lose its Federal Energy Regulatory Commission certificate without speedy access to properties, Teaney said. The project would span 300 miles from Northern West Virginia to Southwest Virginia.Initial plans said the project would cost $3.7 billion and be completed by the end of 2018. But after a panel of judges on the 4th Circuit said the federal government had skirted rules when it approved the pipeline, and FERC halted the project. Developers say that halt pushed completion into 2019 and caused the price of the project to climb to $4.6 billion.

Mountain Valley Pipeline Construction Permit Revoked by Federal Court - Communities along the 300-mile proposed route for the Mountain Valley Pipeline (MVP) heard some good news this week. On Tuesday, the Fourth Circuit Court of Appeals unanimously voted to vacate a permit required by the Clean Water Act, which was previously issued by the U.S. Army Corps of Engineers. The ruling stated the Army Corps lacked the authority to substitute one type of construction for another for the natural gas pipeline, which would crisscross rivers and other sensitive aquatic ecosystems hundreds of times between northern West Virginia and southern Virginia.The case—brought by the Sierra Club, the West Virginia Rivers Coalition, and other citizen organizations—does not kill the project outright, but it is a significant roadblock.MVP is one of two pipelines (the other is the Atlantic Coast Pipeline) that have drummed up fierce public backlash across the region. Concerned residents have been peacefully protesting the projects for months, sometimes among the trees they would be helping to save.The Trump administration hastily approved both pipelines late last year, ignoring the serious risks a spill would pose to the region's watersheds, such as the Chesapeake Bay. Between the two projects, more than315 acres of critical wetlands are at stake, many of which drain into Virginia's Great Dismal Swamp National Wildlife Refuge. The extra sediment that construction would kick up would also harm fish and other aquatic life. Tuesday's decision isn't the first time the Fourth Circuit Court of Appeals has pushed back against the Trump administration's fast-track approval process for environmentally questionable projects. It also pulled a key permit for the Atlantic Coast Pipeline in May after finding that the U.S. Fish and Wildlife Service failed to set clear and adequate limits on its threats to the environment and endangered species.

Troubled $4.6B Pipe Hits New Snag on Surprise Ruling - -- A $4.6 billion shale gas pipeline that’s already been delayed by about a year is facing yet another setback after a court unexpectedly vacated a key permit.   A U.S. appeals court voided a federal authorization for the Mountain Valley project, which will be operated by EQT Midstream Partners LP and is designed to carry natural gas from the Marcellus basin in Appalachia -- America’s biggest reservoir of the fuel -- to Southeast markets.  Other eastern U.S. projects, including Dominion Energy Inc.’s Atlantic Coast pipeline, have faced similar woes. The conduits would join several built in the region over the past few years as Marcellus drillers seek outlets for abundant shale supply. In the case of Mountain Valley, the court sided with environmental groups in a ruling Tuesday, saying the Army Corps of Engineers isn’t allowed to substitute a construction method for the pipeline to get around West Virginia’s requirement that work at stream crossings be completed in 72 hours. The decision is “a huge blow to the project,” said Brandon Barnes, an analyst at Bloomberg Intelligence in Washington. It also comes as a shock to policy and legal analysts because the court had lifted a previous stay involving the same permit, said Christi Tezak, managing director at ClearView Energy Partners. The Aug. 29 decision to lift the original stay, put in place in late June, looked "encouraging" for Mountain Valley and the Corps, she said.  Shares of EQT Midstream fell as much as 2 percent in New York on Wednesday. The Pittsburgh-based company is “disappointed” with the decision and is in the process of figuring out whether it can continue with construction that doesn’t include stream and wetland crossings along the affected portion of the pipeline route, spokeswoman Natalie Cox said in an emailed statement. The developer expects to apply for a new Army Corps permit once West Virginia’s proposed water-crossing modifications are considered. Mountain Valley anticipates receiving a new permit early in 2019, allowing it to maintain is target of being fully in-service in the fourth quarter of next year, Cox said.

MVP hopes for new permit in early 2019, after 4th Circuit action strikes W.Va. authorization— After a federal appeals court struck a general permit for West Virginia water crossings for the Mountain Valley Pipeline, the project developer said it expects to secure a new permit from the US Army Corps of Engineers early in 2019. An order Tuesday by the 4th US Circuit Court of Appeals struck the general permit for stream and water crossings that was in place for 160 miles of pipeline in West Virginia.  Environmentalists who prevailed in the case were quick to argue work must stop on the full route. "Because the MVP certificate from [FERC] specifies that all necessary permits must be in place before the project can proceed anywhere, MVP must also halt work along its entire route," Sierra Club said in a statement late Tuesday. The case at issue involved a dispute over whether the US Army Corps of Engineers had authority to issue a general permit, known as Nationwide 12, rather than an individual stream-by-stream permit, for the pipeline in West Virginia. Sierra Club and other environmental groups argued the general permit failed to meet a state standard that all crossings must be able to be completed in within 72 hours. They argued the Corps improperly imposed one condition requiring the use of a "dry cut" method for constructing four river crossings in the state.  The court, in a brief order, concluded the Corps lacked authority to substitute the dry-cut method and vacated in its entirety the Corps' verification of the pipeline's compliance with the permit. It cited regulation stating that if any part of a project requires an individual permit, the nationwide permit does not apply. Each of the four river crossings using the method are expected to take four-to-six months to complete, the court said.  A continued legal battle is likely over whether MVP has authority to use a general permit for the route, or must pursue an individual permit, which requires more extensive analysis of individual water crossings. Sierra Club has argued in September 13 comments to West Virginia regulators that it believes legal authority is lacking for the modification that would allow use of the general permit.  ClearView Energy Partners predicted the environmental groups would return to FERC promptly with a renewed request to stop work, and suggested FERC would grant that within days in a manner similar to its August stop-work order, in this case, halting all incomplete water crossings.   Nonetheless, MVP's extension of its in-service date to the fourth quarter of 2019 should be enough time for West Virginia or MVP to change the route to cross rivers using a horizontal directional drilling method, they said. 

US approves part of TransCanada Mountaineer natgas pipe for service (Reuters) - U.S. federal energy regulators on Friday approved a request by TransCanada Corp's Columbia Gas Transmission unit to put part of its $3 billion Mountaineer XPress natural gas pipeline project into service in West Virginia. Mountaineer is one of several pipelines designed to connect growing output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in other parts of the United States and Canada. Specifically, the U.S. Federal Energy Regulatory Commission (FERC) approved Columbia's request to put Mountaineer's Elk River compressor station into service. One billion cubic feet is enough gas to power about 5 million U.S. homes for a day. New pipelines built to remove gas from the Marcellus and Utica basins have enabled shale drillers to boost output in the Appalachia region to a forecast record high of around 29.4 bcfd in October from 24.2 bcfd during the same month a year ago. That represents about 36 percent of the nation's total dry gas output of 81.1 bcfd expected on average in 2018. A decade ago, the Appalachia region produced just 1.6 bcfd, or 3 percent of the country's total production in 2008. In other news, TransCanada said on Friday that it placed the first Western phase of its WB XPress project into service. The Western phase is designed to move about 0.76 bcfd of gas from producers in Appalachia to consumers in the Gulf Coast. The company said it plans to finish the second Eastern phase of the $900 million project by the end of the year. TransCanada also said it plans to finish its $600 million Gulf XPress project by the end of the year. Gulf XPress is designed to move 0.88 bcfd of gas from Appalachia to the U.S. South.

US approves part of TransCanada WB XPress natgas pipe for service (Reuters) - U.S. federal energy regulators on Thursday approved a request by TransCanada Corp's Columbia Gas Transmission unit to put part of its WB XPress natural gas pipeline project into service in West Virginia. WB XPress is one of several pipelines designed to connect growing output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in other parts of the United States and Canada. The U.S. Federal Energy Regulatory Commission (FERC) said in a filing approving the startup of the $900 million project that Columbia has "adequately stabilized the areas disturbed by construction and that restoration is proceeding satisfactorily." One billion cubic feet is enough gas to power about 5 million U.S. homes for a day. New pipelines built to remove gas from the Marcellus and Utica basins have enabled shale drillers to boost output in the Appalachia region to a forecast record high of around 29.4 bcfd in October 2018 from 24.2 bcfd during the same month a year earlier. That represents about 36 percent of the nation's total dry gas output of 81.1 bcfd expected on average in 2018. A decade ago, the Appalachia region produced just 1.6 bcfd, or 3 percent of the country's total production in 2008. 

WB XPress Project’s Western Build Placed Into Service -- TransCanada today announced it has placed the Western Build of its WB XPress (WBX) project into service. “WB XPress provides an attractive outlet for our producer customers, creating significant new takeaway capacity in Appalachia,” said Stan Chapman, executive vice president & president, U.S. Natural Gas Pipelines. “We are pleased to deliver on the first phase of this project and look forward to placing the Eastern Build in-service later this year.” The Western Build of WBX is designed to move approximately 760 million cubic feet of natural gas per day to a delivery point on Tennessee Gas Pipeline’s Broad Run System for transportation to the Gulf Coast. Highlights of the project include construction of the Elk River Compressor Station in Clendenin, West Virginia, along with associated pipeline and facilities. WBX is an approximate US$900 million investment, upgrading and enhancing an existing TransCanada pipeline system that has been safely serving customers for over 60 years. The project includes two new compressor stations, 30 miles (48 kilometres) of greenfield pipeline and modifications to seven existing pipelines, allowing an additional 1.3 billion cubic feet of natural gas to flow through the system per day. The project is part of TransCanada’s $28 billion near-term growth portfolio that includes US$8 billion in natural gas pipelines in the United States. 

US approves Williams' Atlantic Sunrise natgas pipe for service (Reuters) - U.S. federal energy regulators on Thursday approved a request by Williams Cos Inc’s Transcontinental Gas Pipe Line Co (Transco) unit to put the Atlantic Sunrise natural gas pipeline from Pennsylvania to South Carolina into service. Atlantic Sunrise is one of several pipelines designed to connect growing output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in other parts of the United States and Canada. The U.S. Federal Energy Regulatory Commission (FERC) said in a filing approving the startup of the nearly $3 billion project that Transco has “adequately stabilized the areas disturbed by construction and that restoration is proceeding satisfactorily.” The 1.7 billion-cubic-feet-per-day (bcfd) Atlantic Sunrise project includes about 198 miles (319 km) of new pipe located mostly in Pennsylvania, two new compressor stations and compressor station modifications in five states. One billion cubic feet is enough gas to power about 5 million U.S. homes for a day. Cabot Oil & Gas Corp has secured about 1 bcfd of transport capacity on Atlantic Sunrise. New pipelines built to remove gas from the Marcellus and Utica basins have enabled shale drillers to boost output in the Appalachia region to a forecast record high of around 29.4 bcfd in October 2018 from 24.2 bcfd during the same month a year earlier. That represents about 36 percent of the nation’s total dry gas output of 81.1 bcfd expected on average in 2018. A decade ago, the Appalachia region produced just 1.6 bcfd, which was only 3 percent of the nation’s total production in 2008. Williams said it started laying new pipe in Pennsylvania in September 2017. FERC authorized construction of the project in February 2017. 

FERC Issues Trio of Orders to Advance Appalachian Gas Pipeline Projects -- FERC on Friday issued letter orders to advance a trio of natural gas pipeline projects in the Appalachian Basin.The Federal Energy Regulatory Commission granted Columbia Gas Transmission LLC (CGT), a TransCanada Corp. affiliate, permission to enter the Elk River Compressor Station into service to support its Mountaineer XPress Project [CP16-357]. Elk River, in Kanawha County, WV, was constructed as part of CGT's WB XPress Project [CP16-38], and was given authorization by the Commission to enter service for the latter project on Thursday.FERC approved a CGT request to increase the initial monthly incremental recourse reservation rate on Mountaineer XPress last August, and issued a certificate of public convenience and necessity for the project in January. It is expected to enter service late this year.Mountaineer XPress would add 164.5 miles of 36-inch diameter pipe and six miles of 24-inch diameter pipe to expand CGT's system. It would add about 2.7 Bcf/d of capacity to the Columbia Gas system and is designed to allow additional volumes of Marcellus and Utica shale gas to reach markets in the Midwest, Northeast, South and Gulf Coast.In a second letter order, FERC approved a variance request by Rover Pipeline LLC for 0.3 acres of temporary workspace in Monroe County, OH, to repair an off-right-of-way slip and to retrieve sediments associated with the Rover Pipeline Project [CP15-93]. The workspace is along the 42-inch diameter Seneca Lateral.Last month, Rover asked for FERC authorization to start service on two final supply laterals, Sherwood and CGT, to support the 3.25 Bcf/d Appalachian takeaway project. FERC gave authorization for two additional Rover laterals, Burgettstown and Majorsville, to enter service last August. FERC also approved, in a third letter order, a request by Dominion Energy Transmission Inc. to use 0.24 acres in Doddridge County, WV, as additional temporary workspace for truck turn-arounds at its 1.5 million Dth/d Supply Header Project (SHP) [CP15-555]. SHP includes about 37.5 miles of pipeline looping and modifications to existing compressor stations in West Virginia and Pennsylvania, and is related to work on the embattled Atlantic Coast Pipeline.

US Forest Service seeks 'streamlined' oil and gas permit process - A public comment period ends Oct. 15 for a plan by the U.S. Forest Service to accelerate the permitting process for oil and gas development in the 44 national forests where drilling is authorized, and West Virginia’s Monongahela National Forest is among them.The Forest Service announced earlier this month that it is planning to revise “outdated and inefficient regulations for oil and gas resources” on national forest lands.“This is one of many efforts that our agency is undertaking to focus on our priority of regulatory reform,” Interim Forest Service Chief Vicki Christiansen said in the announcement. “Our goal is to make our processes as simple and efficient as possible while ensuring a sustainable environment for future generations.”About 60 active gas wells, most of them storage wells, are currently found in the Mon. None of the wells were horizontally drilled, as is common in Marcellus Shale production areas. The plan to “update, clarify and streamline internal processes related to environmental review and permitting,” as it is described in the Federal Register, was undertaken to clear a backlog of nearly 2,000 pending Expressions of Interest to acquire oil and gas leases. The pending leases involve nearly 2 million acres of national forest lands. The proposed streamlining would make possible “quicker leasing decisions” for oil and gas developers who, under existing rules, sometimes wait five to 10 years for final leasing decisions to be made, according to the Forest Service’s notice in the Federal Register. The rule changes would “promote domestic oil and gas production by allowing industry to begin production more quickly.”

 Great Lakes 'At Risk' From Plan to Replace Aging Enbridge Pipelines, Environmentalists Argue - The state of Michigan and Canadian pipeline company Enbridge announced a deal Wednesday to replace controversial aging pipelines that environmental groups worried put Lakes Michigan and Huron at risk for anoil spill, The Detroit Free Press reported. Under the new plan, the existing 65-year-old pipelines, which are part of Enbridge's Line 5 carrying oil and liquefied natural gas between Wisconsin and Ontario, will be replaced with a new pipeline in a tunnel to be drilled into the bedrock beneath the Straits of Mackinac connecting Lakes Huron and Michigan, The Associated Press reported. The project will take seven to 10 years to complete and cost as much as $500 million. Enbridge will foot the bill.Michigan Governor Rick Snyder called the proposal "a common-sense solution" to the problem posed by the aging pipelines, saying that it would resolve "nearly every risk" of an oil spill in the Straits of Mackinac.But environmental groups, who have long opposed the pipeline, disagreed that the new plan was any sort of solution."Today, Governor Snyder cemented his disastrous legacy for the Great Lakes and the people of Michigan," Michigan organizer for Clean Water Action Sean McBearty told The Detroit Free Press. "As his administration comes to a close, he announced a last-minute deal with Enbridge Energy that will succeed in keeping the Great Lakes at risk from a massive Line 5 oil spill for the foreseeable future."Mike Shriberg of the National Wildlife Federation also told The Associated Press that the plan would leave the body of water vulnerable to spills for many years, and David Holtz of Oil and Water Don't Mix said that Michigan's own studies showed there were better ways to provide the state with energy. Enbridge said it would take measures to reduce the risk of an oil spill from the older pipelines during construction, including (a) conducting underwater investigations, (b) placing cameras in the straits to keep track of ship movements and enforce a no-anchor zone, and (c) making Enbridge staff available to manually shut down the pipeline during high-wave days if electric mechanisms fail.

Washington rolls back safety rules inspired by Deepwater Horizon disaster - NYTimes — The Trump administration has completed its plan to roll back major offshore-drilling safety regulations that were put in place after the Deepwater Horizon oil rig disaster in 2010 that killed 11 people and caused the worst oil spill in American history.The Interior Department’s Bureau of Safety and Environmental Enforcement, which was established after the spill in the Gulf of Mexico and regulates offshore oil and gas drilling, has finalized a proposal for loosening the regulations as part of President Trump’s efforts to ease restrictions on fossil fuel companies and encourage domestic energy production.The rules “created potentially unduly burdensome requirements for oil and natural gas production operators on the Outer Continental Shelf, without meaningfully increasing safety of the workers or protection of the environment,” says the new 176-page rule, which is scheduled in the coming days to be published in the Federal Register, before becoming the administration’s final policy.“This rule supports the administration’s objective of facilitating energy dominance by encouraging increased domestic oil and gas production and reducing unnecessary burdens on stakeholders, while ensuring safety and environmental protection,” the new rule says.Among the changes, the new rule removes a requirement for independent verification of safety measures and equipment used on offshore platforms.It also removes a requirement that oil companies design their equipment to function in “most extreme” scenarios involving weather, high heat, strong winds or high pressure from within the undersea oil wells, which was a key factor in the deadly 2010 blowout.And it removes a requirement that professional engineers certify the safety of the design of some pieces of offshore drilling equipment for new wells. The new rule appears to reflect many of the requests made by the oil industry, including the American Petroleum Institute, which lobbies on behalf of oil companies.

Ryan Zinke to the oil and gas industry: “Our government should work for you” -- Interior Secretary Ryan Zinke let the mask slip this week, turning the subtext of his term in office into the headline as he spoke to a friendly audience.On Tuesday, Zinke gave the keynote address at the Louisiana Oil and Gas Association’s fall meeting in Lafayette, Louisiana. He told the conference over lunch “our government should work for you,” according to organizers:  You can debate what Zinke meant by “work for you,” but many heard it as a pledge of allegiance to the industry. And according to the Louisiana Oil and Gas Association, the industry members in the room were thrilled with the pledge, giving Zinke a standing ovation. (An organizer told me none of the speeches at the event were recorded.) However, environmental activists and some lawmakers were appalled by the statement. But Zinke has said pretty much the same thing before. In March, he told an energy industry conference: “Interior should not be in the business of being an adversary. We should be in the business of being a partner.” For the record, the Interior Department’s job is to manage about 75 percent of federal public land, which amounts to about one-fifth of the total area of the United States. This means conservation, preserving culture, and facilitating recreation. It also entails leasing rights to mining, drilling, grazing, and logging. However, it does not mean that the agency needs to advance the fossil fuel industry’s interests, certainly not at the expense of the environment.

Trump likely to make pipeline push next year, aide says -- President Trump is likely to make a renewed push to permit and build oil and natural gas pipelines next year, his top economic adviser said Thursday. Larry Kudlow said a new pipeline push would be both a continuation of Trump’s aggressive energy deregulation streak and his ongoing infrastructure agenda. “We need infrastructure, including pipelines,” Kudlow said at an Economic Club of Washington event. “We need east to west, we need west to east.” Kudlow said the need for pipeline is especially strong in the natural gas industry, where drillers, thanks to the boom in fracking and horizontal drilling, are producing more gas than there is pipeline capacity to carry. He said an executive from an unnamed energy company that drills in the Permian Basin in Texas and New Mexico came to the White House Wednesday and spoke with both him and Trump. “He’s got more than he knows what to do with. They’re burning it off, flaring,” Kudlow said of the unnamed executive. Kudlow indicated that Trump’s push is likely to include federal actions to override states that have blocked pipelines. 

Climate Emissions From Gulf Coast’s New Petrochemical, Oil and Gas Projects Same as 29 New Coal Power Plants - In the last six years, officials in Texas and Louisiana issued permits allowing 74 petrochemical, oil, and gas projects to pump as much climate-warming pollution into the atmosphere as running 29 coal-fired power plants around the clock, according to numbers released September 26 by the nonprofit watchdog Environmental Integrity Project.And construction appears to be speeding up, with over 40 percent of those projects permitted between 2016 and mid-2018. The 31 most recent projects combined will add 50 million tons of greenhouse gases — equal to 11 new coal-fired power plants — to the world’s atmosphere in a year, the watchdog adds.  Environmentalists pointed to the risks that climate change poses to Gulf Coast states, where these projects are being built, and noted that the greenhouse effect has already led to sea level rise and a higher risk of extreme storms.“Louisiana is already sinking into the Gulf of Mexico, and yet our state government is permitting more of the emissions that cause flooding and storms,” Anne Rolfes, Founding Director of the Louisiana Bucket Brigade, said in a statement accompanying the numbers. “It’s mind boggling.”  The most recent projects tallied by the group include seven Liquefied Natural Gas (LNG) plants or terminals, 15 chemical and plastic resin plants, five petroleum refineries, and two natural gas processing plants, as well as a fertilizer manufacturer and hydrogen plant, all in Texas and Louisiana. The count does not include plants outside the Gulf Coast, like the Marcellus shale region of Pennsylvania, Ohio, and West Virginia, where a glut of natural gas liquids (NGLs) like ethane, a petrochemical feedstock produced by many shale wells, is attracting attention from plastics and chemical manufacturers. The Marcellus region now produces 27 billion cubic feet of natural gas a day, roughly a third of total U.S. output.  Another report, issued last week by Food and Water Watch, called attention to $35.8 billion worth of petrochemical and plastics projects in central Appalachia, including the Appalachia Development Group’s $10 billion NGL storage hub proposed in West Virginia.

Crude oil entering Gulf Coast refineries has become lighter as imports have declined - The density of crude oil processed by U.S. Gulf Coast refineries has become lighter since 2008 as refineries moved away from heavier imported crude oil to lighter crude oil produced in Texas. The Gulf Coast is home to most of the nation’s petroleum refineries, and these refineries tend to run a diverse mix of crude oils that, similar to the national average, has become lighter since 2008. API gravity is a measure of crude oil density that refiners consider when making decisions about the types of crude oil to process. Crude oil with a higher API gravity is lighter, or less dense. Small changes in the API gravity of the combination of crude oils that a refiner processes, called the crude slate, can affect the profitability of the refinery and the shares of petroleum products produced.Between 1985 and 2008, crude oil inputs to refineries in the Gulf Coast (defined as Petroleum Administration for Defense District 3) were getting heavier, from an API gravity of 34.1 degrees in 1985 to their heaviest at 29.5 degrees in 2008. At about the same time, imported crude oil processed in the Gulf Coast was increasing from 1.4 million barrels per day (b/d) in 1985 to its highest level of 5.8 million b/d in 2004. That trend reversed between 2008 and 2017, when the API gravity of crude oil inputs to refineries in the Gulf Coast increased to 32.0 degrees and imported crude oil processed in the region decreased to 3.1 million b/d.  Most imports of crude oil to the Gulf Coast region are relatively heavy, as crude oils less than 27 degrees API accounted for 46% of the region’s imports in 2009 and 71% of regional imports in 2017. Relatively lighter crude oil imports accounted for 21% of imports in 2009 but had virtually disappeared by 2017.

The experienced, deep-pocketed team behind the Golden Pass LNG project - It’s crunch time in the race to advance the next-round of liquefaction/LNG export projects along the U.S. Gulf Coast to a Final Investment Decision (FID). And if we’re to assume that only a small number of these multibillion-dollar projects will get their financial go-aheads, it would seem eminently reasonable to put a win-place-or-show bet on a joint venture that includes the world’s leading LNG producer (by far) and one of the largest U.S. natural gas producers — oh, and the partners have very fat wallets too. Size and money aren’t everything, of course, but as we discuss in today’s blog, the team behind the Golden Pass LNG project plans to build its liquefaction trains at the site of an existing LNG import terminal with strong interconnections with coastal pipelines already in place.2019 will be a pivotal year for the second wave of U.S. LNG export projects. Global demand for LNG continues to rise, and LNG marketers and customers — acutely aware of how much it takes to build new liquefaction capacity — are eager to line up the incremental LNG supply they will need in the early to mid-2020s. Want proof? Royal Dutch Shell, the lead partner in the LNG Canada project, on Tuesday (October 2) announced a FID on the 14-million-metric-tonnes-per-annum (MMtpa) liquefaction/export terminal in Kitimat, BC. (The project’s other partners are Petronas, PetroChina, Mitsubishi and Korea Gas.)Today, we look at Golden Pass LNG, a joint effort by three global energy powerhouses — Qatar Petroleum, ExxonMobil and ConocoPhillips — to expand their existing LNG import terminal (photo above, magenta diamond in Figure 1) on the Sabine-Neches Waterway near Sabine Pass, TX, into a liquefaction/LNG export facility. Much like Austin’s East Sixth Street is a mecca for live music and New Orleans’ Bourbon Street is a hub of late-night debauchery, the greater Sabine Pass area (on the border of Louisiana and Texas) already has drawn more than its share of liquefaction/LNG export facilities (Sabine Pass LNG, Cameron LNG and a number of second wave contenders, including Venture Global’s Calcasieu Pass), and for good reason. There’s easy, deep-water access to the Gulf of Mexico and large tracts of waterfront land, but just as important, there are few places on the planet with as many long-haul gas pipelines nearby to deliver large volumes of U.S.-sourced natural gas.

Hi-Crush Temporarily Idles One Sand Plant on 'Temporary Softness in Completions - Hi-Crush Partners LP said Wednesday it temporarily has shuttered dry sand plant operations at the Whitehall, WI, facility given “softness” in U.S. completions activity. Whitehall’s wet sand plant remains operational, and Hi-Crush still is selling inventory from on-site storage to meet northern white customer demand for hydraulic fracture (frack) and completions activity. Wet and dry plants also remain operational at the Wyeville, Augusta and Blair sand mines in Wisconsin, as well as the Kermit sand mine in Winkler County, TX, which serves Permian Basin producers. “Our strategic decision to temporarily idle Whitehall’s dry plant was driven by recent, temporary softness in completions activity and frack sand demand,” said CFO Laura C. Fulton. “This reduced level of expected activity is reflected in our updated guidance for sales volumes of 2.8 to 3.0 million tons for the third quarter we previously communicated.” The Kermit facility “continues to run above its nameplate capacity and we anticipate strong demand for northern white and our in-basin Permian sand in 2019 and beyond,” Fulton said.

 Select Sands Halting Independence Expansion Project Due to Softer Demand for Northern White Silica Fracking Sand - -- Select Sands Corp. has announced that it will be halting its previously announced Independence expansion project due to a period of softer demand for Northern White silica/fracking sand.The expansion project will be under regular review and progress will resume once demand reaches appropriate levels. The Company will remain fully operational during the interim period, with a nameplate capacity of 600,000 tons per year of premium Northern White silica. Zig Vitols, President and CEO, commented: "We feel it is prudent to coincide the timing of the expansion project and its completion with increased basin activity and proppant demand. Select Sands is committed to adding new business and pursuing opportunities to generate value for shareholders."

 Power to the Permian- Spotty at Best, Outrun by Shale Boom - America’s fastest-growing source of energy has a power problem. The Permian Basin, which produces almost 4 million barrels of oil a day, has expanded so quickly that suppliers of the electricity needed to keep wells running are struggling to keep up. The Delaware portion alone consumed the equivalent of 350 megawatts this summer, tripling the load from 2015. That’s enough to power about 280,000 U.S. homes. And providers say the draw is likely to triple again by 2022. While providers are rushing to build new power lines, it takes three to six years to get them up and working. In the meantime, drillers are bemoaning the reliability of the system and desperately seeking alternatives, exploring the use of solar and natural gas to fuel power-generating gear on-site. The electrical grid in West Texas “was not set up to withstand that much power going through it,"  "Plain and simple, you have reliability challenges." Power is just one more oilfield complication in a region struggling to deal with extraordinary growth over an incredibly short period of time. Worker and pipeline shortages are major concerns, along with the growing levels of water and sand needed for fracking. Meanwhile, highways initially designed for minimal use are gridlocked in the day and deadly at night. Conventional drilling with vertical wells in the region reached an apex in 1973, producing about 763 million barrels for the year. Output then steadily declined, falling to 309 million barrels in 2006.   Then fracking hit. The iconic 40-horsepower “nodding donkeys” that power vertical wells draw about 30 kilowatts each. Shale wells developed using fracking can run horizontally for miles. To lift oil out, companies now depend on electric submersible pumps that individually draw about 300 kilowatts

 Permian Needs $300B in CAPEX for Growth through 2023 -A new report by consulting firm Arthur D. Little finds that U.S. independents will need to adjust their business models to keep up with forecasted growth in the Permian.While production in the Permian Basin has been abundant, U.S. independent operators will need to look at new ways of doing business to position themselves for long-term value, according to a report released Oct. 2 by consulting firm Arthur D. Little.Data in the report forecasts Permian activity through the next five years to:

  • Rise by up to 3 million barrels of oil equivalent per day
  • Possibly produce up to 5.4 billion barrels of oil equivalent per day
  • Have a need for up to 41,000 new wells (mostly unconventional) to be drilled to meet production outlook
  • Require more than $300 billion in capital expenditures (CAPEX) to keep pace with growth projections

In turn, independents will need to “comprehend and exploit global markets,” the report states, while suggesting partnership opportunities for U.S. independents as refineries in Mexico, Latin America and China.Independents will also need to collaborate.The report called the demands on infrastructure “tremendous,” citing trucking, roads, water usage, power consumption, sand to frack wells and community services like housing, schools and hospitals.Additionally, about one million barrels per day in production growth are at risk due to the inability of the local infrastructure to support daily operations, according to the report.Pioneer Natural Resources’ effort to potentially pool power generation to benefit both the operator’s community and local towns and ranches was an example mentioned in the report of the type of collaboration needed.  Still, the biggest challenge remains the amount of capital needed.

No Relief Likely in Permian Takeaway Before Late 2019, Energy Execs Tell Dallas Fed - Oil and natural gas sector activity continued its momentum during the third quarter across Texas, northern Louisiana and southern New Mexico, according to a survey of energy executives, but many are concerned that it’s going to take awhile before any relief in pipeline constraints in the Permian Basin.The Federal Reserve Bank of Dallas, which covers the Eleventh District, published its 3Q2018 energy survey on Monday, comparing activity to the second quarter. Data were collected Sept. 12–20, and 171 energy firms responded to the survey. Of the respondents, 110 were exploration and production (E&P) firms and 61 were oilfield services (OFS) firms.The business activity index, considered the broadest measure of conditions facing the region’s energy firms, dipped “very slightly” to 43.3 from 44.5, but it remained near the highest level since the survey began.The OFS business activity index also declined to 45.9 from 54.2 in 2Q2018, “suggesting a slight deceleration in growth.” Meanwhile, the business activity index for E&Ps rose sequentially to 41.8 from 37.2.Positive readings in the survey generally indicate expansion, while readings below zero generally indicate contraction. “All indexes in the latest survey reflected expansion on a quarterly basis,” Dallas Fed researchers said.Oil and gas production increased for the eighth quarter in a row, according to E&P executives. The oil production index moved down to 34.8 from 39.0 in the second quarter, suggesting crude production “rose at a slightly slower pace relative to last quarter.” However, the natural gas production index edged up sequentially to 35.5 from 33.4, “its highest level since the survey began. This suggests gas production rose at a slightly faster pace relative to last quarter.”

West Texas ex-senator Uresti and businessman Bates charged in fracking Ponzi scheme --The bad news for former West Texas Senator Carlos Uresti and San Antonio businessman Stanley Bates just keeps coming.The U.S. Securities and Exchange Commission officially charged the two men Friday with securities fraud in an alleged $11 million oil and gas fracking Ponzi scheme. The SEC will not have difficulty serving the federal complaint on either man. In June, Uresti was sentenced to 12 years in federal prison after being found guilty of 11 counts of fraud and money laundering. In August, Bates was arrested by FBI officials after he agreed to plead guilty to eight counts of defrauding investors. In an 18-page complaint filed in the U.S. District Court for the Western District of Texas, the SEC’s Fort Worth Regional Office said Uresti and Bates raised $11.2 million from investors for a company they owned called Fourwinds Logistics Laredo. Fourwinds’ business plan called for the company to buy and sell sand used in hydraulic fracking to extract oil and gas from shale rock. The SEC claims that Bates used a significant portion of the $11 million to pay for prostitutes, drugs, models to work in his office, his mother’s housing costs, child support payments, his son’s fraternity dues, designer shoes for his girlfriend and a Ferrari. He listed these charges as investor relations expenses or corporate housing. “Bates misrepresented his background and experience, overstated the profitability and safety of the investments and failed to disclose his misuse of investor funds to make Ponzi payments to earlier investors and to make extravagant office and personal expenditures,” the SEC complaint states. “Bates also provided investors with a doctored bank statement showing FWLL had $18.8 million in the bank, when in reality FWLL had less than $100,000.”

In Nebraska, resistance and negotiation along Keystone XL pipeline – public radio audio - TransCanada, the company behind the Keystone XL pipeline, is pressing forward with plans to build an oil pipeline between Alberta and Nebraska. Many landowners along Nebraska’s portion of the company’s planned route have joined the Nebraska Easement Action Team to help them resist the pipeline by refusing to sign easements or negotiate with the company. Others have even raised constitutional issues that will be argued in Nebraska’s Supreme Court in November. Other landowners who haven’t joined are trying to negotiate a better deal themselves.

Enbridge is said to eye long-term deals on biggest oil pipeline - Enbridge Inc. plans to overhaul its system of awarding space on the biggest pipeline carrying Canadian oil to U.S. refiners. Canada’s largest pipeline operator wants to contract 90 percent of the capacity on its 2.85 million-barrel-a-day mainline system by signing long-term deals with potential shippers in an open season early next year, according to people familiar with the matter. The so-called take-or-pay agreements will begin January 2020, assuming the company gets necessary approvals from the nation’s regulators. This would effectively displace Enbridge’s current system of operating the mainline as a common carrier, where anyone can seek to ship crude on the line. It represents Enbridge’s latest attempt to more efficiently transport Canadian crude south of the border and solve a years-old problem of shippers gaming its nomination process by requesting space for more barrels than they actually have. "In a take-or-pay system, a company commits to making a payment for a fixed volume for a fixed term, regardless of whether you use it," Kevin Birn, a director on the North American crude oil markets team at IHS Markit, said in a phone interview. "It can provide a midstream company like Enbridge greater financial security." The changes may help better allocate space at a time when Canada is severely lacking in pipeline capacity to the U.S. The acute shortage has pressured heavy Canadian crude to the weakest level in more than four years. Enbridge’s mainline system has been consistently oversubscribed this year. The process of having long-term shippers on a pipeline is commonplace among U.S. and other Canadian pipelines, but the system could sideline small users and favor larger companies such as Chicago-area refiners that take the lion’s share of Canadian oil.

Don’t Frack So Close to Me: Colorado to Vote on Drilling Distances From Homes and Schools -- Coloradans will vote on a ballot initiative in November that requires new oil and gas projects to be set back at least 2,500 feet from occupied buildings. If approved, the measure—known as both Initiative 97 and Proposition 112—would mark a major change from their state's current limits: 500 feet from homes and 1,000 feet from schools.  As sociologists who have researched oil and gas drilling in the communities that host it for the past seven years, we think this measure would provide local governments and Coloradans more say over where drilling occurs and enhance the rights of those who live near these sites. Partly because fracking and related industrial processes often occurs close to homes, schools and other occupied buildings, the debate over Proposition 112 is contentious.Opponents, especially those funded by industry groups, argue that stricter rules will mean less state tax revenue, job losses and weakened private property rights. Proponents express concerns about air pollution,earthquakes, water well contamination and explosions to explain why they want the public to have more sway. But many state governments have tried to stymie the attempts of communities to gain this power. For example, Colorado's Supreme Court ruled in 2016 that local communities have no right to regulate where drilling occurs. And industry-funded groups and the Colorado Farm Bureau, which represents farmers, ranchers and other agricultural interests, are countering this electoral effort to restrict drilling with their own measure. Known asAmendment 74, it would force any city or county government that limits drilling to compensate property owners if new setback rules were to lower property values or reduce revenue from fracking leases.

Oil and gas firm plans Loveland fracking  — Oil and gas operator Magpie Operating, Inc. is planning a 2019 drilling operation in southeast Loveland that will include fracking, according to a Loveland Reporter-Herald report.A Magpie representative told the newspaper that the company hopes to fast-track the permitting process before November’s election. Colorado voters will be deciding then whether to approve Proposition 112, which would expand oil and gas setback requirements.If the drilling moves forward, many mineral rights holders in southeast Loveland could be eligible for financial compensation.

BLM OKs 175-Well Natural Gas Project in Utah - ExxonMobil Corp. subsidiary XTO Energy Inc. on Thursday received a green light from the Bureau of Land Management (BLM) to pursue three-year-old plans for drilling up to 175 natural gas wells in the Uinta Basin of Utah.An environmental assessment (EA) and record of decision were issued by BLM’s Utah office for the Horse Bench Natural Gas Development Project.The project is to be done on 6,565 acres of federal and state lands in Carbon County, where XTO plans to drill from 16 well pads.The EA supported the finding that no environmental impact statement was needed for the project, which is about 36 miles from Price.Horse Bench is in the West Tavaputs Plateau in the Desolation Canyon area, considered one of the largest roadless areas managed by BLM. XTO’s project is to include access roads and natural gas gathering pipelines. XTO has been working in Utah for several years. In 2011, it acquired leases in a quarterly BLM auction and more acreage in a state sale. According to its filings with BLM, XTO indicated it now works across 381,000 acres in Utah, with 90 employees helping to produce an estimated 46 MMcf/d.Assuming the Horse Bench wells are productive, the project has an anticipated life span of 30 years, BLM noted. Final well abandonment and reclamation indicated XTO is committed to “specific environmental protection measures designed to reduce impacts to existing resources, and are integral to this decision.”

Oil and gas firm battles with coal giant over right to develop minerals in Campbell County - An oil and gas firm is seeking help from the courts to stop Peabody Energy from destroying wells in a case of conflicting rights to produce coal or oil and gas. Berenergy and the coal giant have overlapping lease rights in Campbell County, and they have fought over who gets the right to develop minerals for more than three years. The dispute traveled all the way to the Wyoming Supreme Court before the Bureau of Land Management made a final decision in August in favor of coal.Berenergy’s wells are nearing the end of life, whereas Peabody’s coal would be part of one of the largest existing open surface mines in the country.The Denver-based oil and gas firm is appealing the BLM’s decision to favor Peabody’s leases and wants the courts to keep the coal firm from continuing to plug Berenergy’s wells until the Interior Board of Land Appeals has made a final decision, which is due Nov. 4.“The BLM does not have the power to ignore its own regulations, violate the first-in-tine operating rights it granted to a federal oil lessee, and act without statutory authorization in order to serve the private economic interests of a federal coal lessee,” Berenergy’s lawyers argued in court docs. “Nonetheless, that is precisely what the BLM did.”A spokeswoman for Peabody Energy said the firm is in compliance with the Bureau of Land Management decision from August.“Peabody fully supports this decision and will oppose all requests by Berenergy for a finding that the BLM decision is not valid or should not be effective,” Charlene Murdock said in an email Monday. In August, the BLM suspended the oil and gas leases that would interfere with coal production, with the caveat that the coal firm would pay for plugging and abandoning the seven affected oil and gas wells. Berenergy would be allowed to restart production once Peabody is done mining.

Standing Rock Sioux pledges support for pipeline protests  (AP) — The American Indian tribe that's led opposition to the Dakota Access oil pipeline has formally pledged support for protests against pipeline projects in four states.The Standing Rock Sioux Council this month in unanimous votes approved resolutions supporting efforts by other tribes to oppose the Enbridge Line 3 project in Minnesota, the Keystone XL pipeline in Montana and South Dakota, and the Bayou Bridge pipeline in Louisiana.The resolutions don't come with any promise of money or other aid but are a payback of sorts for other tribes' support of Standing Rock's struggle against Dakota Access. Standing Rock led protests in 2016 and 2017 against that pipeline, and thousands of people traveled to protest camps just outside the reservation that straddles the North Dakota-South Dakota border to support the tribe.

ACLU Fears Protest Crackdowns, Surveillance Already Being Planned for Keystone XL - The Keystone XL pipeline is expected to draw protests from indigenous and environmental activists when construction begins, and many activists are worried law enforcement agencies may be planning surveillance and a militarized response. Now, the American Civil Liberties Union is accusing federal agencies of trying to hide the extent of these preparations, which the group says are clearly underway. The ACLU and its Montana affiliate sued several federal agencies this week, including the Departments of Justice, Defense and Homeland Security, saying the agencies are withholding documents that discuss planning for the expected protests and any coordination among state and local authorities and private security contractors.Fears about the law enforcement response follow the 2016 armed crackdown on people protesting the Dakota Access Pipeline, where authorities used tear gas and turned water cannons on protesters in freezing temperatures. Since then, dozens of bills and executive ordershave been introduced in at least 31 states to clamp down on protests. Activists say the bills are part of a concerted campaign by energy companies and their allies in government to suppress these protests by increasing criminal penalties for minor violations and in some cases trying to use anti-terrorism laws against activists. The ACLU says documents it obtained from state agencies in Montana suggest law enforcement agencies have begun extensive trainings in preparation for the Keystone XL project, and that federal agencies are involved.

Ordinary High Water Mark Study Accepted By The NDIC -- September 29, 2018 -- NDIC accepts "ordinary high water mark study" results: the state owns 9,500 more acres than originally shown by the US Army Corps of Engineers; mineral owners along the river between New and Williston may find they don't have as many acres as they once thought they did.The study, directed by the Legislature, aimed to resolve disputes over oil and gas ownership by investigating the accuracy of the 1950s river survey conducted by the U.S. Army Corps of Engineers.The Industrial Commission’s action determines the ordinary high water mark of the Missouri River. The final report concludes that North Dakota owns about 9,500 more acres than the corps survey of the river showed. The consultant did reduce the state’s ownership by about 900 acres based on “clear and convincing evidence” received during a public comment period last spring.Josh Swanson, an attorney who represents several mineral owners, said Thursday he’s disappointed by the Industrial Commission’s decision, which he called sanctioning “a blatant taking of thousands of acres of mineral acres of private landowners.”  My understanding is that the study, at the NDIC website, which has been previously linked, is the study that the NDIC accepted. The links are at this post.

Third federal defendant sentenced from DAPL protest - U.S. District of North Dakota Chief Judge Daniel Hovland has sentenced the third of seven federal defendants indicted from the Dakota Access Pipeline protests. As part of a plea agreement with prosecutors from earlier this year, Michael Markus pleaded guilty to civil disorder, with the more serious crime of use of fire to commit a federal felony dismissed. Hovland sentenced Markus on Thursday in Bismarck's federal court to 36 months in federal prison followed by three years supervised release, under attorneys' joint recommendation.   He will also serve at least a year of supervised release, depending on a potential recommendation from his probation officer to Hovland to lessen the three-year period of supervision. Markus was indicted with several others for starting a barricade fire on the Morton County Road 134 bridge on Oct. 27, 2016, one of the most chaotic days of the monthslong protests in southern Morton County. Law enforcement officers swept south along North Dakota Highway 1806, where protesters had erected a camp on a pipeline easement. Markus poke for several minutes in federal court in Bismarck, noting how his original involvement in the protests was to deliver supplies and food, but grew more "heavily" involved after pipeline construction bulldozed what protesters have said were sacred sites.  "How would you feel if someone went through your family cemetery and plowed through? Or Arlington (National Cemetery)?" Markus said before Hovland. Markus wiped his eyes and said his role in camp was to protect people, be they protesters or police. "That is what I'm meant to do, protect people, no matter who they are," he told Hovland.

Trial Will Test New Weapon Against Climate Change: Necessity Defense -- No one—least of all the defendants—disputes the facts of the case against four people known as valve-turners: activists who trespassed on private property to shut down an oil pipeline in 2016. As their otherwise straightforward case goes to trial in October, it’s their defense that has everyone’s attention.  Part of a multi-state protest in 2016 dubbed #Shutitdown, their goal was straightforward: to force Enbridge to shut down the pipeline, which the activists viewed as a serious and imminent threat to the global environment. If the company refused to do so, the activists would turn the valves themselves. Enbridge did stop the flow safely, until the trespassers were arrested. Annette Klapstein and Emily Johnson were both charged with multiple felonies and could face up to 10 years in prison. Videographer Steve Liptay and Benjamin Joldersma, who was on hand to lend support, are both facing misdemeanor charges. Their defense is that their crime was part of preventing a greater harm: climate change. It’s called the necessity defense and when the judge in archly conservative and rural Clearwater County ruled last year (and was upheld by an appeals court in August) that the defendants could use it in this trial, it threw an entirely new wrinkle into the battle to force climate action through the courts. That battle has gathered steam in the past two years on multiple fronts, with a landmark youth-led suit, Juliana v. United States, also headed to trial in October, with 21 young people arguing the federal government is robbing them of a safe climate and livable future. A wave of communities and one state attorney general have begun to sue the fossil fuel industry to pay for the spiraling costs of climate impacts. And two states, New York and Massachusetts, are using consumer and investor protection statutes to investigate whether the biggest of the U.S. oil giants, Exxon, is guilty of fraud.

Environmental Groups Sue Over Venting/Flaring Rule - A coalition of 21 environmental and citizens' groups asked a federal district court in San Francisco to block the Trump administration's plans to rescind most of an Obama-era rule governing associated natural gas flaring and venting on public and tribal lands. According to a complaint filed Friday in U.S. District Court for the Northern District of California, plans by the Department of Interior (DOI) to rescind and revise its Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule, aka the venting and flaring rule, are unlawful because they would revoke "reasonable protections designed to limit waste of natural gas by oil and gas companies on federal public and Indian lands..." Under a final rule issued last month, 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."The Trump administration's action will imminently harm Americans by allowing substantial waste of natural gas that will result in lost money for taxpayers and additional air pollution that puts families at risk," said Environmental Defense Fund (EDF) Lead Attorney Peter Zalzal. "We plan to vigorously challenge the administration's decision to eliminate the Waste Prevention Rule, which completely disregards these foundational public interests." EDF filed the lawsuit with the Sierra Club; Los Padres ForestWatch; the Center for Biological Diversity; Earthworks; the Natural Resources Defense Council; The Wilderness Society; the National Wildlife Federation; Citizens for a Healthy Community; Diné Citizens Against Ruining Our Environment; the Environmental Law and Policy Center; Fort Berthold Protectors of Water and Earth Rights; the Montana Environmental Information Center; San Juan Citizens Alliance; the Western Organization of Resource Councils; Wilderness Workshop; WildEarth Guardians; the Wyoming Outdoor Council; Earthjustice; the Clean Air Task Force, and the Western Environmental Law Center.

700 gallons of oil spilled near Woodland --In a suspected act of vandalism, someone opened a valve on a construction truck and caused 700 gallons of oil to spill onto the ground near Woodland Monday night, according to state and other sources.The oil soaked a nearby field and the job site where Granite Construction is working on Dike Road. The diking district dug up the affected dirt and the spill was cleaned up by Wednesday evening, said Jeff Woolever, owner of West Coast Training, a school near the spill. Department of Ecology spokeswoman Sandy Howard said the agency was notified and is responding along with local authorities. “The company has a spill plan. The environmental cleanup contractor on contract, River City Environmental, was being contacted to perform the cleanup,” Howard said.

A pipeline in SLO County was shut down after an oil spill. The company wants to rebuild - The company that was recently found guilty of several criminal counts in connection to a pipeline break that caused an oil spill near Refugio State Beach is moving forward with a proposed replacement project to reopen the pipeline — including 37 miles through San Luis Obispo County.  Texas-based Plains All American Pipeline applied last year to replace 123 miles of existing non-operational pipelines to move domestic crude oil produced offshore through Santa Barbara County, south San Luis Obispo County along Highway 166 and Kern County.  The existing lines, known as Line 901 and Line 903, began operation in the early 1990s. They have remained shut down since 2015, after a corroded on-shore pipeline ruptured suddenly and released 142,800 gallons of heavy crude oil onto the coastline near Gaviota.  Signaling the next stage in a long permitting process, San Luis Obispo County supervisors on Tuesday will consider signing an agreement with Santa Barbara County to work together to review and prepare an environmental impact report under the California Environmental Quality Act. A spokeswoman for Plains All American Pipeline said that company representatives hope the environmental impacts will be limited because the proposed route largely follows the existing right-of-way that has already been disturbed. That route travels through federal Bureau of Land Management lands, Los Padres National Forest and Bitter Creek National Wildlife Refuge. The project also includes a new pump station that would be located just south of the Carizzo Plain National Monument boundary.

Trump Administration Moves to Open 1.6 Million Acres to Fracking, Drilling in California  Ending a five-year moratorium, the Trump administration Wednesday took a first step toward opening 1.6 million acres of California public land to fracking and conventional oil drilling, triggering alarm bells among environmentalists. The U.S. Bureau of Land Management said it’s considering new oil and natural gas leases on BLM-managed lands in Fresno, San Luis Obispo and six other San Joaquin Valley and Central Coast counties. Meanwhile, activists in San Luis Obispo are pushing a ballot measure this fall to ban fracking and new oil exploration in the county. If BLM goes ahead with the plan, it would mark the first time since 2013 that the agency has issued a new lease for oil or gas exploration in California, according to the Center for Biological Diversity, which immediately vowed to fight the move. California is the nation’s fourth largest oil-producing state, after Texas, North Dakota and Alaska, with much of the production concentrated in the southern San Joaquin Valley and Southern California. The Trump administration is trying to “sell off our public lands again,” said Clare Lakewood, a senior attorney with the Center for Biological Diversity in San Francisco. The federal government oversees about 15 million acres of public lands in California, and leases some of them for private use by contractors. Lakewood said environmentalists are particularly concerned about the possibility of a big increase in hydraulic fracturing, or fracking, the controversial process of extracting oil or gas by injecting chemicals or other liquids into subterranean rocks. The notice released Wednesday by the BLM, which allows for 30 days of public comment, specifically seeks “public input on issues and planning criteria related to hydraulic fracturing.” Environmentalists say fracking can contaminate groundwater and increase earthquake risks, and they’ve called on Gov. Jerry Brown to ban the practice. The energy industry says there’s no evidence of environmental harm from fracking. The U.S. Geological Survey says that, when “conducted properly,” poses little risk to groundwater.

Shale Oil Propels U.S. Crude Export Increase -- Dallas Fed  - Crude oil exports from the U.S. are rising, reaching 2.2 million barrels per day (mb/d) in June 2018, triple the 2016 average and the highest ever for the nation. More than 90 percent of crude exports this year have originated on the Gulf Coast, generating jobs, capital and income for ports in Houston and Corpus Christi. Such exports were at a trickle before Congress lifted a federal crude oil export ban that had been in place since 1975. The change, which took effect in December 2015, allows U.S. producers to sell oil directly to the global market at a time when shale oil production is high and risingU.S. crude oil production has grown steadily since 2008, reaching a record of more than 10 mb/d this year, with 12 mb/d expected by the end of 2019, according to the Energy Information Administration. Shale oil accounts for 99 percent of the production growth. Shale yields a light-sweet crude oil, requiring a simple refining configuration to produce gasoline and diesel. As domestic crude production declined in the 1990s and 2000s, U.S. refiners made significant investments in their refining capabilities to process imported heavy-sour crude, primarily from Venezuela and nearby Mexico and Canada. Heavy-sour crude, which is generally cheaper than light sweet, provided greater profitability for refiners.

US shale exports find new pathways to China -China exceeded Canada as the largest buyer of U.S. crude exports for the first time in February 2017 and in year-to-date 2018 has averaged 378 Mb/d versus Canada’s 347 Mb/d. Ramping up purchases from virtually nothing in 2015 to more than 500 Mb/d in June 2018 was no small feat — the logistics in getting that much oil across the world include multiple ship-to-ship transfers, several weeks at sea and a whole lot of negotiating between U.S. crude marketers and the major Chinese buyers: Unipec and PetroChina. That already complicated process has recently been made just a little more complicated by the escalating trade war rhetoric between the U.S. and China. In today’s blog, which launches our new Crude Voyager service, we explain how crude flows to China are evolving. Given the explosion of interest around U.S. crude exports, not a day goes by that our clients and readers aren’t asking us about developments in this burgeoning market. After several consulting projects and a lot of time staring at maps and crude oil tanker movements, we’ve created a weekly tool that puts into perspective the dynamic relationships between crude export terminals and export volumes, including the reverse-lightering operations across the U.S. Gulf of Mexico. In addition to the weekly service, which will give readers our estimate of crude exports about 24 hours before the Energy Information Administration’s (EIA), the report includes quarterly supplements tracking all the developments, investments and projects planned for U.S. crude exports.

U.S. crude oil shipments to China "totally stopped" amid trade war - Shipper (Reuters) - U.S. crude oil shipments to China have “totally stopped”, the President of China Merchants Energy Shipping Co (CMES) said on Wednesday, as the trade war between the world’s two biggest economies takes its toll on what was a fast growing businesses. Washington and Beijing have slapped steep import tariffs on hundreds of goods in the past months. And although U.S. crude oil exports to China, which only started in 2016, have not yet been included, Chinese oil importers have shied away from new orders recently. “We are one of the major carriers for crude oil from the U.S. to China. Before (the trade war) we had a nice business, but now it’s totally stopped,” Xie Chunlin, the president of CMES said on the sidelines of the Global Maritime Forum’s Annual Summit in Hong Kong. 

Oil, Gas Producers Could See More Money from Lenders in 2018 - A new survey by Haynes and Boone offers a bright outlook for oil and gas producers. Oil and gas producers have a reason to be optimistic, if results from law firm Haynes and Boone, LLP’s recent survey is any indication. The September 2018 borrowing base redetermination survey which included responses from oil and gas producers, service companies, financial institutions, private equity firms and professional services providers revealed that more than 78 percent expect borrowers to see a borrowing base increase in Fall 2018. And 36 percent of respondents expect borrowing bases to increase by 20 percent or greater. “The survey shows that optimism for the upstream oil and gas industry is really gaining momentum,” Kraig Grahmann, head of Haynes and Boone’s Energy Finance Practice Group, stated in a release. “We have now had several recent surveys, including the Fall 2018 survey, predicting that producers will see borrowing base increases of 10 to 20 percent.” The survey also found that two-thirds of respondents believe borrowers have locked in prices for the majority of their 2019 production. And producers are expected to use cash flow from operations (21 percent), debt from banks (20 percent) and equity from private equity firms (17 percent) as their sources of capital in 2019. However, the greatest challenge oil and gas producers will face in 2019 by far, according to respondents, is midstream capacity constraints (42 percent). This is followed by oilfield service costs (19 percent) and commodity price volatility (17 percent). “In prior years, producers were worried about a sudden drop in commodity prices or high costs of oilfield services,” Grahmann said. “Now … survey respondents were most concerned about midstream capacity constraints in transporting production to market.”

$32B Worth of Oil, Gas M&A Deals in 3Q Breaks Record- Drillinginfo reports that the US saw a 250% increase in mergers and acquisitions activity in the third quarter. U.S. oil and gas M&A activity soared in the 3Q to $32 billion, a 250 percent increase from $9.1 billion in 2Q, according to new data from Drillinginfo, which provides software and data analytic services to the energy industry. Third quarter numbers reflect big upstream deals including BP plc’s $10.5 billion purchase of BHP Billiton subsidiary Petrohawk Energy Corporation to acquire onshore assets in the Permian, Eagle Ford, Fayetteville and Haynesville plays, Permian-focused Diamondback Energy’s $9.2 billion all-stock deal purchase of Energen Corporation and Chesapeake Energy Corp.’s sell of its Utica shale assets to Encino Acquisition Partners for $1.9 billion. Drillinginfo said 3Q’s M&A activity broke all quarterly records dating back to as far back as 4Q 2012. It’s also 76 percent above the quarterly average of $18.3 billion dating back to 2009. In 3Q, BP’s $10.5 buy of BHP’s U.S. onshore assets is included in Multiple/Other Play. Deal value is allocated as follows: Permian $3.9B, Eagle Ford $4.8B, Haynesville $1.8B. | Source: Drillinginfo Drillinginfo senior director Brian Lidsky said he expects U.S. M&A activity to continue at a heightened level. “The industry is regularly reporting record well results across the U.S. shales as it continues to de-risk acreage positions and advance technology,” he said in a release. “As Wall Street is increasingly discriminating among public companies, the food chain of the big getting bigger is alive and well – shale basin leaders are being rewarded for mastering scale, efficiency and technology. This sets the stage for additional mergers that not only checks all the accretive boxes for the buyer, but also provides sellers upside by joining forces with these leaders.”

Hydraulic fracturing Market size is forecast to cross USD 68 billion by 2024-- Increasing investment towards exploration and production of unconventional resources due to rising concern towards rapid depletion of conventional resources will drive the hydraulic fracturing market size during the forecast period. Growing petroleum demand, rapid infrastructure development and demographics will drive industry growth. Global hydrocarbon based liquid fuel demand for2015 was more than 92 mb/d.Natural gas is expected to witness the considerable growth owing to wide applications across industries and power plants. Its environment friendly nature makes it preferable over other alternatives. Tight gas accounted for over 15% of global hydraulic fracturing market share in 2015. Horizontal fracturing demand is expected to witness substantial growth, owing to its ability to access natural gas surrounding the entire portion of horizontal drilled section.Plug and perforation hydraulic fracturing market size was valued at over USD 15 billion in 2015 and is expected to witness handsome growth in future. Ease of accessibility for fracking in horizontal wells will boost technology demand. Several restrictions in some countries owing to its adverse environmental impact including noise and visuals impact, seismic events, land surface disturbance etc. may hamper the business. High operational expenditures involved in development of shale gas is also among the major restraints.

Crude oil, natural gas may be about to repeat coal's hubris: Russell (Reuters) - The crude oil and natural gas industries believe they have got their mojo back, with the overwhelming impression gained at two recent conferences that the future is indeed bullish. It was hard to find any downbeat delegates at last week’s Asia Pacific Petroleum Conference, the region’s largest annual event, or at the well-attended GasTech in Barcelona the prior week. However, one advantage of having been around the commodity sector for what seems like ages is that sometimes one can get a sense of deja vu. The crude and natural gas industries today sound remarkably similar to the coal industry of a decade ago. In the recovery from the 2008 global recession, the coal industry found itself in the happy place of being in strong demand to fuel robust economic growth in China and India, the two fast-growing economies that displaced Japan as the region’s top importer of the polluting fuel. The refrain at numerous coal industry events at the time was the outlook is bright because coal is cheap, reliable and necessary to bring electricity to populations in Asia that were rapidly moving from poverty to a more middle-class existence. This optimism manifested itself in some extremely bullish forecasts, which seem ridiculous with the benefit of hindsight. Among those was a forecast that China’s coal imports would rise to 1 billion tonnes a year, when they in reality peaked at 327 million tonnes in 2013. This rosy outlook for coal led the industry to invest heavily in mines to boost the availability of seaborne supplies, which in turn led to five consecutive years of declining prices as supply overwhelmed demand. But that wasn’t the real problem for the coal industry, what is causing them more problems now is the fact that they didn’t see either renewables and natural gas in their rearview mirror.

Oil and Gas Cyber Attacks Increased in Past Year - Cyber attacks in the oil and gas sector increased over the past year, according to Mike Spear, industrial cyber security global operations director at Honeywell. “You’re looking at about 365,000 new malware every year … that’s like four per second,” Spear told Rigzone during a briefing at a recent conference in Madrid. “What we’re seeing is in the space, or in what we call the process industries … the level of the malware, the more sophistication that’s coming up,” he added. “Some of it now is being very targeted, which is kind of different than it was say five years ago. Everybody was focused on the financial systems, the Walmarts … that type of chain, now we’re seeing a significant increase targeting the critical infrastructure of the process industries,” Spear continued. Oil and gas cyber security is lagging behind cyber security in other sectors, according to Mark Littlejohn, Honeywell’s global leader in cyber security managed services, who spoke to Rigzone during the same conference in a one-on-one interview. “Financial of course is doing much better … and then hospitals I think are doing a pretty good job. They still have a bit to go, but they’re still way ahead,” Littlejohn said, providing examples of fields the oil and gas sector was trailing behind in terms of cyber security. When asked if the oil and gas industry could learn from these sectors, the Honeywell representative said, “absolutely”.

U.S. net natural gas exports in first half of 2018 were more than double the 2017 average -- From January through June of 2018, net natural gas exports from the United States averaged 0.87 billion cubic feet per day (Bcf/d), more than double the average daily net exports during all of 2017 (0.34 Bcf/d). The United States, which became a net natural gas exporter on an annual basis in 2017 for the first time in almost 60 years, has continued to export more natural gas than it imports for five of the first six months in 2018.  U.S. natural gas exports have increased primarily with the addition of new liquefied natural gas (LNG) export facilities in the Lower 48 states. U.S. exports of LNG through the first half of 2018 rose 58% compared with the same period in 2017, averaging 2.72 Bcf/d.  Total U.S. LNG export capacity reached 3.6 Bcf/d in March 2018. The LNG facility at Sabine Pass in Louisiana has an export capacity of 2.8 Bcf/d, which includes the recently completed Train 4. Cove Point LNG in Maryland, which has an export capacity of 0.8 Bcf/d, delivered its first cargo in March 2018 and entered full commercial service in April. In the first two full months of operation after the capacity additions (May and June), Cove Point exported an average of 0.57 Bcf/d (76%) of its nameplate capacity. Another four LNG facilities are under construction and planned to enter into service by the end of 2019, ultimately increasing U.S. LNG export capacity to 9.6 Bcf/d. While U.S. LNG exports have continued to grow in 2018, U.S. natural gas pipeline import and export volumes have either remained relatively flat or declined from 2017 levels. Exports of natural gas by pipeline to Mexico grew by just 4%, while exports of natural gas by pipeline to Canada declined 14%. Most of this decline occurred in deliveries from St. Clair, Michigan, to the Dawn hub in Ontario, Canada. Although U.S. exports into eastern Canada declined, eastbound flows on the TransCanada Mainline from western Canada increased by 0.26 Bcf/d from 2017 as tolls on the pipeline were lowered this year, according to data from Canada’s National Energy Board. January was the only month so far in 2018 in which the United States was not a net exporter of natural gas. In that month, extreme and prolonged low temperatures led to record demand for natural gas. U.S. natural gas imports from Canada during January averaged 9.25 Bcf/d, its highest level since January 2014.  According to EIA’s Short-Term Energy Outlook, net natural gas exports are expected to continue rising through the end of 2018 as additional LNG export capacity comes online and as natural gas infrastructure in Mexico is placed into service. Overall net natural gas exports are expected to average 2.0 Bcf/d in 2018 and 5.8 Bcf/d in 2019.

Prices Edge Higher On Bullish Storage Levels --Highlights of the Natural Gas Summary and Outlook for the week ending September 28, 2018 follow. The full report is available at the link below.

  • Price Action: The now prompt November rose 3.4 cents (1.1%) to $3.008 on a 16.1 cent range ($3.111/$2.950).
  • Price Outlook: Prices rose as a smaller than expected EIA storage injection helped to lift the market. Demand remains incredibly impressive. This month’s EIA data noted record US production even as past production levels were revised even higher. However, with no change to previous storage levels, the higher production was also accompanied with revised record demand.
  • Weekly Storage: US working gas storage for the week ending September 21 indicated an injection of +46 bcf. Working gas inventories rose to 2,768 bcf. Current inventories fall (698) bcf (-20.1%) below last year and fall (608) bcf (-18.0%) below the 5-year average.
  • Storage Outlook: The EIA weekly implied flow was (6)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 336 bcf compared to our 323 bcf estimate and that is more tolerable.
  • Supply Trends: Total supply rose 0.8 bcf/d to 81.1 bcf/d. US production rose. Canadian imports rose. LNG imports fell. LNG exports fell. Mexican exports rose. The US Baker Hughes rig count rose +1. Oil activity decreased (3). Natural gas activity increased +3. The total US rig count now stands at 1,054 .The Canadian rig count fell (19) to 178. Thus, the total North American rig count fell (18) to 1,232 and now exceeds last year by +79. The higher efficiency US horizontal rig count rose +3 to 922 and rises +128 above last year.
  • Demand Trends: Total demand rose +4.9 bcf/d to +73.1 bcf/d. Power demand rose. Industrial demand rose. Res/Comm demand fell. Electricity demand rose +3,982 gigawatt-hrs to 83,579 which exceeds last year by +1,596 (1.9%) and exceeds the 5-year average by 5,629 (7.2%%).
  • Nuclear Generation: Nuclear generation fell (7,343)MW in the reference week to 85,308 MW. This is (6,806) MW lower than last year and (4,178) MW lower than the 5-year average. Recent output was at 83,335 MW.

The cooling season is now entering its final stretch. With a forecast through October 12 the 2018 total cooling index is at 5,606 compared to 4,781 for 2017, 5,483 for 2016, 4,384 for 2015, 3,451 for 2014, 4,811 for 2013, 7,205 for 2012 and 6,706 for 2011.

Natural Gas Could Well Be The Energy Story Of 2018-2019 --   -- Re-posting from earlier today, since "natural gas could well be the energy story of the year." US natural gas:

Natural gas: this might be the story of the year -- lots of buzz, lots of talk -- from SeekingAlpha yesterday --
  • a severe cold spell could raise Henry Hub natural gas prices to a range of $12-$16/MMBtu, “similar to where marginal generation costs of fuel oil and diesel would be,” says Citi’s Anthony Yuen
  • and if bitter cold weather hits both the U.S. and “either Europe or Asia at the same time... spot LNG [liquefied natural gas] prices could surge to $20/MMBtu at the extreme," Yuen writes; Nymex U.S. natural gas currently trades at ~$3.00/MMBtu
  • Yuen thinks a spike in gas prices this winter could lift shares of gas-oriented companies such as Range Resources, Southwestern Energy, and Cabot Oil & Gas
  • shares of many gas companies, while up from winter lows, are still lower YTD, reflecting concerns that there is too much new gas supply to sustain a rally in the gas market

Cold Winter Could Burn Natural Gas Traders  - Inventory for the winter may be headed toward its lowest level since 2005, when prices hit a record high.  Fortunately for utilities eyeing natural gas prices for the coming winter, forecasts by The Farmer’s Almanac are about as accurate as a coin flip. Unfortunately for them, official long-range temperature forecasts are only slightly better. While the almanac warns of a very cold winter, government forecasters point to a mild El Niño pattern in the Pacific Ocean, which lessens the odds of a frigid North American winter in parts of the country that rely heavily on the fuel for heating. That matters more than usual this year because, despite being a decade into a glut with no end in sight, there is little margin for error over the coming months.Domestic natural gas production of about 82 billion cubic feet a day isn’t nearly enough to provide for peak winter demand, which is why up to about 4 trillion cubic feet of gas is stored underground and nearly 3 trillion drawn upon during some heating seasons. This year, though, the U.S. Energy Information Administration expects the starting amount at the end of next month to be around 3.3 trillion cubic feet—the lowest since 2005, when natural gas prices hit their all-time high. A projected ending storage level much below 1 trillion cubic feet often spooks traders. A 2005-style hurricane-fueled squeeze is out of the question, but a big price spike isn’t. It was just four winters ago that a cold winter caused a 75% surge in futures prices to above $6 a million British thermal units. So far there is little sign of anxiety among traders, with both front-month and February futures below $3. Thursday’s weekly inventory report and forecasts for continued builds in coming weeks were encouraging, yet storage is now 20% below year-ago levels and 18% below the five-year average. Possible tough sledding ahead.

Natural Gas Prices Could Quadruple This Winter, Says Analyst --Natural gas prices could spike this winter if there is a severe cold snap. Gas stockpiles are expected to end the month of October at 3,330 to 3,370 billion cubic feet, the lowest level for an October month-end since 2005—making the market vulnerable to potential winter supply disruptions, according to a note published Thursday by Anthony Yuen, global energy strategist at Citi.

NGSA outlook sees 'flat pressure' on US prices as production helps offset record demand, lower storage — The Natural Gas Supply Association anticipates lower storage levels will be countered by soaring production this winter, resulting in neutral pressure on wholesale natural gas prices, despite record domestic consumption this winter. NGSA on Wednesday released its winter outlook, which evaluates the combined impact of weather, economic growth, customer demand, storage, supply and "wild card" factors on prices winter over winter. Overall, it said a flexible, stable marketplace is likely despite consumer demand exceeding the extremely cold winter of 2013-2014. The outlook anticipates a record demand of 102.7 Bcf/d, mostly tied to an increase in electric sector and industrial use of gas, as well as exports, combining to add 3.4 Bcf/d, on average, to consumption. On the supply side, lower storage inventories at the start of the winter -- 3.3 Tcf versus about 3.8 Tcf last winter -- were seen as exerting upward pressure on prices this winter compared with last. In contrast, offering downward pressure, production this winter was forecast to average 84.9 Bcf/d, up from 77.4 Bcf/d last winter. "You've got a flowing supply that can directly go to market that will reduce the need to draw on storage," said Donald "Blue" Jenkins, vice chairman of NGSA and chief commercial officer of EQT. "I think we're going to learn a lot about how flowing supply and storage interface with one another and how the market gets comfortable with that moving forward." A key caveat is "how does the winter show up," he said. For instance, cold in the front end of the season that requires an early storage draw could affect thinking in the first quarter, while a warmer start would make the market more comfortable headed into January and February. Jenkins added that "storage is a regional conversation." Having 3.7 Tcf in storage does not preclude regional disruptions, particularly in places that haven't invested in infrastructure to resolve winter peaks. New England and California still have the potential to be "a bit more volatile," he said. Demand was up in every category, Jenkins noted, with electricity demand forecast to reach a record 24.8 Bcf/d. The outlook considered that demand factors exert neutral pressure overall on prices. LNG exports, at 4.7 Bcf/d, were forecast to average 57% above last winter's level, but still make up only 5% of the 2018-2019 winter demand. Weather is the largest determinant in the forecast, Jenkins said. Temperatures are forecast to be 1% warmer than last winter, exerting neutral pressure on prices.

EIA Reports Larger-than-Expected 98 Bcf Storage Injection; November NatGas Drops - After a substantially bullish storage report last week, the Energy Information Administration (EIA) flipped the script as it reported a 98 Bcf build into storage inventories for the week ending Sept. 28, beating some low-ball estimates by more than 20 Bcf but still coming in within the larger range of expectations. The Nymex November natural gas futures contract was already trading about 4 cents lower just ahead of the EIA’s 10:30 a.m. ET release, but then fell another couple of cents to around $3.17 as the print hit the screen. By around 11 a.m., the prompt month had bounced back a bit to trade at $3.181, down about a nickel on the day. The EIA’s reported 98 Bcf injection was a full 10 Bcf above Bespoke Weather Services’ projection. “This comes after a 14 Bcf smaller injection last week, and in this regard, we see what may be an implicit revision following last week’s very tight print.” With the 98 Bcf build, inventories stood at 2,866 Bcf, 636 Bcf below year-ago levels and 607 Bcf below the five-year average. Broken down by region, the EIA reported a 36 Bcf injection in the Midwest, a 34 Bcf build in the East and a 22 build in the South Central. Some 8 Bcf was injected into salt dome storage, while 14 Bcf was injected into non-salt facilities. “This eases some of the storage concerns that played a role in the recent run-up in price, especially with a larger salt build,” Bespoke said. Even with Thursday’s build, however, salt dome storage remains at a 120 Bcf deficit to year-ago levels and a 107 Bcf deficit to the five-year average. But Wood Mackenzie natural gas analyst Gabe Harris questioned whether it was necessary for inventories to recover to historical highs given the rampant production growth in the United States. “The long-haul pipes from these high deliverable facilities” to the Northeast and Midwest “are not crucial anymore with production going through the roof,” he said. Another market observer agreed, saying that salts play less of a role in balancing winter demand today as Northeast production has the ability to ramp up and down daily to match price/demand. “I've see production in 2017 jump by almost 1.2 Bcf/d in a matter of three days ... as demand and cash prices rocketed higher.” Instead, salts are needed just to balance supply/demand in the Southeast quarter of the country as little wind there and plenty of coal retirements have left the Southeast “as one of the best places” for natural gas demand growth, Harris said. 

 Natural gas prices are on fire this month — here's why - The country is heading into the winter with natural gas stockpiles at their lowest in at least a decade, according to the commodities research group at Barclays. At the same time, power plants are grappling with a hotter-than-usual autumn that is keeping air conditioners running. Add a series of nuclear power plant outages to the mix, and you've got a recipe for a rally. Natural gas prices are up about 12 percent over the last month to roughly $3.16 per million British thermal unit. On Wednesday, they hit a more-than-seven-month high, at $3.26 per mmBtu. Prices backed down 2 percent on Thursday after government data showed a weekly increase of 98 billion cubic feet in U.S. natural gas stockpiles. However, prices are still near their highest since the dead of last winter. Barclays expects prices to ease, but the bank warns that heading into the winter with so little gas in storage leaves the market susceptible to price spikes. "If winter weather comes in mild, then this current storage shortfall is a speed bump on the way to a looser market in 2019. If cold weather comes to fruition, though, the tenor of the 2019 outlook is fundamentally changed and the market will spend a good portion of next year just digging out of the storage deficit," Michael Cohen, head of energy markets research at Barclays, wrote in a research note on Thursday. The bank's weather outlook calls for natural gas prices to average $2.99 per mmBtu this winter, but if temperatures are 10 percent colder than anticipated, that estimate shoots up to $3.65 per mmBtu. Barclay's view that natural gas prices will moderate speaks to the roots of the rally. While low stockpiles provide a bearish backdrop, it's largely the unseasonably warm weather and unplanned nuclear power outages that are to blame. Cooling degree days, or days that were warm enough to require air-conditioning, were 20 percent higher in September than the 10-year average, according to Barclays. Meanwhile, Hurricane Florence forced power plants in the Carolinas region to shut down as much as 17 gigawatts of nuclear power, or about 10 gigawatts more than usual over the last four years. While those issues will soon pass, Barclays warns that a tug of war between market forces will determine how skinny natural gas supplies get — and how high prices rise — this winter.

Both natural gas supply and demand have increased from year-ago levels – EIA - In the first half of 2018, U.S. natural gas supply and demand grew significantly compared to the first half of 2017. According to EIA’s Natural Gas Monthly, natural gas consumption and exports averaged 93.4 billion cubic feet per day (Bcf/d) during the first half of 2018, or 12% greater than during the first half of 2017. Total supply of U.S. natural gas, including domestic production, imports, and storage withdrawals, averaged 93.3 Bcf/d during the first half of 2018, a 12% increase from the first half of 2017. The increase in U.S. natural gas supply was driven by production, especially from the Appalachia region. Total U.S. dry natural gas production rose 7.4 Bcf/d (10%) compared to the same period last year. The additional pipeline capacity brought into service since June 2017 has enabled production increases, including the Leach XPress, the Rover Pipeline, and Phase 1 of Atlantic Sunrise, all of which transport natural gas out of the Northeast region. Domestic natural gas consumption in the first half of 2018 increased in all sectors compared with year-ago levels. The largest growth occurred in the residential and commercial sectors, which increased by 3.8 Bcf/d (16%) combined, compared to the first half of 2017. Residential and commercial consumption is primarily related to heating needs, and the beginning of 2018 experienced record, prolonged cold temperatures across many of the Lower 48 states. Population-weighted heating degree days, a temperature-based proxy for heating demand, were 17% higher in the United States during the first half of 2018 than in the first half of 2017.In the U.S. electric power sector, power plants used 3.6 Bcf/d (16%) more natural gas during the first half of 2018 compared with the same time last year. Electricity demand tends to increase as hot weather increases demand for air conditioning or as cold weather increases demand for electric space heating. Natural gas consumption in the power sector has also increased with the increased buildout of natural gas-fired power plants in much of the country. Industrial consumption of natural gas in the United States (including lease and plant fuel) was 1.6 Bcf/d (6%) higher in the first half of 2018 compared to the first half of 2017. Industrial consumption of natural gas is affected by weather-related space heating needs, particularly in the Northeast and Midwest.  Overall, consumption and exports increased 2.7 Bcf/d more than production and imports in the first half of the year, which prompted withdrawals of natural gas from storage facilities. Relatively high net withdrawals and low net injections so far in 2018 have resulted in natural gas inventories falling 18% lower than the previous five-year average as of September 21, 2018.

Shell, Partners Approve $31 Billion Project to Speed Gas to Asia - -- Royal Dutch Shell Plc and its partners announced an agreement to invest in a multibillion-dollar liquefied natural gas project in western Canada -- the largest of its kind in years that will carve out the fastest route to Asia for North American gas. LNG Canada -- comprised of Shell, Malaysia’s Petroliam Nasional Bhd, Mitsubishi Corp., PetroChina Co. and Korea Gas Corp. -- confirmed the expected final investment decision in the C$40 billion ($31 billion) project, according to a statement from Shell on Tuesday. Bloomberg News reported Sunday that the group had approved the investment and an announcement was imminent. The project marks a turning point for Canada and the global gas industry. Set to be the nation’s largest infrastructure project ever, LNG Canada augurs a new wave of investments for major gas export projects after a three-year hiatus forced by fears of a global supply glut. LNG Canada will be able to send cargoes from Kitimat, British Columbia, to Tokyo in about eight days versus 20 days from the U.S. Gulf. “As the market grows, our LNG business needs to grow,” Shell Chief Financial Officer Jessica Uhl said in a call with reporters. “Demand has exceeded expectations. We believe that that pattern will continue going into 2020s.” TransCanada Corp. said in a separate statement it will move forward with its C$6.2 billion Coastal GasLink pipeline, a 420-mile (676-kilometer) conduit that will carry gas from British Columbia to LNG Canada for export. The project has all necessary permits and will have an initial capacity of 2.1 billion cubic feet a day -- about a third of Canada’s total gas demand, government data show.  Shell believes LNG demand will roughly double by 2035. LNG Canada will generate a 13 percent internal rate of return to Shell, if gas prices in Tokyo are $8.50 per million British thermal units or higher, according to the company. Prices have been lower than that for the vast majority of the past four years, but Uhl suggested there would be a “supply gap” opening up around the time the project starts selling fuel that will raise prices.

Massive Canada LNG project gets green light as Asia demand for fuel booms  (Reuters) - A massive liquefied natural gas (LNG) export project in Canada has received final approval from its partners, LNG Canada said on Tuesday, making it the first major new project for the fuel to win approval in recent years. FILE PHOTO: Cranes work in the water at the Kitimat LNG site near Kitimat, in northwestern British Columbia on April 13, 2014. REUTERS/Julie Gordon/File Photo First gas from the C$40 billion ($31 billion) project, led by Royal Dutch Shell Plc, is expected before 2025, aiming to feed an expected surge in demand for the super-chilled fuel from Asian buyers, mainly China. LNG Canada is the largest private-sector investment project in Canadian history, Prime Minister Justin Trudeau said at a news conference in Vancouver. The announcement provides a much-needed boost for Trudeau’s ruling Liberals, who have struggled with an exodus of global majors from Alberta’s oil sands and setbacks in building a crude pipeline expansion to Canada’s Pacific Coast. “We can’t build energy projects like we did in the old days where the environment and the economy were seen as opposing forces,” Trudeau said. “They must go together.” Canada is committing C$275 million to infrastructure and environmental performance measures related to LNG Canada, which will have the lowest carbon intensity of any large LNG facility in the world, Trudeau said. The project will move LNG to Asia faster than from the U.S. Gulf Coast. With global LNG demand expected to double by 2035, much of the growth will come from Asia where gas is displacing coal,

Looming large: Shell's LNG Canada seen as tip of megaproject iceberg (Reuters) - The launch of a massive liquefied natural gas (LNG) export project in Canada could fire the starting gun on a wave of other approvals around the world, potentially curbing a supply crunch expected after 2020. Royal Dutch Shell on Tuesday said it would export LNG from the west of Canada by 2025 after approving a C$40 billion ($31.2 billion) project capable of initially producing 14 million tonnes a year. That comes just weeks after Qatar, the world’s top LNG exporter, said it would expand its already huge annual output of 77 million tonnes to 110 million tonnes in the coming years. The Canada and Qatar developments will significantly boost the around 300 million tonnes of LNG traded per year, helping ease a supply shortage expected in the next decade amid surging appetite for cleaner fuels from places such as China and wider Asia. The projects are seen as just the start, with a host of other approvals - known as final investment decisions (FIDs) - expected to follow after waiting in company drawers while LNG prices recovered from a three-year slump. “LNG Canada’s FID ... (signals) the appetite to invest in LNG is back,” said Saul Kavonic, an energy researcher at Credit Suisse. With prices almost tripling from 2016 lows to over $11 per million British thermal units (mmBtu) as demand gathers steam, the industry has regained confidence and is preparing to invest in new projects again. Another 175 million tonnes per year of capacity is expected to be approved by the end of 2019. “We believe 2019 could be the busiest year of LNG FIDs ever,” said Wood Mackenzie’s director of North America gas, Dulles Wang. 

LNG Canada Raises Bar for Gulf Coast Projects - It could become harder to justify US Gulf Coast greenfield LNG proposals.Now that Shell and its partners in the $31 billion LNG Canada project have decided to proceed with the investment on Canada’s West Coast, it could become more difficult to make the economic case for greenfield LNG export proposals on the U.S. Gulf Coast. A major reason why, say analysts interviewed by Rigzone, is the difference in shipping costs to Asia from British Columbia versus facilities on the Texas and Louisiana coasts. While LNG carriers from British Columbia would enjoy a straight shot to Asian markets, vessels departing U.S. Gulf Coast terminals do not enjoy direct access to the Pacific Ocean.“There are no choke or strategic shipping points in this route such as the Panama Canal, straits of Hormuz and the straits of Malacca,” said Madeline Jowdy, senior director of global gas and LNG analysis with S&P Global Platts, adding that Asia is home to three-quarters of the global LNG market.“West Coast Canada is the closest non-Asian supplier to the north Asian demand centers of China, Japan and Korea,” said Jowdy. “Shipping costs are a critical factor in LNG due to boil off costs. During periods of global gas price convergence, the lower shipping costs are a critical factor in producing the marginal cargo.” Jowdy added that the trade war between the United States and China – specifically, perceptions about the political risk of supplying U.S.-sourced LNG to China – could dampen the prospects for some next-generation Gulf Coast projects. “China will account for roughly 35 percent of total demand growth over the next five years and, at this point, they are under-contracted,” Jowdy noted.

 Canada Won’t Appeal Pipeline Ruling – WSJ —Canada said Wednesday it would waive its right to appeal a court ruling that blocked work to expand the existing Trans Mountain pipeline, arguing it would unnecessarily delay government efforts to complete the energy project.The Liberal government also unveiled plans to kick-start a new round of consultations with indigenous groups, whose lawsuits led to the latest setback to Canada’s efforts to add to limited pipeline capacity.The difficulty domestic producers face to move their crude to the U.S. and other foreign markets is weighing on the price of western Canadian crude, which now trades at a significant discount compared with global benchmarks such as Brent and West Texas Intermediate. In August, Canada’s Federal Court of Appeal annulled regulatory approval for the pipeline project, which envisages nearly tripling the amount of landlocked crude oil that can be moved from the province of Alberta to a Pacific coast port, where it can be loaded on tankers and transported to faster-growing economies in Asia. In the ruling, the appeal court said the government didn’t adequately carry out its constitutional duty to consult with affected indigenous communities, and the energy regulator relied on a study that didn’t fully consider the impact of increased oil-tanker traffic on the environment. Wednesday’s decision to waive its right to appeal and restart such consultations is the latest move by the Liberal government to get construction going on the project following the court judgment. Last month, the government instructed the country’s energy regulator to conduct another review in the span of 22 weeks, or 5½ months, with a focus on the impact of increased oil-tanker traffic on the Pacific coast.  Prior to a Wednesday morning Liberal Party caucus meeting, Canadian Prime Minister Justin Trudeau said an appeal “would take another few years” before construction could start. He said a blueprint laid out in the court ruling on how Ottawa should proceed with Trans Mountain “will allow us to get things done quicker and get our resources to new markets other than the U.S. in a more rapid fashion.”The initiatives to date from Canada demonstrate “tangible and substantial ways that our government will follow on our duty to consult on the Trans Mountain pipeline in the right way” in the aftermath of the appeal court ruling, Amarjeet Sohi, Canada’s natural resources minister, said at a news conference in the nation’s capital. “We are not going to presuppose what we are going to hear from indigenous communities. We are going to listen very carefully,” Mr. Sohi said. “And if there are appropriate accommodations to emerge, those will be considered.  Mr. Sohi declined to put a timeline on how long consultations with the affected 117 indigenous groups would take. He acknowledged some indigenous communities would likely remain opposed to the project following talks, due to the threat the pipeline project poses to their livelihood, which involves fishing off the coastline in British Columbia, Canada’s westernmost province.

Tribal Cooperation Sought to Move Trans Mountain Expansion Forward - A retired Supreme Court of Canada judge, Frank Iacobucci, has been appointed to lead a native affairs team seeking tribal cooperation with the suspended Trans Mountain Pipeline expansion project.In Ottawa, Natural Resources Minister Amarjeet Sohi said Wednesday the consultations would follow guidance in a book-length Federal Court of Appeal verdict that had overturned the project’s approval. The government will not launch a further appeal, said Sohi and Prime Minister Justin Trudeau.The Canadian government’s decision to buy the pipeline from a Kinder Morgan Inc. subsidiary was completed even after the unanimous ruling by the appeals court, which concluded that the government’s review was flawed and said Indigenous groups had not been adequately consulted.Iacobucci’s team plans to meet all 117 tribes affected by the plan to triple capacity to 890,000 b/d on the Trans Mountain conduit across Alberta and British Columbia to a Vancouver harbor tanker dock, Sohi said.The appellate court ruled native consultations to date on the project fell short of constitutional requirements for “meaningful” and “focused” work. Sohi set no deadlines for completing the new round but indicated the government has not set a target of unanimous native consent that could delay the pipeline indefinitely."We understand there will be groups who will still oppose this project,” said the natural resources minister. “That's fine, because that's their right to do so. But that doesn't mean if we fulfill our constitutional obligation that those groups may have a veto to stop this project." The native consultations will run in parallel with a 22-week further review of oil tanker safety and environmental standards by the National Energy Board, also following instructions in the appellate court verdict. The legal setback foiled hopes for a quick start on Trans Mountain expansion construction because the government bought the pipeline for C$4.5 billion ($3.6 billion). The Canadian government has set no target date for rescuing the project from legal limbo.

Canadian Oil Pain Grows as Crude Discount to WTI Hits $40  - (Bloomberg) -- Canadian heavy crude’s discount to West Texas Intermediate futures increased to the widest in almost five years, raising the specter of local oil producers curtailing operations. Western Canadian Select’s discount for November fell 65 cents to $41.40 a barrel Wednesday, the biggest since November 2013, data compiled by Bloomberg show. The plunge came as new supply from Suncor Energy Inc.’s Fort Hills mine helps to fill pipelines to capacity. “If you get this sustained wide differential, you are going to see these guys start to ramp down production,” Mike Walls, a Genscape Inc. analyst, said by phone.When discounts widened to $30 a barrel early this year on the back of a pipeline outage, companies including Cenovus Energy Inc. and Canadian Natural Resources Ltd. said they were cutting some production or starting maintenance earlier than planned. Yet, with oil sands maintenance soon to wind down and further maintenance not planned until next spring, there is “no relief valve for the next two to four months,” according to Walls.Other grades of Canadian crude are also suffering. Light synthetic crude, produced from bitumen processed in an oil sands upgrader, fell to a $19.75 a barrel discount to New York futures on Tuesday as Syncrude Canada Ltd. prepared its upgrader next month back to full production after a plant-wide shutdown in June. New pipeline projects, including the Trans Mountain expansion to the Vancouver area, have been stymied by court-imposed delays. While increasing volumes of oil are being shifted onto rail cars, the pickup in crude-by-rail has been slow, Walls said. Exports rose one percent in July from June to 207,000 barrels a day, National Energy Board data show. Cenovus said last month it signed oil-by-rail agreements to ship about 100,000 barrels a day on tracks but the agreements won’t go into full effect until the second quarter next year.

3 reasons why Alberta oil prices have sunk - Around the world oil prices are on the rise, except in Alberta where a barrel is worth less than half of what it would fetch in the United States. Global prices are climbing as some key, oil-producing countries are in trouble — whether it's Iran facing new sanctions or Venezuela creeping closer to an economic implosion. Even in the United States, oil production growth is showing signs of a slow down. That's why prices are spiking just about everywhere. The Brent oil price, considered the global benchmark, has surged above $85 US per barrel. In the U.S., West Texas Intermediate cruised past $75 US. But in Alberta, Western Canada Select is stuck at $35 US per barrel. The divide between WCS and WTI has never been larger, according to Martin King, commodities analyst with Calgary's GMP FirstEnergy. The steep discount in Canadian oil prices compared to American prices could cost Alberta oil producers billions this year in foregone revenues. The main problem is a backlog of oil in Alberta. Here are the three reasons why that's happened.

  • Refinery outages - As the summer driving season began to wind down, some U.S.-based refineries shutdown for maintenance. That was an unpleasant surprise for Canadian oil companies in August and September because those refineries process heavy oil from Alberta. One of the refineries still shutdown is BP Plc's Whiting operation in Indiana, which is the single largest consumer of Canadian heavy crude in the U.S.
  • Pipelines full. Oilsands production continues to climb as projects like Suncor's Fort Hills facility ramp up to full activity. The problem is all that supply is "bumping into a dearth of pipeline capacity available to take it to market,"  Export pipelines out of Alberta continue to run near full capacity, and some companies are struggling to export their oil.
  • New marine fuel standards. The International Maritime Organization will have a sulfur limit rule in place for 2020, which is known as IMO 2020. The policy generally will target heavy sour crudes like those produced in Alberta in favour of low-sulphur sweet oil.  experts also say refineries in North America are sophisticated enough to reduce the sulphur content when they process Canadian heavy oil. Regardless, the sulphur restrictions are still weighing on future prices of heavy oils around the world because the potential impact is unknown.

That other trade battle—in energy—heats up - North America has a new free-trade agreement. But PetroChinamay soon be tanking up in British Columbia rather than on the Gulf Coast.The Chinese state-owned energy giant on Friday gave the thumbs-up for its 15% stake in Canada’s first liquefied-natural-gas export port, at $30 billion the country’s largest infrastructure project ever. On Tuesday 40% owner Royal Dutch Shell and its other joint-venture partners followed suit.The timing—as President Trump aims to isolate China by reaching new direct-trade agreements with allies—doesn’t look coincidental.The global energy business has always come with a heavy dollop of geopolitics, but the emergence of the U.S. as a significant exporter—and China as the world’s largest net importer—is adding a new twist. The burgeoning U.S. liquefied-natural-gas (LNG) export industry could end up as collateral damage.LNG Canada will start shipping in the early 2020s, eventually as much as 26 metric million tons of gas a year. For perspective, the U.S. exported just 14 million metric tons last year, and the whole global market amounted to just 285 million. China, by far the fastest-growing major market, already slapped a 10% tariff on American gas, and just signed a big supply deal with Qatar. With Canada also entering the game, U.S. energy companies’ ambitious expansion plans are starting to look riskier.  The irony is that in pre-trade fight days, the U.S. looked well-positioned to capture a big chunk of the Chinese market. Cheniere Energy , the largest U.S. exporter, in 2017 estimated its break-even point on sales to Asia from future projects at $7.50 to $8.50 per million British thermal units. That’s substantially below the $9 to $12 estimates for LNG shipped from Western Canada, as calculated by Paris-based Cedigaz and the Canadian Energy Research Institute.  But an increase in Chinese tariffs to 25%—as threatened—would move U.S. LNG overnight from the low end of the cost curve firmly into the middle. Add in higher steel costs for pipeline and terminal construction thanks to U.S. import tariffs, and a report that PetroChina is already considering curtailing American LNG purchases, and the storm clouds over U.S. exporters are getting hard to ignore.  Given the scale of China’s near-term needs, it may not be able to avoid U.S. LNG this winter. But the long winters to come could be chilly ones for U.S. Gulf Coast exporters—and surprisingly warm up north in Canada—if Sino-U. S. trade tensions keep ratcheting higher.

New NAFTA deal omits climate change, and hands oil and gas yet another win - President Donald Trump’s deal to tweak the trade agreement among the United States, Mexico, and Canada won early praise for changes meant to raise wages and improve safety regulations on cross-border trucking.  But on Monday, environmental groups panned the accord to replace the North American Free Trade Agreement, arguing it includes “corporate giveaways” for fossil fuel giants, excludes binding agreements on lead pollution, and contains no mention of human-caused global warming.  Neither “climate” nor “warming” are among the words in the 31 pages of the new deal’s environment chapter. NAFTA was long criticized for encouraging companies to shift polluting operations to Mexico, the poorest country with the laxest environmental rules in the trilateral trade agreement. Particular complaints focused on the investor-state dispute settlement process, a system in which companies have been historically afforded broad corporate rights that override local environmental regulations.  The new deal limits those rights, with one major exception: U.S. oil and gas companies. Under the rules, firms that have, or may at some point obtain, government contracts to drill or build infrastructure like pipelines and refineries in Mexico ― such as ExxonMobil Corp. ― can challenge new environmental safeguards Mexican President-elect Andrés Manuel López Obrador has vowed to erect. “It’s like saying, ‘From here on, we’re going to protect the henhouse by keeping all animals away, except for foxes, they’re cool,’” That’s not the only giveaway for the oil and gas industry. The updated deal, which requires congressional approval, preserves a provision that requires the U.S. government to automatically approve all gas exports to Mexico, despite another rule mandating regulators consider the public interest.  “We urge Congress to approve” the revised deal, said Mike Sommers, chief of the American Petroleum Institute, the oil and gas industry’s biggest lobby. “Retaining a trade agreement for North America will help ensure the U.S. energy revolution continues into the future.”

Here's What Trump's New Trade Deal With Mexico Means For The Energy Industry - President Donald Trump’s new trade pact with Canada and Mexico contains provisions that free up the energy industry to continue expanding U.S. natural gas exports into Mexico without worrying about tariffs.The U.S., Mexico, and Canada Agreement (USMCA) focuses mostly on differences between the countries on the exportation of automobiles. But it does allow for continued market access for U.S. gas and investments in Canada and Mexico, which is highly dependent on U.S. natural gas exports.The oil industry’s biggest lobbying group is pushing Congress to pass the deal. “We urge Congress to approve the USMCA,” API President and CEO Mike Sommers said in a statement Monday morning. “Having Canada as a trading partner and a party to this agreement is critical for North American energy security and U.S. consumers. Retaining a trade agreement for North America will help ensure the U.S. energy revolution continues into the future.”Some in the energy industry were concerned Trump’s decision to rip up the more than 25-year-old North American Free Trade Agreement would dramatically affect oil producers’ ability to capitalize on Mexico’s growing natural gas market.“For the energy sector, there was never really a huge amount of positive stuff that could come out of this,” Sarah Ladislaw, senior vice president and director of the Energy and National Security program at the Center for Strategic and International Studies, told reporters in August. Mexico accounts for the bulk of U.S. gas exports, with 90 percent coming from pipelines and the rest from LNG. The country receives roughly 60 percent of its total gas supply from the U.S., while oil production inside Mexico has fallen nearly 45 percent since 2010.Those numbers are unlikely to change much once newly-elected Mexican President Andrés Manuel López Obrador (AMLO) takes office in December. AMLO has expressed a desire to ban fracking, which could give the U.S. an even larger market share in Mexico.

Investors wary of Mexico's new president's plans for oil -The revamped Nafta deal has raised the prospect of investment picking up again in Mexico, but foreign investors remain wary of the incoming president's proposed policies and will be closely watching his plans for the country's oil sector.The newly-minted United States-Mexico-Canada Agreement (USMCA), agreed earlier this week, has helped to soothe trade tensions between the longtime strategic allies and eased investor concerns about the Mexican economy."The agreement removes a major risk," said Jorge Mariscal, the chief investment officer for emerging markets at UBS Wealth Management. "It sets the rules of the game and injects an important source of stability that will bring back confidence."With trade concerns now ebbing, investors have shifted their attention to another potential hazard: president-elect Andrés Manuel López Obrador. He will take office in December following his landslide victory against Mexico's political establishment.While Mr. López Obrador has somewhat moderated his leftwing, nationalist stance, vowing to adhere to fiscal prudence and respect the central bank's independence, many investors are concerned about what he could do with such a decisive political mandate."He believes the public sector should have a strong hand in the economy and distrusts the private sector's ability to do business in a fair and clean way," said Kim Catechis, a portfolio manager at Martin Currie, a Legg Mason affiliate. "He's also a man who has very high convictions in himself, his ability and his policy. You put all that together and you see a higher perception of risk in Mexico." Michael Gomez, head of emerging markets at Pimco, sees the energy sector as Mr. López Obrador's "litmus test." Investors have long cheered outgoing President Enrique Peña Nieto's landmark reform in 2013 to reverse a 75-year history of state ownership and allow foreign and private investment in the oil, gas and electricity industries.

Mexico President-Elect Says Oil, Gas Contracts to be Honored -- Mexican President-Elect Andrés Manuel López Obrador signaled late last week that his administration will honor the 107 contracts awarded so far through oil and gas bid rounds conducted under the current administration led by President Enrique Peña Nieto. In a meeting last Thursday with the Asociación Mexicana de Empresas de Hidrocarburos (Amexhi), a trade group that includes heavyweights such as BP plc, Royal Dutch Shell plc, Chevron Corp. and ExxonMobil Corp., López Obrador expressed his commitment to maintaining the current energy model and to eliminating bureaucratic red tape in regulatory institutions, Amexhi said. “I’m optimistic because together we’re going to reverse the decline in oil production and move the energy industry forward,” the president-elect was quoted as saying. “This administration will not act arbitrarily. We want you to be able to invest, but we want results.” López Obrador “was very clear on respecting the contracts and was very clear that we must fulfill the obligations of these contracts,” local paper El Universal quoted Amexhi President Alberto de la Fuente as saying. López Obrador’s transition team is currently fulfilling a campaign pledge to review the contracts, which has driven speculation that his government could dispute their legality. 

Fracking expected to start at Lancashire site next week despite judge's interim order - Fracking at the UK’s first horizontal shale gas well is expected to start next week, despite a judge granting an interim order to stop the work.Francis Egan, chief executive of energy firm Cuadrilla, said he was confident the controversial hydraulic fracturing process would begin at the site in Lancashire within a week, despite continued protests.A High Court hearing will be held on Wednesday after Lancashire campaigner Bob Dennett applied for an injunction to stop the work going ahead pending the determination of a judicial review case against Lancashire County Council, which claims the authority’s emergency response planning and procedures were inadequate.  A court order issued by Mrs Justice Farbey requires Cuadrilla to stop any fracking pending the outcome of the hearing.Speaking at a media day on the Preston New Road site in Little Plumpton, near Blackpool, Mr Egan said: “We have everything on site, everything has been set up, everything has been tested and we should be ready to start fracturing next week.”Cuadrilla said work had not been scheduled to start before the hearing on Wednesday.Speaking after the request for the injunction was made, Mr Egan said: “I think it’s probably a last gasp attempt at trying to frustrate the process, trying to slow down the process, but no, this is going to go ahead.“I’m confident about that.” On Friday, small group of protesters with placards remained outside the site, which has two of the horizontal shale gas exploration wells.

Council investigating oil spill in Nelson city marina - Nelson City Council are investigating an oil spill that has affected the city's marina. Believed to have come from a vessel's bilge between 7pm and 2am on Sunday night, the spill was cleaned up by the council's environmental response team, with between two and three tonnes of vegetation removed from the foreshore. "Due to the large amount of pollutant, we believe this spill has come from a larger vessel," says Clare Barton, Group Manager Environmental Management. "We were lucky that the northerly wind direction blew the oil into the marina where it could be more easily removed, if the wind had been blowing the other direction and had it been swept along the Boulder Bank there could have been serious impacts for our wildlife. Costs of clean-up are estimated to be considerable, with material needed to be trucked from Christchurch for appropriate disposal.

Oil spill reported in Vistabella; clean-up operations ongoing - An oil spill has been reported in Vistabella. The Environmental Management Authority (EMA) says it received a report at 10 a.m. on Saturday of the presence of oil in a watercourse within the Vistabella area. The EMA said its Emergency Response and Investigations(ERI) Unit conducted an investigation to identify the potential source of the spill. The environmental body said the source was identified as Petrotrin’s Mossetville Manifold buried high pressure gas and oil line. It said Petrotrin is engaged in clean-up operations and have taken precautions of shutting off the line and deploying booms to ensure that oil will not reach the coast. The EMA said Petrotrin at this time cannot confirm the quantity of oil spilled. The environmental body says it will continue to monitor this incident.

How the world's oil refiners plan to grapple with their fuel oil output after 2020 (Reuters) - High-sulfur fuel oil (HSFO), essentially the leftovers of an oil refiner’s output, will still flow from refineries around the world even after new rules start up in 2020 curtailing its use in the global shipping fleet, a Reuters survey showed. Sixty percent of the 33 refineries contacted by Reuters in a global survey will still produce HSFO in 2020 although the supply will tighten as 70 percent of these refiners plan to reduce their output. Starting that year, ships will have to use marine fuel, which primarily consists of residual fuel oil, with a maximum sulfur content of 0.5 percent under International Maritime Organization (IMO) rules to reduce air pollution. Currently, the global shipping fleet, which includes oil and chemical tankers as well as container ships, uses as much as 3.3 million barrels per day of HSFO with a maximum of 3.5 percent sulfur. Refiners will have little incentive to produce HSFO after the regulations though some demand will remain as a small but growing number of vessels are fitted with smokestack scrubbers that remove the sulfur from the exhaust fumes and power plants will continue to consume the fuel. “Although HSFO demand for ships is expected to decline substantially in 2020, the oil’s demand for power generation and general users will remain,” When asked how they plan to reduce HSFO output, just over half of the refiners said they will upgrade their plants to further process their fuel oil to produce more higher value products such as gasoline and diesel. Two-thirds of the 16 refiners who responded to a question about how much investment they plan to pump into their plants to produce more ultra-low and low-sulfur fuel oil, said they plan to spend less than $100 million. Five of them are investing between $500 million and more than $1 billion in such projects. 

Petrochemicals set to be the largest driver of world oil demand, latest IEA analysis finds - Petrochemicals – components derived from oil and gas that are used in all sorts of daily products such as plastics, fertilisers, packaging, clothing, digital devices, medical equipment, detergents and tyres – are becoming the largest drivers of global oil demand, in front of cars, planes and trucks, according to a major study by the International Energy Agency.Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then. They are also poised to consume an additional 56 billion cubic metres (bcm) of natural gas by 2030, and 83 bcm by 2050.The Future of Petrochemicals is part of a new IEA series shining a light on “blind spots” of the global energy system – issues that are critical to the evolution of the energy sector but that receive less attention than they deserve. The report is among the most comprehensive reviews of the global petrochemicals sector, and follows other reports in the series, including the impact of air conditioners on electricity demand, the impact of trucking on oil demand, or the role of modern bioenergy in the renewables sector.Petrochemicals are particularly important given how prevalent they are in everyday products. They are also required to manufacture many parts of the modern energy system, including solar panels, wind turbines, batteries, thermal insulation and electric vehicles.“Our economies are heavily dependent on petrochemicals, but the sector receives far less attention than it deserves,” said Dr Fatih Birol, the IEA’s Executive Director. “Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. In fact, our analysis shows they will have a greater influence on the future of oil demand than cars, trucks and aviation.”Demand for plastics – the key driver for petrochemicals from an energy perspective – has o utpaced all other bulk materials (such as steel, aluminium, or cement), nearly doubling since 2000. Advanced economies currently use up to 20 times more plastic and up to 10 times more fertiliser than developing economies on a per capita basis, underscoring the huge potential for global growth.

Iran Finalizing Mechanism To Bypass SWIFT In Trade With Europe - Just days after Europe unveiled a "special purpose vehicle" meant to circumvent SWIFT and US monopoly on global dollar-denominated monetary transfers - and potentially jeopardizing the reserve status of the dollar - Iran said it was finalizing mechanisms for the oil trade to bypass US sanctions against the country, said Iranian Deputy Foreign Minister Abbas Araghchi.According to RT, Araghchi said that Tehran is not ruling out the possibility of setting up an alternative to the international payments provider SWIFT to circumvent sanctions imposed by Washington."As we know, Europeans are also trying to see how SWIFT can continue working with Iran, or if a parallel [financial] messaging system is necessary… This is something that we are still working on," Araghchi said.According to the Iranian diplomat, the independent equivalent of the SWIFT system that was earlier suggested by the EU to protect European firms working in Iran from US sanctions will be available for third countries.“This is the important element in SPV (Special Purpose Vehicle) that it is not only for Europeans but other countries can also use this. We hope that before the re-imposition of the second part of the US sanctions [from November 4], these mechanisms can be in place and be functional,” said the official.One can see why: the Iranian economy has been hit hard in recent days, and the Rial has plunged to all time lows, amid fears that the sanctions will cripple Iran's most valuable export resulting in a shortage of hard currency, eventually leading to a replica of Venezuela's economic collapse.Separately, Iran's Foreign Ministry spokesman Bahram Qassemi said that "after much negotiation over a clear mechanism with Europe, we have neared certain understandings; and for sure, US sabotage in that regard will fail."On September 24, Iran and its five partners released a joint statement announcing the setting up of a "Special Purpose Vehicle" to facilitate continued trade with Iran, bypass the US's financial system, and avoid any impact of America's secondary sanctions. That statement did not provide details. And EU foreign policy chief Federica Mogherini said technical talks would ensue.

 Iran builds 10 million barrel capacity crude oil storage on Sea of Oman — Iranian companies signed a contract Sunday to build infrastructure for the storage of 10 million barrels of crude in the southern port of Jask on a build-operate-transfer basis, which will be Iran's second oil exports terminal, the National Iranian Oil Co. said on its website. The Eur200-million ($232-million) project will be completed in three years and will operate for 15 years. NIOC arm Petroleum Engineering and Development Co. signed the contract with Petro Omid Asia and Omid Investment Management Group. The ownership will be transferred to NIOC at the end of the 15 years. "The tanks will gather oil from West Karoun, shared oil fields and central oil fields," Managing Director NIOC Ali Kardor told state television. The storage will also feed refineries to be built in Jask. Iran aims to raise its oil-product output and sales in the face of US sanctions on its crude exports to avoid capping its oil wells like it did during the previous period of sanctions between 2012 and 2016. "This company has no plans to cut oil production; and production is continuing at full steam ahead," Kardor was quoted as saying by state television. "Iran has access to all of its oil money and can use it. We even had an around 40% increase in income from oil exports," he added. Kardor said Iran would sign an upstream deal with an unnamed "Russian consortium" under its new contract model. Twenty metal tanks will be built to store light and heavy oil received from a 42-inch, 1,100-km (682-mile) pipeline. The oil will be pumped into future marine pipes and floating buoy mooring facilities for export. Jask is a port in Hormozgan province on the Sea of Oman. A littoral area of around 5,000 hectares, 65 km west of Jask town has been allocated for oil, gas, refining and petrochemical projects. The area allocated to the storage facility is around 600 ha and can be expanded for storage of up to 30 million barrels. The contract signed was to carry out the first phase of the major plan. A second phase has been designed to store 10 million barrels.

Trump calls Saudi's King to discuss oil supplies (Reuters) - U.S. President Donald Trump called Saudi Arabia’s King Salman on Saturday and they discussed efforts being made to maintain supplies to ensure oil market stability and global economic growth, Saudi state news agency SPA reported. The call comes days after the U.S. president criticized OPEC for high oil prices and called again on the exporting group to boost crude output to cool the market ahead of midterm elections in November for U.S. Congress members. Saudi Arabia is the world’s top oil exporter and OPEC’s de-facto leader. Speaking at the United Nations General Assembly in New York last week, Trump said OPEC members were “as usual ripping off the rest of the world”. “I don’t like it. Nobody should like it,” Trump said on Tuesday. “We defend many of these nations for nothing, and then they take advantage of us by giving us high oil prices. Not good. We want them to stop raising prices, we want them to start lowering prices.” The White House said in a statement that the two leaders had a call “on issues of regional concern”, without giving further details. Oil prices rose more than 1 percent on Friday, with Brent climbing to a four-year high, as U.S. sanctions on Tehran squeezed Iranian crude exports, tightening supply even as other key exporters increased production. Brent crude LCOc1 futures settled at $82.72 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 futures settled at $73.25 a barrel. Saudi Arabia is expected to add oil to the market to offset the drop in Iranian production. Two sources familiar with OPEC policy told Reuters that Saudi Arabia and other OPEC and non-OPEC producers had discussed a possible production increase of about 500,000 barrels per day (bpd). But OPEC and other major oil producers have so far ruled out any immediate official increase in output. The move effectively rebuffed Trump’s calls on oil producers to take action. 

How Much Oil Can Saudis Really Pump? We're Set to Find Out - Does Saudi Arabia have the extra oil? For the first time since Saddam Hussein invaded Kuwait in 1990, Saudi Arabia could face the ultimate petroleum test: pushing its complex network of oilfields, processing plants, pipelines, tank farms and export terminals to the limit, pumping every possible barrel of oil. Today another Middle East crisis is stretching the Saudi oil machine. U.S. sanctions on Iran are crippling exports from the Islamic Republic, prompting buyers to look to the world’s largest exporter for replacement barrels. In a pithy description of its role during a supply crisis, Majid Al-Moneef, a former Saudi senior oil official, told U.S. lawmakers a few years back that "Saudi Arabia is the ‘Federal Reserve of oil,’" according to American intelligence cables published by Wikileaks. Yet, unlike a central bank, the Saudis can’t print unlimited amounts of money. Their crisis-fighting tool is finite: a buffer of wells sitting idle in the desert. Use them now, and there’s nothing left for the next crisis. "Any unforeseen outages such as those from Libya, Venezuela or elsewhere could potentially expose the lack of OPEC’s spare capacity -- particularly of Saudi Arabia," said Abhishek Deshpande, an oil analyst at JPMorgan Chase & Co. The Saudis and their OPEC allies seem aware that using their spare capacity is a now a double-edged sword: it may cool down prices, but the impact could be limited by the risk-premium as the market worries about what’s left. Oil’s already passed the $80 mark despite assurances from Riyadh and its allies that it can fill Iran’s gap. Some traders are predicting oil could reach $100 this winter as the impact of sanctions ratchets up.

Hedge funds doubt Saudi Arabia will replace Iranian oil : Kemp (Reuters) - Hedge fund managers are increasingly betting Saudi Arabia and its allies cannot or will not replace all the crude lost from the market when U.S. sanctions on Iran go into effect fully from November. Hedge funds and other money managers increased their combined net long position in the six major petroleum contracts by another 50 million barrels in the week to Sept. 25. Portfolio managers have raised their combined net long position by a total of 196 million barrels over the last five weeks, according to exchange and regulatory data. Bullish long positions now outnumber bearish short ones by a ratio of more than 12:1, and the imbalance is rapidly closing in on the record 14:1 back in April. But the new wave of hedge fund bullishness is concentrated almost entirely in Brent rather than WTI or refined fuels (https://tmsnrt.rs/2OvBJTE ). Fund managers have raised their net in Brent by 172 million barrels since Aug. 21 compared with an increase of just 5 million in WTI. Fund managers now hold a net long position of almost 500 million barrels in Brent betting prices will increase even further from their current four-year high. Hedge fund long positions outnumber short ones in Brent by more than 19:1, up from a ratio of just 8:1 at the start of August, and closing in on the record 21:1 set in April. Traders foresee a shortage of seaborne crudes linked to Brent as U.S. sanctions on Iran go into effect on Nov. 4, despite reassurances from Saudi Arabia, Russia and the United States supplies will remain adequate. Concern about feedstock shortages linked to sanctions explains why position-building has been overwhelmingly concentrated in Brent rather than WTI or refined fuels. The inland U.S. crude market remains well-supplied and refined fuel markets appear balanced as an international freight slowdown and higher prices take their toll on consumption. But Brent spot prices have climbed by more than $12 per barrel (17 percent) since mid-August while the six-month calendar spread has risen almost $2.60 and swung from contango into a pronounced backwardation. 

Saudi Crown Prince to discuss Neutral Zone oil output during Kuwait trip: source (Reuters) - Saudi Arabia’s Crown Prince Mohammad bin Salman is expected to discuss the resumption of oil output from the Neutral Zone, which the kingdom’s shares with Kuwait, during a trip to the Gulf Arab state on Sunday, a source familiar with the matter told Reuters. Prince Mohammad will be accompanied by Energy Minister Khalid al-Falih during his trip to Kuwait, two separate sources said. The Saudi crown prince will hold talks with Kuwaiti Emir Sheikh Sabah al-Ahmad al-Jaber al-Sabah, the Kuwaiti News Agency has reported. The closure of the Neutral Zone’s jointly operated oilfields, mainly Khafji and Wafra, has become a political sticking point between the two Gulf OPEC allies and senior officials have been trying to resolve the issue for months. It was not clear whether the renewed talks on the Neutral Zone would result in the resumption of oil production from the area, one of the sources said. The Saudi government media office did not immediately respond to a Reuters request for comment. Khafji was shut in October 2014 for environmental reasons and Wafra has been shut since May 2015 due to operating difficulties. Any restart would come at a sensitive time for the oil markets as Washington presses Riyadh to increase oil production to bring crude prices down. The resumption of the Neutral Zone’s oilfields could add up to 500,000 barrels per day of oil output capacity to both Saudi Arabia and Kuwait. 

OPEC Output Edges Higher - -- OPEC production rose last month as deepening losses in Iran due to looming U.S. sanctions were countered by other members. The group’s 15 nations pumped 32.83 million barrels a day in September, 30,000 more than the month before, according to a Bloomberg survey of officials, analysts and ship-tracking data. Even though Iranian production fell by 140,000 barrels a day to 3.36 million -- the lowest since early 2016 -- Saudi Arabia, Angola and Libya offset the losses. Iran’s decline is expected to accelerate once sanctions formally begin in November. Major buyers of the country’s crude have already started to diversify their supplies. India was said to plan no purchases of Iranian crude in November, according to officials at the largest state-run refiners. That followed similar moves by South Korea and Japan. The Middle Eastern nation’s shipments of crude have fallen 1.1 million barrels a day, or 39 percent, since April, according to tanker tracking data compiled by Bloomberg. That outpaces the 11 percent drop in production over the same period. The tracked shipments exclude volumes held on tankers that remain close to Iran’s export terminals, after the nation resorted to storing some of its barrels at sea last month. Offsetting Losses Combined with deepening losses in Venezuela due to an economic crisis, the U.S. sanctions on Iran have propelled crude prices to a three-year high above $80 a barrel in London. While the rally has prompted President Donald Trump to demand the rest of the Organization of Petroleum Exporting Countries open the taps, they’ve been cautious so far. Although Saudi Arabia, the most powerful OPEC member, has promised to fill any shortages, it’s taking a gradual approach. The kingdom raised output by 80,000 barrels a day to 10.53 million, according to the survey. Angola, which has been ramping up the Kaombo project operated by Total SA, pumped an extra 90,000 barrels a day. Nigeria and Libya also revived some output halted earlier by internal strife. Russia, which has partnered with OPEC in a grand coalition established in late 2016, is also pushing ahead with production increases. At one point last month, its output jumped as high as 11.36 million barrels a day, a post-Soviet record, according to a government official. That means the country has fully reversed the cutbacks it implemented with OPEC last year, and is boosting output even further.

OPEC and traders in standoff over oil outlook: Kemp (Reuters) - OPEC and oil traders are now in fundamental disagreement about the market outlook and the standoff is fuelling a sharp rise in prices that could spell trouble for the global economy over the next 18 months. The overall balance between supply and demand is "healthy" according to a statement from the Joint Ministerial Monitoring Committee of OPEC and non-OPEC producers last month. The committee expressed its satisfaction regarding the current oil market outlook, according to a press statement released afterwards ("JMMC meets in Algiers to monitor developments in the oil market", OPEC, Sept. 23). But where the committee sees a balanced market and warned about downside risks to demand in 2019, traders see a market that is increasingly tight and are worried about the adequacy of future supply. Front-month Brent crude futures have jumped by almost $14 per barrel (20 percent) since the middle of August, including an increase of nearly $6 (7 percent) since the JMMC meeting, to their highest in almost four years. Brent's six-month calendar spread, which has been a good proxy for the global supply-demand balance in the last 25 years, has risen by $2.50 per barrel and swung from a small contango into a pronounced backwardation. The recent intense backwardation in Brent futures close to delivery and the surge in Oman crude prices to a rare premium over Brent are all consistent with a market that fears physical shortages in the next few months. Hedge funds and other money managers have boosted their bullish position in Brent by 172 million barrels since late August, an increase of more than 50 percent, including 50 million barrels in the aftermath of the JMMC. Nearly all hedge fund managers expect oil prices to rise rather than fall in the short to medium term, according to exchange data (https://tmsnrt.rs/2OyHccI ). 

Trump: Saudi king wouldn't last 'two weeks' without US support - US President Donald Trump said close ally Saudi Arabia and its king would not last "for two weeks" without US military support at a rally in Mississippi on Tuesday."We protect Saudi Arabia. Would you say they're rich? And I love the king, King Salman. But I said 'King - we're protecting you - you might not be there for two weeks without us - you have to pay for your military,'" the president said to cheers at the rally.Trump did not say when he made those remarks to the Saudi monarch, but they come amid increasing oil prices in the US.Saudi Arabia is the world's top oil exporter and the de facto leader of the oil-producing bloc, OPEC, which has been criticised by Trump for high oil prices. Trump called King Salman on Saturday to discuss efforts to maintain supplies to ensure oil market stability and global economic growth, according to Saudi state news agency SPA.Saudi Crown Prince Mohammed bin Salman travelled to Kuwait last weekend to speak with Kuwaiti Emir Sheikh Sabah al-Ahmad al-Jaber Al Sabah, reportedly about increasing oil production. No further developments have surfaced from the Kuwait meeting but media reports said the Gulf crisis was also on the agenda of the talks. Speaking at the United Nations General Assembly in New York last month, Trump said OPEC members were "as usual ripping off the rest of the world".

Qatar's energy minister defends OPEC from Trump, says it has not manipulated oil prices - Qatar's energy minister has defended OPEC's oil market strategy, saying a deal between the oil producing group and non-OPEC producers is not aimed at manipulating oil prices."OPEC is not trying to manipulate the price, it's trying to bring the market to balance," Qatar's Minister of Energy and Industry Mohammed Bin Saleh Al-Sada, told CNBC on Wednesday.President Donald Trump has argued that OPEC and non-OPEC producers' late-2016 deal to curb production, made in a bid to support prices and balance oil market supply and demand dynamics, is hurting consumers. He has called on OPEC's de facto leader Saudi Arabia, and Russia, to raise output.Al-Sada said low oil prices do not necessarily have a positive impact on global economic growth, however."When OPEC took the measure to restrict the production from its end, as well as some allied (oil producing) countries, it was meant to shave the extra excessive stock which was at a record high that was depressing the oil price. That depression of the oil price led to what? (Did it) lead to a better world economy?," he told a panel moderated by CNBC's Geoff Cutmore at the Russian Energy Week in Moscow."In fact, there was the worst record for the global economy during that downturn in the oil price," he said. "Now during the journey of the recovery in the oil price looks what happened - the balance (in the market) between supply and demand has taken place, the world economy is at its best now," he added.

OPEC 'powerless to prevent' oil prices jumping toward $100 a barrel this year OPEC - kingpin Saudi Arabia is ill-equipped to prevent a supply shock in the energy market, analysts told CNBC on Monday, as oil traders prepare for the possibility of $100 a barrel before year-end."Nobody wants to get caught short, full in the knowledge that more Iranian barrels are poised to be removed from the market," Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note published Monday. Late last month, President Donald Trump urged OPEC producers to ratchet up production levels to prevent further price rises ahead of the mid-term elections in early November. China initially rejected a U.S. request to choke off the flow of petrodollars to the Islamic republic but, amid intense pressure from the Trump administration, the Asian giant is now reportedly taking steps to comply.China's top state refiner, Sinopec Corp, was seen halving its loadings of Iranian crude in September, Reuters reported Friday, citing unidentified sources. The prospect of a reduction from Sinopec would constitute a significant blow for Iran. That's because OPEC's third-largest producer considers China to be its leading oil client at a time when European producers and other global buyers are dramatically reducing Iranian crude purchases to avoid U.S. sanctions.

US State Department tweets but should the Middle East listen? - An undiplomatic tweet from the US State Department has betrayed a worrying lack of understanding both of the oil market and American strategy in the Middle East.  The missive, which apparently reflects President Donald Trump’s views, stated that, “Opec nations are ripping off the rest of the world. We defend many of these nations for nothing, and then they take advantage of us by giving us high oil prices.”  OPEC nations are ripping off the rest of the world. We defend many of these nations for nothing, and then they take advantage of us by giving us high oil prices. We want them to stop raising prices, we want them to start lowering prices — EnergyAtState (@EnergyAtState) September 25, 2018  This chimes with a recent report by Securing America’s Future Energy, a campaigning group advocating less American reliance on oil, which argues that the US military spends at least $81 billion (Dh297.4bn) annually on protecting global oil supplies, equivalent to $11.25 per barrel consumed in the US.  Yet the US is pushing up oil prices itself by imposing sanctions on Iran and Venezuela. And, through purchases of American armaments, the Middle East states do in fact make a large financial contribution.  But the biggest weakness in this view is that it misunderstands the reason for the US military presence in the Middle East. The US is no longer in the region to defend its own oil supplies; it is there to maintain its global power, and to deter China. Otherwise, who, other than a weak Iran, is the Middle East foe that requires $81 billion per year to deter?

China halts all oil imports from US amid escalating trade war RT  -America’s second-largest oil client, China, has completely stopped buying crude from the United States as trade tensions between the world’s two largest economies continue to grow.  While oil has not been included on the list of bilateral tariffs, Chinese refiners have been staying away from buying crude from the US.  “We are one of the major carriers for crude oil from the US to China. Before [the trade war] we had a nice business, but now it’s totally stopped,” Xie Chunlin, the president of CMES, said on the sidelines of the Global Maritime Forum’s Annual Summit in Hong Kong, as quoted by Reuters.“It’s unfortunately happened, the trade war between the US and China. Surely for the shipping business, it’s not good,” the CMES president said.He added that the trade war was also forcing China to diversify its soybean supplies. Beijing is now buying most of its soybeans from South America.China’s crude oil imports from America reached an average of 334,880 barrels per day through August, making Beijing the second-largest buyer of US oil after Canada.In fact, China may be the largest buyer of American crude since much of the oil imported by Canada is re-exports – Canadian crude that briefly crosses into the US on pipelines before re-entering Canada. After ending a 40-year ban on oil exports in late 2015, the US has ramped up sales to two million barrels per day (bpd).China buys most of its crude from Russia, with imports soaring from 665,000 bpd in 2014 to 1.2 million bpd last year. Beijing’s other major suppliers are Saudi Arabia and Iran.

Putin says Trump is right about oil prices being too high — but adds US is partly to blame -Russian President Vladimir Putin has said President Donald Trump is "right" to complain that global oil prices are too high — but added Trump is to blame for higher prices."President Trump has said he thinks the oil price is too high. Well, probably to some extend he's right, but we are absolutely OK with it at $65 to $75 per barrel to ensure the efficient operation of oil companies and ensure investment," Putin said Wednesday during an address to delegates at the Russia Energy Week forum in Moscow."But let's be frank, such oil prices are to some extent the result of the U.S. administration. I'm talking about sanctions against Iran, about political problems in Venezuela and just looking at what's happening in Libya."Putin added: "If we touched upon the topic we are discussing now with him (Trump), I would say, if you want to find the culprit of who's guilty that prices are growing then you should just have a look in the mirror." Putin's comments come after Trump criticized Russia and OPEC for a 2016 deal in which they agreed to curb oil output in a bid to support prices that had slumped in mid-2014 due to a glut in global supply.The deal has worked and oil prices rose. The deal, and subsequent price rise, has drawn criticism from Trump, who said OPEC, Saudi Arabia and Russia are keeping prices high and called on them to increase production and thereby bring down oil prices. Trump's criticism of the major oil producers ignores the fact that his own decision to implement sanctions on OPEC members Iran and Venezuela has also put pressure on oil prices, with markets fearing a shortfall in global supply.

Russian Oil Output Rises to Record as OPEC Cuts Rolled Back --  Russia’s oil production rose to a post-Soviet high last month as the country completely rolled back the output cuts it had agreed on with OPEC, then pumped some more.The country produced a record 11.356 million barrels of oil and condensate a day in September, according to data released Tuesday by the Energy Ministry’s CDU-TEK statistical unit. That’s an increase of almost 150,000 barrels a day from August and follows Russia’s June agreement with OPEC to boost supplies amid climbing prices.OPEC itself raised output by 30,000 barrels a day last month as deepening losses in Iran were countered by other members, a Bloomberg survey showed.Russia’s production exceeded the previous high of 11.247 million barrels a day reached two years ago. That shows the country has completely erased its 300,000-barrel-a-day cut agreed on with the Organization of Petroleum Exporting Countries in 2016, and has added over 100,000 barrels a day more. The nation’s production next year may increase by an average of 300,000 barrels a day, excluding seasonal factors, according to Sagers.Energy Minister Alexander Novak said last month that the country had spare capacity to add more barrels if needed -- “a few hundred thousand barrels” -- yet a specific amount would depend on the market.  Among Russia’s top producers, state-run Rosneft PJSC and the Sakhalin-1 project, led by Exxon Mobil Corp., were key drivers of September’s output boost, according to Bloomberg calculations based on the CDU-TEK data. Smaller companies also contributed, as other majors including Lukoil PJSC, Gazprom Neft PJSC and Surgutneftegas PJSC held output steady or even reduced supply. Rising output from Russia -- and from OPEC partner Saudi Arabia -- hasn’t stopped oil prices from surging to an almost four-year high as losses from Iran boost supply concerns even before U.S. sanctions take effect in November. Brent crude rallied almost 10 percent in the past month, topping $85 a barrel on Monday for the first time since October 2014.

Oil's Leap Toward $100 Softens the Blow of Russia Sanctions -- When former U.S. President Barack Obama first imposed sanctions on Russia in 2014, a plunge in global crude prices turned the penalties into a crushing blow. This time round, oil markets are doing the opposite. As U.S. lawmakers mull a new round of “crippling” sanctions, some traders are predicting the price of Russia’s main export will hit $100 a barrel for the first time since 2014. The windfall from higher oil revenue could end up mitigating the effect of even the harshest measures under discussion in Washington and investors are picking up Russian government bonds on the back of crude’s gains. “The surge in oil prices should outweigh the sanction fear,” said Viktor Szabo, a portfolio manager at Aberdeen Standard Investments in London. “Russia is one of the strongest among emerging markets in terms of fundamentals.” The renewed threat of U.S. penalties lumped Russian assets in with the worst performers amid the summer’s broader emerging-markets slump, but the subsequent crude-oil rally and central bank ruble support have sparked a rebound. In Washington meanwhile, U.S. lawmakers continue to brandish sanctions that could see a ban on new sovereign debt sales and even shut Russian banks out of the international financial system.

US Interior Secretary: Naval Blockade is an Option for Dealing with Russia  - Speaking Friday at an industry event in Pittsburgh hosted by the Consumer Energy Alliance, US Interior Secretary Ryan Zinke said the US Navy can blockade Russia if needed in order to keep it from controlling energy supplies in the Middle East as it does in Europe. "The United States has that ability, with our Navy, to make sure the sea lanes are open, and, if necessary, to blockade… to make sure that their energy does not go to market," Zinke said. According to Washington Examiner, Zinke attended the event to explain why the technology of hydraulic fracturing, also known as fracking, and the shale energy boom has supposedly given the US an edge over its rivals Russia and Iran, by making the US less dependent on foreign sources of energy.The Interior Secretary believes that the reason why Russia entered the Middle East is hydrocarbons trade.  "Russia is a one trick pony," Zinke said, stating that Russian economy depends solely on its ability to sell energy. "I believe the reason they are in the Middle East is they want to broker energy just like they do in Eastern Europe, the southern belly of Europe."Answering the question on how the US should deal with Russia and Iran, Zinke said that "there are two ways.""There is the military option, which I would rather not. And there is the economic option," he said. "The economic option on Iran and Russia is, more or less, leveraging and replacing fuels."  "We can do that because… the United States is the largest producer of oil and gas," Zinke added.

Official- Washington ready to impose naval blockade on Moscow over oil supplies - The US could impose a naval blockade on Russia if necessary to limit its role in controlling global energy supplies, according to a senior US official."The United States has that ability, with our navy, to make sure the sea lanes are open, and, if necessary, to blockade ... to make sure that their energy does not go to market," Secretary of the Interior Ryan Zinke said Friday at an industry event hosted by the Consumer Energy Alliance, Press TV reported.Zinke underscored that hydraulic fracturing, or fracking, along with the shale energy boom had put the US in an advantageous position over Russia, by making the country less dependent on foreign energy.The administration of President Donald Trump has fiercely opposed energy projects by Russia, including the Nord Stream II pipeline to Germany, because it would give Moscow leverage over Europe. Trump has been pressuring European countries to purchase more US natural gas and reduce their dependence on Russian energy."President Trump has been clear: America has to be energy dominant," Zinke said. "We have relit the pilot light of American energy under this president. We are incorporating industry innovation, best science and best practices to improve reliability, safety and environmental stewardship. Our energy strategy is ‘all-of-the-above,’ leveraging every source of energy to take our nation forward. I am bullish about America’s energy future."

US energy executives expect $69/b WTI, but uncertainties abound: Dallas Fed  — US energy executives expect WTI to close 2018 at nearly $69/b as oil production continues to grow, but at a slower pace than earlier this year, the Federal Reserve Bank of Dallas said in its quarterly survey of oil and gas firms. Not registered? Receive daily email alerts, subscriber notes & personalize your experience. Register Now But there are a growing numbers of uncertainties, including the arguably sluggish pace of developing oil takeaway capacity out of the Permian, pending sanctions on global oil flows and the impact of steel tariffs on US shale development, the survey shows. Respondents to the survey, which included executives at 110 exploration and production companies and 61 oilfield services companies, said they expected WTI prices to be between $55/b and $85/b at the end of 2018. NYMEX WTI November was trading at $74.05/b Monday morning, up 80 cents/b from Friday's settlement. EIA currently forecasts WTI to average $67.69/b in Q4 and then to fall to $64.69/b in Q1. Overall, EIA expects WTI to average $67.03/b in 2018 and $67.36/b in 2019. But anonymous comments from within the Dallas Fed survey show that there is much uncertainty about future oil prices, particularly due to the supply impact of looming US sanctions on Iranian crude and continued declines in Venezuelan output. "Shale producers in the US will not be able to ramp up production as fast in 2019 as we have over the past two years," one executive at an oil services firm said. "Calls for increased production could only be answered by Saudi Arabia and Russia, and I doubt they have the excess capacity to satisfy demand growth."  An E&P executive said that any major disruption out of the Middle East will likely cause a price spike. "The capacity of any of the major producers to significantly increase daily production from current levels is limited, at best, and that is a formula for an exaggerated price of crude if a disruption does occur," the executive said. Overall, 64% of the executives polled said the global oil market will be close to balance in 2019, with 26% stating it will be undersupplied and 10% believing it will be oversupplied. EIA forecasts total global liquids production to average 101.65 million b/d in 2019, about 80,000 b/d above global demand.

Brent oil near four-year high ahead of Iran sanctions, but demand concerns loom -- Brent crude oil hovered close to its highest since November 2014 on Monday, supported by supply concerns before U.S. sanctions against Iran come into force next month. Benchmark Brent crude oil futures rose 48 cents to $83.21 at 9:48 a.m. ET (1348 GMT), having touched their highest in almost four years at $83.32. U.S. West Texas Intermediate (WTI) crude futures were up 26 cents at $73.51 a barrel.  "Saudi Arabia are signalling that they do not have a lot of prompt spare capacity available, or that they don't have the will to really use it on a proactive basis,"  There's nothing right now that gives a strong incentive to be a strong seller of the market."Investors have indicated that they see prices rising, loading up on options that give the holder the right to buy Brent crude at $90 a barrel by the end of October. Open interest in call options at $90 a barrel has risen by nearly 12,000 lots in the past week to 38,000 lots, or 38 million barrels. Higher oil prices and dollar strength, which has battered the currencies of several big crude importers, could hit demand growth next year, analysts said.But for now the focus is U.S. sanctions on Iran's energy industry, which come into force on Nov. 4 and are designed to cut crude exports from the third-biggest producer in the Organization of the Petroleum Exporting Countries (OPEC).Several major buyers in India and China have signaled that they will cut purchases of Iranian oil. China's Sinopec said it had halved loadings of Iranian oil in September. "If Chinese refiners do comply with U.S. sanctions more fully than expected, then the market balance is likely to tighten even more aggressively,"

Oil surges above $75 to the highest level since November 2014 - U.S. crude prices surged on Monday, hitting a nearly four-year high on signs that sanctions are shrinking Iranian crude exports and as North American trade tensions ease.U.S. West Texas Intermediate crude ended Monday's session up $2.05, or 2.8 percent, at $75.30, its best closing prices since Nov. 24, 2014. WTI hit a session high of $75.48, breaking through this year's intraday peak in July.International benchmark Brent crude was last up $2.31, or 2.8 percent, at $85.04, having hit its highest since November 2014.Oil prices rose after the United States, Canada and Mexico announced they had agreed on a path forward for the North American Free Trade Agreement, or NAFTA. A trade dispute among the three trading partners has raised fears of a slowdown in growth that could impact oil demand."The stock market is loving it. It unleashes some more economic activity. It should enable Mexico to buy some crude oil off of us," said John Kilduff, founding partner at energy hedge fund Again Capital.The market was also bouncing on news that China's Sinopec has cut crude imports from Iran in half ahead of the Trump administration's Nov. 4 deadline for oil buyers to stop importing Iranian supplies.Questions have lingered about whether China, the world's second biggest crude consumer, would comply with the U.S. sanctions.The National Iranian Oil Company's deal to build a crude oil storage facility at the port of Oman is also being viewed as tacit acknowledgment that Iran expects the market for its crude to shrink, Kilduff said.U.S. sanctions on Iran, OPEC's third biggest oil producer, are expected to wipe roughly 1 million barrels a day off the market by the end of the year.

What Drove Brent Above $85- Oil prices spiked on Monday on heightened fears of a supply crunch as more Iranian oil goes offline. Also, news reports suggesting that China is also cutting imports from Iran are only going to add to the bullish sentiment since China was expected to resist U.S. pressure regarding Iranian oil purchases. Brent topped $85 per barrel on Monday. “It shows that the market is not convinced about the ability of the producers’ group to replace Iranian barrels,” said Tamas Varga, an analyst at PVM Oil Associates Ltd., according to Bloomberg. Iranian oil exports are plunging, and fell to their lowest level since at least February 2016 last month at 1.72 million barrels per day. That was a decline of around 250,000 bpd from August, and down roughly 1 mb/d since a peak in April, according to Bloomberg. However, Iran likely has diverted more oil to storage at sea in the Persian Gulf.  Saudi crown prince Mohammad bin Salman reportedly discussed the idled Neutral Zone oil fields with Kuwait when he held talks with the Kuwaiti Emir on Sunday. The fields, capable of producing around 500,000 bpd, have been shuttered for several years. The latent capacity is more important than ever as the oil market continues to tighten and traders focus their scrutiny on Saudi spare capacity.   U.S. President Donald Trump reportedly called Saudi King Salman on Saturday, and although the White House was cagey about the specifics, it appeared to be about a request to keep oil prices in check. The call comes just days after Trump criticized OPEC in a speech at the UN General Assembly.  A U.S. Senate subcommittee will hold a hearing on Wednesday to look at the No Oil Producing and Exporting Cartels Act (“NOPEC Act”), which would revoke the sovereign immunity that has protected OPEC countries from lawsuits over manipulating the oil market. If passed, the U.S. could sue OPEC members for collusion. The bill has been kicked around for years but past American administrations, from both parties, have opposed it for fear of damaging the U.S.-Saudi relationship. The difference now is that some analysts think that Donald Trump may actually support it.

U.S. and Brent crude reach highest settlements in nearly 4 years -- Oil futures rallied by almost 3% on Monday, lifting both U.S. and global benchmark crude to their highest price settlements in nearly four years. Michael Lynch, president of Strategic Energy & Economic Research, told MarketWatch he was surprised by the strength of Monday’s rally, but believes that prices got a boost from the pending trade agreement between the U.S., Canada and Mexico, as well as “growing attention on the possibility that we’ll hit $100,” a barrel. Still, “almost any bearish news should see a sell off” in prices, he said. November West Texas Intermediate crude CLX8, -0.04% the U.S. benchmark, rose $2.05, or 2.8%, to settle at $75.30 a barrel on the New York Mercantile Exchange. December Brent crude LCOZ8, -0.40% rose $2.25, or 2.7%, to mark a finish at $84.98 a barrel on the ICE Futures Europe exchange, after tapping a high of $85.40. WTI marked its highest front-month contract settlement since late November 2014, while Brent finish at its highest since late October 2014, according to FactSet data. Read: Oil prices usually decline in the fourth quarter, but may buck that trend this year Monday’s moves come after Brent crude posted a weekly gain of 5%, based on the front-month contract, while WTI oil saw a weekly climb of 3.5%, according to Dow Jones Market Data. For the month, Brent advanced 6.8%, while the U.S. contract returned 4.9% in September.

Middle East sour crude oil grades surge to 4-year highs amid global crude rally — Prices of Middle East sour crudes surged to four-year highs within the first two trading days of October, carried by a global rally in crude oil, market sources said Tuesday. The price for December Dubai crude, currently the front month in the Platts Market on Close assessment process, rose to $82.95/b at the end of Asian trading hours on Tuesday. It was $80.80/b Monday, marking a surge of $2.15/b on the day and a four-year high for cash Dubai M1. Cash Dubai M1 was last higher in 2014, when the flat price touched $83.61/b on October 31, 2014, according to S&P Global Platts data. Global sentiment for crude oil remained bullish on supply side concerns stemming from questions about OPEC's remaining spare capacity amid rising end-year demand and impending Iranian sanctions, market participants said. "Market focus is on how much an OPEC production increase will compensate for the supply losses due to Iranian sanctions," ANZ analysts said in a note. The increase in Dubai prices was more than simply a structural result of the global crude complex moving higher, sources said. Data on the screen of the Intercontinental Exchange showed active volume traded on the various Brent/Dubai spread derivatives available on the exchange Tuesday. "November Brent/Dubai [instruments] on ICE also going through in very large numbers [volume wise] - 4 to 5 million barrels done today," a Singapore-based trader said Tuesday. At the close of business at 4:30 pm Singapore time (0830 GMT), approximately 4.6 million barrels equivalent of November and December Dubai-related contract volume had been traded via ICE, including private broker deals, the data showed. The volume includes the November/December Dubai 1st line spread, as well as the December Brent/Dubai Exchange Futures for Swaps spread. The robust trading activity on the Dubai derivatives continued from the Monday, when approximately 3.69 million barrels equivalent of these contracts traded as of 4:30 pm Singapore time, for a combined total of 8.29 million barrels in the first two days of October. December Brent/Dubai EFS -- an indicator of Dubai's strength relative to Brent -- kept pace with the global rally in December ICE Brent crude futures this week. The EFS has kept steady at $3.54/b since Monday, despite the sharp uptick in the Brent half of the spread, implying equivalent strength for the Middle East sour crude grade.

As oil prices rise, US locks in on Iran sanctions — Rising global oil prices will not deter the Trump administration from pushing sanctions forward on Iranian crude exports in November, several analysts told S&P Global Platts Tuesday. And, rather than developing a contingency plan which may delay or phase in Iranian sanctions, the administration appears emboldened by the current price environment, these analysts said. "I just don't see them wavering right now," said Amy Myers Jaffe, director of the Council on Foreign Relations. After closing at their highest levels since 2014 on Monday, ICE December Brent settled at $84.80 Tuesday, down 18 cents/b from Monday and NYMEX November WTI settled at $75.23/b Tuesday, down 7 cents/b from Monday. Trump administration officials are confident they can get Saudi Arabia and other OPEC nations to boost supply in coming weeks and an expected increase in US shale oil production will also further dull the impact of Iranian sanctions, set for reimposition on November 5, Myers Jaffe said. US oil production is expect to climb roughly 500,000 b/d by the end of the year, from about 10.7 million in September to about 11.2 million b/d in December, according to the US Energy Information Administration. S&P Global Platts Energy Symposium: North American Crude Oil Exports Summit | October 9, 2018 | Houston, TX The summit invites international buyers and North American producers, midstream managers and port officials to examine the changing dynamics of U.S. crude specifications, flows, prices and arbitrage. REGISTER Platts Analytics expects Iranian crude and condensate exports to fall to 1.1 million b/d by October loadings, and to 800,000 b/d by Q4 2019, down from 2.91 million b/d in April. It remains unclear how much the loss of that much oil from the world market may impact prices, but administration officials are not considering a weakening of sanctions or a gradual imposition in response, said Elizabeth Rosenberg, director of the energy program at the Center for a New American Security and a former senior sanctions adviser at the Treasury Department. "That isn't to say that some people aren't mindful of the price and are concerned about its fallout," Rosenberg said. "But, broadly speaking, this administration is very comfortable with economically destructive policies and they even embrace them. They'll be happy to place the blame on someone else." No matter how oil prices may go, the administration is unlikely to ever weaken its sanctions reimposition approach and is likely not even considering a delay. "It would be intolerable for them to back off such an important policy," Rosenberg said. "Appearing weaker than the Obama administration would be a tough pill for them to swallow."

Brent oil prices near Nov. 2014 highs ahead of US sanctions against Iran --Oil prices dipped on Tuesday but remained near their highest since November 2014 as markets braced for tighter supply once U.S. sanctions against Iran kick in next month.International benchmark Brent crude oil were down 16 cent at $84.82 per barrel by 11:15 a.m. ET (1515 GMT) after reaching a new four-year high of $85.45 in the previous session.U.S. West Texas Intermediate (WTI) crude futures fell 21 cents to $75.09 a barrel, having hit a nearly four-year high of $75.91 earlier in the session. Brent and WTI have roughly tripled compared with lows seen in January 2016, which prompted OPEC and allies led by Russia to curb oil supplies to rebalance an oversupplied market starting in January 2017. Sentiment was lifted by a last-gasp deal to salvage NAFTA as a trilateral pact between the United States, Mexico and Canada, rescuing a $1.2 trillion a year open-trade zone that had been about to collapse. More fundamentally, oil markets have been pushed up by looming U.S. sanctions against Iran's oil industry, which at its most recent peak this year supplied nearly 3 percent of the world's almost 100 million barrels of daily consumption.  A Reuters survey of OPEC production found Iranian output in September fell by 100,000 barrels per day, while production from the group as a whole rose by 90,000 bpd compared with August."Oil prices continue to climb, supported by the nearing Iran embargo and related supply concerns," said Norbert Ruecker, head of commodity research at Swiss bank Julius Baer.HSBC said in its fourth-quarter Global Economics outlook that "our oil analysts believe there is now a growing risk it (crude) could touch $100 per barrel."  The Trump administration set a deadline of Nov. 4 for oil buyers to stop purchasing Iranian crude. Many analysts say OPEC will struggle to cover a decline in exports from Iran. Britain's Barclays bank, however, said "OPEC has ample spare capacity."

Oil dips below four-year highs; U.S. inventory build expected  (Reuters) - Oil prices eased slightly on Tuesday after rallying for three straight sessions, but remained close to four-year highs on worries that global supplies will drop due to Washington’s sanctions on Iran. In addition to the worries that Iran, prices are being supported by global demand that has remained strong in the face of trade tensions. Brent fell 18 cents to settle at $84.80 per barrel, a day after hitting a four-year high of $85.45. U.S. West Texas Intermediate (WTI) crude futures CLc1 were off 7 cents at $75.23 a barrel, after earlier touching a four-year high of $75.91. Analysts polled by Reuters forecast that U.S. crude stocks rose about 2 million barrels last week ahead of data from industry group the American Petroleum Institute (API) due out at 4:30 p.m. and from the U.S. government on Wednesday morning. Crude prices have roughly tripled from lows hit in January 2016 after the Organization of the Petroleum Exporting Countries and allies led by Russia cut output. Oil market sentiment was lifted by Sunday’s last-gasp deal to salvage NAFTA as a trilateral pact between the United States, Mexico and Canada. The U.S. sanctions against Iran’s oil industry, which at its peak this year supplied nearly 3 percent of the world’s daily consumption, are due to go into effect on Nov. 4. A Reuters survey of OPEC production found Iranian output in September fell by 100,000 barrels per day, while production from OPEC as a whole rose by 90,000 bpd from August. “Our oil analysts believe there is now a growing risk it (crude) could touch $100 per barrel,” HSBC said in its fourth-quarter Global Economics outlook. Many analysts say OPEC will struggle to cover a decline in exports from Iran. Britain’s Barclays bank, however, said, “OPEC has ample spare capacity.” Soaring crude prices and weak emerging market currencies may erode economic growth. “Softening demand growth and new supply should cool the bullish sentiment and push prices lower by the end of the year,” Barclays said.

WTI Holds Gains After Cushing Stocks Build Most Since March - WTI held above $75 today but did not extend yesterday's surge gains ahead of tonight's API print. After last week's surprise build, crude was expected to build again, and did but it was Cushing that surprised with the biggest rise in stocks since March.“It shows that the market is not convinced about the ability of the producers’ group to replace Iranian barrels,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London. API:

  • Crude +907k (+1.5mm exp)
  • Cushing +2.018mm (+800k exp) [Genscape +600k]
  • Gasoline -1.703mm
  • Distillates -1.197mm

A second weekly build for crude and the biggest weekly rise in Cushing stocks since March...WTI hovered just above $75 ahead of the API print, holding most of yesterday's impressive ains, and thoroughly unimpressed at the crude builds from API...“The market bounces around a lot,” Michael Lynch, president of Strategic Energy & Economic Research, said. “As of now, people are hedging on the side of fear rather than working the probabilities.”

Oil Climbs as Iran Fears Eclipse Big U.S. Crude Build - - Oil prices gained ground on Wednesday as market participants stayed focused on upcoming Iranian sanctions and their expected squeeze on supply, despite weekly data showing U.S. crude stockpiles ballooning four times more than expected. Crude oil inventories across the United States rose by 7.975 million barrels during the week ended Sept. 28, vs. analysts’ forecasts for a build of 1.98 million, the Energy Information Administration (EIA) said. In the previous week to Sept. 21, stockpiles rose by 1.85 million. Crude prices fell initially on the outsize inventories reported by the EIA. As trading progressed, however, the mood shifted back to the theme that had dominated the market over the past few months. U.S. sanctions on Iranian oil exports will begin on Nov. 4 and could take some 3% off the global market’s daily supply. New York-traded West Texas Intermediate (WTI) crude for November delivery settled up $1.18, or 1.6%, at $76.41 per barrel, after racing to $76.90, a new peak since November 2014. It fell as much as 92 cents initially, to an intraday low of $74.31, on the EIA report. London traded Brent crude for December delivery was up $1.40, or 1.7%, at $86.20 a barrel by 3:00 PM ET (19:00 GMT). Brent’s high for the day was $86.73, a peak since October 2014. Some traders, who had expected oil prices to settle lower on the EIA report, said Wednesday’s highs were clearly against fundamentals, particularly given the stronger performance of the dollar, which was another negative for commodities. “In our opinion, on the global macro, with the front 10-year yield inching higher along with a little strength in the U.S. dollar, the only thing keeping crude from a large move down is the upcoming Iran sanctions,” said Tariq Zahir, managing member at Tyche Capital Advisors in New York, which typically makes bets on calendar spreads of WTI. Iran is the world’s fourth-largest oil producer and the third-largest exporter in the Organization of the Petroleum Exporting Countries (OPEC). It produced a peak of 2.7 million barrels per day in May and could be prevented from shipping up to 1.5 million bpd under U.S. sanctions. Many energy analysts fear that OPEC and other major non-OPEC producers, including Russia, have little spare capacity to make up for the shortfall in Iranian supplies from November, and expect Brent to hit $100 a barrel or so from the squeeze

Weekly EIA petroleum report-- October 3, 2018 - Weekly EIA petroleum report: link here.

  • wow!  US crude oil inventories increased by most I have seen in the two years I have followed
  • US crude oil inventories up a whopping 8.0 million bbls
  • refiners are operating at 90.4% of their operable capacity
  • crude oil imports keep increasing; up 10.2% more than the same four-week period one year ago
  • WTI up almost 1%; OPEC up over 2% but let's see what WTI/OPEC basket does by the end of the day
  • at 404.0 million bbls, US crude oil inventories at five-year average; my threshold is 400 million bbls; the five-year average includes the Saud Surge, 2014 - 2016
  • gasoline? awash in gasoline -- inventories decreased by half a million bbls, but gasoline inventories still 7% above five-year average for this time of year
  • gasoline and distillate production right on target: 10.0 and 5.0 respectively
  • 30-second speech: refiners at 90% capacity (autumn maintenance; switch over to winter grades) simply means that inventory built up; once we get to 97% capacity, the inventories will start to drop
  • this happened back in March -- same thing -- spring maintenance; switch over to summer blends
  • by the way, Cushing inventories were getting so low, some thought some tanks would bottom out

WTI Tumbles On Biggest Crude Build In 19 Months -  Modest overnight gains following API's data have been erased as DOE reports a massive surprise (biggest since March 2017) crude build...“We’re right in the middle of refinery maintenance season and you’ll probably see a lot of demand coming offline,” says Michael Loewen, a commodities strategist at Scotiabank. “It might take a few market participants by surprise to see a larger build than what we are used to in crude oil inventories” DOE:

  • Crude +7.975mm (+1.5mm exp) - highest since Mar 2017
  • Cushing +1.699mm (+800k exp) [Genscape +600k] - highest since March 2018
  • Gasoline -459k (+1.25mm exp)
  • Distillates -1.75mm

Massive crude build shocks the market...Bloomberg notes that you can't really pin this week's huge crude build on refiners. Gross inputs were little changed and are the highest ever historically for this week. US Crude production held at record highs...WTI hovered risght around $74 ahead of the DOE data, then dumped... Bloomberg Intelligence Senior Energy Analyst Vince Piazza warns that with WTI approaching $80 a barrel, we believe oil has moved too far, too fast, notwithstanding reduced Iran exports because of sanctions and declining production from Venezuela. Demand destruction remains a concern due to elevated prices and geopolitics. We also expect heightened hedging by U.S. E&Ps at current prices, while trade tensions, robust production and seasonal refinery maintenance in the U.S. add to the negative price outlook.

Oil prices dip on rising US supply, but Iran sanctions still loom - Oil rose on Wednesday, touching a fresh four-year high as the market focused on upcoming U.S. sanctions on Iran and shrugged off a surprisingly big build in U.S. crude stockpiles and reports of higher Saudi Arabian and Russian production."Nothing matters between here and Nov. 4," said Bob Yawger, director of futures at Mizuho in New York, referring to the date when U.S. sanctions take full effect.U.S. crude inventories jumped 8 million barrels last week, quadruple analysts' expectations and the biggest build since March 2017, the Energy Information Administration said on Wednesday.Both crude benchmarks briefly moved lower on the EIA report before reversing course. Global benchmark Brent crude settled up $1.49, to 1.8 percent, to $86.29, it best closing price since October 2014. U.S. West Texas Intermediate (WTI) crude futures ended Tuesday's session up $1.18, or 1.6 percent, at $76.41 a barrel, the highest closing price since November 21, 2014.Earlier in the session, crude had been pushed lower as Saudi Energy Minister Khalid al-Falih said the kingdom had raised output to 10.7 million barrels per day in October and would pump more in November. The record high for Saudi output is 10.72 million bpd in November 2016.Russia and Saudi Arabia struck a private deal in September to raise oil output to cool rising prices and informed the United States before a meeting in Algiers with other producers, four sources familiar with the plan told Reuters. Al-Falih, who is attending a Moscow energy conference with Russian President Vladimir Putin and other influential energy officials, said Saudi Arabia has successfully met additional demand.

Oil Bulls Continue Stampede -The bull market for crude oil picked up steam Wednesday as the West Texas Intermediate (WTI) and Brent futures prices posted impressive gains. The November WTI benchmark gained $1.18 to settle at $76.41 a barrel. It peaked a dime shy of $77 during the day and fell to $74.30. The front-month Brent contract price settled at $86.29, reflecting a $1.49 increase for the day.“Since our last commentary on Rigzone, we have remained bullish crude oil,” said Jerry Rafferty, president and CEO of Rockville Center, N.Y.-based Rafferty Commodities Group, Inc. “We looked for the crude oil to break out to the upside, which it has. Since breaking and closing above the major level resistance level at 7110, November Crude Oil has rallied over $5.”Rafferty’s firm provided Rigzone with a chart that highlights the recent rally for crude oil. Rafferty pointed out the bulls continue to expand the oil market and exceed new levels of resistance.“We remain bullish crude oil and want to stick with our strategy of buying pullbacks around our listed support levels and buying additional breakouts to the upside,” said Rafferty. “Until the market close below our major support levels, we will remain bullish.”Reformulated gasoline for November delivery ended Wednesday’s session a penny higher, settling just under $2.14 a gallon.Another benchmark that has been bullish is the November Henry Hub natural gas contract. Rafferty pointed out that the bull trend began when prices broke above the 3.091 level three days ago. On Wednesday, Henry Hub natural gas rose six cents to settle at $3.23.“The rally is now approaching the first major resistance seen on the weekly chart at 3.239,” said Rafferty. “This is an area of resistance we have not seen since last winter.”

The oil market 'fever' pushing prices toward $100 won't break soon --Investment banks and hedge funds say oil prices have rallied too far too fast, but the fear and uncertainty gripping the market will keep pressure on crude futures in the coming weeks. Brent crude hit a new four-year high of $86.74 on Wednesday, fueled by concerns about a shortfall in global supply as U.S. sanctions whittle away at Iranian crude exports. The market is just one month away from the Nov. 4 deadline that President Donald Trump set for oil buyers to stop purchasing Iran's crude.In May, Trump pulled the United States out of the 2015 Iran nuclear deal and restored sanctions on OPEC's third-largest oil producer. Much of the world — including the European Union, China and Russia — oppose the move, but companies around the world have curtailed their imports from Iran for fear of running afoul powerful U.S. sanctions."If you have a sustainable loss in Iran, $90 to $100 is a potential outcome here, but we don't know at this point what's going to happen to Iran" -Jeff Currie, Goldman Sachs global head of commodities researchThat has pushed oil prices higher and left some analysts saying they cannot rule out a rally to $100 a barrel. There are too many questions about how strictly the Trump administration will enforce the sanctions, how many oil importers will ignore the penalties, and how quickly a group of producers led by Saudi Arabia and Russia can turn on the taps."There's sort of a fever building in the market right now about what the landscape is going to look like in terms of supply and demand," said John Kilduff, founding partner of energy hedge fund Again Capital.That fever will persist until the market determines how many Iranian barrels will come off the market and whether Saudi Arabia is able to step up to fill the gap, Kilduff said. He believes the uncertainty could pushU.S. crude prices up another $10 a barrel to $85, until new supply potentially tamps down the cost early next year. U.S. crude ended Wednesday's trading session at $76.

Oil prices enter the danger zone for consumers – Kemp - (Reuters) - Crude oil prices continue to climb despite attempts by oil producers to reassure the market about availability and the existence of enough spare capacity to offset oil lost as a result of U.S. sanctions on Iran.Recent price moves bear a strong resemblance to previous price spikes in 2007-2008 and 2010-2012, especially if prices are expressed in euros or yen to eliminate the impact of a stronger dollar this time around.  Brent crude has risen to almost 75 euros per barrel, the same level it reached in May 2008, on its way to a peak of 93 euros in July 2008 (https://tmsnrt.rs/2OzVObC).  Front-month futures have also hit 9,800 yen per barrel, the same as in October 2007, on their way to a peak of 15,300 yen in July 2008 (https://tmsnrt.rs/2OzVRUQ). Prices in Indian rupees are already at the same level that they peaked in 2008 and on the way to the record set in 2013 (https://tmsnrt.rs/2OG5HEy).  Only the strength of the dollar against other currencies is masking how high prices have become in oil-consuming countries outside the United States (https://tmsnrt.rs/2ODp8hm and https://tmsnrt.rs/2OFSSug). Prices have already risen to a level that has contributed to a slowdown in economic growth and oil consumption in the past. "Expensive energy is back at a bad time for the global economy," the chief executive of the International Energy Agency has warned ("IEA boss urges oil producers to ease supply concerns", Reuters, Oct. 4).  "It is now high time for all the players, especially those key producers and oil exporters, to consider the situation and take the right steps to comfort the market," he added. The blame-shifting game is well underway, with the United States blaming OPEC, Russia faulting U.S. sanctions, and Saudi Arabia blaming speculators for escalating prices. In reality, U.S. sanctions, output restrictions by OPEC and its allies, strong consumption growth and position building among the hedge funds have all contributed to the price surge.

Putin Tells Trump to Blame Guy in the Mirror for High Oil Prices - Russian President Vladimir Putin said his American counterpart’s Iran sanctions are largely to blame for current high oil prices.“President Trump considers that the price is high; he’s partly right, but let’s be honest,” Putin said at the Russian Energy Week conference in Moscow on Wednesday. “Donald, if you want to find the culprit for the rise in prices, you need to look in the mirror.”The Russian leader pushed back against escalating criticism of OPEC and its allies, which Trump has blamed for Brent crude’s rise to a four-year high near $85 a barrel. Still, Putin said his country has already boosted output and has the capacity to add another 200,000 to 300,000 barrels to the market.Saudi Arabia, Russia’s closest ally within the oil-producers’ group, earlier showed signs of bowing to Trump’s pressure. The kingdom has “significantly” raised production to a near-record level of 10.7 million barrels a day, Energy Minister Khalid Al-Falih told reporters in the Moscow.Russia’s cooperation with the Organization of Petroleum Exporting Countries successfully restored the oil market to balance and a good price range of $65 to $75 a barrel, Putin said. Current prices are “largely the result of the current U.S. administration -- these expectations of sanctions against Iran, the political problems in Venezuela,” Putin said. “Look at what’s happening in Libya. The state is destroyed. It’s the result of irresponsible policies which have a direct impact on the world economy.”

US accuses OPEC of withholding 1.42 million b/d of spare capacity — As oil prices hit new four-year highs Wednesday, the US State Department accused OPEC of withholding 1.42 million b/d of spare capacity from the world market. Citing an OPEC spare capacity estimate from the US Energy Information Administration, State said that Trump administration officials are working with OPEC to produce the spare capacity they are "not deploying." State said that US was "doing its part" to meet rising global demand. "The United States continues to engage with OPEC countries and we encourage them to utilize their spare capacity to ensure world oil supply meets the demand," the State spokesperson said in a statement to S&P Global Platts on Wednesday. The spokesperson said that while OPEC and non-OPEC producers, including Russia, "continue to withhold production," the US is ramping up output, citing an EIA estimate that domestic production will increase by nearly 1 million b/d within a year. "The United States is doing its part to add to the oil supply," the spokesperson said. The statement comes as President Donald Trump has pressed Saudi Arabia to boost oil output in order to stabilize prices and continues to criticize OPEC nations for driving up prices. December ICE Brent settled at $86.29/b Wednesday, up $1.49/b from Tuesday, while November NYMEX crude settled at $76.41/b Wednesday, up $1.18/b. Both settlements were the highest since 2014. OPEC, Russia and nine other countries pledged in June to reduce overcompliance with production cuts that have been in force since January 2017, which they say will result in a 1 million b/d output rise from May levels.  Saudi Arabia and Russia stressed Wednesday in Moscow that they are boosting oil production to record levels in response to global demand, not geopolitics or pressure from the US administration. Saudi Arabia is producing an average 10.7 million b/d, with November projected to come in "slightly higher," energy minister Khalid al-Falih said at Russia Energy Week. "There is not a single customer who has requested a barrel since June that hasn't been supplied," he said. Russia reported record output of 11.356 million b/d in September but can boost production by another 200,000-300,000 b/d "within several months," energy minister Alexander Novak said at same conference.

Trump Request for Max OPEC Output May Backfire -- If OPEC is the central bank of oil, then the Trump administration is commanding it to run the printing presses at full speed. The U.S. State Department took the unusual step of issuing a statement on Wednesday asking the cartel to boost production by tapping the supply buffer it maintains in case of unexpected disruptions. It even gave a figure for how much more the group could pump -- 1.4 million barrels a day. If the Organization of Petroleum Exporting Countries were to fill this request -- and Saudi Energy Minister Khalid Al-Falih said on Thursday that it could -- the oil market would be in uncharted territory. Even during the worst crises of the past two decades, including the U.S. invasion of Iraq and Libya’s civil war, the cartel has never been forced to pump flat out. If President Donald Trump gets what he wants from OPEC, it might not bring an end to the high oil prices he’s been complaining about for months. U.S. crude futures responded on Wednesday to the news that Saudi Arabia had joined Russia in pumping at close to record levels by rising 1.6 percent to $76.41 a barrel -- the highest since 2014. The U.S. is making these demands for one reason -- Iran. The sanctions Trump imposed on the country after tearing up the international nuclear deal have had a more severe impact on its oil exports than many people in the market were expecting. Even Russian President Vladimir Putin says it’s been the main driver of higher prices, and the situation may get worse when sanctions formally start on Nov. 4. “I don’t think we’re reflecting the full impact of Iranian sanctions as yet in the price,” said Gammel. From early November “the market is probably susceptible to further upside moves in price.” Trump has made clear that he expects OPEC’s largest producer, Saudi Arabia, to fill the gap in the market created by his Iran sanctions and stop prices going too high. It’s the only nation that deliberately maintains a large supply buffer -- at a cost of about $2 billion a year according to Al-Falih -- and as a result holds almost all of the group’s spare capacity. “We’re doing everything we can, and then some,” the Saudi minister said at the Russian Energy Week conference in Moscow on Thursday. The kingdom’s production has risen from below 10 million barrels a day in the first five months of the year to about 10.7 million currently, Al-Falih said. November will probably be higher again, he said, potentially breaking the Saudi production record set in November 2016. The kingdom is willing to tap all of its spare capacity of 1.3 million barrels a day, if necessary, Al-Falih said. But promises like this don’t seem to be reassuring the market. There are echoes of 2008, when prices hit an all-time high above $140 a barrel and pledges for more supply only increased the fear of disruptions.

Oil falls as Saudi and Russia quietly agree to output rise, US stocks swell --Oil prices on Thursday fell from four-year highs reached the previous session, pressured by rising U.S. inventories and after sources said Russia and Saudi Arabia struck a private deal in September to raise crude output.Brent crude oil futures were trading at $85.85 per barrel at 0104 GMT, down 44 cents, or 0.5 percent, from their last close.Brent on Wednesday hit a four-year high of $86.74 a barrel.U.S. West Texas Intermediate (WTI) crude futures were down 30 cents, or 0.4 percent, at $76.11 a barrel."Data for last week showed a much more significant than expected ... build in U.S. commercial crude (inventories), which generally suggests that oil prices should tumble," said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.U.S. crude oil stocks rose by nearly 8 million barrels last week to about 404 million barrels, the biggest increase since March 2017, Energy Information Administration data showed on Wednesday.U.S. weekly Midwest refinery utilization rates dropped to 78.9 percent, their lowest since October 2015, according to the data.Meanwhile, U.S. crude oil production remained at a record-high of 11.1 million barrels per day (bpd)."This on top of the other big news of the day from Riyadh that ... Saudi Arabia and Russia will boost output," Innes said.Russia and Saudi Arabia struck a private deal in September to raise oil output to cool rising prices, Reuters reported on Wednesday, before consulting with other producers, including the rest of the Organization of the Petroleum Exporting Countries (OPEC).Russia's and Saudi Arabia's actions come as markets have heated up ahead of U.S. sanctions against Iran's oil sector, which are set to kick in from Nov. 4, and which many analysts expect to knock around 1.5 million bpd of supply out of markets.

Oil Halts Gain Near 4-Year High - -- Oil halted gains near $76 a barrel on emerging concerns prices have rallied too fast as traders bracing for Iranian supply losses sent crude to a four-year high. Futures in New York fell as much as 0.6 percent on Thursday. Prices have jumped 4 percent so far this week on concerns over tightening markets, with Iran at the risk of losing another customer, the United Arab Emirates. Traders also shrugged off growing output from Saudi Arabia and Russia, as well as a gain in U.S. inventories. Still, the Relative Strength Index topped 70 earlier this week for the first time since late June, signaling to some that the rally may be overdone. Oil has rallied about 16 percent since mid-August on fears of a global supply crunch, prompting U.S. President Donald Trump to repeatedly demand the Organization of Petroleum Exporting Countries to lower prices. While Saudi Arabia and Russia could pump more, traders continue to speculate whether OPEC and allied producers can offset a supply loss in Iran and declining production in Venezuela. “Investors are betting the oil market will tighten as Saudi Arabia and Russia won’t be able to fill the gap with optimum timing,” Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., said by phone from Tokyo. Still “after the recent price rally, oil is now in the overbought territory, which could lead to profit-taking.” Prices Slip West Texas Intermediate for November delivery dropped as much as 42 cents to $75.99 a barrel on the New York Mercantile Exchange, and was at $76.16 a barrel at 3:40 p.m. in Tokyo. The contract climbed $1.18 to $76.41 on Wednesday, the highest since November 2014. Total volume traded was about 31 percent below the 100-day average. Brent for December settlement fell 0.4 percent to $85.98 a barrel on the London-based ICE Futures Europe exchange. Prices rose 1.8 percent to $86.29 on Wednesday, the highest level since October 2014. The global benchmark crude traded at a $9.98 premium to WTI for the same month. With a November deadline to comply with renewed U.S. sanctions approaching, Iran’s customers are increasingly being scared away. Iranian condensate cargoes to state-owned Emirates National Oil Co. dropped by half in September, while customs officials in the United Arab Emirates are said to require oil tankers docking at Fujairah’s fuel terminal to provide a certificate attesting to the origin of their cargoes.

 Oil falls from four-year highs; Wall Street weighs - (Reuters) - Oil prices fell on Thursday as the prospect of increased crude production from Saudi Arabia and Russia prompted profit-taking the day after futures hit four-year highs on a boost from imminent U.S. sanctions on OPEC’s No. 3 producer Iran. Brent crude futures fell $1.71, or 1.98 percent, to settle at $84.58 a barrel. On Wednesday, Brent rose to a late 2014 high of $86.74. U.S. West Texas Intermediate (WTI) crude futures fell $2.08 to settle at $74.33 a barrel, a 2.72 percent loss. Market participants took profits after Brent on Wednesday climbed to the most technically overbought level since February 2012. WTI was the most overbought since January. The relative strength index (RSI) for both Brent and U.S. crude rose this week to above 70, a level often regarded as signaling a market that has risen too far. On Thursday, both contracts’ RSI retreated to below 70. Weighing on oil prices, U.S. stock market indexes broadly fell, with the benchmark S&P 500 .SPX on pace for its biggest one-day drop since late June. Crude futures at times track with equity markets. Also pressuring oil prices, crude inventories at the U.S. hub of Cushing, Oklahoma, rose about 1.7 million barrels from Sept. 28 to Tuesday, traders said, citing a report from market intelligence firm Genscape. “Today’s pullback appeared heavily influenced by the sharp decline in the equities and looked like a deserved correction given the magnitude of the recent upside price acceleration,” Oil prices have risen as the market braces for sanctions on Iran that kick in on Nov. 4. Saudi Energy Minister Khalid al-Falih said on Thursday the Organization of the Petroleum Exporting Countries was able to raise output by 1.3 million barrel per day, but offered no signal that the producer group would do so. The kingdom plans to invest $20 billion to maintain and possibly expand its spare oil production capacity, and currently has a maximum sustainable capacity of 12 million bpd. Reuters reported on Wednesday that Russia and Saudi Arabia struck a private deal in September to raise output. “About the end of November, we will have a good idea as how many barrels will be lost due to the launch of the second round of the Iranian sanctions. By that time all the bullish news will be in the market

The Oil Price Rally Is Under Threat - Oil fell back sharply on Thursday, coming on the heels of a huge buildup in U.S. crude inventories. However, the stock increase was largely due to an unexpected dip in exports, so the implications of the EIA report are still unclear. Still, even as Iran outages loom, seasonal factors could offset the bullishness. “We’re now into fall refinery maintenance season, and so we’re seeing builds in inventories because refineries aren’t taking in as much crude. Those builds could continue for a while,” Mark Waggoner, president of Excel Futures, told the Wall Street Journal in an interview.  The IEA put out a new report that highlights the increasingly prominent role that the petrochemical sector is playing in driving global crude oil demand. Petrochemicals will account “for more than a third of the growth in oil demand to 2030, and nearly half to 2050, ahead of trucks, aviation and shipping.” Transportation will start to lose its prominence as an engine of demand growth in the years ahead, with electrification taking hold. But there are few major alternatives to crude oil and natural gas in the petrochemical sector.  The U.S. State Department criticized Saudi Arabia for not using its spare capacity this week. A State Department official said that the U.S. was working with Saudi Arabia to use the spare capacity that they are “not deploying,” while also insisting that the U.S. was “doing its part.” "The United States continues to engage with OPEC countries and we encourage them to utilize their spare capacity to ensure world oil supply meets the demand," the State spokesperson said in a statement to S&P Global Platts on Wednesday. The official said OPEC and non-OPEC producers including Russia “continue to withhold production.” The statement was odd given that spare capacity is very low by any standard.  . Saudi Arabian oil minister Khalid al-Falih said it will invest $20 billion to maintain and potentially grow the volume of its spare production capacity. Saudi Arabia has consistently claimed that it could produce and sustain 12 million barrels per day, a figure that has yet to be tested. Riyadh is contemplating investments to increase that threshold to 13 mb/d. “This spare capacity is not just a natural reservoir that we have. This is very expensive investments for the kingdom, and some of our partners within OPEC and OPEC+ have elected to invest to maintain (oil capacity) to have the readiness on a short notice,” he said at an energy industry event in Moscow. “The next 1 million bpd of Saudi capacity is going to cost us over $20 billion. It costs us $2 billion a year of operation expenses to staff and maintain these facilities.” . Hedge funds and other speculators have staked out bets that would pay off if WTI hit $100 per barrel by the end of 2019, a sign that the market thinks that the loss of Iranian supply, combined with IMO regulations cutting into marine fuel supply at the start of 2020, could severely tighten the oil market.

Oil steadies near 4-year highs after volatile week of trading on Iran sanctions --Oil prices steadied just below four-year highs on Friday as U.S. sanctions curbed Iran's exports, tightening global crude supply. International benchmark Brent crude oil futures was down 5 cents a barrel at $84.53 by 8:29 a.m. ET (1229 GMT). On Thursday, Brent fell by $1.34 a barrel or 1.6 percent, but the contract remained on course for a gain of around 2 percent for the week.U.S. West Texas Intermediate (WTI) crude futures was up 22 cents at $74.55, a gain of nearly 2 percent since last Friday.  "The market mood is exceptionally bullish, with fears growing that the U.S. demands for an Iran oil embargo could cause a significant supply shortfall,"  Both benchmarks retreated on Thursday following a rise in U.S. oil inventories and after Saudi Arabia and Russia said they would raise output to at least partly make up for expected disruptions from Iran, OPEC's third-largest producer. But the pull-back did little to dent a 15-20 percent rise in oil prices since mid-August, which has pushed them to their highest since 2014. Washington wants governments and companies around the world to stop buying Iranian oil from Nov. 4 to put pressure on Tehran to renegotiate a nuclear deal. India will buy 9 million barrels of Iranian oil in November, an industry source told Reuters, indicating that the world's third biggest oil importer would continue to buy crude from the Islamic republic despite U.S. sanctions coming into force on Nov. 4.Many analysts say they expect Iranian exports to drop by around 1 million barrels per day (bpd).  "It now appears that only China and Turkey may be willing to risk U.S. retaliation by transacting with Iran." Speculators have accumulated bullish long positions, betting on a further rise in prices, amounting to almost 1.2 billion barrels of oil.  Meanwhile, the number of short positions in the six most important petroleum futures and options contracts has fallen to the lowest level since before 2013, creating a near-record imbalance between bullish and bearish positions in financial crude markets.

Oil Poised for Fourth Weekly Gain -- Oil headed for the longest run of weekly gains since the start of 2018 amid concern that Saudi Arabia and Russia may not pump enough crude to prevent a supply crunch as Iranian cargoes disappear from world markets. Futures climbed as much as 0.9 percent in New York on Friday. Prices may hit $100 this autumn as U.S. pressure stymies exports from Iran, OPEC’s No. 3 producer, according to Russian Energy Minister Alexander Novak. Saudi Arabian Energy Minister Khalid Al-Falih said the kingdom is boosting production and will supply needy refiners. “We’re just seeing a lot of fear about future supply,” said Ashley Petersen, senior oil market analyst at Stratas Advisors LLC. Saudi Arabia is juggling intense pressure from U.S. President Donald Trump to boost output and ease high prices. The kingdom has lifted production almost to a record and may raise it again next month, although doing so will infringe on available spare capacity, limiting Saudi Arabia’s ability to react to other supply shocks. “The Saudis won’t flood the market and they don’t want to see it oversupplied,” said Giovanni Staunovo, an analyst at UBS Group AG. “Their demand is picking up because Iran volumes are falling. But the price for the Saudi strategy to cover those supply losses are extreme low spare capacity, and that worries the market.” West Texas Intermediate for November delivery rose 47 cents to $74.80 a barrel at 10:13 a.m. on the New York Mercantile Exchange. Prices have advanced 2.2 percent for the week, capping the longest streak of weekly increases since January. Brent for December settlement was little changed at $84.50 on the London-based ICE Futures Europe exchange. The contract was up 2.2 percent this week. The global benchmark crude traded at a $9.96 premium to WTI for the same month. Russia’s Novak was not alone in predicting a return to three-digit price levels last seen in 2014. As Iran’s customers cut purchases and Venezuela’s industry struggled, trading giant Mercuria Energy Group Ltd. said last month Brent may spike over $100 in the fourth quarter and Trafigura Group expects it in early 2019. While Goldman Sachs Group Inc. isn’t that bullish, the Wall Street bank sees a risk of oil holding above $80 toward the end of the year. 

 Baker Hughes data show U.S. oil-rig count down for a third straight week - Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil fell by 2 to 861 this week. The oil-rig count had edged down by 3 last week. The total active U.S. rig count, which includes oil and natural-gas rigs, was also lower by 2 at 1,052, according to Baker Hughes. November West Texas Intermediate crude was up 40 cents, or 0.5%, to $74.73 a barrel from Thursday's finish, compared with $74.90 before the rig data Friday.

Rig Count Inches Lower As Oil Prices Stabilize | OilPrice.com --Baker Hughes reported a dip of two in the oil and gas rig count in the United States this week, bringing the total number of active oil and gas rigs to 1,052 according to the report, with the number of active oil rigs decreasing by 2 to reach 861 and the number of gas rigs holding steady at 189.The oil and gas rig count is now 116 up from this time last year.At 12:30pm. EDT on Friday, WTI Crude was trading up 0.35 percent at $74.59—up more than $1 from last week and at highs not seen since near the end of 2014. Brent Crude was trading up on the day by 0.17 percent at $84.72 up over $2 per barrel from this time last week.Prices climbed on persistent fears that US sanctions on Iran will take off more barrels of oil than other suppliers can make up for, although analysts are insistent that the fears are overblown, and numerous bearish signals in the industry have been insufficient to keep prices from rising ever higher. Bearish events in the industry include India’s reports that it is thinking about ditching the dollar for oil trades, which would allow the second largest importer of crude oil the ability to continue to purchase oil from Iran. If India pulls this off, it would ease the “tight market” that is causing the oil prices to remain high. Other bearish signs, also related to India, were reports that India has plans to purchase 9 million barrels of oil from Iran in November, contrary to earlier reports that led the market to believe India had no plans to do so.Canada’s oil and gas rigs for the week gained 4 rigs this week after losing 19 rigs last week, bringing its total oil and gas rig count to 182, which is 27 fewer rigs than this time last year, with a 3-rig decrease for oil rigs, and a 7-rig increase for gas rigs.  On the production side, the EIA’s estimates for US production for the week ending September 28 were for an average of 11.10 million bpd for the second week in a row.

Oil prices mark weekly gain ahead of Iran sanctions (Reuters) - Crude futures steadied on Friday after climbing to four-year highs earlier this week, and both Brent and U.S. crude marked weekly gains ahead of U.S. sanctions on Iranian oil exports. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 1 cent to settle at $74.34 a barrel. Global benchmark Brent crude LCOc1 futures for December delivery fell 42 cents to settle at $84.16 a barrel. On Wednesday, Brent hit its highest price since late 2014, at $86.74. “They’re taking a pause after yesterday’s sell-off,” said Andrew Lipow, president of Lipow Oil Associates. Price gains this week were limited by Saudi Arabia and Russia’s saying they would raise output to at least partly make up for expected disruptions from Iran, OPEC’s No. 3 producer, due to the U.S. sanctions that take effect on Nov. 4. Oil prices are up 15-20 since mid-August, at their highest levels since late 2014. Washington wants governments and companies around the world to stop buying Iranian oil to pressure Tehran into renegotiating a nuclear deal. Saudi Arabian Crown Prince Mohammed bin Salman insisted the kingdom is fulfilling promises to make up for lost Iranian crude supplies, Bloomberg reported. Saudi Arabia is now pumping about 10.7 million barrels per day (bpd) and can add a further 1.3 million “if the market needs that,” he said. India will buy 9 million barrels of Iranian oil in November, two industry sources said, indicating that the world’s third-biggest oil importer will keep purchasing crude from the Islamic republic. Many analysts said they expected Iranian exports to drop by around 1 million barrels per day. U.S. bank Jefferies said there was enough oil to meet demand, but “global spare capacity is dwindling to the lowest level that we can document.” 

OPEC compliance 110% in Sep for 12 members with quotas  — OPEC's 15 countries boosted crude oil output in September to 33.07 million b/d, a 180,000 b/d rise from August, according to an S&P Global Platts survey of analysts, industry officials and shipping data released Friday, as the producer group seeks to instill confidence in its ability to keep the market well-supplied. That is the most OPEC has pumped since July 2017, if the Republic of Congo, which joined the organization in June, is not included.The survey indicates that OPEC and its 10 non-OPEC partners, led by Russia, have surpassed their stated aim of raising production by a combined 1 million b/d from May levels. OPEC's September output was 850,000 b/d above where it was in May, not including Congo, according to Platts survey data, while Russia on Tuesday reported a record high in its September output of 11.356 million b/d, up 390,000 b/d from May.OPEC has been under fire by the US for not pumping more to bring down oil prices, which have hit four-year highs in recent days over apprehension that the producer bloc would be unable or unwilling to make up for expected output losses from sanctions-hit Iran and economically careening Venezuela.Platts reported Wednesday that the US State Department accused OPEC of withholding some 1.42 million b/d of spare capacity from the market, a charge denied by Saudi energy minister Khalid al-Falih, who said at the Russia Energy Week forum Thursday that there was adequate supply and that the price rise was due to geopolitics and speculators.Indeed, Saudi Arabia, OPEC's largest producer and the world's largest crude exporter, pumped 10.60 million b/d in September, according to the Platts survey, a 110,000 b/d increase from August. That more than offset Iran's 100,000 b/d month-on-month decline to 3.50 million b/d in September, while Venezuelan production held steady at 1.22 million b/d, the survey found. But many analysts expect Iran, whose exports are plummeting as its customers cut their purchases, to lose a further 1 million b/d or more after the sanctions go into effect November 5, and Venezuelan production to fall below 1 million b/d by year's end. Iranian production is down 330,000 b/d since May, while Venezuela is down 140,000 b/d, according to the Platts survey. Falih, who said Saudi Arabia's October production is expected to average 10.7 million b/d, said the kingdom was capable of pumping 1.3 million b/d above that, if there was the market demand to justify it. Saudi Arabia holds the bulk of global spare capacity.

Saudi spare oil capacity ready to be used when demand materializes: Falih — Saudi oil minister Khalid al-Falih Thursday said geopolitical tensions and speculators were behind the recent rise in oil prices to four-year highs, not collusion by OPEC and its allies. OPEC has been increasing its oil production since June and inventories are rising counter-cyclically, Falih said at the Russia Energy Week forum in Moscow. "That proves the point that fundamentals are not behind it," said the minister, who oversees oil production in the world's largest crude exporter. "The market has a strong influence. The true elephant in the room is geopolitics. This has all combined to feed the market frenzy." He reiterated that Saudi Arabia has ample spare production capacity which it is ready to use if the market needs it. With the kingdom producing 10.7 million b/d, it has some 1.3 million b/d of spare capacity available, he said. "It's not going to be popular for me to say this, but the market is well supplied. Some would even say oversupplied." S&P Global Platts reported Wednesday that the US State Department was accusing OPEC of withholding 1.42 million b/d of spare capacity from the market.   "The United States continues to engage with OPEC countries and we encourage them to utilize their spare capacity to ensure world oil supply meets the demand," a State Department spokesperson said in a statement to Platts. Once the US sanctions on Iran go into effect November 5, Platts Analytics expects Iranian crude and condensate exports to fall to 1.1 million b/d, and to 800,000 b/d by the fourth quarter of 2019, down from 2.91 million b/d in April. Falih said the market was too fixated on the Iran sanctions and that OPEC and its allies were prepared to keep supplies healthy.  "You have to remember that oil is fungible," Falih said. "It doesn't matter to global supply and demand who's going up and who's going down."

Exclusive: Saudi Arabia, Russia agreed in September to lift oil output, told U.S. (Reuters) - Russia and Saudi Arabia struck a private deal in September to raise oil output to cool rising prices and informed the United States before a meeting in Algiers with other producers, four sources familiar with the plan said. U.S. President Donald Trump has blamed the Organization of the Petroleum Exporting Countries (OPEC) for high crude prices and called on it to boost output to bring down fuel costs before the U.S. congressional elections on Nov. 6. The deal underlines how Russia and Saudi Arabia are increasingly deciding oil output policies bilaterally, before consulting with the rest of OPEC. The sources said Saudi Energy Minister Khalid al-Falih and his Russian counterpart Alexander Novak agreed during a series of meetings to lift output from September through December as crude headed toward $80 a barrel. It is now over $85. “The Russians and the Saudis agreed to add barrels to the market quietly with a view not to look like they are acting on Trump’s order to pump more,” one source said. “The Saudi minister told (U.S. Energy Secretary Rick) Perry that Saudi Arabia will raise output if its customers asked for more oil,” another source said. Originally, the two countries had hoped to announce an overall increase of 500,000 barrels per day (bpd) from Saudi-led OPEC and non-OPEC Russia at a gathering of oil ministers in Algiers at the end of September. But with opposition from some in OPEC, including Iran which is subject to U.S. sanctions, they decided to defer any formal decision until a full OPEC meeting in December. “Saudi is trying to thread a needle with a rope by satisfying customer concerns about higher oil prices, but also wanting to keep prices from falling and sending the wrong price signal to industry which absolutely needs to continue to invest to prevent a supply crunch,” 

Saudi Energy Minister Confirms- 'November Output Will Be Slightly Higher Than October' - Saudi Arabian Energy Minister Khalid al-Falih has once again articulated concerns about a potentially oversupplied global oil market (concerns that are, of course, directed at the US shale industry), echoing comments he made last month about the dangers of a "potentially oversupplied" market. He also hinted that the recent runup in oil prices is more of a reflection of the market's anxieties about impending US sanctions on Iran than it is a measure of physical oil flows. Rumors that Saudi Arabia might raise oil production spread across financial media last week, prompting representatives of the Kingdom to eventually step in and confirm that the Kingdom planned to ramp up production to try and compensate for the expected hole in global supply left by Iranian exports once US sanctions are reimposed. And as it turns out, Saudi may not be the only major exporter preparing to ramp up production. With oil prices reaching ever-greater highs this week, angering President Trump, who again lashed out at Saudi Arabia during a rally Tuesday night (he reminded the kingdom that it wouldn't last two weeks without US protection), crude dropped from the highs following reports that Saudi Arabia and Russia had told the US earlier this year that they had planned to boost production through December. What's more, they had reportedly informed the US of their plans before the OPEC+ meeting in Algiers.

The Saudis Purchase A Colony- Bahrain's $10 Billion Bailout By Gulf Neighbors -Bahrain's slumping economy and mushrooming public debt have been given a fresh lifeline as Saudi Arabia and other Gulf Cooperation Council (GCC) allies have agreed to inject billions in order to stabilize the tiny island gulf nation and prevent a looming financial crisis.In a move designed to keep Bahrain's currency from collapsing and to avoid a potential credit crunch, Saudi Arabia, Kuwait, and the United Arab Emirates have pledged to give Bahrain $10 billion enough to meet its funding requirements as it attempts to eliminate its budget deficit by 2022.Bahrain had faced the likelihood of defaulting on a $750 million Islamic bond repayment due on Nov. 22. and the IMF last spring warned its public debt represents 89 percent of its gross domestic product, while reserves are low. Bahrain was severely impacted by a slump in global oil prices in 2014 and has experienced sporadic political unrest going back to the so-called "Arab Spring" protests of 2011Beyond wanting to stave off financial collapse and any associated contagion or dwindling confidence in the region from spreading, its GCC partners have a pressing geopolitical interest in protecting the ruling Khalifa monarchy as well.  The last time Bahrain needed an urgent "bail out" from its Saudi older brother - a New York Times headline from 2011: Saudi Troops Enter Bahrain to Help Put Down Unrest The tanks poured across the King Fahd Causeway bridge, which connects Saudi Arabia and Bahrain  When widespread protests among Bahrain's Shia-dominant population first broke out against the longtime Sunni rule of King Hamad bin Isa Al Khalifa and his family a dynasty which has held power since 1783 the Saudis immediately sent tanks and over 1000 troops across the King Fahd causeway to suppress the Shia rebellion, with the UAE sending a further 500 of its own police and security personnel.  Thus Bahrain's Sunni "big brothers" in the region fear that any deep financial turmoil could quickly lead to internal political unrest among the majority Shia population. 

 Saudi agents install secret phone spyware to track critics abroad- Citizen Lab - Saudi agents are reportedly secretly installing spyware on people's smartphones to crack down on critics living abroad.At least one critic of the kingdom had his smartphone targeted by Israeli cyberintelligence firm NSO Group's Pegasus spyware software, which enables hackers to gain access to messages, photos, emails, microphone, and camera, according to a new report from Citizen Lab, a Toronto information and technology lab.The report's authors assessed with "high confidence" that outspoken Saudi critic and YouTuber Omar Abdulaziz was targeted with the spyware in June.Abdulaziz's device got infected after he clicked on a link purportedly sent from the courier company DHL, the report said. He had made a purchase on Amazon earlier and later received a text message from DHL explaining that a package was due to be shipped, the report said. But the message instead linked to a website that, according to Citizen Lab, had been identified as a known Pegasus exploit domain, and clicking on the link resulted in the infection of the software onto his phone. Citizen Lab concluded the Abdulaziz was a target because someone using a consumer and university Internet Service Provider (ISP) in Quebec, Canada, found an infection by the Saudi-linked agent. By corroborating his movements and the suspicious DHL message on his phone, the lab concluded with "high confidence" that he was likely the target of the malicious attack.

Saudi military colonialism sparks protest movement in Yemen’s east - In recent weeks, al-Mahrah has witnessed protests against a Saudi military presence that its detractors say is tantamount to extortion and colonialism. The Saudis, who intervened in Yemen’s war on behalf of the internationally recognized government against the Houthi rebels in 2015, first began setting military bases up in the province late last year. Yet from the moment the Saudis set up their first base in the province, its residents began pushing back, staging protests and asking why Riyadh’s military needs to have a presence in a largely peaceful area that has been mostly spared by the three-year conflict. Huge protest/sit-in being reported in Yemen's eastern province of al-Mahrah, with residents (waving Yemeni and Mehri flags) demanding Saudi forces leave immediately. https://t.co/bTsGXDOTTu   Since early August however, when Yemeni President Abd Rabbuh Mansour Hadi visited the province and backed the Saudi presence, the tense atmosphere has worsened considerably. Now stepping up their protest movement, al-Mahrah’s residents are appealing to the outside world, telling the international community that their province is already safe and they do not need foreign soldiers cementing a presence in their home. Osamah, a 35-year-old resident of al-Mahrah, has participated in several protests against the Saudi presence – the most recent being 17 September. He said he will not stop protesting until the Saudis leave his home. According to Osamah, the Saudis have total control of the border crossings between al-Mahrah and neighbouring Oman, as well as Nishtawan port and Ghaida airport. Their forces have set up checkpoints across the province, and have positioned significant numbers in the coastal town of Sayhut. The bases residents describe are of varying size, some little more than a dozen soldiers enclosed by fencing, others far more substantial. In key positions such as Nishtawan port and Ghaida airport, Yemeni soldiers have been completely replaced by Saudi ones.

Hillary Said So - Iran Quotes WikiLeaks At U.N. To Prove Saudis Are State Sponsors Of Terror --Iranian Ambassador to the UN Gholamali Khoshroo gave a fiery speech during the final days of the UN General Assembly meeting in New York wherein he responded to specific charges of Saudi Arabia that Iran sponsors terrorism and is waging proxy wars on Riyadh throughout the Middle East, saying that global terrorism actually originates with the Saudis.The Iranian ambassador supported his case by appealing to a specific WikiLeaks email: “Everybody knows that Saudi Arabia supports terrorism in a very blatant and widespread manner,” he said. In a shock statement before his UN audience, he added, “in the framework of WikiLeaks in 2009, Hillary Clinton is said to have stated that Saudi Arabia is the greatest donor to terrorist groups around the world.” Interestingly Khoshroo delivered his speech in Arabic, instead of his native Farsi, in order “to make sure that our position is rendered clear” to Riyadh.He was referencing a 2009 intelligence memo released as part of Clinton's emails which said that “donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide" — though she herself was not the author. The memo continued with "Saudi Arabia remains a critical financial support base for Al-Qaida, the Taliban… and other terrorist groups.”The Iranian diplomat may have also been referencing another Wikileaks file which shows that in a private speech Hillary Clinton made in 2013, she said: “The Saudis and others are shipping large amounts of weapons – and pretty indiscriminately – not at all targeted toward the people that we think would be the more moderate, least likely, to cause problems in the future.” And further, a 2014 WikiLeaks released Hillary Clinton memo spells it out clearer, saying “We need to use our diplomatic and more traditional intelligence assets to bring pressure on the governments of Qatar and Saudi Arabia, which are providing clandestine financial and logistic support to Isis and other radical groups in the region.”

New WikiLeaks Release Exposes Corruption In UAE Arms Deal Fueling War On Yemen - The transparency organization WikiLeaks just released a new document that sheds light on the corruption behind a lucrative French-German arms deal with the United Arab Emirates (UAE), weapons that are currently being used to wage a disastrous and genocidal war against the people of Yemen.The document details a court case from the International Chamber of Commerce (ICC) International Court of Arbitration regarding a dispute over a “commission payment” made to Abbas Ibrahim Yousef Al-Yousef, an Emirati businessman, as part of a $3.6 billion arms deal between France’s state-owned weapons company Nexter Systems (then GIAT Industries SA) and the UAE. Per the deal, which was signed in 1993 and set to conclude in 2008, the UAE purchased 388 Leclerc combat tanks, 46 armored vehicles, 2 training tanks, and spare parts, as well as ammunition.Those weapons have been an important part of the UAE and Saudi coalition’s war in Yemen since it began in 2015. The war has killed over ten thousand civilians, largely the result of the Saudi/UAE bombing campaign, which has targeted and crippled the country’s civilian infrastructure. The result of those b ombings, as well as of the UAE/Saudi blockade of Yemen, has been over 17 million people near starvation – including 5.2 million children – and preventable disease epidemics that have claimed tens of thousands of additional lives.The court case described in the leaked document resulted from a claim made by Al-Yousef that Nexter Systems had failed to honor its commitment to pay him a 6.5 percent commission fee on the arms deal, amounting to a $235 million dollars. Nexter Systems made payments regularly for a period of time to the Emirati businessman, totalling over $195 million, through Al-Yousef’s company, Kenoza Consulting & Management Inc. Al-Yousef demanded that the company pay him the nearly $40 million that remained outstanding.However, subsequent arguments from Nexter Systems’ lawyers asserted that payments stopped because of French anti-corruption legislation enacted in 2000, and that Al-Yousef’s business “intended to commit and indeed committed corruption acts.” Nexter Systems effectively claimed in court that the exorbitant “commission fee” given to Al-Yousef was for the use of bribing government officials of the UAE and apparently other countries so that Nexter Systems could secure the $3.6 billion weapons contract. However, the ICC tribunal did not rule on this point, as they claimed that Nexter’s proof for this allegation lacked sufficient evidence.Yet, the tribunal did seek to determine why Al-Yousef had been able to justify the excessive commission fee, especially considering that he did not play an important role in the development of the Leclerc tanks. In investigating this point, the tribunal found that Al-Yousef had convinced German officials to waive Germany’s then-ban on providing German-made weapons to Middle Eastern nations like the UAE — a necessary step, as the Leclerc tanks were fitted with German engines.

Iran Airs Video Of US Carrier Chased By Iranian Speedboats In Straits Of Hormuz -- As was widely expected, Iranian President Hassan Rouhani's pleas for the US to "honor its international commitments" and "return to the negotiating table" during a speech at the UN General Assembly last week were promptly ignored. And with the full implementation of US oil sanctions in November rapidly approaching, Iran is already antagonizing the US as the regime hopes to spin the inevitable economic toll into a propaganda victory - if only to stave off another round of disruptive street protests that shook the country during the first weeks of 2018.As tensions between the US and North Korea flared last summer, the media largely ignored several confrontations between Iranian Revolutionary Guard troops and US carriers, including a USS Nimitz-class carrier. The Trump Administration, of course, was eager to play down these incidents because they ran counter to its preferred narrative that the president's tough rhetoric had cowed the Iranians into reducing their ballistic missile tests and rolling back other generally disruptive behavior. But in the Iranian regime's latest attempt to undercut this idea, a domestic television station has aired footage of an until-now unreported incident that occurred in March - a time when the Trump administration had insisted that these encounters had ceased - depicting IRGC ships and drones menacing a US carrier group centered around the USS Theodore Roosevelt in the all-important Strait of Hormuz. The footage was intended to be part of a documentary about the encounter set to air on Iranian television.

US shuts down consulate in Iraq's Basra citing Iranian 'threats' - The United States has announced it is closing its consulate in the Iraqi city of Basra and evacuating its diplomats from there after increasing threats and rocket fire from Iran and Iran-backed fighters.The decision adds to mounting tension between the US and Iran, which is the target of increasing economic sanctions imposed by Washington.US Secretary of State Mike Pompeo, explaining the move, renewed a warning that his country would hold Iran responsible for any attacks on US diplomatic facilities and citizens. The move follows recent rocket attacks that Pompeo said were directed at the consulate in Basra. US officials said the rockets, however, had not impacted the consulate, which is located in the Basra airport compound. "I have made clear that Iran should understand that the United States will respond promptly and appropriately to any such attacks," Pompeo said in a statement.

Iran fires missiles at militants in Syria over Ahvaz attack -Iran's Revolutionary Guards say they have fired missiles at eastern Syria targeting the ringleaders of the deadly attack on a military parade in Ahvaz. A statement said "many terrorists" were killed or injured in the strikes. Iranian state television suggested that the missiles hit an area close to the border town of Albu Kamal where Islamic State militants are known to operate. IS and ethnic Arab separatists from Ahvaz both claimed the 22 September parade attack, in which 25 people died. The Iranian government has alleged that the assailants were jihadist separatists supported by Gulf Arab allies of the United States. US Defence Secretary Jim Mattis has dismissed the allegation as "ludicrous". The Revolutionary Guards announced that its aerospace forces' missile unit had "targeted a base of the ringleaders of Ahvaz terrorist crimes to the east of the Euphrates [river] in Syria with a number of surface-to-surface ballistic missiles" at 02:00 on Monday (22:30 GMT on Sunday). In addition to causing casualties among the militants, the strikes also reportedly destroyed infrastructure and ammunition stockpiles. "Our iron fist is prepared to deliver a decisive and crushing response to any wickedness and mischief of the enemies," the statement added. The Revolutionary Guards did not say where in western Iran the six missiles were launched, but revealed that they travelled a distance of 570km (354 miles).

Iran fires missiles at Islamist “rebels” as US vows to remain in Syria -- Iran’s Islamic Revolutionary Guard Corps (IRGC) early Monday morning carried out missile strikes against targets inside Syria, claiming that it had killed and wounded a significant number of Islamist militia members that it charged with responsibility for a terrorist attack against an Iranian military parade last month. The six missiles fired from the western Iranian province of Kermanshah flew 355 miles over Iraqi territory to hit their targets in Syria’s eastern Deir Ezzor province. Tehran said that the missiles, Iranian-made Qiam and Zolfaghar models capable of carrying over 1,500 pounds of explosives, were followed up with drone strikes.The Pentagon reported that the missiles hit just three miles from where US troops are based in the Al Bukamal district of Deir Ezzor.“Iranian forces did conduct no-notice strikes last night and we see open source reports stating that they were targeting militants it blamed for the recent attack on an Iranian military parade in the Middle Euphrates River Valley,” US military spokesman Col. Sean Ryan said in a statement.  Iranian media reported that some of the missiles were inscribed with the slogans “death to America,” “death to Israel” and “death to the house of Saud.”Tehran has blamed Washington, Tel Aviv and Riyadh, as well as the United Arab Emirates for supporting “foreign mercenaries” responsible for the September 22 terrorist attack on a military parade in Iran’s southwestern city of Ahvaz that killed 29 people and wounded 70 others. The Iranian missile strike coincides with a ratcheting up of tensions between Washington and Tehran, with US President Donald Trump and other top administration officials using last week’s opening of the United Nations General Assembly to demonize Iran as the source of all problems in the Middle East and to issue a series of bellicose threats.

US says it will stay in Syria until it spends $1 trillion defeating ISIS  — U.S. military officials have assured worried allies that the fight in Syria will continue until it spends at least $1 trillion defeating ISIS and a corrupt, democratically-elected government beholden to the U.S. can be instituted, sources confirmed today. Defense Secretary Jim Mattis told reporters this week that the primary mission for the U.S. has not changed in Syria, which is to defeat remnants of the ISIS terrorist group. Still, he added that the situation was “complex” and the military would also remain in Syria to guard against Iranian influence, work to end the Syrian civil war, deal with humanitarian issues, play geo-strategic chess with Russia, support and defend against its ally Turkey, and ensure girls can attend school. Mattis downplayed the idea of “mission creep” in Syria to reporters, reiterating the mission of the Defense Department has been to take care of every problem in the world since the country’s founding.

3 years of Russia strikes on Syria kill 18000, says monitor group - More than 18,000 people, nearly half of them civilians, have been killed in Russian air strikes on Syria since Moscow began its game-changing intervention exactly three years ago, a monitor said Sunday. Russia, for its part, said its “accurate” strikes had killed 85,000 “terrorists”. A steadfast ally of Syria’s ruling regime, Russia began carrying out bombing raids in the country on September 30, 2015 – more than four years into the devastating conflict. Since then, they have killed 18,096 people, according to the Syrian Observatory for Human Rights. “That number includes 7,988 civilians, or nearly half of the total,” said Observatory chief Rami Abdel Rahman. Another 5,233 Islamic State fighters were also killed in Russian strikes, with the rest of the dead including other rebels, Islamists and jihadists, the Britain-based monitor said. Russia’s defence commission published drastically different figures on Sunday. “All of the air strikes have targeted and are still accurately targeting terrorist targets,” said commission chief Viktor Bondarev. Human rights groups and Western governments have criticised Russia’s air war in Syria, saying it bombs indiscriminately and targets civilian infrastructure including hospitals. The White Helmets, a Syrian rescue force that works in opposition areas, said in a report released Sunday that it had responded to dozens of strikes by Russia on buildings used by civilians since 2015. They included Russian bombing raids on 19 schools, 12 public markets and 20 medical facilities over the past three years, as well as 21 of its own rescue centres

Russian officials confirm: S-300 surface-to-air missile system reached Syria - Russia has delivered an S-300 surface-to-air missile system to Syria, Defence Minister Sergei Shoigu told President Vladimir Putin during a meeting broadcasted by Rossiya 24 TV on Tuesday. "The work was finished a day ago," Shoigu said. On Saturday, Russian Foreign Minister Sergey Lavrov said Moscow had already started delivering the S-300 air defense systems to Syria's government. He added that "the measures we will take will be devoted to ensure 100  percent safety and security of our men in Syria, and we will do this."   Russia announced last week that it would supply the anti-aircraft missiles after Syrian forces responding to an Israeli airstrike on September 17 mistakenly shot down a Russian military reconnaissance plane, killing all 15 people on board.  The friendly fire incident sparked regional tensions. Israel's Prime Minister Benjamin Netanyahu called Russian President Vladimir Putin to express sorrow at the loss of life and sent a high-level military delegation to Moscow.  Last week, an  Israeli official said that the S-300 anti-aircraft missiles are "a complicated challenge" for Israel. he official added: "We're dealing with it in different ways, not necessarily by preventing the delivery." According to the official, Russian President Vladimir Putin updated Prime Minister Benjamin Netanyahu on the fact that he intends to send the missiles to Syria within two weeks, and then acted accordingly.Israel has meanwhile clarified to Putin that it will continue to act within Syrian territory and U.S. President Donald Trump has stated that his country fully supports Israel's actions as well as its right to defend itself. "Putin made a move, but it's a big playing field and he understands that," the official said.

The US Military-Industrial Complex’s Worst Nightmare: The S-300 May Destroy and Expose the F-35 - The tragic episode that caused the death of 15 Russian air force personnel has had immediate repercussions on the situation in Syria and the Middle East. On September 24, Russian Defense Minister Sergei Shoigu informed allies and opponents that the delivery of the S-300 air-defense systems to the Syrian Arab Republic had been approved by President Vladimir Putin. The delivery had been delayed and then suspended as a result of Israeli pressure back in 2013. In one sense, the delivery of S-300 batteries to Syria is cause for concern more for Washington than for Tel Aviv. Israel has several F-35 and has claimed to have used them in Syria to strike alleged Iranian weapons transfers to Hezbollah. With the S-300 systems deployed in an updated version and incorporated into the Russian command, control and communications (C3) system, there is a serious risk (for Washington) that Israel, now incapable of changing the course of events in Syria, could attempt a desperate maneuver. It is no secret that Greece purchased S-300s from Russia years ago, and that NATO and Israel have trained numerous times against the Russian air-defense system. Senior IDF officials have often insisted that they are capable taking out the S-300s, having apparently discovered their weaknesses. But Greece’s S-300s are old, out of maintenance, and have not had their electronics updated. Tel Aviv’s warning that it will attack and destroy the S-300 battery should not be taken as an idle threat. It is enough to look at the recent downing of Russia’s Il-20 surveillance aircraft to understand how reckless a desperate Israel is prepared to be. Moreover, more than one IDF commander has over the years reiterated that a Syrian S-300 would be considered a legitimate target if threatening Israeli aircraft.

Beijing ready to contribute to Syria reconstruction China - On the sidelines of the UN General Assembly Session in New York, Chinese Foreign Minister announced at a meeting with his Syrian counterpart that his country is ready to do its share of Syria's reconstruction, IRNA reports. In the meeting Wang Yi said China respects Syria's sovereignty and independence. He expressed satisfaction with the improvement in Syrian peoples' lives and security and said China will spare no effort to contribute to the economic and social development of Syria. Wang Yi went on to say Beijing believes there is a political solution to the Syria crisis and the problem must be resolved through diplomatic and political means. Chinese Foreign Minister stated sovereignty, independence and territorial integrity of Syria should be respected and the people and the leaders of the country should be allowed to decide their own destiny. Wang Yi described as important the relationship between the two countries and said China's economic growth and social development can be of use in reconstructing Syria. Syrian Foreign Minister, Wahid Muallem also considered China's help in reconstructing Syria important and said Syria appreciates Beijing's humanitarian assistance. He also called for boosting cooperation between the two countries. While supporting Syria's participation in the New Silk Road Initiative, the two sides also expressed satisfaction with its important role in the plan. 

World Court: Palestine files complaint over U.S. Embassy in Jerusalem (Reuters) - The International Court of Justice on Friday said it has received a complaint from the “State of Palestine” against the United States, arguing that the U.S. government’s placement of its Israeli embassy in Jerusalem violates an international treaty and it should be removed. The ICJ, known as the World Court, said in a statement Palestine argues the 1961 Vienna Convention of Diplomatic Relations requires a country to locate its embassy on the territory of a host state. While Israel controls Jerusalem militarily, its ownership is disputed. U.S. President Donald Trump ordered the American embassy in Israel relocated from Tel Aviv to Jerusalem, and the new embassy opened in May. The Palestinian suit requests the court “to order the United States of America to withdraw (its) diplomatic mission from the Holy City of Jerusalem.” The ICJ is the United Nations’ venue for resolving disputes between nations. Palestine was recognized by the U.N. General Assembly in 2012 as a non-member observer state, though its statehood is not recognized by either Israel or the United States. 

 Israel shoots hundreds across occupied West Bank, Gaza – Israel yesterday shot hundreds of Palestinians participating in a general strike across the occupied Palestinian territories (oPt), leaving scores wounded.In the besieged Gaza Strip, 93 people were left injured after Israeli naval forces fired live rounds and rubber-coated bullets at protesters. Thirty-seven Palestinians were shot with live bullets, according to Wafa, and were subsequently transferred to hospitals for medical treatment “where their conditions were described as moderate.” Wafa also added that there were “several suffocation cases due to tear gas inhalation.”In the occupied West Bank, Palestinians participating in the general strike were also targeted by Israeli forces in Ramallah, Nablus and Hebron. In Al-Bireh, just outside Ramallah, a Palestinian journalist was shot and injured with a rubber-coated bullet and others suffocated, according toWafa. Similar incidents were reported in Qalandia refugee camp, where Israeli soldiers attacked a rally taking place, “shooting and injuring a youth with live ammunition in his back.” In Jerusalem, Israeli police attacked Palestinians who gathered in the courtyards of Damascus Gate. Wafa reported that “[Israeli] police physically assaulted protesters and used pepper spray against them, injuring a young man”. Israeli forces also stormed the Palestinian neighbourhood of Jabal Al-Mukabbir in occupied East Jerusalem and targeted protesters in Al-Azariya and Abu Dis. According to the Palestinian Red Crescent Society (PRCS), five Palestinians were shot and injured by Israeli occupation forces and ten others suffered from tear-gas inhalation, Ma’anreported.

Turkey to make defense deals with any country, NATO member or not, Erdogan says - Turkey could purchase weaponry from any country, be it a NATO member or not, President Recep Tayyip Erdoğan said late Thursday. Speaking to reporters after his New York visit, the president also added that Turkey could "even jointly produce weaponry" with any country including Russia and China, and is preparing itself accordingly. "It is not appropriate to try to block a country if there is free market economy involved," Erdoğan said. In December, Turkey officially signed a $2.5 billion agreement with Russia for the S-400s – Russia's most advanced long-range anti-aircraft missile system. With the move, Turkey is set to become the first NATO member country to acquire the system. Turkey's interest in the Russian systems started due to Washington's indifferent attitude on technology transfer in the case of a possible purchase of the American-made Raytheon Patriot missiles. Turkish officials said in July that Ankara may consider buying Patriot missiles but it won't consider them as an alternative to the Russian S-400 system. With the S-400s, Ankara aims to build Turkey's first long-range air and anti-missile defense system to boost its defense capabilities amid threats from PKK and Daesh terrorists at home and conflicts across its borders in Syria and Iraq. Turkish officials have repeatedly stressed the fact that ties with other countries are not seen as alternatives to one another and that Turkey's diplomacy is based on mutual advantage.  The U.S. has expressed concern that NATO ally Turkey's planned deployment of the S-400s could risk the security of some U.S.-made weapons and other technology used by Turkey, including the F-35s.

Turkey inflation surges to nearly 25 pct in Sept, highest in 15 years (Reuters) - Turkish inflation surged to nearly 25 percent in September from a year earlier, official data showed on Wednesday, hitting its highest in 15 years and sharpening focus on whether the central bank will be able to deliver another hefty rate hike. The size of the increase - prices jumped by 6.3 percent from a month earlier - far outpaced expectations and underscored the deep impact of a currency crisis on the economy and consumers. The lira has lost nearly 40 percent of its value this year, hit by concerns about President Tayyip Erdogan’s influence over the central bank and a rift with Washington. The sell-off has pushed up prices of everything from food to fuel and eroded confidence in what was once a high-flying emerging market. “The central bank will need to react to this,” said Inan Demir, senior emerging markets economist at Nomura. “This is not something that could be ignored and they will have to hike at their next meeting.” The lira weakened and was at 6.0700 to the dollar, more than 1 percent weaker, at 1150 GMT. The currency has been underpinned in recent weeks by the central bank’s massive 6.25 percentage point rate hike last month and by hopes for an improvement in ties with the United States, particularly over the fate of a jailed American pastor. It remains to be seen whether Erdogan will brook another increase in borrowing costs. The president, a self-described “enemy of interest rates”, has called for lower rates to keep the economy growing.

 Falling melt margins threaten Turkish steel mill profitability – Platts video - The economic and political situation in Turkey and the recent US tariffs on Turkish steel imports has also affected the Turkish steel market as finished steel product sales have slowed both domestically and in the export market in recent weeks. While export rebar prices are currently hovering at 18-month lows, steel mills' raw material inputs, especially steel scrap, have resisted a large correction, reducing their margins and profitability of production considerably. In this video, S&P Global Platts senior pricing specialist Pascal Dick and markets specialist Marcel Goldenberg discuss to what recent price trends mean for the profitability of Turkish steel producers.

 Insider Attacks, Blowback, and a Generation of American Folly in the Middle East -- He was shot in the back, the ultimate act of treachery. On September 3rd, a U.S Army sergeant major was killed by two Afghan police officers — the very people his unit, the new Security Force Assistance Brigade, was there to train. It was the second fatal “insider attack,” as such incidents are regularly called, this year and the 102nd since the start of the Afghan War 17 long years ago. Such attacks are sometimes termed “green-on-blue” incidents (in Army lingo, “green” forces are U.S. allies and “blue” forces Americans). For obvious reasons, they are highly destructive to the military mission of training and advising local military and security forces in Afghanistan. Such attacks, not surprisingly, sow distrust and fear, creating distance between Western troops and their supposed Afghan partners. Reading about this latest tragic victim of Washington’s war in Afghanistan, the seventh American death this year and 2,416th since 2001, I got to thinking about those insider attacks and the bigger story that they embodied. Considered a certain way, U.S. policy across the Greater Middle East has, in fact, produced one insider attack after another. Short-term thinking, expedience, and a lack of strategic caution (or direction) has led Washington to train, fund, and support group after group that, soon enough, turned its guns on American soldiers and civilians. It’s a long, sordid tale that stretches back decades — and one that, unlike the individual instances of treachery that kill or maim American servicemen, receives next to no attention. It’s worth thinking about, though, because if U.S. policies had been radically different, such green-on-blue incidents might never have occurred. So let’s consider the last decades of American war-making in the context of insider attacks.

China to lower tariff rates on 1,585 taxable items - (Xinhua) -- Starting from Nov. 1 this year, China will slash most-favored-nation tariffs on a total of 1,585 taxable items as the country moves to further open its market, an official statement said Sunday.The average tariff rate will be reduced from 10.5 percent to 7.8 percent for these items, said the Customs Tariff Commission of the State Council.The number accounts for 19 percent of the total taxable items. After the adjustment, China's overall tariff rate will stay at 7.5 percent, down from 9.8 percent last year.Such a rate is slightly higher than that of the European Union but lower than most developing countries, the commission said.The tariff cuts covered sectors including textiles, ceramics, steel, machinery and some resource-based products and primarily processed goods.Lowering tariffs to an appropriate level can promote balanced development of foreign trade and opening-up, the commission said.The move came after China provided zero tariffs on a majority of imported medicines starting May 1 and a reduction of tariffs on vehicles and auto parts as well as some consumer goods starting July 1. KEY WORDS:tariffs

China Manufacturing PMI slumps, US tariffs not necessarily the culprit - China's National Bureau of Statistics reported slowing growth pointing to weaker exports as the China Manufacturing Purchasing Managers Index (PMI) dropped to 50.8 percent, down 0.5 percentage points from the previous month to the second lowest reading in 12 months. The PMI of large enterprises came in at 52.1 percent, unchanged from last month, whilst medium-sized enterprise PMI was 48.7 percent, 1.7 percentage points lower than the previous month and now in contraction. (>50 = expansion, <50 = contraction). London based macroeconomic consultancy Capital Economics said in their report on the statistics release that: 'In theory, 50 is the line that separates expansion from contraction, but in practice, the latest reading points toward a slowdown in annualized growth on the China Activity Proxy, our in-house alternative to GDP, to around 5%.' Large enterprise PMI which includes industrial State-Owned Enterprises such as steel mills, power stations and heavy industry saw the commodity inventory components of the PMI drop to just 47.8 percent, down 0.9 percentage points indicating the start of widespread de-stocking of iron ore, coal and energy. Further evidence can be seen in the input price index which rose 1.3 percentage points to 55.6 percent as oil prices rise and the value of the Yuan has fallen by 7 percent this year. The service industry input price index was 54.3 percent, up 1.4 percentage points from the previous month. The construction industry input price index was 62.8 percent, up 0.7 percentage points from the previous month. The latter is volatile but does suggest that the recent surge in local government bond issuance may have helped to kick-start stagnant infrastructure spending said Capital Economics. China Beige Book, a consultancy focused on 'under the bonnet' Chinese economics said last week that manufacturing 's multi-year rally has given way to declining revenue and sharply declining profit growth, and that an explosion in corporate borrowing is not being captured by official government statistics and domestic orders are not making up for the drop in exports.

They Are Worried About Panic - China Blocks Bad Economic News As Economy Slumps - China's Shadow-banking system is collapsing (and with its China's economic-fuel - the credit impulse), it's equity market has become a slow-motion train-wreck, its economic data has been serially disappointing for two years, and its bond market is starting to show signs of serious systemic risk as corporate defaults in 2018 hit a record high.  But, if you were to read the Chinese press, none of that would be evident, as The New York Times reports a government directive sent to journalists in China on Friday named six economic topics to be "managed," as the long hand of China's 'Ministry of Truth' have now reached the business media in an effort to censor negative news about the economy.  The New York Times lists the topics that are to be "managed" as:

  • Worse-than-expected data that could show the economy is slowing.
  • Local government debt risks.
  • The impact of the trade war with the United States.
  • Signs of declining consumer confidence
  • The risks of stagflation, or rising prices coupled with slowing economic growth
  • “Hot-button issues to show the difficulties of people’s lives.”

The government’s new directive betrays a mounting anxiety among Chinese leaders that the country could be heading into a growing economic slump. Even before the trade war between the United States and China, residents of the world’s second-largest economy were showing signs of keeping a tight grip on their wallets. Industrial profit growth has slowed for four consecutive months, and China’s stock market is near its lowest level in four years.

China’s Health Care Crisis: Lines Before Dawn, Violence and ‘No Trust’ - NYT — Well before dawn, nearly a hundred people stood in line outside one of the capital’s top hospitals. They were hoping to get an appointment with a specialist, a chance for access to the best health care in the country. Scalpers hawked medical visits for a fee, ignoring repeated crackdowns by the government. A Beijing resident in line was trying to get his father in to see a neurologist. A senior lawmaker from Liaoning, a northeastern province, needed a second opinion on her daughter’s blood disorder. Mao Ning, who was helping her friend get an appointment with a dermatologist, arrived at 4 a.m. She was in the middle of the line. “There’s no choice — everyone comes to Beijing,” Ms. Mao, 40, said. “I think this is an unscientific approach and is not in keeping with our national conditions. We shouldn’t have people do this, right? There should be a reasonable system.” The long lines, a standard feature of hospital visits in China, are a symptom of a health care system in crisis. While the wealthy have access to the best care in top hospitals with foreign doctors, most people are relegated to overcrowded hospitals.

Effort to Form Union in China Meets Ferocious Repression - A group of workers in China’s manufacturing hub of Shenzhen tried something very rare this summer—they attempted to follow the legal process to set up a union. University students lent tremendous support. But their employer and the Chinese government cracked down on both the workers and the students with firings, detention, surveillance, and the threat of jail sentences. Workers at the welding-equipment manufacturer Shenzhen Jasic Technology initiated the process of forming a union in May. Among their biggest complaints were arbitrary fines and the company’s underpayment into government-run funds that help workers pay rent or buy houses. Workers followed the law in setting up a union, including requesting and receiving permission from upper-level unions affiliated with the government-controlled All-China Federation of Trade Unions, the only unions authorized in China. After workers collected signatures to form a union, in July the district-level union federation and the company denounced their effort as illegal—since the company had quickly formed a union to forestall the workers’ effort. Jasic changed the job duties of union supporters and fired six of the most vocal. On July 20 the sacked workers attempted to return to work, but were beaten up and taken to the police station. Twenty other workers and supporters who went to the police station to protest were also arrested.

China’s Leaders Confront an Unlikely Foe: Ardent Young Communists - NYT — They were exactly what China’s best universities were supposed to produce: young men and women steeped in the ideology of the Chinese Communist Party. They read Marx, Lenin and Mao and formed student groups to discuss the progress of socialism. They investigated the treatment of the campus proletariat, including janitors, cooks and construction workers. They volunteered to help struggling rural families and dutifully recited the slogans of President Xi Jinping. Then, after graduation, they attempted to put the party’s stated ideals into action, converging from across China last month on Huizhou, a city in the south, to organize labor unions at nearby factories and stage protests demanding greater protections for workers. That’s when the party realized it had a problem. The authorities moved quickly to crush the efforts of the young activists, detaining several dozen of them and scrubbing the internet of their calls for justice — but not before their example became a rallying cry for young people across the country unhappy with growing inequality, corruption and materialism in Chinese society. “You are the backbone of the working class!” the protesters chanted at one rally, addressing workers at an equipment factory. “We share your honor and your disgrace!” Protests are common in China, especially by workers who have nowhere else to turn in a nation without independent unions, courts or news media. But the demonstrations in Huizhou were unusual because they were organized by students and recent graduates from some of the country’s top universities, who have generally stayed off the streets since the 1989 pro-democracy movement that ended in bloodshed outside Tiananmen Square.

Will China’s new laser satellite become the ‘Death Star’ for submarines? China is developing a satellite with a powerful laser for anti-submarine warfare that researchers hope will be able to pinpoint a target as far as 500 metres below the surface.It is the latest addition to the country’s expanding deep-sea surveillance programme, and aside from targeting submarines – most operate at a depth of less than 500 metres – it could also be used to collect data on the world’s oceans.Project Guanlan, meaning “watching the big waves”, was officially launched in May at the Pilot National Laboratory for Marine Science and Technology in Qingdao, Shandong. It aims to strengthen China’s surveillance activities in the world’s oceans, according to the laboratory’s website.Scientists are working on the satellite’s design at the laboratory, but its key components are being developed by more than 20 research institutes and universities across the country.Song Xiaoquan, a researcher involved in the project, said if the team can develop the satellite as planned, it will make the upper layer of the sea “more or less transparent”. “It will change almost everything,” Song said.

China to Raise Billions in Rare U.S. Dollar Debt as Trade Tensions Persist - China is planning to sell $3 billion in U.S. dollar bonds this month, wooing foreign investors at a time of heightened trade tensions with the U.S. and turbulence in its own stock market. If successful, it would be the country’s second dollar-bond sale in a year and only its third since 2004. China’s Ministry of Finance has tapped a dozen Chinese and global investment banks to handle the offering and plans to market the securities to investors next week, according to people familiar with the matter. China intends to sell bonds that mature in five, 10 and 30 years and become a regular issuer of sovereign debt, the people added. The offering is coming at a delicate time for the world’s second-largest economy. China’s gross-domestic-product growth is slowing and the pace of investment in factories and public-works projects has cooled this year. The U.S. has imposed tariffs on hundreds of billions of dollars of Chinese exports and is threatening more of them. China’s stock-market benchmark, the Shanghai Composite Index, is down 15% this year. Despite those issues, debt investors still regard China’s creditworthiness as very strong, thanks to the country’s robust foreign-currency reserves and large trade surplus.

Tensions rise on the South China Sea -- “China accused the United States of ignoring its sovereignty Tuesday after an American warship sailed near islands claimed by Beijing in the disputed South China Sea, further rattling relations between the countries after weeks of escalating military tensions,” writes The Washington Post. “A Chinese destroyer came within yards of the U.S. Navy ship Sunday, compelling it to switch direction in what American officials called an ‘unsafe and unprofessional’ clash.” Following up on Tuesday, China condemned the U.S. for conducting the freedom of navigation operation, via Reuters: “The U.S. side repeatedly sends military ships without permission into seas close to South China Seas islands, seriously threatening China’s sovereignty and security, seriously damaging Sino-U.S. military ties and seriously harming regional peace and stability,” the [Defense] Ministry said. “China’s military is resolutely opposed to this,” it said.  “Defense Secretary Jim Mattis said Monday that he doesn’t see the U.S. relationship with China worsening after a series of setbacks that officials said include canceling the Pentagon chief’s planned visit to Beijing this month,” via The Associated Press. “Mattis said the U.S. has to learn how to manage its relationship with the communist nation. “‘There’s tension points in the relationship, but based on discussions coming out of New York last week and other things that we have coming up, we do not see it getting worse,’ Mattis told reporters traveling with him to Paris. ‘We’ll sort this out.’”

The US military is planning a serious showdown with China that would be a significant show of force on tense tides and involve American warships and aircraft -  The US military is reportedly planning to put on a serious show of force in contested waters from the South China Sea to the Taiwan Strait as a warning to China and a reminder of the United States' ability to rapidly confront and counter any potential adversaries. The US Pacific Fleet has proposed a series of exercises for November that would see American warships and aircraft demonstrating US military might in disputed waterways in a message to Beijing, CNN reported Wednesday afternoon, citing several defense officials. While one official reportedly characterized the plans as "just an idea," others indicated that the proposal, which already has an operational name, is being circulated at various levels of the military.   News of this plan comes on the heels of serious incidents in the East and South China Seas. Twice last week, the US sent B-52H Stratofortress heavy long-range bombers tearing through the South China Sea. Those flights were immediately followed by a joint military exercise in which a US B-52 bomber joined forces with Japanese fighter jets over the East China Sea and Sea of Japan. China called the flights "provocative," warning the US that it would take "necessary measures" to defend Chinese national interests. Several days later, the Chinese military conducted "live-fire shooting drills" in the South China Sea. On Sunday, the US Navy's Arleigh Burke-class guided-missile destroyer conducted a freedom-of-navigation operation near the Spratly Islands in the South China Sea. During the routine operation, a Chinese Luyang II-class guided-missile destroyer confronted the US warship. The Chinese vessel, according to the Pacific Fleet, engaged in "increasingly aggressive" behavior. The Chinese ship nearly collided with the US destroyer during the exchange, which was described as "unsafe and unprofessional." These incidents came amid other deteriorations in the US-China bilateral relationship, specifically issues pertaining to sanctions, trade, and Taiwan.

North Korea, South Korea begin removing landmines along fortified border (Reuters) - Troops from North and South Korea began removing some landmines along their heavily fortified border on Monday, the South’s defense ministry said, in a pact to reduce tension and build trust on the divided peninsula. Project details were agreed during last month’s summit in Pyongyang, the capital of North Korea, between its leader, Kim Jong Un, and South Korean President Moon Jae-in. In a statement, the ministry said the two sides agreed to remove all landmines in the so-called Joint Security Area (JSA) in Panmunjom within the next 20 days, with military engineers performing the hazardous task on the South Korean side. There was no immediate confirmation from North Korea that its troops had begun the process. The deal also provides for removal of guard posts and weapons from the JSA to follow the removal of the mines, with the troops remaining there to be left unarmed. The JSA is the only spot along the 250-km (155-mile) -long “demilitarized zone” (DMZ) where troops from both Koreas are face to face. South Korean troops have gradually taken over most operations along their side of the border but international forces under the U.S.-led United Nations Command retain major roles, especially at the JSA, where an American commander and a South Korean deputy lead the security battalion. UNC spokesman Colonel Chad Carroll declined to confirm if the command would also withdraw any weapons from the JSA, but said American forces would provide support for the demining operation. “United States Forces Korea will perform a support role - to include having air medical evacuation assets available to respond within minutes of any potential medical emergencies,” he told Reuters in a statement.

Former South Korean President Sentenced To 15 Years In Prison For Accepting $5.4 Million In Bribes From Samsung - South Korea's former president, Lee Myung-bak, was sentenced Friday to 15 years in prison for bribery and embezzlement. He will also have to pay $11.5 million in fines. Lee is the second South Korean leader convicted this year of charges of corruption and the fourth former president to be arrested for corruption since the 1990s. Prior to entering politics, Lee had been an executive at Hyundai and campaigned on a promise to help South Korea's economy grow. Lee served as president of South Korea from 2008 until 2013. A court ruled Friday that before and during his presidency Lee accepted $5.4 million in bribes from Samsung, South Korea's largest conglomerate. In exchange, Lee had granted a presidential pardon to Lee Kun-hee, Samsung's chairman, who had been convicted of embezzlement and tax evasion. The conviction had forced Lee Kun-hee to resign from Samsung in 2008; he returned to work at the company shortly after receiving the presidential pardon. The court also found that former president Lee disguised his ownership of a lucrative auto-parts maker under the names of his relatives and embezzled 24 billion Korean won from the company, according to The New York Times.. Samsung later offered to pay legal fees for a court case involving the auto-parts company.

Ex-Malaysian PM Najib’s wife Rosmah pleads not guilty to 17 counts of money laundering and tax evasion - Straits Times -- Rosmah Mansor, the wife of disgraced former Malaysian prime minister Najib Razak, pleaded not guilty on Thursday morning (Oct 4) to 17 charges of money laundering and tax evasion, amounting to more than RM7 million (S$2.3 million). She was charged under Section 4(1) of the Anti-Money Laundering and Anti-Terrorism Financing and Proceeds from Unlawful Activities Act 2001 (Amla) at Kuala Lumpur’s Sessions Court 9 for allegedly receiving RM7,097,750 in funds obtained from money-laundering activities. It is the first time in Malaysia's history that the wife of a former prime minister has been charged. The charges were read out before Sessions Court judge Azura Alwi, to which a calm and composed Rosmah said: “Saya mohon bicara (I claim trial).” If convicted, she could face a jail term of up to 15 years and a fine five times the amount of the illicit activity, or RM5 million, or whichever is higher, for each of the charges. After the court was adjourned on Thursday morning, Rosmah walked out of the courtroom before the judge even exited the dock. The case is fixed for mention on Nov 8.

Malaysia wants Burma’s commanders probed for ‘atrocities’ against Rohingya -- MALAYSIA has joined the list of countries seeking the international prosecution of Burma’s (Myanmar) military commanders for the alleged atrocities committed against the Rohingya Muslim minorities. Calling for the United Nations Security Council to establish an international judicial mechanism to try those responsible for the crimes, Malaysia’s foreign ministry said Burma’s government had the responsibility to act against the perpetrators. “All of us should, therefore, use our leverage to urge Myanmar’s Independent Commission on Enquiry on Rakhine State to bring all perpetrators of gross human rights violations to justice,” Foreign Ministry multilateral affairs deputy secretary-general Kennedy Jawan told national news agency Bernama. “Malaysia has also put forth that an international judicial mechanism should take effect in the event the efforts of the Myanmar authorities to investigate and prosecute the perpetrators are deemed insufficient,” he said. SEE ALSO: Burma staged ‘well-planned’ atrocities against Rohingya, says US State Dept Jawan said the crisis faced by the Rohingyas needed urgent attention and a long-term solution was required to determine their future. “To that end, the international community cannot, and should not, stand idle as we witness the human catastrophe which has besieged the Rohingya, unfolding before our very own eyes,” he said.

Escaping India within India -The important quality of a private social club, the kind that is not a metaphor but really a private social club, is that it is very honest about its most important objective—to keep the other kind of Indians out. The emergence of these new private clubs is a response to the near-impossibility for the upper middle class of urban India to gain admission into the legendary old clubs. In essence, the response of the new rich to the high walls of the old rich is not the demolition of such walls, but to build new swanky walls. That is human nature, and the middle class is beginning to stop pretending that such a wish for social islands where they can escape India for a few hours is debauched. The very goal of the entire Indian upper class, in fact, is to escape India within India. Our pursuit of the good life is automatically the pursuit of islands. Affluent India is an archipelago of islands where people pay a premium not for quality but for the invisibility of Other Indians. Our residential colonies, schools, crèches, restaurants, resorts, cars and cinemas are in reality clubs where the other Indians can enter only as “servants”.  Outside our islands, real India awaits. Roads are choked, air is poison, sad urchins say they are hungry, beggars show their deformities, and markets are filthy. But, India is too potent not to permeate the islands, and it does as the odours of the drivers and the heart-breaking stories of the maids who want a raise. And how much, in contrast to the fulminations of island intellectuals, Aadhaar has transformed their lives. The Indian craving for social islands has only grown, driving up the prices of anything that might offer mediocre services but promises isolation from real India. Such islands are most successful and enduring in the richest segments, where the islands themselves cannot be purchased, they can only be inherited. Elsewhere, the islands are ephemeral. In the past few years, there has been an economic democratization of the nation and that has confused the social order in many Indian spaces.

 Major Arms Deal Gets Green Light Ahead Of Russia-India Summit - The Russian-Indian time-tested partnership has experienced an upward trend in all areas of cooperation in recent years. Last year, the two great powers marked the 70th anniversary of diplomatic relations. The leaders meet regularly and hold phone conversations to discuss acute problems. A very important event has just taken place to bring the two nations even closer.The Indian Cabinet Committee on Security, chaired by PM Narendra Modi, approved the $6.2 billion S-400 Triumf deal with Russia on Sept.26. It’s rather symbolic that the final decision to purchase the five cutting-edge air defense systems to protect Indian critical infrastructure sites was taken just a few days before the Russian President Vladimir Putin’s visit to India scheduled on Oct.4-5. The Indian government defied the US threats to impose sanctions for buying Russian weapons in accordance with the 2017 “Countering America’s Adversaries Through Sanctions Act” (CAATSA) the way it did to “punish” China for buying the same systems and Su-35 combat planes.The law allows making a waiver for India but US officials do not guarantee New Delhi will be exempt. It takes a risk by dealing with Russia. India has signed multiple multi-billion deals with US weapons producers. Defense Secretary James Mattis and State Secretary Mike Pompeo tried to talk India out of the S-400 deal during the 2+2 talks in September. Randall G. Schriver, Assistant Secretary of Defense for Asian and Pacific Security Affairs, has warned that a waiver is not a slam dunk decision. Indeed, if an exemption is made, others will demand waivers too, but with no sanctions imposed, the CAATSA will be deprived of any purpose. The US has put itself into an awkward situation and has to make a hard choice. Russia and India are in talks on the way to make non-dollar payments. They could resort to clearing options, another currency, such as the Singapore dollar, or a go-between based in a third country. The US uses go-betweens to sell arms to the Syrian Kurds.

Russia Missile Deal Puts India in U.S. Sanctions Crosshairs - When Indian Prime Minister Narendra Modi hosts Russian President Vladimir Putin on Friday, one item on their agenda will be closely tracked in Washington: India’s planned purchase of Russia’s S-400 air-defense missile systems. Washington is targeting Russia’s defense industry and those who do business with the country using a sanctions power mandated by Congress last year. Sanctioning New Delhi for its deal with Moscow, though, would disrupt U.S. efforts to cultivate India as a security partner—a key prong in its Indo-Pacific strategy to counterbalance China’s rise. At the same time, granting India a sanctions waiver for a more-than $5 billion deal involving one of Russia’s most advanced weapons systems risks undermining Washington’s escalating campaign against Moscow. The Treasury and State Departments last month sanctioned China’s Equipment Development Department for its recent purchases of Sukhoi Su-25 jet fighters and S-400 missiles from Russia. Officials said the move was intended to send a message to other countries considering similar Russian arms deals. India has declined to back out of the deal with the Kremlin, with a signing ceremony expected during Mr. Putin’s trip. Russia has long been the biggest source of New Delhi’s military equipment, and its supply of spare parts and maintenance services remains crucial to India’s defense needs. Indian military planners see the S-400 surface-to-air missile system—capable of tracking and taking down aircraft hundreds of miles away—as an important asset against neighbors Pakistan and China. The deal also reflects India’s effort to repair relations with Russia. Those ties have frayed in recent years as India diversified its arms purchases, turning to the U.S. for equipment, including maritime patrol aircraft and attack helicopters.   Officials in New Delhi expect the U.S. will understand that India can’t cut Russia out or allow ties to drift, that imposing sanctions would be “highly disruptive.” “It would revive old debates and suspicions in India about the U.S.’s agenda,” Mr. Pant said. “Few governments in India would be able to do anything substantial with the U.S. for some time.” 

The Brazilian Elite’s Plan to Destroy the Workers’ Party Has Failed - The plan was the following: Deny the legitimacy of Dilma Rousseff’s 2014 election victory. Push for impeachment on a trumped-up charge (creative accounting to disguise a budget deficit). Organize mass protests against the Workers’ Party (PT) and in support of the Lava Jato (Car Wash) anti-corruption attorneys who aimed to prosecute Luiz Inácio Lula da Silva, Brazil’s popular former president and longtime PT leader, for corruption and money laundering. Encourage big corporate media outlets, namely the all-powerful Globo network, to identify the PT as the root cause of Brazil’s institutional corruption. Then, once Rousseff was removed, implement a neoliberal shock plan—euphemistically labeled by new president Michel Temer as the “bridge to the future”—with fast-track privatizations, a fire sale of Brazilian assets to international investors, draconian austerity, and labor-market deregulation. Markets would respond, and confidence would flood back. A private-sector-led economic recovery would lay the foundation for a successful presidential run by the pro-business, center-right Brazilian Social Democratic Party (PSDB), supported by all sensible commentators in São Paulo, Wall Street, and Washington. Lula, always a threat due to that damned charisma, would, meantime, have been marched off to prison. Last week, as a new set of opinion polls pointed to a second-round run-off between far-right Jair Bolsonaro and former São Paulo mayor Fernando Haddad, candidate for the presumed-dead PT, the plan was definitively in tatters. (The first round of elections will be held on October 7; if no candidate receives more than 50 percent, a second round is scheduled for October 28. Voters will elect not only a new president and vice president, but also federal and local governors and legislators.) Alckmin is nowhere to be seen. He trails Bolsonaro by 10 points and, in an electorate that still cleaves between right and left, it is highly unlikely both can progress to the second round.

I Just Visited Lula, the World’s Most Prominent Political Prisoner. A “Soft Coup” in Brazil’s Election Will Have Global Consequences. Noam Chomsky -- My wife Valeria and I have just visited a prison to see arguably the most prominent political prisoner of today, a person of unusual significance in contemporary global politics.  By the standards of U.S. prisons I’ve seen, the Federal Prison in Curitiba, Brazil, is not formidable or oppressive — though that is a rather low bar.  Nonetheless, it is a prison.  The prisoner we visited, Luiz Inácio Lula da Silva – “Lula,” as he is universally known — has been sentenced to virtual life imprisonment, in solitary confinement, with no access to press or journals and with limited visits one day a week. The day after our visit, one judge, citing press freedoms, granted the request of the nation’s larges