The Fed Is Panicking -- Nomi Prins: This week I’ve been in Washington, D.C. for high level meetings focused on the economy. While meeting at the Fed, I was given the impression that bank regulators have been routinely chastised by Wall Street bankers. What I learned is that some of the biggest playmakers in finance don’t want to disclose the true nature of their positions and money-making schemes. This confirmed my own experiences as an former investment banker. In addition, it became clearer that Fed Chairman, Jay Powell, and Vice Chairman, Randal Quarles, will be closely studying real economic and bank data when rendering decisions about the path of interest rates. Many have speculated about such dealings, and whether they will be swayed by President Trump’s pressure. The truth is that the leaders at the Fed have a firmer understanding of what’s really going on in the economy than they allude to publicly. Even though the Fed has been able to avoid another financial crisis the last decade, with quantitative easing (QE) policy — or what I call dark money — their “toolkit” might not render us “safe enough.” They need to grapple with this reality. You see, the Fed manufacturers dark money that the markets have come to rely on. Through quantitative easing (QE) the central bank has accumulated a balance sheet that hit a high of $4.5 trillion of assets last year. By having purchased these assets with electronically created money, the Fed was able to keep rates at the middle and longer end of the yield curve low, while they specifically set low rates for the short end of the yield curve, too. Currently the Fed’s book of assets has been reduced by only a bit — to about $4.1 trillion — but it’s still historically large. If the Fed continues to sell those assets (which consist of treasury and mortgage bonds) there is a risk that their value will drop too much, too quickly. If bond values drop, then rates will rise in the middle and longer end of the yield curve. This would make it more expensive for most companies to repay, or extend, their corporate debts. The Fed knows it is currently in a catch-22. That’s why over the last two weeks, it has barely sold any of its assets as volatility in the markets picked up.
Duy: Fed Stuck In An Uncomfortable Situation -- From Professor Tim Duy at Fed Watch: Fed Stuck In An Uncomfortable Situation: The Federal Reserve faces a most uncomfortable confluence of events as central bankers begin their two-day meeting to ponder the path of rate policy. In a nutshell, equities continued to struggle in the midst of fairly solid data as President Trump complains yet again about rate hikes while stoking the uncertainty that appears at least partly if not mostly to blame for the volatile equity markets. Yes, I know, it’s a lot to follow. Hopefully I can break it down into more manageable pieces. …Bottom Line: The baseline case is for a dovish hike that basically sends the message that the data is consistent with another rate hike but IF the economy turns slower more quickly than anticipated, this will be the last hike for some time if not the last hike of the cycle. The risk is that the Fed skips this meeting and leaves January open IF the data continues to support a hike. It is worth thinking about what the Fed would need to do to offset the impacts Trumpian uncertainty should that bleed over from Wall Street to Main Street. Note: Duy thinks it is likely the FOMC will "Hike rates 25 basis points to push rates at the edge of the lower range of neutral estimates" and 'Drop “further gradual increases” for language that imparts much more uncertainty about the future path of rate hikes.' This would be a "dovish hike".
Trump Slams Fed On Eve Of Rate Decision- Incredible Fed Hiking With World Blowing Up - On the eve of Wednesday's Fed decision, President Trump is once again bashing the Federal Reserve over its plans to raise interest rates at a time when markets are already in chaos and the "world is blowing up" thanks in part to the central bank's "double-barreled blitz" of higher rates and tighter liquidity.But instead of insinuating that Fed Chairman Jerome Powell is trying to undermine the administration, the president ticked off a reasonable list of factors that should give a truly "data-dependent" Fed reason to reconsider.Instead of moving ahead with more rate hikes, Trump said the Fed should "Take the Victory!" Trump said.It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!— Donald J. Trump (@realDonaldTrump) December 17, 2018 Trump's Monday tweet follows a widely discussed op-ed published by investor Stanley Druckenmiller and former Fed Governor Kevin Warsh, who became the latest establishment heretics to side with President Trump over the economic establishment by urging the Fed to stop raising interest rates - for now, at least - due to "recent economic and market developments." The two authors wrote that the Fed should have stopped QE years ago before the easy money policies helped blow a massive asset-price bubble that could collapse as liquidity is withdrawn and borrowing costs are raised.
Fed hikes rate, lowers 2019 projection to 2 increases - The Federal Reserve on Wednesday raised its benchmark interest rate a quarter-point but lowered its projections for future hikes. As markets had expected, the central bank took the target range for its benchmark funds rate to 2.25 percent to 2.5 percent. The move marked the fourth increase this year and the ninth since it began normalizing rates in December 2015. It came despite President Donald Trump's tweets against rate hikes. On Monday, he said "it is incredible" that "the Fed is even considering yet another interest rate hike." Officials, though, now project two hikes next year, which is a reduction but still ahead of current market pricing of no additional moves next year. The language in the post-meeting statement was not entirely dovish, or easy on its outlook for rates. The committee continued to include a statement that more rate hikes would be appropriate, though it did soften the tone a bit. "The Committee judges that some further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term," the statement said. The only changes from the November post-meeting statement was adding "some" to describe the trajectory of future rate moves and said it now "judges" rate increases to be appropriate whereas November's said "expects." Along with the hike, investors had been keyed on where the Federal Open Market Committee, which sets rates, expected to go in the future. Heading into this week's two-day meeting, the committee had been pointing to three more moves in 2019 and possibly another one in 2020. That changed amid tightening financial conditions and worries that the Fed was moving too quickly. Stock indexes have moved into correction territory and are largely negative for the year.
FOMC Statement: 25bps Rate Hike --FOMC Statement:Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have been strong, on average, in recent months, and the unemployment rate has remained low. Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee judges that some further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term. The Committee judges that risks to the economic outlook are roughly balanced, but will continue to monitor global economic and financial developments and assess their implications for the economic outlook.In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2‑1/2 percent.In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments
Merrill and Goldman comments on Fed Rate Hike -- Some brief excerpts from research notes by economists at Merrill Lynch and Goldman Sachs … From Merrill Lynch:The Fed hiked rates while signaling a lower path, as we expected. ... We think Fed Chair Powell delivered a clear message: when the Fed has reached the neutral target range, there is a need for greater caution and policy to become ever more data dependent. This means that the threshold to bring rates into restrictive territory - above the neutral rate - is high. The Fed would need to see convincing data including a further decline in the unemployment rate, above target inflation with inflation expectations shifting higher and cooperative financial markets.We are changing our call for the Fed. We now expect the Fed to hike just two more times in 2019 with no additional hikes in 2020. This would leave the terminal rate of the cycle to be 2.75 - 3.0% and shaves 50bp off our previous path of the Fed. The market has already shifted and is not even pricing in a full hike in 2019 with cuts in 2020. In our view, the Fed is too optimistic about the terminal rate but the market is too pessimistic. In addition, consistent with our forecast for fewer Fed hikes, we lower our US interest rate forecasts across the curve, with the 10yr ending at 3%. From Goldman: The FOMC raised the funds rate target range to 2¼% -2½%, as widely expected. The median dot in the Summary of Economic Projections now shows a 2-1 baseline for rate hikes in 2019-2020, compared to 3-1 in September, but the average dot declined significantly, a dovish surprise suggesting broad endorsement of the new baseline. Changes to the post-meeting statement were generally dovish as well. While the growth characterization was more upbeat than we had expected, the policy guidance was a bit more dovish than we had expected.
Dow dives 350 points, closes at new low for the year after Fed hikes rates - U.S. stocks sank Wednesday in a wild session after the Federal Reserve raised its benchmark overnight lending rate for the fourth time this year. The Dow Jones Industrial Average fell 351.98 points and closed at its lowest level so far this year at 23,323.66, erasing a 380 point gain that came prior to the Fed decision. The broad S&P 500 index also closed at a 2018 low, falling 1.5 percent to finish at 2,506.96 as technology and banks stocks rolled over. The Nasdaq Composite fell 2.1 percent to 6,636.83, its own 2018 closing low with shares of Apple losing more than 3 percent. For traders, the Fed's statement and Chairman Jerome Powell's subsequent press conference did not suggest that the central bank would slow its pace of rate hikes as quickly as some hoped. Markets took a leg lower during Powell's comments that the central bank would continue to reduce the size of its balance sheet at the current pace. The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 8 percent and 9 percent, respectively, this month. The S&P 500 is now in the red for 2018 by 6.3 percent. The Fed decided to hike its benchmark overnight lending rate by one quarter point on Wednesday to a target range between 2.25 to 2.5 percent. The Fed did however trim its 2019 outlook for rate hikes to just two increases from three previously. "I think the market reaction to all of this is the Fed is going to overdo it," said James Paulsen, chief market strategist at Leuthold Group. "Powell said he sees no problem with balance sheet run off. That's the one that hurts, that's another potential path of dovishness that he didn't take." The central bank permits $50 billion a month to run off the balance sheet, a collection of bonds the central bank bought to stimulate the economy during and after the financial crisis. "I think that the runoff of the balance sheet has been smooth and has served its purpose," he said during a news conference. "I don't see us changing that." The benchmark 10-year Treasury note yield hit a fresh low of 2.798 percent, its lowest level since May 30. The 30-year Treasury bond broke below 3 percent.
Bill Dudley Admits Fed Is Hiking Until Something Breaks - Speaking to Bloomberg TV, former NY Fed president and Goldman managing director Bill Dudley brought brief tears of laughter to the eyes of traders when he said the biggest joke today, if not this year: namely that the Fed is not there to take away the market's pain. And then this: "It’s important that people in the markets should understand that the fed doesn’t care about market prices for themselves. They only care about market prices in terms of how it affects the economy, the unemployment rate and inflation." Why is this funny? Because taking away the market's pain is precisely what the Fed is meant to do... and Dudley knows it... and those watching Dudley know that he knows it. Hence the hilarity that ensues. Next, Dudley confirmed what all traders already knew: that the Fed was dovish, but not dovish enough. This took place as the Dow was trading over 1000 point lower than where it was yesterday when the Fed released its statement: Dudley had some advice for economists, investors and traders: focus on the Fed's outlook, which incidentally has always been wrong and will be again, but not for the immediate future, when the Fed continues to see "above trend growth"...... which is notable because it again means that the Fed is focusing on the economy, and not the market, a welcome departure from the Feds of Greenspan, Bernanke and Yellen where the sanctity of the S&P was the supreme goal of all monetary policy.And this is why stocks suddenly spiked just after 2pm: Dudley's confirmation that if the economy slows down, the Fed would stop hiking...... although in the very next sentence, Dudley also makes it clear that the Fed will continue shrinking its balance sheet: The former NY Fed president also confirmed he actually read the projections, and noted that the Fed will hike at least 2-3 more times, and that yesterday's hike was not a close call...
Trump reportedly wants to fire the Fed chair, a move that could wreak havoc on the financial markets- President Donald Trump wants to fire Federal Reserve Chairman Jerome Powell for raising interest rates, according to a report, an unprecedented action by a president against the independent body, that could undermine confidence in the U.S. financial system already under the strain of a vicious equity sell-off. Trump has discussed firing Powell privately because of his frustration with stock market losses in recent months, according to Bloomberg News, which cited four people familiar with the situation. The president's frustration intensified in recent days, with him discussing the firing "many times" during that time, according to the report. The Dow Jones Industrial Average dropped 7 percent this week, its worst week in 10 years, on fears the Fed is unnecessarily slowing the economy as the central bank on Wednesday raised its benchmark interest rate for a fourth time this year. The Dow, which Trump cheered when it was at record highs earlier this year, is now down 9 percent in 2018. The report said the Trump's advisers have warned him against such a move, which has never been done by a president and it's not even clear whether he has the legal authority to do so. White House and Fed spokespeople declined to comment to Bloomberg. Powell became Fed chair in just February of this year after Trump nominated him to take over for Janet Yellen. He was easily confirmed in the Senate and has a four-year term. While the president appoints the Fed's board of governors, including the chairman, the central bank "derives its authority from the Congress, which created the System in 1913 with the enactment of the Federal Reserve Act," according to the Fed's website. "The President can nominate a chair but once the chair is confirmed, the president is out of it and the only way you can remove a chair from office is literally if they broke the law. Congress will have to find a cause to remove them from office through a vote and a procedure," Ellen Zentner, Morgan Stanley's chief U.S. economist, told CNBC in October. But Trump has already broken with precedent through his repeated criticism in the second half of this year of the Fed and the chairman to the press and via Twitter, including this week before the central bank hiked rates. Other presidents privately tried to influence the Fed, but none did so in such a public and forceful matter.
PCE Price Index: November Headline & Core - The BEA's Personal Income and Outlays report for November was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.06% month-over-month (MoM) and is up 1.84% year-over-year (YoY). The latest Core PCE index (less Food and Energy) came in at 0.15% MoM and 1.88% YoY. Core PCE is now below the Fed's 2% target rate. The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. The first string of red data points highlights the 12 consecutive months when Core PCE hovered in a narrow range around its interim low. The second string highlights the lower range from late 2014 through 2015. Core PCE shifted higher in 2016 with a decline in 2017 only to bounce back later in the year.The first chart below shows the monthly year-over-year change in the personal consumption expenditures (PCE) price index since 2000. Also included is an overlay of the Core PCE (less Food and Energy) price index, which is Fed's preferred indicator for gauging inflation. The two percent benchmark is the Fed's conventional target for core inflation. However, the December 2012 FOMC meeting raised the inflation ceiling to 2.5% for the next year or two while their accommodative measures (low FFR and quantitative easing) are in place. More recent FOMC statements now refer only to the two percent target.The index data is shown to two decimal points to highlight the change more accurately. It may seem trivial to focus such detail on numbers that will be revised again next month (the three previous months are subject to revision and the annual revision reaches back three years). But core PCE is such a key measure of inflation for the Federal Reserve that precision seems warranted. For a long-term perspective, here are the same two metrics spanning five decades.
GDP December 21, 2018 - Highlights: The third estimate for third-quarter GDP, at annualized growth of 3.4 percent vs 3.5 percent in the first two estimates, shows a fraction less strength for consumer spending at 3.5 percent from 3.6 percent, and a bit greater weakness for residential spending at minus 3.6 percent vs minus 2.6 percent. Business investment held steady at a constructive 2.5 percent rate of growth, as did government purchases at 2.6 percent. Exports, subtracting 0.62 points, pulled down GDP by a little more than the second estimate, while imports rose steeply to pull down GDP by 1.37 percentage points, little changed from the second estimate. Combining the two, the negative contribution from net exports was 1.99 points vs the second estimate's 1.91. Inventories rose $89.8 billion in the month to contribute slightly more to GDP, at 2.33 percentage points vs 2.27 in the second estimate. The third quarter was a strong one for the economy, getting a boost from an overdue inventory build but driven once again by the most important factor and that is consumer spending. Whether continued strength for the consumer can be expected in the fourth quarter will get an indication later this morning with the personal income and outlays report for November.
Q3 GDP Revised Down to 3.4% Annual Rate -- From the BEA: Gross Domestic Product, 3rd quarter 2018 (third estimate); Corporate Profits, 3rd quarter 2018 (revised estimate) Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter of 2018, according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.2 percent.The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 3.5 percent. With this third estimate for the third quarter, personal consumption expenditures (PCE) and exports were revised down, and private inventory investment was revised up; the general picture of economic growth remains the same. PCE growth was revised down from 3.6% to 3.5%. Residential investment was revised down from -2.6% to -3.6%. This was slightly below the consensus forecast. Here is a Comparison of Third and Second Estimates.
Q3 GDP Third Estimate: Real GDP at 3.4% The Third Estimate for Q3 GDP, to one decimal, came in at 3.4% (3.36% to two decimal places), a decrease from 4.2% for the Q2 Third Estimate. Investing.com had a consensus of 3.5%. Here is the slightly abbreviated opening text from the Bureau of Economic Analysis news release:Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter of 2018 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.2 percent.The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 3.5 percent. With this third estimate for the third quarter, personal consumption expenditures (PCE) and exports were revised down, and private inventory investment was revised up; the general picture of economic growth remains the same (see "Updates to GDP" on page 2).The third-quarter percent change in real GDP was revised down 0.1 percentage point from the second estimate, reflecting downward revisions to PCE and exports that were partly offset by an upward revision to private inventory investment. For more information, see the Technical Note. A detailed "Key Source Data and Assumptions" file is also posted for each release. For information on updates to GDP, see the "Additional Information" section that follows. [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.22% average (arithmetic mean) and the 10-year moving average, currently at 1.80%. Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 13.5% below trend. A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.35%. Six of the eleven recessions over this timeframe have begun at a higher level of current real YoY GDP. In summary, the Q3 GDP Third Estimate of 3.4% was fractionally worse than expected and worse than the Q2 Third Estimate.
Q3 GDP Revised Lower To 3.4% As Ex-Inventories GDP Rises Just 1.0% - With the US economy firing on all four cylinders heading into the 3rd quarter, largely thanks to the latent effects from Trump's fiscal stimulus, the BEA released its final estimate of Q3 GDP which confirmed what we learned first two months ago, and was revised last month, namely that the US economy grew at an annualized rate in the mid-3% range, in line with both expectations and the first estimate released a month ago, although the final estimate showed a modest slowdown to the prior revision, with Q3 GDP now said to have grown 3.4%, below the 3.5% 2nd revision and consensus estimate. Combined with the 4.2% GDP growth in the second quarter,, the results capped the best back-to-back quarters since 2014. At the same time, growth is projected to moderate significantly this quarter, with estimates now running in the mid to low 2% range. Furthermore, just like last month, a quick look at the internals reveals some ugly details below the surface. While household spending remained strong, rising 3.5% after 3.8% in Q2, the largest increase since Q4 2014, it shrank from both the first estimate of 4.0%, and the second estimate of 3.6%, and missed expectations of 3.6%, contributing 2.37% of the bottom line 3.360% GDP print (below the 2.45% in the second estimate), the main reason why the US economy grew as fast as it did in the third quarter was a build up in inventories, which contributed even more than was previously estimate, or some 2.33%, or 69% of the bottom line number. This was the biggest quarterly inventory stocking since the last quarter of 2011, and also implies that excluding Inventories, GDP rose a paltry 1.0% in the quarter. Another change from the second GDP estimate came from a slightly weaker business investment offsetting the increase in inventories, while most other categories were in line with earlier readings. Net exports subtracted 1.99% from growth, while inventories provided a 2.33 point boost. All other components of GDP were ugly, with nonresidential fixed investment, or spending on equipment, structures and intellectual property shrinking to 2.5% in 3Q after rising a blistering 8.7% in the prior quarter. Government spending added 0.44 point to growth, unchanged from the prior revision.
Q4 GDP Forecasts: Mid-to-High 2s - And from the Altanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thefourth quarter of 2018 is 2.7 percent on December 21, down from 2.9 percent on December 18. The nowcast of fourth-quarter real personal consumption expenditures growth decreased from 4.1 percent to 3.7 percent after this morning's personal income and outlays release from the U.S. Bureau of Economic Analysis. [Dec 21 estimate] From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.5% for 2018:Q4 and 2.1% for 2019:Q1. [Dec 21 estimate] CR Note: These estimates suggest GDP in the mid-to-high 2s for Q4.
Could an Oil Patch decline turn a 2019 slowdown into an outright recession? - One of the items I mentioned in my piece yesterday at Seeking Alpha was the recent big decline in oil prices. Please go read the piece, it puts a couple of pennies in my pocket! But in that article I referenced the decline in industrial production that was caused by the 2014-15 decline in gas prices. I wanted to follow up a little here. In 2014 into early 2015, Oil prices declined by almost 75%, from a little under $110/barrel to a little under $30/barrel. Gas prices declined from close to $4/gallon to about $1.75/gallon: The recent decline in oil and gas prices, while significant, is less than half of that. Energy extraction is counted in the "mining" component of industrial production, but even the "manufacturing" component declined between the end of 2014 and mid-2016: At the time I called it the "shallow industrial recession." While GDP never turned outright negative, real GDP slowed to 1% annualized in Q3 2016 and 0.4% in Q4 of that year. That's a real slowdown! So, why wasn't there an actual recession? Because employment, sales, and income continued to rise. As I and almost everybody else said at the time, the big decline in gas prices was a boon to consumers. And indeed it was, as shown in the below graph of real personal income (red) and real personal spending (blue)(note: in the graph both series are normed to 100 as of the bottom of the recession in 2009): In fact, as you can see in the graph, both series not only rose, but, especially for spending, both rose a little more steeply in 2016. In other words, the decline in gas prices, which showed up as a decline in inflation, put more "real" money in consumers' pockets, and they spent it, and then some. ( Preliminarily, note that in 2012 there was a 2% FICA tax rebate, which shows up as an increase in the savings rate, which then reversed in January 2013. But notice that consumers kept savings constant in 2015, and then dug into their pockets and spent a little more vs. saving in early 2016. (Note: graph does not show this morning's small decline in the savings rate). While I claim no expertise whatsoever it what will happen to the price of gas and oil from here, what I can say is that, if prices remain low or continue lower, a smaller version of the 2015-16 pattern in both production and consumption is a good simple model. That in turn suggests that there would be pain in the Oil Patch, flatness in manufacturing production, and a mild increase in income and consumption. The problem, of course, is that these consequences are piled on top of the slowdown that has already been strongly suggested by the flatness in the long leading indicators for the past 7 months, and the haphazard and generally negative effects of Trump's trade wars that were initiated since then. In other words, the effects of a knock to "Saudi America" together with the effects of the trade wars, might be enough to turn a slowdown next summer that already looks "baked in the cake" into a recession.
Rah Rah Economics -- Greg Mankiw read Trumponics by Art Laffer and Stephen Moore so we don’t have to: The authors offer no credible evidence that the tax changes passed will lead to such high growth. Most studies yield far more modest projections. The Congressional Budget Office estimates that the Trump tax cuts will increase growth rates by 0.2 percentage points per year over the first five years. A study by Robert Barro (a conservative economist at Harvard) and Furman (a liberal economist at Harvard) published in 2018 estimates that the tax bill will increase annual growth by 0.13 percentage points over a decade. And that is if the changes are made permanent. Barro and Furman estimate that as the legislation is written, with many of the provisions set to expire in 2025, it will increase annual growth by a mere 0.04 percentage points over ten years.
Trump finds himself isolated in shutdown fight --President Trump is finding himself increasingly isolated less than a week ahead of a potential government shutdown, as even members of his own party admit that he has backed himself into a corner with his demands for $5 billion in funding for a wall on the Mexican border. “Everybody is looking to him for a signal about what he wants to do, and so far it’s not clear,” Sen. John Cornyn (R-Texas) said of the president. Few Republicans will criticize Trump on the record, but behind the scenes there is frustration that he has weakened the GOP’s negotiating position with Democrats. There is also a sense that Trump might not be worried about the fallout for his party if his own supporters delight in his fighting with Democrats. “Trump will get the blame, but he won’t care,” one GOP lawmaker told The Hill. “And the base will love him for it.” Trump’s declaration last week that he would be “proud” to shut down the government to secure $5 billion for his border wall emboldened Democrats. They say they will only agree to measures that extends last year's funding level, which would provide $1.6 billion for border security, including $1.3 billion for pedestrian fencing. Rep. Nancy Pelosi (D-Calif.), the presumed next Speaker, publicly challenged Trump on whether Republicans could muster enough votes to pass such a bill in the House. “You won’t win,” she told him at an extraordinary televised Oval Office meeting on Tuesday alongside Senate Minority Leader Charles Schumer (D-N.Y.). The House GOP’s decision to adjourn until Wednesday night, just two days ahead of the shutdown deadline, seemed to indicate that she was correct, though top Republicans continue to insist that they may bring the bill to a vote next week, and cautioned members that they should be prepared to return to Washington early. While Republicans dutifully blame Democrats, most seem to agree that, were it not for Trump, there would be little trouble keeping the government open.
No Wall In Any Form - Govt Shutdown Odds Explode Amid Trump-Schumer Standoff - With a potential government shutdown just days away, Senate Democratic Leader Chuck Schumer (NY) dug in on Sunday, telling Meet The Press that President Trump is "not going to get the wall in any form." Last Tuesday Trump, Schumer and House Minority Leader Nancy Pelosi (D-CA) clashed over Trump's $5 billion demand for border wall funding in an awkwardly televised argument in the Oval Office, prompting Schumer to later declare on the Senate Floor: "I want to be crystal clear. There will be no additional appropriations to pay for the border wall. It’s done." The New York Democrat echoed his comments on Meet The Press Sunday, telling host Chuck Todd that Trump doesn't have the votes in the House or the Senate - saying that the president is having a "temper tantrum" over the wall. "They do not have the votes to pass the president’s proposal — $5 billion or whatever it is for the wall," said Pelosi at a recent news conference. "So … if nothing is going to change in that regard, I don’t know why we just don’t proceed to keep government open so that people can be home for the holidays." Meanwhile, the odds of a shutdown spiked to 58% on PredictIt, nearly double what it was 24 hours ago.
A government shutdown is looming, but you may hardly notice Trump has threatened to close down the government if Senate Minority Leader Chuck Schumer, D-New York, and House Minority Leader Nancy Pelosi, D-California, who is poised to take over in January as House speaker, do not acquiesce to his demand for $5 billion in border wall funding. They have resisted and made it plain Trump will take the blame for a shutdown. A deal to avert the shutdown seemed elusive as the week began. “We’re five days away and President Trump doesn’t seem to have a plan,” Schumer said Monday on the Senate floor. “Even with the Republican Congress, no threat or temper tantrum will get the president his wall.” Senate Majority Leader Mitch McConnell of Kentucky said Monday he hoped lawmakers from both sides of the aisle could agree to fund the government in full and make a “substantial investment in the integrity of our border. “I hope the same bipartisan collaborative spirit that has carried us this far will enable the Senate and the House to complete this business without undue delay,” McConnell said. The White House signaled over the weekend that it was dug in. White House Senior Adviser Stephen Miller said the administration would do “whatever is necessary to build the border wall to stop this ongoing crisis of illegal immigration.” Asked on CBS’ “Face the Nation” if that would lead to a shutdown, Miller replied: “If it comes to it, absolutely. This is a very fundamental issue.” The House left Thursday morning after a round of votes and isn’t expected back in Washington until Wednesday night — less than 72 hours before funding runs out.
The US Government Will (Likely) Shut Down On Dec. 21- What To Expect - As we creep closer to the Dec. 24 government shutdown deadline, the ongoing impasse between Trump and Schumer has sent PredictIt's shutdown odds to a contract high of 58%, suggesting the market is confident the US government will shutdown at midnight on Friday 21. And so as both traders and pundits are convinced the market will likely shut down at midnight on December 21st, here’s what to expect courtesy of UBS analyst Peter Hahn.The good news, is that in this particular instance, the impact to price action should be largely discounted – 5 out of 12 appropriation bills accounting for 75% of discretionary spending have already been approved, so only 25% of discretionary spending is at risk. Even if 100% of discretionary spending were at risk, we would generally need to see a prolonged shutdown before there were to be a meaningful impact to growth. Having said that, it can be useful to understand what typically happens in price action even if in order to fade the move the market gets it wrong (in either direction). UBS took a look at the moves in equities, rates, curves, and USD in various time windows leading into the government shutdown across 19 shutdowns since 1976 (Tables 1 and 2). The Swiss bank also measured the largest move (from minimum to maximum or vice versa) within 1 month of the shutdown to get a sense for which direction the volatility was. DXY lower and curves steeper were the most consistent asset price moves ahead of upcoming government shutdowns, where each moved more than 60% of the time in all of the given windows, indicating a robustness in the signal. A Quick Look:
- Congress can avoid a partial shutdown on December 21st by passing another Continuing Resolution (CR). Congress has already issued two CRs for the current budget thus far – in September, Congress issued a CR to extend the deadline to pass the remaining 7 appropriations (out of 12) to December 7th, which was again extended by 2 weeks to the current deadline of December 21st. To the extent that Congress doesn’t want to be responsible for a shutdown, they could easily issue another CR to extend the deadline again.
- Congress is ultimately in control: If President Trump refuses to sign a CR passed by Congress, Congress does have the option to overrule the veto (2/3 in both House and Senate). And conventional wisdom would say that neither the Republicans nor the Democrats would benefit from another shutdown.
- 75% of discretionary spending has funding through the end of fiscal year 2019 (Oct 1, 2018 – Sep 30, 2019): The 5 appropriation bills that have been passed so far (Energy & Water; the Legislative Branch; Military Construction & VA; Department of Defense; and Labor, Health and Human Services) account for 75% of discretionary spending. The outstanding appropriation bills are for Agriculture; Commerce, Justice, Science; Financial Services and General Government; Homeland Security; Interior, Environment; State, Foreign Ops; Transportation, HUD.
- Brief shutdowns may have no effect on the economy: In a study from January this year, UBS Economists estimated that each day of a full shutdown would reduce GDP by 2.4bp, but also found that the true effect would depend on the length of the shutdown. Shorter shutdowns (<1week) may have zero effect.
- The debt ceiling will be the bigger risk for markets next year: The deadline to raise the debt ceiling is March 2, 2019. However, this could be extended through extraordinary measures for many months depending on how tax receipts come in for March (corporate taxes) and April (personal taxes). In March 2017, extraordinary measures lasted the government all the way through September (6+ months).
Trump’s border wall funding: Ohio congressman says a WallCoin could pay for it. - Ohio Rep. Warren Davidson has drafted a bill, called the “Buy a Brick, Build a Wall Act,” that he says would enable the government to raise money for a border wall by creating a cryptocurrency. President Trump is currently threatening to partially shut down the government if Democrats do not acquiesce to his demand for $5 billion in funding for a wall. The bill itself, which Davidson submitted on Nov. 30, makes no explicit mention of cryptocurrency, but rather allows the Secretary of the Treasury to accept monetary gifts on the condition that it be used for a border wall. However, Davidson on Wednesdayelaborated to NPR on the form that those gifts could take. “You could do with this sort of, like, crowdfunding site,” he said. “Or you could even do blockchain, and you could have wall coins.” Under Davidson’s proposal, the government would set up a public website to electronically accept donations for a “Border Wall Trust Fund.” Raising money through cryptocurrency typically involves an initial coin offering, a process through which tokens are distributed to investors. ICOs have gained notoriety for losing investors’ money: It’s estimated that 85 percent of ICOs are scams and that 56 percent of cryptocurrencies fail within four months of their debut. Davidson in fact announced earlier this month that he is draftinglegislation to regulate ICOs and create an “asset class” for cryptocurrencies, rather than considering them as securities. Since Davidson has so far only mentioned the idea of a “wall coin” in the NPR interview, it’s unclear if he was just spitballing or presaging a future endeavor. (He didn’t respond to Slate’s interview request, so we couldn’t ask him.) His proposal, if it ever did come to fruition, wouldn’t be the first attempt by a government to develop a cryptocurrency to raise funds.
White House suggests it will back down on $5 billion border wall demand - The White House suggested Tuesday that President Donald Trump could back down from his demand for $5 billion to fund his proposed border wall in a year-end spending bill. Trump's push for the money has threatened a partial government shutdown when funding for seven agencies lapses after midnight Friday. Last week, the president said he would be "proud" to close parts of the government over border security. "We have other ways that we can get to that $5 billion that we'll work with Congress," White House press secretary Sarah Huckabee Sanders told Fox News on Tuesday morning. She added that the Trump administration could support $1.6 billion in border security funding proposed by Senate Democrats, as long as it can "couple that with other funding resources" to get to $5 billion. She added that "at the end of the day, we don't want to shut down the government. We want to shut down the border." Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi have cast the potential lapse in funding as the "Trump shutdown." When Pelosi goaded Trump into an Oval Office fracas last week, the characterization appeared to irritate the president. Sanders' comments mark a de-escalation in the White House's rhetoric on the proposed barrier on the U.S.-Mexico border. Trump has repeatedly threatened to force a shutdown if he cannot secure money for the wall. As a candidate, he promised to force Mexico to fund the barrier. Still, Trump himself has not weighed in Tuesday on how much money he would accept. As always, a comment or tweet from the president could trample on the message administration officials try to send.
Shutdown- Dems Balk At GOP Budget Over $1 Billion Border Security Slush Fund - After the White House backed down on Trump's $5 billion in wall funding, Democrats led by Sen. Chuck Schumer of New York rejected a GOP proposal which included $1.6 billion for border security and an additional $1 billion in flexible funding for Trump's immigration policies. Schumer said he that Democrats would not accept a billion-dollar "slush fund." Senate Majority leader Mitch McConnell (R-KY) says he's "in consultation" with the White House about a path forward, and that the administration is "extremely flexible on this issue," according to AP. When asked if he's confident that a partial shutdown during Christmas can be avoided, McConnell replied "Yeah, I am." “I believe incoming Speaker Pelosi has little latitude to make a deal,” McConnell says with a grin, hinting she’s worried about her left flank. — Sahil Kapur (@sahilkapur) December 18, 2018 Schumer says he will stick with his two offers to avoid a shutdown; a stopgap bill across the board, or a stopgap to fund the Department of Homeland Security with appropriate packages for the rest of the agencies subject to closure. Earlier Tuesday White House Press Secretary Sarah Sanders said that the Senate has "thrown out a number of ideas," and that when something passes, the White House will evaluate it. On the topic of funding the wall, Sanders told Fox News "We have other ways that we can get to that $5 billion," adding "At the end of the day we don’t want to shut down the government, we want to shut down the border." She then said that the White House was looking into other funding sources and believed that it could be accomplished legally. "There are certainly a number of different funding sources that we’ve identified that we can use, that we can couple with money that would be given through congressional appropriations that would help us get to that $5 billion that the president needs in order to protect our border," said Sanders. Schumer disagreed - saying "They need congressional approval - they're not getting it for the wall, plain and simple."
Trump retreats on shutdown - In a swift reversal, the White House on Tuesday dropped its demand that a government funding measure include $5 billion for President Trump’s wall on the Mexican border. Trump’s concession paves the way for lawmakers to reach a compromise and end the Congress without a partial government shutdown. It also raises questions over whether Trump will ever get full funding for his wall now that Democrats are poised to take control of the House in a few weeks. Republican and Democratic leaders still need to iron out the details of a possible deal, but the biggest wild card in the debate, Trump, appears to have taken a shutdown off the table. Still, the walk-back is a stunning blow to the White House and Republicans, who stared down and out-maneuvered Democrats in a three-day shutdown in January. This time around, Republicans caved.Senate Majority Leader Mitch McConnell (R-Ky.), who has been in close consultations with Trump, told reporters Tuesday afternoon that he is confident a partial shutdown will be avoided. Funding for about 25 percent of the federal government is due to expire Saturday. “I think a government shutdown is not a good option,” McConnell said. “We’ve been down this path before and I don’t believe we’ll go down this path again.”“I think there’s certainly bipartisan support for avoiding a government shutdown,” he added. White House press secretary Sarah Huckabee Sanders signaled a breakthrough Tuesday when she told Fox News “at the end of the day we don’t want to shut down the government.” It was a dramatic turnaround from a week ago, when Trump declared at a televised White House meeting that he would be “proud” to shut down the government. “I will be the one to shut it down,” he told surprised Democratic leaders.
Congress Agrees On Stopgap Funding Bill To Keep Govt Open Until Feb 8 - Senate Majority Leader Mitch McConnell announced Wednesday that he will introduce a stopgap spending bill to keep the government open until February 8, after Democrats pushed back on Tuesday against a proposal which would allocate $1 billion to President Trump's immigration policies. The measure, which Sen. Chuck Schumer says Democrats will back, will prevent a partial government shutdown set to begin Saturday. According to The Hill, McConnell's proposal will keep funding for border fencing flat. The White House had previously backed down on a demand for $5 billion in funding for President Trump's wall, with Press Secretary Sarah Sanders claiming "We have other ways that we can get to that $5 b illion." "At the end of the day we don’t want to shut down the government, we want to shut down the border," she added. On Wednesday, Sen. Chuck Schumer (D-NY) said that Trump appears to have backed down on his wall demand - just one day after the New York Democrat said "They need congressional approval - they're not getting it for the wall, plain and simple." Earlier Wednesday President Trump tweeted: "In our Country, so much money has been poured down the drain, for so many years, but when it comes to Border Security and the Military, the Democrats fight to the death. We won on the Military, which is being completely rebuilt. One way or the other, we will win on the Wall!" The details of McConnell's stopgap proposal will be released later Wednesday.
Senate approves funding bill, preventing partial government shutdown -- The Senate approved a seven-week funding bill on Wednesday, preventing a partial government shutdown that was expected to begin on Saturday. Senators passed the legislation by voice vote, which represented the final item on the Senate's to-do list as they wrap up their work for the year this week It still needs to pass the House, which returned to Washington on Wednesday night, and be signed by President Trump. Republican senators say that while they believe Trump is unhappy with Congress passing a short-term fix, they believe he will sign it because they were able to keep other controversial policy riders off of it. "I think the message is don't add anything else to it," said Sen. John Cornyn (R-Texas), the No. 2 Senate Republican. "He's not happy about that [a continuing resolution] but he understands the reality." The stopgap bill, which will fund roughly 25 percent of the federal government, kicks the funding deadline from Dec. 21 to Feb. 8 avoiding dragging a partial shutdown fight into the Christmas holiday.
House GOP cancels news conference as potential for Trump veto increases shutdown fears - Fears about a partial government shutdown grew Thursday as President Donald Trump left the door open to vetoing a short-term spending bill expected to pass Congress.The Senate has passed a bill to avoid a partial government shutdown. But it was unclear Thursday morning whether the House would pass it — or if Trump would sign it — ahead of the midnight Friday deadline to keep the government running.In a vague tweet Thursday morning sent as House Republicans scrambled to find a way forward, Trump expressed frustration with Congress. He said he was "promised the Wall and Border Security" when he "begrudgingly signed" an omnibus spending bill earlier this year."It didn't happen! We foolishly fight for Border Security for other countries - but not for our beloved U.S.A. Not good!" Trump wrote, while continuing not to divulge whether he would sign the spending measure.The legislation would fund seven government agencies, including the Department of Homeland Security, at their current levels through Feb. 8. Trump has lamented a lack of money for his proposed border wall, a key campaign promise that tripped up talks in Congress.The Senate unanimously approved the legislation Wednesday. But a House GOP conference meeting Thursday morning sparked confusion about whether the chamber could pass it amid simmering opposition within the caucus. House Republicans huddled Thursday morning, and leaders reportedly could not assure members that Trump would sign the bill. The leaders then canceled a news conference after House Speaker Paul Ryan took an emergency call from the president. Republicans claimed they delayed the event due to the meeting running long and votes taking place on the floor.
As Trump Throws Tantrum for Wall Funding, His Christmas Gift to 800,00 Federal Employees: No Paychecks - In his latest attempt to deliver on his promise to shut down the government if he didn't get money to spend on his deeply unpopular border wall, President Donald Trump refused Thursday to approve the spending bill which passed in the Senate.The news came to light when outgoing House Speaker Paul Ryan (R-Wis.) was forced to postpone his final press conference, after Trump told Republican leaders that he would not sign the bill if it crossed his desk because the Senate version, which was passed unanimously on Wednesday, did not include $5 billion for a wall along the U.S.-Mexico border.Ryan declared the meeting "productive" after emerging, but admitted that the president's red line was holding up progress. The stopgap bill was intended to keep the government running through February 8. Without the spending bill entering into force, funding for seven agencies and nine departments which make up a quarter of the government could be in jeopardy. Sen. Bernie Sanders (I-Vt.) noted that Trump's refusal to sign the bill also confirms what progressives and other critics knew about the president's priorities long before he took office in 2017—crystallizing his lack of support for working Americans including the 800,000 federal employees who face potential furloughs if the government partially shuts down.
GOP seeks to ram through Trump’s $5B wall demand - Faced with a conservative revolt and a change of heart from an unpredictable president, House GOP leaders on Thursday altered course and will try to ram through a government spending bill that includes $5.7 billion for President Trump's wall and border security.The new funding package would add two things to the stopgap measure that cleared the Senate by voice vote Wednesday night: $5 billion for President Trump’s wall on the Mexican border and another $700 million for border security; and $8.7 billion in emergency disaster aid for wildfires, hurricane damage and flooding.The House Rules Committee met Thursday afternoon to launch the altered proposal, quickly adopting the rule governing the bill. And House Majority Whip Steve Scalise(R-La.) and his vote-counting team began whipping members to gauge support for the new package.While some Republicans voiced confidence, others remained skeptical it has the necessary support to pass. The $5 billion is a non-starter for Democrats and it is also opposed by a number of GOP lawmakers.Rep. Carlos Curbelo (R-Fla.) told The Hill he is opposed to the new package even though it would contain hurricane aid for the Sunshine State. And dozens of House absences on Thursday were only complicating the GOP whip effort.In a vote earlier Thursday, there were 42 lawmakers — 23 Republicans and 19 Democrats — who failed to show up for the roll call due to various reasons. Rep. Kristi Noem (R-S.D.), for example, is building out her new governor’s office, while retiring Rep. Lynn Jenkins (R-Kan.) is getting married this weekend.With roughly 390 voting members, it will require roughly 195 GOP votes to pass the new funding package.
Trump promises a 'very long' government shutdown as the Senate is set to reject border wall money - Congress appeared to have no solution for a government shutdown stalemate Friday, as President Donald Trump warned of a "very long" closure if lawmakers do not approve money for his proposed border wall. Parts of the government will close if Congress cannot pass seven spending bills by midnight Friday. As of the morning, lawmakers appeared far from breaking an impasse over whether to fund the barrier on the U.S.-Mexico border. House Republicans passed a bill Thursday night to keep the government running through Feb. 8 and put more than $5 billion toward the president's wall. The Senate is expected to vote on, and reject, the legislation after it convenes at noon on Friday. The GOP-controlled chamber already passed a temporary funding measure without wall money. Democrats, whose votes are needed to reach the necessary 60 in the Senate, have repeatedly said they will not approve funds for the barrier. Republicans hold a 51-49 majority. Trump met with Senate Republicans at 10:30 a.m. to "discuss the Funding Bill and the importance of Border Security," White House press secretary Sarah Huckabee Sanders said in a tweet Friday. Senate Majority Leader Mitch McConnell and Senate Appropriations Committee Chairman Richard Shelby were seen leaving the White House after noon. The deadlock leaves Washington speeding toward its third shutdown this year with only hours to prevent it and no clear resolution in sight. A lapse in funding would likely last through Christmas and into the new year, past when Democrats take control of the House on Jan. 3. It would send the unified Republican government out in a swirl of chaos that marked Trump's first two years in the White House. Funding for nine departments, including Homeland Security, Justice and State, will lapse after midnight. While essential law enforcement officers and other employees would stay on the job, many would not get paid during the shutdown.
Retiring Sen. Bob Corker Blasts Trump For Succumbing To The Tyranny Of Talk Radio - Clearly still miffed over the fact that President Trump blew him off earlier this week after the president announced his plans to withdraw US troops from Syria, Bob Corker lashed out at the president Friday during a brief huddle with reporters (what, presumably, will be one of the retiring senators last such scrums), accusing Trump of being beholden to conservative talk radio hosts Anne Coulter and Rush Limbaugh, who reportedly intervened to push the president not to back down on his battle to secure $5 billion in funding for his border wall - a battle that will likely lead to a lengthy partial shut down if Democrats don't cave before midnight. The Tennessee Republican accused Trump of caving to the influential hosts, citing his 180 on the budget battle as an example of the "tyranny of talk radio.""We have two talk-radio show hosts who basically influenced the president, and we’re in a shutdown mode," Corker said. "That’s tyranny, isn’t it?," he said. "How do you deal with that?"He described Trump's pivot as "juvenile.""I mean, this is a juvenile place we find ourselves. The reason we’re here is that we have a couple talk-radio hosts that get the president spun up."Though he said he's still undecided on how he will vote, Corker asserted that the bill "will fail."Senate Majority Leader Mitch McConnell said he'd push for a vote on the stopgap spending plan, which has already passed the House, after meeting earlier with Trump and other Senate Republicans to discuss "a way forward."Trump is reportedly pushing McConnell to consider using "the nuclear option" - aka suspending filibuster rules that would allow the bill to pass with a simple majority, not the 60 votes needed to avoid a filibuster.Meanwhile, Democratic leader Chuck Schumer said earlier there was "broad agreement" on a funding bill without the funding for the wall, and that Congress should vote on - and Trump should support - that. Shortly after Corker's comments hit the tape, at least one other Trump critic seized on the "tyranny of talk radio" theme":
Government to Shutdown- House and Senate Adjourn With No Spending Deal - The Senate adjourned around 8:10 p.m. without a spending deal, ensuring that for the third time this year, parts of the government would shut down. Just over an hour before, the House announced it had adjourned. Both chambers are expected to reconvene on Saturday at noon.Vice President Mike Pence and Jared Kushner, the President’s senior adviser and son-in-law, were among those who had been huddling in negotiations across the Capitol.Senator Richard C. Shelby of Alabama, the chair of the Senate Appropriations Committee, said that before bringing a bill to the floor, there would need to be assurances that the president would support it.“We’ve made some serious overtures,” Mr. Shelby said, emerging from a meeting that included Mr. Pence and Mr. Kushner. “We’re not done.”Vice President Mike Pence, along with Mick Mulvaney, left, and Jared Kushner, on Capitol Hill Friday. Here’s what to expect when the government shuts down.
- • Nine departments will close: The Treasury as well as the departments of Agriculture, Homeland Security, Interior, State, Housing and Urban Development, Transportation, Commerce and Justice.
- • More than 420,000 people will work without pay, including nearly 54,000 Customs and Border Protection agents and 42,000 Coast Guard employees. As travelers flood the nation’s airports and train stations, 53,000 T.S.A. agents will keep working, as will air traffic controllers and aviation and railroad safety inspectors.
- • Another 380,000 workers will be furloughed.
- • The status of National Parks will be up in the air. Park staff would be furloughed, although the parks themselves would remain accessible. However, some parks, including the Grand Canyon, are planning to stay open.
- • Visa and passport services will continue “as long as there are sufficient fees to support operations,” a department spokesman said, but passport agencies located in government buildings affected by a lapse in appropriations may become “unavailable to the public.”
Government Shutdown: Economic Data Likely to be Delayed - In previous shutdowns, Government data from the BLS, BEA and Census Bureau were delayed. Data from the Federal Reserve was released on time.As an example, if the government shuts down, I expect New Home sales - currently scheduled for next Thursday - to be delayed. Unemployment claims will probably be released on time.The following week, the key report that will probably be delayed is the employment report for December.If the shutdown continues, then data gathering will be impacted - and economic observers will be flying blind. In addition, any shutdown will be expensive and impact Q1 GDP. Hopefully the shutdown will be avoided.
Blame game begins as federal government partially shuts down - The federal government partially shut down on midnight Saturday after lawmakers were unable to reach agreement on a spending deal to keep the government open -- and a race to assign blame began. The partial shutdown began at midnight a few hours after House and Senate adjourned. It was expected to last at least a few days, with sources on both sides of the aisle telling Fox News that Washington could be in for a prolonged shutdown. The White House, however, was projecting confidence that they could secure a deal. Talks were expected to resume Saturday afternoon, but Sunday was expected to be the key day for negotiations to end the shutdown. Lawmakers were aiming for a tentative agreement on all seven outstanding appropriation bills, to be funded until the end of September 2019. A senior source close to the negotiations told Fox News that they will aim to “see by Sunday morning if there is a center of gravity” for nailing down a deal. The main sticking point for negotiations was funding for Trump’s signature 2016 campaign promise of a wall on the southern border. Trump had demanded $5.7 billion for wall funding, and a bill with that funding attached passed the House on Friday. But efforts have snarled in the Senate, where 60 votes were required for passage, and therefore Democrat votes are needed. Trump has been keen to blame Democrats for the impasse and on Friday urged Senate Majority Leader Mitch McConnell, R-Ky., to invoke the so-called “nuclear option” which would change Senate procedure to require only a simple majority to approve the bill -- therefore allowing Republicans to override Democratic objections. “Mitch, use the Nuclear Option and get it done! Our Country is counting on you!” he tweeted on Friday. Late Friday he emphasized the need for a wall in a video he posted to Twitter and blamed the shutdown on the Democrats. “We’re going to have a shutdown, there’s nothing we can do about that because we need the Democrats to give us their votes,” he said. “Call it a Democrat shutdown, call it whatever you want, but we need their help to get this approved.” Democrats meanwhile sought to blame the president and blasted what they called a “temper tantrum” from the White House. "Instead of honoring his responsibility to the American people, President Trump threw a temper tantrum and convinced House Republicans to push our nation into a destructive Trump Shutdown in the middle of the holiday season," a joint statement late Friday by House Minority Leader Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y. said. The Democratic leader said they have offered "multiple proposals" to keep the government open, all of which they said includes "funding for strong, sensible, and effective border security – not the president's ineffective and expensive wall."
Shutdown to stretch on until at least Thursday as Senate adjourns with no deal over budget, Trump's border wall - Parts of the federal government are set to remain closed through much of next week as Congress shuttered Saturday for Christmas amid a stalemate with President Trump over border wall funding. Senate Majority Leader Mitch McConnell (R-Ky.) announced that his chamber would not return to legislative business until Thursday, which means many federal agencies will remain closed until later next week at the earliest and hundreds of thousands of federal workers will be left in limbo about their status. “Listen, anything can happen,” McConnell said. “We’re pulling for an agreement that can get 60 votes in the Senate and a majority in the House.” The decision came after Trump had a lunch with conservative Republicans and dispatched Vice President Pence to the Capitol to make the latest offer to Senate Minority Leader Charles E. Schumer (D-N.Y.). That meeting ended after 30 minutes with no resolution. “Still talking,” Pence told reporters as he and acting White House chief of staff Mick Mulvaney left Schumer’s office; the senator had said he would “remind” the vice president that Democrats would not sign off on funding for a border wall. “The vice president came in for a discussion and made an offer. Unfortunately, we’re still very far apart,” a spokesman from Schumer’s office said.
Schumer demands Trump 'abandon the wall' as DC faces shutdown stalemate - Senate Democratic Leader Chuck Schumer, D-N.Y., called on President Trump to "abandon the wall" Saturday if he wants to reopen the government, saying Trump does not have the votes in the Senate to get it funded -- hours after the government shut down over an impasse over funding for Trump's signature 2016 campaign promise. "It will never pass the Senate, not today, not next week, not next year. So President Trump, if you want to open the government, you must abandon the wall, plain and simple," Schumer said on the Senate floor. The partial shutdown began at midnight Saturday, a few hours after the House and Senate adjourned without getting a funding agreement to the president's desk. The shutdown was expected to last at least a few days, with sources on both sides of the aisle telling Fox News that Washington could be in for a prolonged shutdown. The Senate adjourned Saturday afternoon and was not due to meet for a scheduled session until Thursday. Early Saturday evening, the House also concluded for the day. Vice President Mike Pence and Acting Chief of Staff Mick Mulvaney arrived at the Capitol Saturday afternoon to meet with Schumer to continue negotiations for an end to the stalemate. Senate Majority Leader Mitch McConnell, R-Ky., said that "productive discussions are continuing." "When those negotiations produce a solution that is acceptable to all parties -- which means 60 votes in the Senate, a majority in the House, and a presidential signature -- at that point, we will take it up here on the Senate floor," he said.
US Sends $10 Billion To Mexico, Central America To Improve Security Conditions And Job Opportunities - While Democrats won't agree to give Trump $5 billion for his border wall, the United States on Tuesday pledged over $10 billion in aid to Central America and Mexico, according to AP. $5.8 billion will go to Central American countries to strengthen government and economic development, while $4.8 billion will go towards development aid for southern Mexico - which we're sure won't be misappropriated into a giant slush fund.The U.S aid aims to promote better security conditions and job opportunities as part of a regional plan to allow Central Americans to remain in their countries and not have to emigrate.The plan was announced in a joint U.S.-Mexican statement released by the State Department and read aloud by Mexican Foreign Relations Secretary Marcelo Ebrard in the Mexican capital. -AP"In sum I think this is good news, very good news for Mexico," said Ebrard, adding "The commitments established here signify more than doubling foreign investment in southern Mexico starting in 2019."
The US reportedly plans to pull all its troops from Syria as Trump declares victory over ISIS - President Donald Trump declared in a tweet Wednesday that the U.S. mission to defeat the so-called Islamic State in Syria has been accomplished.Defeating the militant Islamic group in the region, he said, was "my only reason for being there during the Trump Presidency."The declaration follows reports that the U.S. military was planning a complete withdrawal from Syria in a reversal of U.S. policy as the declining threat of ISIS has been supplanted by increasing tensions with other world powers in the region.Earlier Wednesday, The Wall Street Journal quoted U.S. officials as saying the withdrawal was set to begin immediately.The decision would take 2,000-plus U.S. servicemembers out of the country, ending the ground strategy against the Islamic State, a U.S. defense official told The Washington Post.The move appears to contradict the existing stance on the conflict in Syria advocated by senior Trump administration officials. They called for a longer-term presence in the country and even to expand the mission beyond defeating ISIS. National security advisor John Bolton reportedly said in September that the U.S. was "not going to leave as long as Iranian troops are outside Iranian borders."Defense Department spokesman Col. Rob Manning told reporters Wednesday, "At this time, we continue to work by, with and through our partners in the region."The surprise pivot comes just days after Turkey reaffirmed to CNBC that it would not soften its rhetoric against the U.S.-backed Kurds in northern Syria. Turkish Foreign Minister Mevlut Cavusoglu said his country's military was "not risking American soldiers' lives" through its targeting of the Kurdish factions. During a news briefing Wednesday morning, a spokeswoman for Russia's foreign ministry knocked the existing U.S. forces in Syria as "a dangerous obstacle to the path to" a peace settlement, Reuters reported. The spokeswoman also accused the U.S. of keeping its troops in Syria illegally.
Trump’s Surprise Syria Pullout Fuels Backlash From Hawks Across DC — President Trump’s announcement of an immediate withdrawal of US forces from Syria seems to have taken a lot of people by surprise. Such big news is fueling both a predictable backlash from hawks, and angry criticism from political rivals who are portraying the announcement as a reckless shift from the open-ended military engagement everyone was expecting.Trump presented the move as a natural response to he defeat of ISIS, which is leading a lot of hawks to deny that ISIS is really defeated. Sen. Lindsey Graham (R-SC) compared this to the 2011 withdrawal from Iraq, and said Congress must make Trump explain the policy.Still, since the war has been spun as being sort of about Iran, analysts are still predicting anger among Iran hawks, both in the cabinet and in the party leadership. Charles Lister from the Middle East Institute said it might plant the seeds for rebellion among Republicans to not be in the war.Hillary Clinton advisers said the move would “strengthen Russia,” and CNN’s Jake Tapper quoted an unnamed Pentagon official calling the end of the war a Russian victory. Yet Russia has also been very public in drawing down its own war effort.Indeed CNN was broadly critical in its coverage of the move out of Syria, generally focusing on liberal opposition to the change. The opposition appeared primarily built around it being a Trump policy.MSNBC was also critical in its coverage, quoting former CIA Director John Brennan and multiple analysts reiterating the narrative that underpins the long-term presence in Syria which the rest of the administration had been parroting up until today.The Pentagon had been positioning the US for a permanent presence in Syria, coming up with additional military goals beyond the defeat of ISIS, centering on demanding all Shi’ite militias leave Syria, and ensuring ISIS-like groups never reemerge at any point in the future. Still, the Pentagon’s focus now is shifting away from those secondary goals they invented, and now they’re simply arguing that ISIS is not defeated, and that the war is not over. Rep. Ed Royce (R-CA) claimed this was a function of “arbitrary political deadlines.” Yet there doesn’t appear to have ever been a public deadline. Trump, rather, has long expressed interest in ending the war, and it’s only been intense pressure that’s kept him from doing so before now.
Is Trump Really Bringing US Troops Home From Syria? - — The announcement on Wednesday that the U.S. will withdraw all remaining troops from Syria within the next month looked at first like a rare victory for Donald Trump in his admittedly erratic opposition to senseless wars of adventure. “We have defeated ISIS in Syria, my only reason for being there,” the president tweeted with an unmistakable air of triumph.Don’t get your hopes up. Just about everything in these initial reports is either wrong or misleading. One, the U.S. did not defeat the Islamic State: The Syrian Arab Army, aided by Russia, Iran, and Hezbollah militias did. Two, hardly was ISIS the only reason the U.S. has maintained a presence in Syria. The intent for years was to support a coup against the Assad government in Damascus—in part by training and equipping jihadists often allied with ISIS. For at least the past six months, the U.S. military’s intent in Syria has been to counter Iranian influence.Last and hardly least, the U.S. is not closing down its military presence in Syria. It is digging in for an indefinite period, making Raqqa the equivalent of the Green Zone in Baghdad. By the official count, there are 503 U.S. troops stationed in the Islamic State’s former capital. Unofficially, according to The Washington Post and other press reports, the figure is closer to 4,000—twice the number that is supposed to represent a “full withdrawal” from Syrian soil.It would be nice to think Washington has at last accepted defeat in Syria, given it is preposterous to pretend otherwise any longer. Damascus is now well into its consolidation phase. Russia, Iran, and Turkey are currently working with Staffan de Mistura, the UN’s special envoy for Syria, to form a committee in January to begin drafting a new Syrian constitution.It would also be nice to think the president and commander-in-chief has the final say in his administration’s policies overseas, given the constitution by which we are supposed to be governed. But the misleading announcement on the withdrawal of troops, followed by Trump’s boastful tweet, suggest something close to exactly the opposite. As Trump finishes his second year in office, the pattern is plain: This president can have all the foreign policy ideas he wants, but the Pentagon, State, the intelligence apparatus, and the rest of what some call “the deep state” will either reverse, delay, or never implement any policy not to its liking.
US Military Ordered to Withdraw 7,000 Troops From Afghanistan — CNN warns that US officials are bracing themselves for Trump’s announcement on Afghanistan after his bombshell Syria troop pullout announcement on Wednesday. Trump has now initiated “a major drawdown” of forces in Afghanistan, and while inside the beltway neocon heads might continue to explode, the broader public for which the seventeen year long Afghan war is deeply unpopular will no doubt cheer the move. And already NBC reports Thursday evening that based on defense sources, the White House has already asked the Pentagon to draw up plans presenting “multiple options” including a “complete withdrawal.” Following the “options” order it now appears Trump has pulled the trigger and “ordered the start of a reduction of American forces in Afghanistan”according to a breaking WSJ report: More than 7,000 American troops will begin to return home from Afghanistan in the coming weeks, a U.S. official said. The move will come as the first stage of a phased drawdown and the start of a conclusion to the 17-year war that officials say could take at least many months. There now are more than 14,000 U.S. troops in Afghanistan. Further the WSJ reports it marks “the start of a total pullout that could take at least many months.” The major reduction of U.S. troops in the country will begin as soon as within several weeks, according to sources cited in The Wall Street Journal. Currently there are about 14,000 troops in Afghanistan in continuation of a NATO advise, train and assist mission as part of the longest running war in United States history. Trump reportedly stoked “anger and confusion” among some lawmakers and Pentagon officials over his Syria pullout decision; however, he appears to be sticking to his prior “bring the troops home” promises made on the campaign trail in 2016. In a series of Tweets, the president defended the 180 degree shift in Syria policy, which as of only less than a week ago was was expressed by US special envoy for Syria, Ambassador James Jeffrey, as “countering Iran”. In a Thursday Tweet that could have just as well been about Afghanistan, Trump stated: “So hard to believe that Lindsey Graham would be against saving soldier lives & billions of $$$.” And added, “Time to focus on our Country & bring our youth back home where they belong!”
Mattis resigns, says views aren't in line with Trump's - Defense Secretary James Mattis announced Thursday he would resign in February, sending a note to President Trump saying he deserved a secretary "whose views are better aligned with yours." The announcement came shortly after the White House said the U.S. would be withdrawing its troops from Syria, as well as reports it was also considering a drawdown in Afghanistan. Both moves have been met with opposition by Pentagon officials and members of the foreign policy establishment. In his resignation letter to Trump, Mattis said he was resigning “because you have a right to have a Secretary of Defense whose views are better aligned with yours.” His letter was released minutes after Trump said on Twitter that Mattis was "retiring." "General Jim Mattis will be retiring, with distinction, at the end of February, after having served my administration as Secretary of Defense for the past two years," Trump tweeted in part. Rumors of Mattis’s potential departure have swirled for months as Trump bucked his defense secretary’s advice on a number of issues. Over the last couple years, Trump announced a ban on transgender troops on Twitter, canceled joint U.S.-South Korea military exercises, withdrew from the Iran nuclear deal and deployed troops to the U.S.-Mexico border, among other moves that Mattis either opposed or received little forewarning of. Recently, Trump passed over Mattis’s choice of successor for Joint Chiefs of Staff Chairman Gen. Joseph Dunford in favor of Army Chief of Staff Gen. Mark Milley.
Defense Secretary Mattis resigns amid Washington backlash over Syria troop withdrawal - The announcement by US President Donald Trump of his decision to withdraw all US troops from Syria—followed by reports that he has ordered a partial withdrawal of US troops from Afghanistan—has unleashed a major crisis within the administration and its relations with the military. Thursday’s resignation of Defense Secretary James Mattis laid bare these sharpening divisions. In his letter to Trump, Mattis wrote, “Because you have the right to have a secretary of defense whose views are better aligned with yours ... I believe it is right for me to step down from my position.” Mattis’s letter laid out an unconcealed criticism of Trump’s policies, declaring the necessity of being “resolute and unambiguous in our approach to those countries whose strategic interests are increasingly in tension with ours,” i.e., China and Russia. The resignation of the former Marine Corps general who required a waiver from Congress because of his appointment as defense secretary so soon after his retirement from the military, came just one day after Trump’s announcement of the Syria withdrawal, which Mattis opposed. In a Capitol Hill press conference Thursday night, House Democratic leader Nancy Pelosi described herself as “shaken” by the resignation of the ex-general. Appearing with Senate Democratic leader Chuck Schumer, she hailed Mattis as a “patriotic American” and a “voice of stability,” adding, “Our troops look to Secretary Mattis as a leader, and he is now leaving.” Schumer went on to link the resignation of Mattis to the previous departures of Gen. H.R. McMaster, Trump’s former national security adviser, and Gen. John Kelly, his chief of staff, describing them as a loss of the forces of “stability” within the administration. If this is the kind of “stability” you are looking for, you can’t find anything better than a military dictatorship.
The Last Adult In The Room Walks Out Over ISIS - Barkley Rosser - Yesterday President Trump announced that he was removing all US troops from Syria over the next 30 days. Today, “Mad Dog” Jim Mattis, the US Secretary of Defense and widely viewed as “the last adult in the room” among the Trump national security team, announced his resignation effective at the end of February. This is not a coincidence, although his letter makes it clear that he had been thinking about this seriously for some time. In his letter the most fundamental issue seems to be his concern for proper relations with US allies, with Trump obviously treating nearly all of them badly. So a crucial sentence is the following. “While the US remains the indispensable nation in the free world, we cannot protect our interests without maintaining strong alliances and showing respect to those allies.” Now I have mixed feelings about various pieces of this. Many of those upset by this sudden and unexpected decision by Trump are focused on Iran and Russia and Assad in Syria: that Assad will remain in power with both Russia and Iran influential there. I agree Assad is a murderous dictatorial creep, but Russia (and before it the USSR) has had a naval base there in Tartus since 1971 that they are not remotely going to give up. The Iranians are less important,so the worry about them is mostly silly huysteria. And on Assad, those most likely to replace him were radical Sunnis allied with al-Qaeda, the group that attacked the US on 9-11. Where this gets bad involves indeed ISIS or ISIL or Daesh to give some of its other names. They really are a bad bunch, worse even than al Qaeda from whom they split. Trump says we can leave because they have been defeated, but they have not been defeated. They have been pushed out of all urban areas of any size they once controlled, but they continue to hold out in a final desert area on the Iraqi border in the desert, and for whatever reason nobody has been able to finally defeat them. I fear withdrawal of US troops at this point, likely to be followed by a Turkish invasion to push out the Kurdish forces allied to the US that defeated ISIS in their old capital of Raqqa, will allow the obviously still pretty strong ISIS to revive and retake some of their former territories. I suspect this is also a concern of Mad Dog Mattis. Anyway, aside from the Turks signing a $3 billion Patriot missile deal after Trump made this announcement, this decision seems to be completely incoherent. The US is against Iran, but Iran gains, not to mention Hezbollah? That Trump may be pleasing Putin, well, what do we expect? And as for the Kurds? Well, we have screwed them over many times. No wonder the Mad Dog is walking out.
Mattis Eviscerates Trump Worldview in Blunt Resignation Letter - The world long wondered what Defense Secretary Jim Mattis thought about Donald Trump’s approach to the world. Now it knows. In a scathing two-page letter that Mattis said reflected his “four decades of immersion” in national security issues, the four-star general praised U.S. leadership in global alliances, called out Russia and China for authoritarian behavior and said American leaders need to be “clear-eyed” about separating friends from foes. That amounted to a repudiation of Trump’s “America First” doctrine in which historic allies found themselves demeaned and sidelined while authoritarians like Kim Jong Un and Vladimir Putin were frequently praised. In both his first and last sentences to the president, Mattis said he was honored to serve the nation alongside American men and women in uniform. One person not mentioned: Donald Trump. The unexpected resignation came one day after Trump abruptly reversed course on Syria over his defense chief’s objections, declaring “victory” over Islamic State and saying he wanted all 2,000 American troops in the country to leave soon. The withdrawal went against everything the president’s national security team had been advocating since Trump took office. Trump also has decided to cut in half the U.S. troop presence in Afghanistan, according to a defense official. By contrast, in his letter Mattis cited the Defeat-ISIS coalition of 74 nations as an example of the power of American-led alliances, but he made clear his decision was much more than frustration over any one policy move. In the span of eight paragraphs, Mattis put to words the misgivings that many of Trump’s senior-most defense and foreign-policy officials have held about the president’s disruptive approach to foreign policy -- and said he could no longer serve. “We must do everything possible to advance an international order that is most conducive to our security, prosperity and values, and we are strengthened in this effort by the solidarity of our alliances,” Mattis wrote. “Because you have the right to have a Secretary of Defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my position.”
James Mattis’s Letter of Resignation - On Thursday, December 20, Secretary of Defense James Mattis submitted a letter of resignation to President Donald Trump. “Because you have the right to a Secretary of Defense whose views are better aligned with yours on these and other subjects,” he wrote, “I believe it is right for me to step down from my position.” The full text of the letter is reproduced below. One core belief I have always held is that our strength as a nation is inextricably linked to the strength of our unique and comprehensive system of alliances and partnerships. While the US remains the indispensable nation in the free world, we cannot protect our interests or serve that role effectively without maintaining strong alliances and showing respect to those allies. Like you, I have said from the beginning that the armed forces of the United States should not be the policeman of the world. Instead, we must use all tools of American power to provide for the common defense, including providing effective leadership to our alliances. NATO’s 29 democracies demonstrated that strength in their commitment to fighting alongside us following the 9-11 attack on America. The Defeat-ISIS coalition of 74 nations is further proof. Similarly, I believe we must be resolute and unambiguous in our approach to those countries whose strategic interests are increasingly in tension with ours. It is clear that China and Russia, for example, want to shape a world consistent with their authoritarian model—gaining veto authority over other nations’ economic, diplomatic, and security decisions—to promote their own interests at the expense of their neighbors, America and our allies. That is why we must use all the tools of American power to provide for the common defense. My views on treating allies with respect and also being clear-eyed about both malign actors and strategic competitors are strongly held and informed by over four decades of immersion in these issues. We must do everything possible to advance an international order that is most conducive to our security, prosperity and values, and we are strengthened in this effort by the solidarity of our alliances. Because you have the right to a Secretary of Defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my position
Elites United in Panic Over Syria Pullout, Afghanistan Drawdown - Open-ended war continuation has so much momentum in the US that President Trump’s announced pullout from Syria shocked the nation. Followed up the same week with a drawdown from Afghanistan, the mainstream is now completely apoplectic. On the left and right, comfort with the status quo was virtually uniform. The arguments behind condemning the drawdowns vary depending on the side of the aisle the commenter is on, but the message is uniform opposition to ending a war Congress never authorized in the first place. Conservative hawks are playing the usual fear-mongering about threats that have been ongoing since 2001, with suggestions that either not being in Syria, or being in Afghanistan but at a lower troop number, will lead to “the next 9/11.” Perma-hawk Sen. Lindsey Graham (R-SC) has never seen an escalation he didn’t like, and he is demanding Senate hearings on Trump’s troop level changes. It’s not clear such hearings will happen, however. In Afghanistan, this is hardly the first drawdown the US has done, and despite Graham opposing them all, they’ve generally just happened. It’s also not clear the Senate has any say in how the Syrian War is being engaged in, or not engaged in, as the Senate has consistently refused to vote on the question of authorizing the US to be in Syria in the first place. Others were quick to call Trump’s policy in Syria “Obama-like,” even though Obama is the one who sent troops to Syria in the first place, and Trump campaigned in 2016, at least at times, on the idea of eventually withdrawing. Eventually withdrawing works as a campaign slogan, but clearly officials never expected it to happen as a real policy. Among Democrats, the argument is a bit more confused but no less shrill, as they’ve attacked Trump’s hawkish impulses, but are now accusing him of acting hastily and arbitrarily in ending the war. That Russia has not favored the US presence in Syria is only riling up the argument that Putin is driving US policy as well.
Continued American Occupation Of The Middle East Does Not Suppress Terrorism, It Causes It - It is plain as a pikestaff that the presence of US occupation troops is itself the best recruiting sergeant for resistance. In Sikunder Burnes I trace how the battle lines of tribal alliances there today are precisely the same ones the British faced in 1841. We just attach labels like Taliban to hide the fact that invaders face national resistance. The secret to ending the strength of ISIS in Syria is not the continued presence of American troops. It is for America’s ever closer allies in Saudi Arabia and the Gulf to cut off the major artery of money and arms, which we should never forget in origin and for a long time had a strong US component. The US/Saudi/Israeli alliance against Iran is the most important geo-political factor in the region today. It is high time this alliance stopped both funding ISIS and pretending to fight it; schizophrenia is not a foreign policy stance. There has been no significant Shia Islamic terrorist or other threat against the West in recent years. 9/11 was carried out by Saudi Sunni militants. Al Qaida, ISIS, Al Nusra, Boko Haram, these are all Sunni groups, and all Saudi sponsored. It is a matter of lunacy that the West has adopted the posture that it is Iran – which has sponsored not one attack on the West in recent memory – which is the threat in the Middle East. The origin of this stance appears to lie in the fact that the Shia group Hezbollah proved to have the only military force among Israel’s neighbours capable of halting an Israeli invasion. After the disastrous invasion of Iraq resulted in an Iran friendly regime in Baghdad, the US decided for balance of power reasons to back Saudi regional power plays, only for Saudi Arabia to fall into the hands of the psychopathic warmonger Mohammed Bin Salman who escalated an already flawed policy to breaking point. The chaos of this incoherent and counterproductive strategy is, peculiarly enough, what the neocons actually want. Perpetual war and destabilisation in the Middle East is their goal. One of the findings I had not expected to discover in writing Sikunder Burnes was that the British had been deliberately exploiting and exacerbating the Shia/Sunni divide as early as 1836 to the Imperial purpose. Today, by keeping Arab populations poor and politically divided, the neo-cons believe that they enhance the security of Israel, and they certainly do facilitate the access of western companies to the oil and gas of the region, as we see in destabilised Iraq and Libya.
Reactions to Trump’s Syria Withdrawal Plan Say More Than the Plan Itself -- Caitlin Johnstone — President Trump has ordered the withdrawal of US troops from Syria, which is reportedly expected to take 60–100 days or 30 days depending on who you ask. According to Kurdish forces in eastern Syria the withdrawal of American as well as French troops is already underway, though France is saying it’s staying. The number of troops to be withdrawn which keeps getting repeated in the news is 2,000, but there’ve been reports that the actual number of US ground troops in Syria is closer to 4,000. The US-led airstrike campaign against Islamic State will reportedly continue.Trump says the withdrawal is because ISIS has been defeated in Syria, but others are pointing to the conspicuous timing of his recent chat with Turkey’s President Tayyip Erdoğan, who has announced a coming military operationagainst Kurdish forces in Syria east of the Euphrates in the near future, as the more likely reason. An anonymous senior US official has told Reuters that the two leaders didn’t discuss a US withdrawal from Syria, but the timing of the conversation as well as a recent $3.5 billion arms deal with Turkey indicates the the US withdrawal and Erdoğan’s planned military assault could very well be related. The Kurds put all their eggs in the basket of US support out of a desire to create their own nation, and a US withdrawal means they’ll be forced to either court an alliance with Damascus, as some analysts believe will happen, or risk being trapped between hostile Turkish forces and hostile Syrian coalition forces as the Assad government races to reclaim Syrian territory.Beyond that, it’s hard to tell what’s actually happening. I’ll be astonished if there is an actual US withdrawal from Syria without any residual or proxy forces left behind, and it remains extremely possible that US troops won’t leave at all, especially if another conveniently timed “chemical weapons attack” gets attributed to Damascus. Everything I’ve just typed is basically a jumbled information salad of possibilities and speculation; it’s just me saying “Here’s what little we know, now we wait and see” and then shrugging. The real information that we can look at right now is the absolutely bizarre bipartisan response that Trump’s announcement has elicited.
The Inside Story Behind Trump's Shocking Withdrawal From Syria - In a report that essentially confirms what Secretary Mattis only insinuated in his letter of resignation, the Associated Press offered an account sourced from anonymous US and Turkish officials that appears to confirm all of President Trump's hawkish critics' worst fears about his landmark decision to withdraw US forces from Syria: Namely, that it was made seemingly on a whim, without consulting his national security team, during a phone call with Turkish leader Recep Tayyip Erdogan.The play-by-play of the call, which was strenuously denied by White House officials, who implied that the account had been planted by Turkish agents who were seeking to undermine the president (though they neglected to specify which details in the account were untrue).It began by explaining how Trump's aides had prepared detailed talking points for a Dec. 14 call with Erdogan. But Trump abandoned them shortly after it began after apparently being convinced by Erdogan's argument that ISIS had effectively been defeated, given that the once-powerful faction now controls less than 1% of its former territory. The call had been set up by the NSC after Erdogan threatened to attack US-backed Kurdish troops in Northern Syria whom the Turkish leader accused of supporting the Kurdish independence movement in Turkey.Trump's advisors had coached him to offer Erdogan a small concession, like holding territory on the Turkish-Syrian border. But after the call began, Erdogan put Trump on the defensive."The talking points were very firm," said one of the officials, explaining that Mr Trump was advised to clearly oppose a Turkish incursion into northern Syria and suggest the US and Turkey work together to address security concerns."Everybody said push back and try to offer (Turkey) something that’s a small win, possibly holding territory on the border, something like that."Mr Erdogan, though, quickly put Mr Trump on the defensive, reminding him that he had repeatedly said the only reason for US troops to be in Syria was to defeat IS and that the group had been 99% defeated."Why are you still there?" the second official said Mr Erdogan asked Mr Trump, telling him that the Turks could deal with the remaining IS militants. Erdogan swiftly persuaded the president to come around to Turkey's (admittedly reasonable) point of view: If ISIS had been defeated - and the US's primary objective for its incursion into Syria accomplished, then what were US troops still doing camped out on his boarder?
The Pentagon Failed Its Audit Amid a $21 Trillion Scandal (Yes, Trillion) -- Lee Camp - A few months ago, I covered the story of the $21 trillion that has gone unaccounted for at the Pentagon. That’s right—trillion with a T—an amount of money you can’t possibly come to terms with, so stop trying. Seriously, stop. It’s like trying to comprehend the age of the earth. Anyway, the $21 trillion includes $6.5 trillion unaccounted for at the Pentagon in 2015 ALONE. When I covered all this a few months ago, very few people were talking about it. David Degraw investigated it for his website (which has since been destroyed by hackers), and Mark Skidmore, the economist who discovered the unaccounted adjustments, co-authored a single Forbes article on the subject. And by “discovered,” I don’t mean that Skidmore found a dusty shoebox in Donald Rumsfeld’s desk underneath the standard pile of baby skeletons. I mean that he took a minute to look at the Defense Department’s own inspector general’s report. So really he just bothered to look at the thing that was designed for the public to look at. Anyway, my column on this topic went viral, as did the Forbes article, each garnering hundreds of thousands of views. Yet despite all that, still not a word from Congress, and not a word from the hacks at your mainstream media outlets. But then again, getting important news about the corruption of our military-industrial complex from the mainstream media would be like getting a philosophy lesson from a strip-club dancer (in that it would be most unexpected, and it’s not really why you’re there). But just a few weeks ago, something significant happened. It took place in a quiet news dump during a Pentagon press conference that TRULY began like this:
- DEPUTY SECRETARY OF DEFENSE PATRICK SHANAHAN: So you guys know why I came down here today?
- REPORTER: To see if we ate the donuts?
Yes, Pentagon press conferences apparently begin in much the same manner as a “Three Stooges” sketch. (Unfortunately the subsequent bonks on the head usually involve Tomahawk missiles.) During that wacky press conference, the deputy secretary of defense casually mentioned halfway through that the Pentagon had failed its first-ever audit. This is the first time the Pentagon has ever been audited, even though it has been legally required to do so since the early 1990s. Don’t you wish you could put off your tax returns for 20 years? The Pentagon’s official response to why it failed its audit is a word salad after it has gone through an industrial-grade militarized Slap Chop. It’s the type of response you get when a fraud has been filtered through a cover-up, then filtered through a publicist, then filtered through a public official who probably doesn’t know that much to begin with. It’s the corrupt feeding the blind feeding the stupid feeding the disingenuous. And yet even THAT didn’t get much press coverage. As far as I can tell, The New York Times didn’t report on the audit failure until two weeks later..
‘The Pentagon Has Steadfastly Stonewalled Against Making Its Budget Auditable’ - (audio and transcript) For those of us who remember the $640 toilet seat, the unbelievable absurdity of Pentagon spending has long been—while unbelievably absurd—taken for granted: The Department of Defense spends billions and billions on we know not what, year after year, tra-la. Elite media reported that Congress passed a $700 billion Pentagon bill—more than Trump even asked for—and that was a blip, unchallenged, although the same press corps, faced with a proposal for healthcare, see themselves in the business of grilling proponents on how on Earth they would pay for it. Pentagon spending is untethered, unaccountable. And no one complains too loudly, because “national security”—magic words that shut down any critical conversation. But, you know, things are changing, and people are reviving questions that have been shrugged or laughed off, like, why can’t we know what the Defense Department is doing with what, if it were a matter of a few dollars for food stamps, would be importantly described as “our taxpayer dollars.” Our next guest has been examining that set of questions, resulting in an exclusive for The Nation magazine. The story’s called “The Pentagon’s Massive Accounting Fraud Exposed: How US Military Spending Keeps Rising Even as the Pentagon Flunks Its Audit.” He’s called Dave Lindorff, longtime investigative reporter and author. He also writes for Salon, the London Review of Books and Tarbell.org, sometimes for FAIR.org as well. He joins us by phone from Philadelphia. Welcome back to CounterSpin, Dave Lindorff.
The bad economics of PAYGO swamp any strategic gain from adopting it – EPI - The obscure Congressional budget rule known as PAYGO (“pay as you go”) has burst into the news lately. A PAYGO rule means that any tax cut or spending increase passed into law needs to be offset in the same spending cycle with tax increases or spending cuts elsewhere in the budget. Incoming House Speaker Nancy Pelosi has indicated that the House of Representatives will abide by PAYGO in the next Congress, and this decision has sparked much controversy. Many Washington insiders assert forcefully that committing to PAYGO rules in the House for the next Congress is good politics. The argument is that it assuages fears of politicians who believe they must make public commitments to lower deficits to avoid being punished by voters who care deeply about this issue. The strength of evidence supporting this political claim is debatable. What’s less debatable is that PAYGO really has hindered progressive policymaking in the not-so-recent past. For example, it was commitments to adhere to PAYGO that led to the Affordable Care Act (ACA) having underpowered subsidies for purchasing insurance and, even more importantly, having a long lag in implementation; the law passed in January 2010 yet the exchanges with subsidies only were up and running by 2014. This implementation lag meant that the ACA’s benefits were not as sunk into Americans’ economic lives by the time a hostile Republican Congress and administration began launching attacks on it following the 2016 elections. It is a real testament to how much better the ACA made life for Americans that it has been stubbornly resistant to these attacks. But it would have been helpful to have a couple more years to have it running smoothly, but that didn’t happen largely because the ACA’s architects wanted to meet PAYGO rules over the 10-year budget window. Even more fundamentally, it is terrible economics to view federal budget deficits as always and everywhere bad. Making good policy in the future will require that voters be educated on this front. Why not start now? After all, our failure as a society to understand the economics of deficits and debt greatly contributed to the destructive impact of the Great Recession of 2008–09. The stakes of allowing history to repeat itself are high enough that we should take the time to quickly recap the history of how costly irrational deficit-phobia has been.
Top secret report- North Korea keeps busting sanctions, evading U.S.-led sea patrols - — A top secret U.S. military assessment found that North Korea is still evading U.N. sanctions by transferring oil at sea, and that a coalition of U.S.-led forces deployed to disrupt the movements has failed to dent the overall number of illegal transfers, three U.S. officials familiar with the intelligence told NBC News.The finding underscores the Trump administration's struggle to maintain economic pressure on North Korea amid a diplomatic bid to persuade Pyongyang to abandon its nuclear and missile arsenal. The smuggled fuel provides a crucial lifeline for the regime's economy and armed forces.The U.S. Pacific Command assessment, labeled "Top Secret," found that the presence of warships and surveillance aircraft deployed by an eight-nation coalition since September has forced North Korea to adjust its tactics at sea, including transferring oil farther away from the Korean Peninsula and often in other countries' territorial waters.The White House and the State Department declined r equests for comment. After this story was published, President Trump tweeted, "Many people have asked how we are doing in our negotiations with North Korea — I always reply by saying we are in no hurry, there is wonderful potential for great economic success for that country ...Kim Jong Un sees it better than anyone and will fully take advantage of it for his people. We are doing just fine!"
US Must Eliminate Nuclear Threat First, Demands Jarring North Korea Statement - In the latest sign that the Trump-Kim brief honeymoon phase of mutually presenting glowing letters and heaping praise on each other is over, North Korea said Thursday it will never voluntarily give up its nuclear weapons unless the “U.S. nuclear threat to Korea” is eliminated, according a statement presented by its official Korean Central News Agency (KCNA)."The proper definition of denuclearization of the Korean Peninsula is completely eliminating the American nuclear threat to North Korea before eliminating our nuclear capability," the statement said. The aggressive statement asserting the US must blink first comes a moment the US and North Korea have been deadlocked over negotiations related to easing sanctions, and after the Trump-Kim historic summit on June 12 in Singapore wherein both leaders pledged to "work toward complete denuclearization of the Korean Peninsula." And though advancements between the North and South have been perhaps presented in a rosier light than what Thursday's statement suggest is the actual state of relations, it appears the pressing issue remains of extensive military assets in South Korea as well as the South being under the US nuclear umbrella. The statement indicated North Korea will eventually demand withdrawal of the some 28,500 US troops currently stationed on the peninsula.“The United States must now recognize the accurate meaning of the denuclearization of the Korean Peninsula, and especially, must study geography,” the statement said.And further, the KCNA statement said the following, according to the AP: When we talk about the Korean Peninsula, it includes the territory of our republic and also the entire region of (South Korea) where the United States has placed its invasive force, including nuclear weapons. When we talk about the denuclearization of the Korean Peninsula, it means the removal of all sources of nuclear threat, not only from the South and North but also from areas neighboring the Korean Peninsula.
North Korea sounds the death knell for denuclearization - On Thursday, North Korea shattered any illusions that may still linger in Seoul and Washington about the reclusive state’s willingness to negotiate away its nuclear deterrent. It did so by defining exactly what it means by “denuclearization of the Korean Peninsula” – the mission-critical phrase that was at the heart of the June Singapore Summit Declaration signed by Kim Jong Un and Donald Trump. The daily Report Must-reads from across Asia - directly to your inbox While North Korea’s rhetoric is frequently explosive, the bombshell announcement from the Korea Central New Agency – an outlet frequently used to send regime messages to the global community – was couched in plain writing which leaves little leeway for misinterpretation. Make no mistake: This is serious. It is not a simple disagreement over nomenclature. It makes starkly clear a divergence of opinion not only over what denuclearization is, but to whom it applies. The statement reads, in part: “The United States must now recognize the accurate meaning of the denuclearization of the Korean Peninsula, and especially, must study geography. When we talk about the Korean Peninsula, it includes the territory of our republic and also the entire region of [South Korea] where the United States has placed its invasive force, including nuclear weapons. When we talk about the complete denuclearization of the Korean Peninsula, it means the removal of all sources of nuclear threat, not only from the South and North but also from areas neighboring the Korean Peninsula.” Thus far, the Trump administration has seen fit to believe that “denuclearization of the Korean Peninsula” – a term the North has been using for years – encompasses the preferred US definition of CVID (‘complete, verifiable, irreversible dismantlement”). In fact – as weary experts have been warning all year – it means very nearly the opposite.
Putin warns the threat of nuclear war should not be underestimated - Russian President Vladimir Putin warned the threat of a nuclear war should not be discounted and criticized the U.S.' move to withdraw from an international nuclear treaty. Speaking at his annual media press conference, Putin was asked by one journalist to assess the threat of nuclear war or a third world war. "The danger of the situation is being downplayed," Putin told the audience of over 1,000 journalists at his year-end question and answer session. "It now seems to be impossible, something without crucial importance, but at the same time if something like this would happen this would lead to the collapse of the entire civilization and maybe our planet. So this is an important question," he said via a translator. "Unfortunately, we have this trend to underestimate the current situation. There are dangers, there are risks in our day-to-day lives. What are those risks? First and foremost, the collapse of the international system of arms control, of moving away from an arms race," he said. Speaking at his annual news conference, Putin said it was hard to predict what the consequences would be of a U.S. withdrawal from the landmark Intermediate-range Nuclear Forces Treaty, signed in 1987. He also stated that an escalation of tensions that could lead to war should not be allowed to happen. "Now they're making another step and they are withdrawing from the INF treaty so what's going to come out of that? It's hard to imagine what will come next," he said.Putin's comments come after President Donald Trump said in October that he will withdraw the U.S. from the long-standing "Intermediate-Range Nuclear Forces Treaty," or INF treaty, citing Russian violations of the deal. Trump says that Russia has violated the arms agreement by building and fielding the banned weapons "for many years." Russia has denied it is in violation of the deal.
“Alexa, Launch Our Nukes!” Artificial Intelligence and the Future of War - There could be no more consequential decision than launching atomic weapons and possibly triggering a nuclear holocaust. With artificial intelligence, or AI, soon to play an ever-increasing role in military affairs, as in virtually everything else in our lives, the role of humans, even in nuclear decision-making, is likely to be progressively diminished. In fact, in some future AI-saturated world, it could disappear entirely, leaving machines to determine humanity’s fate. This isn’t idle conjecture based on science fiction movies or dystopian novels. It’s all too real, all too here and now, or at least here and soon to be. As the Pentagon and the military commands of the other great powers look to the future, what they see is a highly contested battlefield — some have called it a “hyperwar” environment — where vast swarms of AI-guided robotic weapons will fight each other at speeds far exceeding the ability of human commanders to follow the course of a battle. At such a time, it is thought, commanders might increasingly be forced to rely on ever more intelligent machines to make decisions on what weaponry to employ when and where. At first, this may not extend to nuclear weapons, but as the speed of battle increases and the “firebreak” between them and conventional weaponry shrinks, it may prove impossible to prevent the creeping automatization of even nuclear-launch decision-making. Such an outcome can only grow more likely as the U.S. military completes a top-to-bottom realignment intended to transform it from a fundamentally small-war, counter-terrorist organization back into one focused on peer-against-peer combat with China and Russia. This shift was mandated by the Department of Defense in its December 2017 National Security Strategy. Rather than focusing mainly on weaponry and tactics aimed at combating poorly armed insurgents in never-ending small-scale conflicts, the American military is now being redesigned to fight increasingly well-equipped Chinese and Russian forces in multi-dimensional (air, sea, land, space, cyberspace) engagements involving multiple attack systems (tanks, planes, missiles, rockets) operating with minimal human oversight.
Why the Senate Vote to End US Support for the Yemen War Is So Important - by Ron Paul - — Last week something historic happened in the US Senate. For the first time in 45 years, a chamber of the US Congress voted to pull US forces from a military conflict under the 1973 War Powers Act.While there is plenty to criticize in the War Powers Act, in this situation it was an important tool used by a broad Senate coalition to require President Trump to end US participation in the Saudi war against Yemen. And while the resolution was not perfect – there were huge loopholes – it has finally drawn wider attention to the US Administration’s dirty war in Yemen.The four year Saudi war on neighboring Yemen has left some 50,000 dead, including many women and children. We’ve all seen the horrible photos of school buses blown up by the Saudis – using US-supplied bombs loaded into US-supplied aircraft. Millions more face starvation as the infrastructure is decimated and the ports have been blocked to keep out humanitarian aid.Stopping US participation in this brutal war is by itself a wise and correct move, even if it comes years too late.The Senate vote is also about much more than just Yemen. It is about the decades of Presidential assaults on the Constitution in matters of war. President Trump is only the latest to ignore Article I, Section 8 of the US Constitution, which grants war power exclusively to Congress. Yes, it was President Obama who initially dragged the US illegally into the Yemen war, but President Trump has only escalated it. And to this point Congress has been totally asleep. Fortunately that all changed last week with the Senate vote. Unfortunately, Members of the House will not be allowed to vote on their own version of the Senate resolution.Republican Leadership snuck language into a rule vote on the Farm Bill prohibiting any debate on the Yemen war for the rest of this Congressional session. As Rep. Thomas Massie correctly pointed out, the move was both unconstitutional and illegal.However as is often the case in bipartisan Washington, there is plenty of blame to go around. The Republicans were able to carry the vote on the rule – and thus deny any debate on Yemen – only because of a group of Democrats crossed over and voted with Republicans. Democratic Whip Steny Hoyer is being blamed by progressives for his apparent lack of interest in holding his party together.
Imagine If Saudi Arabia Was Not A US Ally - Caitlin Johnstone - The US Senate has voted 56 to 41 to sorta-kinda eventually end America’s part in the Saudi-led war in Yemen, one step out of a great many that will need to happen in order to end the worst humanitarian crisis on the face of the earth. The joint resolution still allows US drones to patrol Yemeni airspace and rain death from above in its “war on terror” against Al Qaeda, and it is unable to pass in the House this year due to an unbelievably sleazy rider that House Republicans attached to the unrelated Farm Bill. The resolution isn’t expected to change much in terms of actual US participation in the war besides some intelligence and reconnaissance assistance to Saudi Arabia and the United Arab Emirates against the Houthi rebels, since the US has already ended its assistance in refueling Saudi jets on their bombing campaigns as of last month. Trump is expected to veto any Yemen resolutions, and the Senate resolution was not passed with a veto-proof supermajority. Still, it’s a step. A step in the right direction, both toward congress imposing some checks and balances on the Executive Branch’s heretofore obscenely unchallenged war powers, and toward the US government moving into opposition to the brazen war crimes being inflicted upon the Yemeni people by America’s close ally Saudi Arabia. And I think that last bit is worth taking a moment to think about. The Senate vote to end U.S. involvement in the #Saudi #Yemen War is a big step forward, and the House should do the same in early 2019. But to actually force an end the Saudi war, Congress must cut off the Saudi Air Force's spare parts, without which it can't fly.. — Gareth Porter (@GarethPorter) December 14, 2018 Research from the Armed Conflict Location and Event Data Project indicates that up to 80,000 people have been killed in this war, which would be eight times more than the 10,000 figure we’ve been hearing from the mainstream media for years on those rare occasions they’ve felt like mentioning Yemen. And it is important to note that this number applies to deaths by military violence only, not to the other untold tens of thousands who have died of starvation and cholera as a result of Saudi Arabia’s inhuman blockades on imports and its deliberate targeting of farms, fishing boats, marketplaces, food storage sites and cholera treatment centers with airstrikes. Just for children under the age of five, the death toll due to starvation alone is believed to be around 85,000. So that’s what’s going on while the bureaucrats on Capitol Hill are slowly pushing their pencils and the diplomats are making nicey nicey with theocratic Gulf state tyrants. If Saudi Arabia were not an ally of the United States, this matter would be treated very, very differently.
100 Percent Of US Senate Against MBS - Sometime ago here, I called for Crown Prince of the Kingdom of Saudi Arabia, Mohammed bin Salman bin Abdulaziz al Sa’ud, (MbS) to be rmoved from his position. How he is punished beyond that for his crimes, I do not care, especially as I think being prevented from becoming the King of Saudi Arabia will be for him the worst punishment. So for once the US Senate agrees with me, 100%, really. Hey, I have to cheer such an event that has never happened brfore and probably will not again. Yay! The US Senate has voted 100% to declare that MbS is guilty for ordering the murder of Kamal Khashoggi. They are right. He is guilty guilty guilty. He needs to be removed, and the sooner the broader Saudi royal family figures this out and moves to replace him, the better, really, for the world as a whole, given the ongoing important role that nation plays in the world economy worldwide. It is clear thart he came to power thanks to Jared Kushner and the Trump admin, who supported his coup removal of his predecessor, Mohammed bin Nayef bin Abdulaziz al Sa’ud, who was deeply respected by US mil-intel apparati. MbS had become Defense Sec and was able to send his guys to MbN’s palace and imprison him until he gave up and let MbS replace him as Crown Prince. None of this would have happened without Trump and Jared Kushner approving of it, which they did. So now the US Senate has figured out that I was right that this was a totsl disaster, that MbS is completely unacceptable as a leader of Saudi Arabis. This is not a matter of the US declaring against a democratically elected leader. This is ultimately an absolute monarchy now facing its deeply, difficult, succession problem. Following corrupt influence from the US, their leaders have made a bad decision, choosing MbS. I appreciate that it may not be that easy for the royal family to get rid of this power hungry murderer, but I applaud this unanimous vote from the US Senate. He needs to go. In any case, recent Saudi policy has been an outrage, with its war in Yemen the extreme manifesation of how bad MbS is. The Senate has also voted against the US supporting this awful war, although not unanimously, and with the old House of Paul Ryan not supporting any of this.
Saudi denounces US Senate vote as ‘blatant interference’ -- Saudi Arabia has denounced as "blatant interference" a resolution by the US Senate accusing the kingdom's Crown Prince Mohammed bin Salman of ordering the murder of journalist Jamal Khashoggi and calling for an end to Washington's military support for a Riyadh-led war in Yemen.The Senate's move last week dealt a new warning to US President Donald Trump, who has repeatedly signalled his backing for the Saudi leadership even amid a mounting outcry the killing of Khashoggi, a critic of the powerful Prince Mohammed, and the devastating Yemen conflict."The recent position of the United States Senate, which has been built on baseless allegations and accusations, includes blatant interference in its internal affairs and the role of the kingdom at the regional and international level," the foreign ministry said in a statement released by the Saudi Press Agency on Monday. Khashoggi, a Washington Post contributor, was murdered on October 2 after he entered the Saudi consulate in the Turkish city of Istanbul to obtain documents needed for his planned marriage. In a unanimous vote on Thursday, the Senate approved the resolution condemning Khashoggi's murder and calling Prince Mohammed - also known as MBS - "responsible" for it.The senators' move came after senior intelligence officials from the US spy agency CIA reportedly said that such an operation would have needed the approval of MBS, the kingdom's de facto leader.
“Disgusting”: Outrage After US, Saudi Arabia Block UN Resolution on Yemen Ceasefire — “The U.S. should be doing everything we can to support the ceasefire, not undermining it. Disgusting!”That was how Sen. Bernie Sanders (I-Vt.) responded to news on Thursday that the Trump administration teamed up with Saudi Arabia to delay a United Nations Security Council resolution endorsing the Hodeidah ceasefire agreement reached last week.Arguing that the beseiged people of Yemen can’t afford any more delays, Sanders noted that “85,000 children have already starved to death” and “millions more face the prospect of famine and death” due to the years-long U.S.-backed Saudi assault.85,000 children have already starved to death as a result of the Saudi-led intervention in Yemen.Millions more face the prospect of famine and death.The U.S. should be doing everything we can to support the ceasefire, not undermining it. Disgusting! https://t.co/zlyOm4LNMd— Bernie Sanders (@SenSanders) December 20, 2018As the Guardian reported, Yemeni government officials warned that the Hodeidah ceasefire could quickly collapse if a Security Council resolution endorsing the agreement is not adopted soon.
REVEALED- There Were Two CIA Torture Programs - A major aspect of the CIA’s detention and interrogation operations has been purposefully hidden from view, primarily due to secrecy guidelines that make it illegal for anyone “read into” the program to reveal even its very existence.Recent declassified documents make clear that there was not one, but two CIA torture programs. These programs used different interrogation techniques, responded to different bureaucracies within the CIA, and had very different levels of oversight.This article reveals for the first time a crucial untold aspect of the story behind the construction and development of the CIA’s torture programs, such as we can understand them today (December 2018).I will try to retell the history of the CIA’s interrogation and detention programs with this new understanding of how they originated, were constructed, and how they operated. This revisionist history is open source document-based, and it’s worth noting that there is much disinformation and obscure history to clarify. At the close of this article, we will look at some possible reasons for the separation of the two programs, and the meaning of all this for current investigators and concerned citizens.
‘He would have given up a very valuable appendage to get that job’ - Chief of staff to President Donald Trump was seen by many as the job that no one wanted, a thankless post with an impossible mission. But when Trump soured on his former chief, John Kelly, Mick Mulvaney didn't see a quagmire — he saw his next gig. Mulvaney, the president’s budget director, who has also moonlighted as the head of a consumer protection agency conservatives hate, had angled for the job for months. He had a backup plan, too, pitching himself as a potential successor to Treasury Secretary Steven Mnuchin in the event Mnuchin was tapped to be Trump's chief of staff. .“He would have given up a very valuable appendage to get that job,” a Republican close to the White House said of Mulvaney's desire to be Trump's chief of staff. Mulvaney has a résumé that would appear to make him the man for the moment. A former congressman who has steered clear of scandal and remained a favorite of the president, he was tapped for the job at a time when Trump will need a politically minded partner who understands Congress. Mulvaney has maintained relationships with influential members on Capitol Hill and may be able to help him deal with the Democratic House takeover in January. The position has proved challenging for others, first Reince Priebus, the consummate insider and connected former party chairman, and then John Kelly, the retired Marine general who made futile attempts to impose discipline in the West Wing. The failures of his predecessors and the daunting year ahead did not deter Mulvaney, who, according to several current and former White House officials, has spent several months openly lobbying for the job. Reports that he was uninterested in the job, these people said, were in fact an effort to increase his chances of landing it by playing hard to get.
The long (American) arm of the law: how Huawei CFO’s arrest reopened an old wound in China-US relations - The high-profile arrest in Canada and possible extradition to the United States of the chief financial officer of Chinese telecoms giant Huawei has stirred debate over how the US enforces its domestic laws against foreign businesses and individuals. Washington is seeking Meng’s extradition on fraud charges related to alleged breaches of US and European Union sanctions on Iran. Meng, 46, who was arrested by Canadian authorities on her way from Hong Kong to Mexico, was released on C$10 million (US$7.5 million) bail on Tuesday. She is to return to court on February 6 to set a date for her extradition hearing. From the outset, the case prompted a furious reaction from China. The foreign ministry described Meng’s treatment as “vile” and warned of “grave consequences” against Ottawa unless the executive was released. Meng’s arrest cast a shadow over already deteriorating US-China relations. It came just as Beijing and Washington reached a ceasefire in their months-old trade war, a truce that was barely enough to keep tensions from doing further damage to bilateral ties. The case also reopened an old wound in Beijing’s relationship with Washington. Meng and her company are the latest to be encircled by America’s “long-arm jurisdiction”, a power often denounced by China’s Communist Party as a cover for US hegemony and “imperialism”. Jerry Fang, a partner at Beijing-based Zhong Lun Law Firm, said the US exerted such influence over non-US companies through export controls, national security reviews of foreign investments, anti-money laundering and anti-corruption laws, and securities regulations.
Where Can Apple Make Its iPhones If Not In China? - Apple primarily assembles its iPhones in China, but the tech giant could change that if Trump’s tariffs hit 25 percent. For now, Apple is planning to sit tight on its current manufacturing model. People familiar with the matter said that Apple and its suppliers are currently assessing the trade war between the U.S. and China. Apple will still keep manufacturing its iPhones in China if the tariffs only hit 10 percent. However, if tariffs rise to 25 percent, Apple may move out of China entirely and start producing iPhones somewhere else, according to Bloomberg. Right now, Apple isn’t directly affected by the trade war between the U.S. and China. However, President Donald Trump could still decide to raise import tariffs on smartphones as part of the administration’s series of levies that it’s been implementing this year. Last month, Trump suggested that a 10 percent tax on smartphone imports wouldn’t hurt Apple or its customers if the U.S. doesn’t reach a deal with China. “Maybe. Maybe. Depends on what the rate is,” President Trump was quoted as saying by the Wall Street Journal. “I mean, I can make it 10%, and people could stand that very easily.” If that happens, business would go on as usual for Apple and it will keep manufacturing its iOS 12-running smartphones in China. But if tariffs rise to 25 percent, the tech giant might be forced to completely move its production outside the country. This is seen by many as a huge challenge even for Apple. A majority of Apple’s iPhone production is being handled by its partner Hon Hai Precision Industry Co. in China before units are shipped all around the globe. This isn’t just for iPhones either as Apple’s partner is also responsible for the production of iPads and Mac computers. However, some iPhone assembly is already being done outside of the country. Apple has also partnered with Taiwanese manufacturer Wistron, which built an assembly facility in India. This facility was originally intended to handle iPhone SE production back when the low-cost model was gaining ground. Foxconn, which handles final assembly for Apple devices, also opened a facility in Brazil in 2011. However, devices from that country are far more expensive than in the U.S., according to TechCrunch. Apple could also start manufacturing the iPhone in the U.S., but this could also result in a significant price increase. It’s certainly possible for Apple to shift its manufacturing outside China, but it may not be a good business model for the tech giant. Apple CEO Tim Cook did say in July that the tariffs could have “unintended consequences" that may directly affect consumers and the economy.
China to Cut Tax on US Vehicles to Ease Trade Tensions - China will remove the retaliatory duty on automobiles imported from the U.S. for three months in an effort to defuse trade tensions with the world’s biggest economy. The 25% tariff it imposed in a tit-for-tat measure will be scrapped starting Jan. 1, the finance ministry said Friday. Earlier this week, Bloomberg News reported that China was considering cutting the duties. The move comes two weeks after President Donald Trump and his Chinese counterpart Xi Jinping agreed to a truce in the trade war at their meeting in Argentina. Trump claimed he won a concession during trade talks with Xi and said China, the world’s biggest automobile market, would reduce and remove tariffs, a claim that Beijing didn’t immediately confirm. The White House is also looking to officially delay the tariffs that had been due on Jan. 1, with an announcement expected on Friday. Since the leaders met, China has started buying soybeans again, is now cutting car tariffs and may restart corn purchases, as the first steps in a larger deal. But there’s doubt in Washington and Beijing whether China is willing to water down its plans to match and exceed U.S. industrial strength, which are one of the root causes of the current fight. China’s top leaders are expected to meet next week to decide next year’s economic policies. Their focus will be on how they propose to sustain stable growth when faced with both uncertainty from the trade war and from the slowing domestic economy. The temporary tax reduction for U.S. car imports comes as China heads for its very first annual vehicle sales decline in 28 years amid the trade war and an economic slowdown that’s undermining consumption momentum. Car sales in China have fallen for six straight months after decades of almost uninterrupted growth. While there were other factors, the tit-for-tat jabs between the world’s biggest economies have played a role. The move by China would reduce tariffs on cars made in the U.S. to 15% from the current 40%, in line with what other countries pay. China’s decision may provide a respite for American carmakers such as Tesla Inc. German carmakers such as BMW AG and Daimler AG would also benefit as they bring to China U.S.-made cars.
China and U.S. Talk on Trade Ahead of January Negotiations - China and the U.S. held vice-ministerial level talks on Wednesday to discuss the ongoing trade dispute as they move closer to meeting in January. The two sides spoke by phone according to China’s Ministry of Commerce, and have held several rounds of talks in recent weeks, Treasury Secretary Steven Mnuchin told Bloomberg on Tuesday in Washington. They plan to hold a formal, face-to-face meeting in January to negotiate a broader truce in their trade wars but are unlikely to meet in person before then, Mnuchin said. “We’re in the process of confirming the logistics of several meetings and we’re determined to make sure that we use the time wisely, to try to resolve this,” Mnuchin said. Both sides are now focused on trying “to document an agreement” by a March 1 deadline for their current tariffs truce to run out. “We expect there will be meetings in January,” he said. Previously the administration hadn’t been specific on the timing of talks. The two sides are planning to meet in January, according to Chinese officials with knowledge of the discussions who asked not to be named as the talks were private. China’s Ministry of Commerce didn’t respond to a faxed request for comment. Mnuchin said neither he nor President Donald Trump were aware of the arrest of a senior executive from Huawei Technologies Co. when they met with China’s Xi Jinping for dinner on Dec. 1, the same day that the company’s chief financial officer was arrested in Canada.
Dangerous Liaisons -WASHINGTON’S CONVENTIONAL wisdom views a Chinese-Russian alliance as a remote prospect. Defense Secretary James Mattis, who is generally both pragmatic and strategically-minded, sees “little in the long term that aligns Russia and China.” Yet a deeper look at their relations suggests that China and Russia may well build a united front to confront the United States and its allies. Even if such an alignment doesn’t last, it could have dangerous consequences. With short exceptions at the end of the nineteenth century and in the early 1950s, China and Russia have never been close. On the contrary, they have a long history of mutual animosity. While Americans tend to see them as similar because of their authoritarian politics, the truth is that their cultures and values are quite distinct. Beijing, after long resenting Russian power, tends to look down at Moscow’s inferior economy, relatively small population, and inability to develop vast regions of Siberia bordering China. Chinese academics who study in Russia report personally experiencing xenophobic nationalism that their Western counterparts rarely encounter. Russians show little affection for the Chinese way of life and, despite the growing pressure they face in United States and Europe, seem uninterested in purchasing property in Beijing, Shanghai or even Hong Kong. In private, Chinese and Russian officials and experts express scant confidence that their two countries can build a lasting alliance. Russians who claim on domestic television that Moscow and Beijing have already established such a relationship in all but name will admit sotto voce that China’s investment in Russia has been disappointing, that Chinese banks fear exposing themselves to U.S. sanctions by working in Russia and that Russian officials are leery of a settlement of their country’s territorial dispute with Japan (over the Kuril Islands) because any cession of Russian-held lands could encourage new Chinese claims. Moscow’s foreign policy commentators similarly acknowledge that a U.S. withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty would allow Russia to strengthen its nuclear deterrence vis-à-vis China and—so long as the United States and Russia can develop new understandings and Washington avoids actions that threaten Russia—that it may be better off without INF limits.
The New York Times targets McKinsey for doing business with China and Russia - In an extraordinary article last weekend running to more than 6,000 words, the New York Times effectively issued notice to major American banks, investment houses and corporations to fall into line with US foreign policy as determined and prosecuted by the CIA, Pentagon and State Department.The article entitled “How McKinsey has helped raise the stature of authoritarian governments” purports to be an exposé of the activities of the global management consulting firm that was founded in 1926. Undoubtedly McKinsey & Company have been engaged for decades in sordid deals with unsavoury individuals, corporations and governments—many with close ties to Washington. The purpose of the article is not to embarrass McKinsey and other American corporations into ending such operations, but to ensure that they march in lockstep with broader national interests.Much of what is revealed is not new. The decision to publish the article now is completely bound up with the advanced preparations being made in the top levels of the American state apparatus for confrontation and war with China and Russia—the countries regarded by Washington as the chief threats to the continuing global domination of US imperialism.As a result, the arguments advanced by the New York Times are thoroughly hypocritical and regurgitate the lies and half-truths that emanate from Washington. For decades, US administrations have shamelessly exploited “human rights” as a propaganda tool to vilify their rivals and enemies, while maintaining a studied silence on the abuses of autocratic regimes that are US allies and in some cases were installed by Washington. The New York Times increasingly functions as a naked propaganda arm for US imperialism. Unsurprisingly, its so-called exposé of McKinsey’s activities is focused almost entirely on China and Russia to the exclusion of any mention, for instance, of the military dictatorship in Thailand, the one-party state of Singapore or the Stalinist police-state in Vietnam, to name a handful of the many countries where American interests preclude criticism of human rights abuses.
Bill Black: Countering Chinese Accounting Control Fraud and Predation Against U.S. Investors -- On December 13, 2018, the Wall Street Journal published an interesting op ed by Jesse M. Fried, a famous law professor in multiple areas of corporate law, and Matthew Schoenfeld, who works at a hedge fund that is the leading funder of civil lawsuits, primarily fraud and tort suits. The title is “Will China Cheat American Investors? The answer, of course, is yes – it will continue to cheat American (and non-American) investors. Fried also has a strong background in economics, which is relevant to his op ed and my blog article.The op ed is interesting in part because it was published just after a documentary on Chinese stock fraud (“The China Hustle”) had its general video release. The China Hustle explores the pervasive defrauding of primarily U.S. investors by those that control Chinese corporations. Though the documentary does not make the point, it is describing “accounting control fraud.” A ‘control fraud’ is a seemingly legitimate entity used by the person that controls it as a “weapon” to defraud or predate. For the sake of brevity, I use “CEO” rather than “the person that controls the corporation.” Accounting control frauds target creditors and shareholders as their primary intended victims. Their primary weapon of fraud and predation is accounting. The art is to inflate assets and understate liabilities, which overstates capital and income. The “China Hustle” documentary is deeply flawed in its apparent belief that endemic fraud can only occur in places like China that have no effective rule of law. The GFC, the three most destructive financial fraud epidemics in history that drove the GFC, the astonishing level of elite financial predation in the United Kingdom, the U.S., and Australia, and the complete failure to prosecute the financial elites that led those fraud epidemics combined to prove that the United States does not have an effective rule of law.
Marshall Auerback: All of Our Bets on China Have Been Wrong -- Is today’s trade conflict with China beginning to broaden into something bigger and more long-lasting? It would appear so. Much of the current backlash is a product of the West’s longstanding, but misplaced, fawning and awe over Beijing’s historically unprecedented economic advancement over the past 30 years: the naïve assumption that its growing prosperity would inevitably lead to a more open, politically liberalized country whose interests would more closely align with those of the West. As those expectations have been dashed, so too the backlash has arisen accordingly: Many now view China as both a trade cheat and amounting global security threat, as it approaches economic parity and strategic rivalry with the West. And China’s leadership appears less well-equipped both politically and economically than its Western counterparts to deal with this rising conflict, as it metastasizes into a fully-fledged Cold War 2.0. By any standard measure, it has not been a good few weeks for China. In November alone, retail sales slumped to a 15-year low; the country’s exports rose 5.4 percent from a year earlier, the weakest performance registered since a 3 percent contraction in March, and well short of the originally forecasted rise of 10 percent; car sales fell to levels not seen since the 1990s; the vast majority of companies directly impacted by U.S. tariffs (around 86 percent) have reported a decline in orders, “according to a survey of 200 chief financial officers in manufacturing firms with significant export business”; and the default risk (a gauge of financial stress) for Chinese companies has climbed to the highest level in 13 years, according to the Moody’s rating agency. Most ominously, a senior executive from country’s largest telecom equipment manufacturer, Huawei (also the daughter of the CEO), was arrested in Canada, following a U.S. extradition request on the grounds of suspected money laundering designed to mask evading American trade sanctions imposed on Iran. This arrest took place against a backdrop in which Beijing has increasingly been viewed as a security threat. In addition to the longstanding charges of intellectual property theft, China is now being accused of conducting hacking attackson the home-country servers of big Western companies, and using Huawei’s new 5G network as a platform for this cyber espionage.
When Will Trump Deliver on the Trade War: Soybeans - Menzie Chinn -- Stock market meltdown, government closure, coup d’etat at DoJ, announced exit from Syria, maybe-exit from Afghanistan, tanks on the Russia-Ukraine border, DPRK still developing nukes, and Mattis departs. But at least we’re winning the trade war, right? So, despite the “truce”, soy prices have not recovered measurably. From FarmProgress.com: China’s return, if it holds, could increase old crop export demand by 50 million or maybe even 100 million bushels. That’s better than nothing, but it doesn’t change potential for global soybean inventories to swell to record levels in coming months. Barring a sudden turn worse in South American weather, the amount of soybeans leftover at the end of the marketing year Aug. 31 will still be terrible, just not as terrible. If Brazilian beans don’t wind up in China they’ll wind up someplace else. What’s Plan B?
Exclusive- China hacked HPE, IBM and then attacked clients - sources (Reuters) - Hackers working on behalf of China’s Ministry of State Security breached the networks of Hewlett Packard Enterprise Co and IBM, then used the access to hack into their clients’ computers, according to five sources familiar with the attacks. The attacks were part of a Chinese campaign known as Cloudhopper, which the United States and Britain on Thursday said infected technology service providers in order to steal secrets from their clients. While cybersecurity firms and government agencies have issued multiple warnings about the Cloudhopper threat since 2017, they have not disclosed the identity of technology companies whose networks were compromised. International Business Machines Corp said it had no evidence that sensitive corporate data had been compromised. Hewlett Packard Enterprise (HPE) said it could not comment on the Cloudhopper campaign. Businesses and governments are increasingly looking to technology companies known as managed service providers (MSPs) to remotely manage their information technology operations, including servers, storage, networking and help-desk support. Cloudhopper targeted MSPs to access client networks and steal corporate secrets from companies around the globe, according to a U.S. federal indictment of two Chinese nationals unsealed on Thursday. Prosecutors did not identify any of the MSPs that were breached. Both IBM and HPE declined to comment on the specific claims made by the sources. “IBM has been aware of the reported attacks and already has taken extensive counter-measures worldwide as part of our continuous efforts to protect the company and our clients against constantly evolving threats,” the company said in a statement. “The security of HPE customer data is our top priority,” HPE said. “We are unable to comment on the specific details described in the indictment, but HPE’s managed services provider business moved to DXC Technology in connection with HPE’s divestiture of its Enterprise Services business in 2017.”
US Navy Contractors Hacked by China More Than A Handful Of Times - Over the last 18 months, Chinese hackers breached several unidentified Navy contractors, stealing large amounts of data related to undersea warfare, including top-secret programs to develop supersonic anti-ship missiles for submarines, officials and experts said, triggering top-to-bottom review of cyber vulnerabilities for the Navy.Navy Secretary Richard Spencer recently requested a review to examine why the service and its contractors are continuing to get hacked by China.Officials told The Wall Street Journal that a classified initial assessment of the problem was delivered to Navy Secretary Spencer last week and provides appropriate countermeasures to thwart future cyber attacks. Navy officials declined to say how many cyber attacks occurred during the 18 months except to say that there were “more than a handful,” calling some of the cyber attacks "troubling and unacceptable."
China Blasts Baseless Cyber-Spying Accusations, Warns Of Serious Damage To Relations ---- Following today's indictments of two Chinese nationals for cyber espionage (or cyber theft) in which the Trump administration and more than a dozen of its allies condemned Beijing on Thursday over the MSS's campaign to steal other countries' trade secrets and advanced technologies, as well as its efforts to compromise sensitive government and corporate computer networks; China's Ministry of Foreign Affairs has responded with a terse statement lambasting the US Government. China foreign ministry spokeswoman Hua Chunying says in statement that the Chinese government has never participated or supported any stealing of trade secrets (ZH: if it happens, it happens, we never told them to) and urged the U.S. to correct its own cyber espionage wrongdoings and withdraw indictment of Chinese nationals. Full Statement: (via Google Translate) Comment on the Mistakes of the US on Cyber Security Issues: The United States fabricated facts about so-called "cyber theft" with groundless accusations about the Chinese on network security issues, on the basis of which two Chinese officials were "prosecuted."This move is a serious violation of the basic norms of international relations and seriously damages Sino-US cooperation. The nature is very bad. The Chinese side is resolutely opposed to this and has already made solemn representations to the US.The Chinese government's position on cybersecurity issues is consistent and clear. China is a staunch defender of cybersecurity and has consistently opposed and cracked down on any form of cybersecurity. The Chinese government has never participated in or supported anyone in any way in stealing trade secrets.
Stocks Tumble After Navarro Says "Agreement With China Difficult" Unless Beijing Does Full Trade Overhaul - US stocks tumbled to session lows after the Nikkei reported that Trump's trade adviser told the owner of the FT that it would be "difficult" for the U.S. and China to arrive at an agreement after the 90-day period of talks unless Beijing was prepared for a full overhaul of its trade and industrial practices. In an extensive interview at the White House on Thursday, Peter Navarro, an assistant to the president as director of trade and industrial policy, said there are "no half-measures," and that China has to address all of America's concerns for the two sides to come to terms. Those include forced technology transfers - a topic which Beijing has resolutely refused to address - as well as cyber intrusions into business networks, state-directed investments, in addition to the usual complaints about tariffs and nontariff barriers.Commenting on Beijing's "Made in China 2025" initiative, a blueprint for pivoting the country into a leading position in areas such as artificial intelligence and fifth-generation wireless communication, Navarro called it a "label for a Chinese strategy to achieve dominance in the industries of the future.""China is basically trying to steal the future of Japan, the U.S. and Europe, by going after our technology," Navarro said, virtually assuring that no deal will be achieved in the allotted timeframe. Meanwhile, while noting that China has recently abandoned public use of the phrase "China 2025," Navarro said that "no one in Japan or the United States really believes that they have abandoned the goals of China 2025."
India again postpones levying retaliatory tariffs on US goods to Jan 31 -- New Delhi: India has deferred imposing higher duties worth $235 million on 29 American goods to January 31, 2019. The retaliatory tariffs were scheduled to come into effect on December 17 and have been postponed for the fourth time. “…the central government, being satisfied that it is necessary in the public interest to do so,” the government said in a notification on Saturday. The new deadline comes just before US Commerce Secretary Wilbur Ross’ India visit in February for the US-India Commercial Dialogue and the US-India CEO forum. The extension coincides with the US and China’s 90-day truce as the two try to find a solution to the escalating trade dispute.
How to fix America’s dysfunctional trade system - America's trade policy is in incoherent shambles. Decades of neoliberal "free trade" pacts — which as often as not simply gave corporations an end run around the state, or their very own rigged, pseudo-legal system — have created terrible social carnage around the world and a furious political backlash. And President Trump's incoherent, haphazard response has done little to change the system, let alone reform it in a sensible fashion.Overhauling such a gargantuan, world-spanning system is a dizzying task. But Timothy Meyer and Ganesh Sitaraman at the Great Democracy Initiative have a new paper that presents a solid starting point for developing a fundamental reform of American trade structure.Meyer and Sitaraman identify three large problems with the status quo, and propose policy solutions for each:
- The complicated and unbalanced structure of the bureaucracy that oversees trade policy
- The enormous pro-rich bias that is built into trade deals
- How the inequality resulting from trade routinely goes totally unaddressed
Let's take these in turn.
Deportations under Trump are on the rise but still lower than Obama’s, ICE report shows - WaPo - Amid President Trump’s push for tighter immigration policies, the United States deported more than 256,000 people in 2018 — the highest number since the Obama administration, new data shows. U.S. Immigration and Customs Enforcement Deputy Director Ronald D. Vitiello announced Friday that in the past fiscal year, which ended in September, ICE has detained “a record number” of people in the country illegally and that the number of those deported has risen about 13 percent since 2017. The data, which comes from a new agency report, shows that 145,262 of those deported were convicted criminals and that 22,796 had criminal charges pending against them. In addition, 5,872 were reported as known or suspected gang members, and 42 were believed to be terrorists, according to the report. The number of families and unaccompanied children who were deported also increased. ICE said that 2,711 who were traveling in families and 5,571 unaccompanied children were removed from U.S. soil. “We’ve continued to achieve gains in all meaningful enforcement measurements,” Vitiello said, despite significant underfunding. The strain on resources is a consequence of current border crisis, he said. “With the continued surge and without congressional action to fund the agency at adequate levels, ICE may be forced to make difficult choices that could hamper our ability to fulfill our public safety or national security mission,” he added, noting that the agency does not want to release detainees as a result of budgetary constraints because it would create a public safety risk. Since taking office, Trump has maintained a harsh stance on illegal immigration and in favor of border security. On Thursday he vowed to do “whatever it takes to get border security,” in large part by building a wall. The president’s promise to assuage the ongoing “crisis” at the U.S.-Mexico border has also included a series of executive orders in recent months, including calling for separation and detention of families entering at the border and limiting those eligible to apply for asylum.
Central American asylum seekers forced to wait for months at US-Mexico border --WSWS reporters spoke last weekend to members of the Central American caravan who have been waiting in a queue for months, at the West pedestrian entrance of the San Ysidro border crossing in Tijuana, for US Customs and Border Patrol (CBP) to begin processing their asylum claims. Just last month the US military and CBP agents fired tear gas, rubber bullets and flash bang grenades at desperate workers and their families at the San Ysidro Port of entry. It is estimated that between six and seven thousand immigrants from Mexico and Central America are currently in Tijuana. Most of the caravan members spoke of feared repercussions from gangs they had fled and asked that their faces not be photographed. Guillermo, 30, left Honduras with his wife, 12-year-old son and 9-year-old daughter, following a death threat from a local gang that had been extorting him and recently murdered two of his cousins. The gangs had been extorting increasing amounts of money from his convenience store, so much so that very little was left for his family. “I could not give them what they wanted.” One day in June, Guillermo received notice that if he did not pay the amount demanded, he would be killed. He went home and told his wife and children they were leaving that day. Guillermo explained that two of his first cousins, who lived just two blocks away from him, were killed by “las maras,” members of the MS-13 gang, within a month of one another. They both worked for a taxi service and the gang that was extorting them demanded more payment. Manuel, a 52-year-old Honduran man, told reporters that he and his 10-year-old son had been in Tijuana for a little over a month and had seen immigration officials service just a few hundred people in that time. “When we arrived on November 12, they were at number 1025, and a month later they are only at 1308,” he said. Manuel, who did not wish to be photographed, said he sold hot dogs at a cart in Honduras and was also being extorted and threatened by “las maras,” which prompted their journey.
Trump administration to immediately deport new Central American asylum seekers to Mexico - The Trump administration announced a new policy that effectively guts the right of asylum for refugees from Central America. From now on, US Customs and Border Protection (CBP) will begin expelling non-Mexican refugees as soon as they have made application for asylum after crossing the US-Mexico border. They will be immediately deported to Mexico instead of being allowed to stay in the US pending the adjudication of their asylum claims. The Mexican government, taking its orders from Washington, will not oppose these deportations or bring any legal action against the United States for a policy that is in flagrant violation of international law. Its only concession to the refugees is that Mexico will not confine them in US-style detention camps. The asylum seekers will be “free” to share the miserable conditions of life in impoverished neighborhoods of violence-wracked border cities like Tijuana, Juarez, Laredo and Matamoros. Hundreds of thousands of impoverished immigrants—including children—will now be forced to live in makeshift slums and tent encampments. The new policy is a historically unprecedented attack on Central American workers and peasants escaping violence and inequality caused by decades of US imperialist intervention and corporate exploitation. Never before has the US denied the democratic right to seek asylum to so many in one fell swoop. The policy was announced on the same day that President Trump said he would not sign a new continuing resolution, funding about one-fourth of the federal government, without $5 billion allotted to begin full-scale construction of a wall along the US-Mexico border.
Protester who climbed Statue of Liberty found guilty on all counts --A woman who took the Statue of Liberty hostage on the Fourth of July to protest the separation of families at the Mexican border has been convicted on all counts by a Manhattan federal judge. Therese “Patricia” Okoumou, who scaled the base of the national icon, causing the evacuation of the statue and Liberty Island on one of the attraction’s busiest days of the year, was convicted on three misdemeanor charges that could send her to jail for up to 1½ years. Judge Gabriel Gorenstein on Monday found Okoumou guilty of trespassing, disorderly conduct and interfering with government functions, following a one-day bench trial that saw Okoumou crying on the witness stand. “I had been destroyed by the plight of our broken immigration system,” the former personal trainer testified as she recalled her motivation for the 24-foot climb to the feet of Lady Liberty. Okoumou, 44, came to court in a blue outfit littered with statements protesting President Trump’s immigration policies, including “No human is illegal on stolen land.” Gorenstein said he could not give Okoumou a pass simply because she claims that scaling the wall in protest of Trump’s immigration policies was an act of conscience. “I think the defendant’s lawyers know that if I took them up on that invitation, none of us is protected by the law,” the judge said. The prosecutor said Okoumou endangered herself, rescuers and thousands of Liberty Island visitors when she climbed to the feet of the statue. And the two NYPD cops who had to mount a perilous rescue to get her down testified about the ordeal.
Fox News host Tucker Carlson faces advertiser backlash over immigration comments -Some companies are pulling their advertising from Fox News' primetime show "Tucker Carlson Tonight," after the host said he disagreed with "a moral obligation" to let poor people into the U.S., "even if it makes our own country poorer and dirtier and more divided." Carlson made the comments on Thursday 13 and reinforced them on his show Monday night. Online design marketplace Minted tweeted Monday night that it is "permanently discontinuing" advertising on the program. "We do not agree with Mr. Carlson's comments and his opinions are not consistent with the values we hold at Minted. Like other advertisers, our media purchases are done broadly across a number of networks. That being said, we are permanently discontinuing advertising on this particular program," the company said. Personal finance website NerdWallet said in a statement emailed to CNBC that it had "pulled its advertising and will be re-evaluating any ongoing advertising on this program," after Carlson's comments last week. A NerdWallet spokesperson said in a statement emailed to CNBC: "Whenever we receive feedback about advertising on specific programs, we evaluate it on a case-by-case basis. If our review determines that a certain show's content doesn't align with our company values, we take commensurate and appropriate action. That's what we've done in this instance." Financial services company Pacific Life said in a tweet on Friday that it will "re-evaluate our relationship with his program" and would not be advertising on Carlson's show in the coming weeks. "As a company, we strongly disagree with Mr. Carlson's statements. Our customer base and our workforce reflect the diversity of our great nation, something we take great pride in," it said.
Democrats to block end-of-year judges package - Senate Democrats said Wednesday that they will reject any end-of-the-year deal on judicial nominations, signaling they’ll toe a tougher line on court appointments amid heavy pressure from the left. Senate leaders usually agree to a package of judicial and executive nominees before a major holiday recess. Judicial nominees, in particular, have been a top priority of Majority Leader Mitch McConnell (R-Ky.), who views them as the party’s best chance to shape the political leaning of the country’s courts for decades.But Schumer has faced increasing pressure to crack down on Trump’s picks, with progressives accusing Senate Democrats of not doing everything in their power to block or at least slow the nominees from being confirmed to lifetime appointments.After a GOP senator said McConnell and Schumer were discussing a nominations package, Brian Fallon, the executive director of Demand Justice and a former Schumer staffer, reacted by tweeting: “WTF.”A Senate Democratic aide said Wednesday that Schumer would not agree to approve the final slate of judicial nominees as the Senate prepares to wrap up its work for the year.Progressives skewered Schumer for agreeing to two previous deals this year, one in August and the other in October, when he signed off on a group of court picks in exchange for letting vulnerable incumbents head back to their home states to campaign before the November midterm election.But he was cagey earlier this week when asked about judicial nominees, declining twice during Tuesday’s press conference to discuss if he was willing to work on an agreement with McConnell. “Our job right now is to get the government funded without a wall,” Schumer told reporters. “We have had no discussion about judges. None.”
Fate of criminal justice reform bill hinges on Cotton amendments The Senate's criminal justice reform bill took a big, bipartisan step forward Monday night, but it still faces one big hurdle: Sen. Tom Cotton's amendments. The Arkansas Republican is pushing changes, introduced with Sen. John Kennedy (R-La.), that could blow up the fragile compromise on legislation to reform prisons and sentencing laws. The amendments would bar more offenders from participating in the bill’s earned-time credit program and would require the Bureau of Prisons to notify victims when a prisoner is released early. The amendments also would require authorities to track arrests of ex-convicts after they’re released from prison early. In an op-ed published Monday in National Review, Cotton argued that his “conservative friends and colleagues ... have jumped on the bandwagon too soon.” “A number of serious felonies, including violent crimes, are still eligible for early release in the version of the bill the Senate will vote on in a matter of days,” Cotton wrote. “In short, the First Step Act [criminal justice overhaul] flunks their basic test to protect public safety.” But Democrats argue that Cotton’s amendments are nothing more than a strategy to sink the broader bill. They note that the amendments would divide the coalition of lawmakers and interest groups in favor of the bill and that the changes would only complicate the process for getting the bill through the House. “They’re designed to kill it so I’m a no vote on all three,” said Sen. Tammy Duckworth (D-Ill.) “I can’t see how they could possibly go through.” For some Democrats, the passage of the amendments would also kill their ultimate vote for the criminal justice reform bill. “The Cotton amendments basically undo the provisions of the bill, so I’d hope that both Democrats and Republicans will not vote for this amendment,” said Sen. Mazie Hirono (D-Hawaii), adding that “if the amendments basically undo the … bill, then I can’t vote for it.”
US Senate passes bipartisan criminal justice bill - On Wednesday, the United States Senate voted 87-12 in favor of watered-down legislation that will roll back a few of the most draconian provisions of the federal criminal justice system.The “First Step Act,” short for the “Formerly Incarcerated Reenter Society Transformed Safely Transitioning Every Person Act,” goes back to the House of Representatives, which passed a slightly stronger version last May by a vote of 360 to 59. For his own opportunistic reasons, President Donald Trump pushed Senate Republicans to support the legislation, tweeting after the vote, “America is the greatest Country in the world and my job is to fight for ALL citizens, even those who have made mistakes.”When it comes to locking people up, the United States does indeed stand on top of the heap. By large margins, there are more people in state and federal penitentiaries, 2.3 million, and a larger percentage of its population incarcerated than any other nation. The federal Bureau of Prisons (BOP) is the largest single prison system, incarcerating some 180,000 inmates, almost 25 percent beyond its designated capacity.Mass incarceration is not just barbaric and cruel. It adds billions in expenses to government budgets and deprives capitalists of a significant pool of potential workers to keep downward pressure on wages. Efforts to reform the federal system, which can encourage similar reforms on the state level, have been building for years. In a second tweet, Trump added, “In addition to everything else, billions of dollars will be saved. I look forward to signing this into law!”
A federal judge just ruled that Obamacare is unconstitutional, threatening healthcare chaos - In a ruling released Friday evening, a federal judge in Texas sided with states arguing that key provisions of the Affordable Care Act or "Obamacare" are unconstitutional. The decision is almost certain to be appealed, but creates new uncertainty for the country's healthcare system. Per a White House statement, "We expect this ruling will be appealed to the Supreme Court. Pending the appeal process, the law remains in place." Texas led 19 states arguing that the individual mandate — the requirement that everyone must have health insurance — is unconstitutional, after Congress gutted the key portion of the mandate, the tax penalty for not buying coverage. U.S. District Judge Reed O'Connor in the Northern District of Texas agreed with those states and ruled the individual mandate unconstitutional. Because the mandate is an essential part of the ACA in the judge's view, that led him to rule that the entire health law should be struck down. The law includes provisions that provide subsidies that help people buy coverage, its expansion of Medicaid to millions of low income people, and its protections that let people with pre-existing conditions buy insurance. Repealing the Affordable Care Act could lead to about 15 million people losing their health insurance coverage, according to Ana Gupte, a Wall Street analyst at Leerink Partners. "If this Texas decision on the ACA is upheld, it would throw the individual insurance market and the whole health care system into complete chaos," Larry Levitt, a senior vice president at the Kaiser Family Foundation said on Twitter. "But, the case still has a long legal road to travel before that's an immediate threat." Fourteen states along with the District of Columbia argued in favor of the law. However, the Trump administration sided with Texas et all. New York Attorney General Barbara Underwood said the states will continue their defense of the law.
A Texas court has declared the entire ACA unconstitutional -- And I’ve got an op-ed in the Washington Post about why the court is wrong. Here’s a taste: Who cares if a zero-dollar mandate is constitutional or not? Why does it matter in the slightest? And what on earth does it have to do with the rest of ACA?You might have thought that the right remedy would be to invalidate the penalty-free mandate. Doing so would align with Congress’s evident view that an ACA without an individual mandate was preferable to an ACA with it. That’s what I argued in an amicus brief with a bipartisan group of law professors.Instead, the court held that the entire ACA was “inseverable” from the purportedly unconstitutional mandate. To reach that conclusion, the judge leaned heavily on Congress’s findings from 2010, where it said that the individual mandate was “essential” to the law.But the mandate that the 2010 Congress said was essential had a penalty attached to it. The finding is irrelevant to a mandate that lacks any such penalty.In any event, it doesn’t matter what Congress meant to do in 2010. It matters what Congress meant to do in 2017, when a different Congress made a different call about whether the mandate was essential. We know what Congress wanted to do in 2017: repeal the mandate and leave the rest of the act intact. Its judgment could not have been plainer. (I know. I was there! So were you. It wasn’t that long ago.)You can read the whole thing here. My co-amici, Jonathan Adler and Abbe Gluck, have a New York Times op-ed sounding similar themes. I’ll probably write them up more extensively in the coming days, but I’ve also got tentative thoughts about the immediate consequences of the decision (short answer: nothing right now) and the potential difficulties with getting a quick appeal of the decision.
Judge’s Obamacare ruling creates long-term uncertainty -- In the short term, it's status quo. For the long term, U.S. District Judge Reed O'Connor's ruling late Friday invalidating the Affordable Care Act has plunged the industry into an era of uncertainty yet again. Although the Trump administration pledged over the weekend to enforce the law as Democrats and Republicans take their battle over the ACA's future to federal appeals courts, the prospect of dramatic upheaval looms large. President Barack Obama's healthcare law expanded health coverage to millions of Americans, pushed Medicare toward value-based payment, boosted public health funding and established innovation waivers. "In the absence of the statute, the regulations would be invalid," said Timothy Jost, an emeritus professor of law at Washington and Lee University and ACA supporter. "That creates a real problem for Medicare and how providers and Medicare Advantage plans get paid. And the Food and Drug Administration approval of biosimilars—could those be forced to be pulled from the market?" O'Connor's decision rested on the inability to excise the individual mandate from the Affordable Care Act, the zeroing out of the provision's financial penalty, and Supreme Court precedent that the law is a tax rather than regulation of commerce. "Perhaps it is impossible to know which minor provisions Congress would have passed absent the individual mandate," O'Connor wrote in his 55-page decision. "But the level of legislative guesswork entailed in reconstructing the ACA's innumerable trade-offs without the one feature Congress called 'essential' is plainly beyond the judicial power." It's a scenario that's become all too familiar during the ACA's eight-year existence. "We've been through these twists and turns and that makes it impossible to do our business in a coherent fashion," said Ceci Connolly, president and CEO of the Alliance of Community Health Plans. The Supreme Court weighed in on challenges to key ACA provisions in 2012 and again in 2015. The nation waited anxiously for the rulings which ultimately reaffirmed the law's standing. For much of 2017, insurers dealt with a series of reversals from the Trump administration on pledges to fund cost-sharing reduction payments. Also last year, the nail-biting repeal-and-replace debate unfolded in real time leading to Sen. John McCain's now-famous thumbs-down vote. At least for now, industry groups are focused on what happens next with Texas v. Azar. The Democratic attorneys general are expected to ask for an immediate stay of O'Connor's ruling.
Judge’s ruling on ‘Obamacare’ poses new problems for GOP (AP) — A federal judge’s ruling that the Obama health law is unconstitutional has landed like a stink bomb among Republicans, who’ve seen the politics of health care flip as Americans increasingly value the overhaul’s core parts, including protections for pre-existing medical conditions and Medicaid for more low-income people. While the decision by the Republican-appointed judge in Texas was sweeping, it has little immediate practical impact because the Affordable Care Act remains in place while the legal battle continues, possibly to the Supreme Court.HealthCare.gov , the government’s site for signing up, was taking applications Saturday, the deadline in most states for enrolling for coverage next year, and those benefits will take effect as scheduled Jan. 1. Medicaid expansion will proceed in Virginia, one of the latest states to accept that option. Employers will still be required to cover the young adult children of workers, and Medicare recipients will still get discounted prescription drugs. But Republicans, still stinging from their loss of the House in the midterm elections, are facing a fresh political quandary after U.S. District Judge Reed O’Connor said the entire 2010 health law was invalid. Warnings about the Texas lawsuit were part of the political narrative behind Democrats’ electoral gains. Health care was the top issue for about one-fourth of voters in the November election, ahead of immigration and jobs and the economy, according to VoteCast, a nationwide survey for The Associated Press. Those most concerned with health care supported Democrats overwhelmingly.In his ruling, O’Connor reasoned that the body of the law could not be surgically separated from its now-meaningless requirement for people to have health insurance. “On the assumption that the Supreme Court upholds, we will get great, great health care for our people,” President Donald Trump told reporters during a visit Saturday to Arlington National Cemetery. “We’ll have to sit down with the Democrats to do it, but I’m sure they want to do it also.”
How Will The Obamacare Ruling Affect Americans Covered Under The ACA- A Texas federal Judge ruled on Friday that the entire Affordable Care Act (ACA), or Obamacare, was rendered unconstitutional after Congress eliminated the individual mandate - a federal requirement to buy insurance or face a penalty.At issue in the case was the individual mandate, which requires people to have health insurance. The penalty for not having insurance was dropped to $0 in the most recent tax legislation, potentially undercutting the Supreme Court's decision in 2012 that the Affordable Care Act was constitutional because of Congress' ability to tax. With no penalty, there's no tax, the plaintiffs, a coalition of Republican-led states, argued in the Texas case. The plaintiffs also argued that the individual mandate is so essential to the entire law, so that if it's unconstitutional, the rest of the law must also be thrown out. U.S. District Court Judge Reed O'Connor agreed on that point, too. -CBS News The ruling came just one day before the december 15 deadline to sign up for health coverage in 2019 through the ACA's marketplace. How will this the ruling affect people covered under the ACA? It won't, for now - and people can still sign up for coverage through Saturday. "Court's decision does not affect this season's open enrollment," reads a notice on HealthCare.gov. The Trump White House has said that the existing law will stand for now while the ruling works its way through the appeals process up to the Supreme Court - a process which could take years. Some, such as Vox's Ezra Klein, have suggested that since Congress removed the individual mandate with the intention of keeping Obamacare intact, the Texas ruling is judicial overreach and the ruling is unlikely to stand. "We expect this ruling will be appealed to the Supreme Court. Pending the appeal process, the law remains in place," said White House Press Secretary Sarah Sanders in a statement, adding that Trump is now calling on Congress to replace the Affordable Care Act.
Legal experts rip judge’s rationale for declaring Obamacare law invalid - A federal judge’s ruling declaring the entire Affordable Care Act invalid came under harsh attack Saturday from legal analysts who predicted higher courts will reject the rationale as a tortured effort to rewrite not just the law but congressional history. The ruling in Texas came on the eve of Saturday’s deadline for Americans to sign up for coverage in the federal insurance exchange created by the ACA, more commonly called Obamacare. The judge did not issue any injunction in the case, meaning that in the short term, nothing will change in health-care services or insurance while the courts consider the issue. The 55-page ruling late Friday from U.S. District Judge Reed O’Connor found the law invalid on the basis of the political and legal history of a few key provisions. O’Connor decided that once Congress repealed the tax penalty that enforced a mandate that most Americans get health insurance, the whole law became invalid. The political and legal fights surrounding the ACA tend to focus on the mandate and the requirement that insurance companies provide coverage to people with preexisting medical conditions. The 2,000-page law, however, covers a vast array of other health-care issues, touching almost every part of the health-care industry in the United States. For that reason, if the ruling were to take effect, it could create major disruptions across the U.S. health-care system — affecting which drugs patients can buy, preventive services for older Americans, the expansion of Medicaid in most states and the structure of the Indian Health Service. “There’s really no American that’s not affected by this law,” said Yale law professor Abbe Gluck, who filed an amicus brief with other lawyers in the Texas case. “It’s absolutely ludicrous to hold that we do not know whether the 2017 Congress would have wanted the rest of the ACA to exist without an enforceable mandate, because the 2017 Congress did exactly that when it zeroed out the mandate and left the rest of the ACA standing,” Gluck said. “He effectively repealed the entire Affordable Care Act when the 2017 Congress decided not to do so.”
Two Texas Consultants Don’t Have Standing to Take Down Obamacare -I’ve got a piece at The Atlantic this morning arguing that Judge O’Connor was wrong—and obviously so—to hear the Texas lawsuit at all. The states don’t have standing to challenge a mandate that doesn’t apply to them. And the two Texas consultants they recruited as plaintiffs don’t have standing either. Here’s the key argument:Nantz and Hurley say they feel “obligated” to buy insurance because they “believe that following the law is the right thing to do.” But, again, the law doesn’t obligate them to do anything. It’s all in their heads. And, as the Supreme Court has held, plaintiffs can’t “manufacture standing merely by inflicting harm on themselves.”O’Connor rejected that line of argument, saying that it “begs a leading question in the case by assuming that the Plaintiffs need not comply” with the individual mandate. But even assuming that the Texans are right that they’re technically obligated to buy insurance, being subject to an unenforceable legal command doesn’t count as an injury. The Supreme Court has flatly held that “a plaintiff who challenges a statute must demonstrate a realistic danger of sustaining a direct injury as a result of the statute’s operation or enforcement.”So it’s not enough that you feel compelled; you must actually be compelled. In one D.C. Circuit case, for example, a family planning group challenged a provision that prohibited recipients of government grants from discriminating against individuals that refuse to provide abortions. The family planning group said it was laboring under an unconstitutional obligation. That’s not enough for standing, said the court, because there was no reason to think that “good-faith conduct violating a grant condition would trigger an immediate funding cut-off.” No risk of enforcement, no standing. Similar cases led to similar outcomes. One significant implication: it matters that O’Connor hasn’t (yet) found that the red states have standing to sue. If they lack standing, he can’t enjoin the Trump administration from enforcing the law as to them: that’d be giving relief to plaintiffs who aren’t properly before the court.
To Save Obamacare, Repeal the Mandate - Nicholas Bagley - My colleague Richard Primus and I have an article at The Atlantic offering an idea to the incoming House of Representatives about how to deal with the decision out of Texas invalidating the Affordable Care Act.If congressional intent is the key to O’Connor’s decision, Congress can intervene. And the best way for it to do so is not to enter the litigation, as the incoming speaker of the House, Nancy Pelosi, has said she’ll do. It’s to legislate.Congress could fix the problem by saving, severing, or sinking the mandate. First, Congress could make the mandate constitutional again by raising the penalty for not having insurance from zero dollars, where Congress set it in 2017, to one dollar. Second, Congress could declare the individual mandate severable from all other parts of the ACA. Third, it could repeal the mandate—something that might once have wrecked the ACA but that now would have little or no effect on the rest of the regulatory framework. …Any of these solutions could be accomplished in a one-sentence statute, and any one of them would end the Texas lawsuit. The challenge is political. Republicans hold the Senate, Democrats will soon control the House, and the two parties don’t see eye to eye on much. …At least some Republicans, [though], might be interested in gaining a symbolic victory and avoiding a self-inflicted wound. Why not give it a shot? The House should pass a one-sentence bill adopting one of these three fixes. Send it to the Senate. See what happens next. If the Senate goes along, it’ll be a moment of bipartisanship and responsible congressional behavior. And if the Senate refuses, the Democrats can pummel the Republicans for supporting an irresponsible lawsuit. Read the whole thing here!
Republicans Killed Much Of Obamacare Without Repealing It - Saturday was the deadline for Americans in most states to enroll in health plans for 2019 through the marketplaces set up by the Affordable Care Act. When Barack Obama was in office, the federal government, including the president himself, spent the days and weeks before the deadline constantly urging people to sign up. But this year, like in 2017, President Trump and the federal government did little outreach. You’ve probably read about the many attempts by Republicans on Capitol Hill to repeal Obamacare, most notably the failed push last year. But the anti-Obamacare movement is way broader than just the effort to undo it with legislation in Congress. It is not a single, top-down operation, but rather different parts of the conservative movement taking actions in their own spheres in opposition to the law. Republicans in Congress have done away with some parts of the law and cut funding in other areas. GOP-controlled state legislatures and Republican governors have opted out of some of Obamacare’s key provisions. The Trump administration is using its executive powers to essentially rewrite some parts of the law, and it’s taking a largely hands-off approach to some parts it doesn’t like, like the enrollment process, that might benefit from a supportive federal government.This campaign has curtailed Obamacare in some ways we can clearly measure:
- Fourteen states have not yet opted in to the Medicaid expansion, leaving about 4 million eligible Americans unable to enroll. A lawsuit brought by GOP elected officials and a conservative-leaning business group led to a 2012 U.S. Supreme Court ruling that states did not have to extend Medicaid benefits to more of their residents, as the ACA had initially mandated.
- Twenty-eight states have completely opted out of running local Obamacare exchanges, which means all enrollment processes are left up to the federal government. As originally written, Obamacare gave states the option of running their own insurance marketplaces. Like with Medicaid, more conservative states have been chosen not to participate. Of the 28 states that leave their health insurance marketplace entirely up to the federal government, Trump won 24. And of the 22 that are involved in running their own exchanges, Hillary Clinton won 16.
- Federal spending to promote ACA enrollment has been cut from $163 million to $20 million. The Trump administration has cut money both from government programs designed to increase Obamacare enrollment and from grants that are given to nongovernmental groups to help people enroll. In Obama’s last year in office, the federal government spent about $100 million in advertising to encourage people to enroll in ACA plans and gave out $63 million to groups who were supposed to boost enrollment. This year, the Trump administration is spending $10 million on ads and giving to $10 million to these assistance groups.
Big Pharma Fights Proposal to Keep It From Looting Medicare - The Trump administration has proposed that insurance plans providing drug coverage to Medicare beneficiaries will no longer be forced to cover six hitherto “protected” drug classes. The classes––which include drugs for psychiatric conditions, cancer and immune diseases––are among the priciest of all drugs and account for as much as 33 percent of total outpatient drug spending under Part D of Medicare.Under the proposal, Medicare plans could “exclude from their formularies protected class drugs with price increases that are greater than inflation, as well as certain new drug formulations that are not a significant innovation over the original product,” says Seema Verma, the administrator of the Centers for Medicare and Medicaid Services.In 2014, the Obama administration sought the same “price relief” for Medicare but was defeated by drug industry lobbyists. At the time, 100 pills of the “protected” psychiatric drug Abilify cost $1,644, 100 pills of the “protected” psych drug Geodon cost $958, 100 pills of the “protected” psychiatric drug Invega cost $1,789 and 100 pills of the “protected” psych drug Seroquel cost $2,000. Since then, even pricier psychiatric drugs have emerged as well as 6-digit cancer drugs. The Obama proposal was roundly defeated by drug industry funded groupslike the National Alliance on Mental Illness (NAMI). NAMI received $23 million in just two years from drug makers and is heavily financed by them. The proposal “undermines a key protection for some of the sickest, most vulnerable Medic beneficiaries,” said NAMI lobbyist Andrew Sperling, one of many voices that defeated the proposal. “You get much better outcomes when a doctor can work with patients to figure out which medications will work best.” He might have added, as long as the taxpayer pays.
Chuck Schumer Refuses to Endorse Medicare for All – As Medicare for All advocates gear up for what promises to be a long and brutal fight against the powerful industry interests and corporate Democrats committed to upholding the for-profit status quo, critics accused Senate Minority Leader Chuck Schumer (D-NY) of siding with the latter camp after he insisted in an interview on Sunday that “there are lots of different routes” to a universal healthcare system and refused to endorse single-payer. Pressed by MSNBC’s Chuck Todd on whether he thinks it’s time for Democrats to unify around Medicare for All — which has the backing of 84 percent of Democratic voters — Schumer dodged, saying, “Look, Democrats are for universal access to healthcare, from one end of the party to the other.” “We want more people covered, everyone covered; we want better healthcare at a lower cost. People have different views as to how to get there. Many are for Medicare for All, some are for Medicare buy-in, some are Medicare over 55, some are Medicaid buy-in, some are public option,” Schumer added. “I’m going to support a plan that can pass, and that can provide the best, cheapest healthcare for all Americans.” Watch:
'Serious' complaints against Kavanaugh are dismissed because he was confirmed to SCOTUS - Federal judges reviewing complaints lodged against Supreme Court Justice Brett Kavanaugh said Tuesday that the allegations against the former federal appeals court judge are "serious" but that they must dismiss them without determining their merits because of Kavanaugh's October confirmation by the U.S. Senate.Timothy Tymkovich, the Chief Circuit Judge for the U.S. Court of Appeals for the Tenth Circuit, wrote in an order that "the complaints must be dismissed because an intervening event — Justice Kavanaugh's confirmation to the Supreme Court — has made the complaints no longer appropriate for consideration under the [Judicial Conduct and Disability Act]."The decision was widely expected.The Judicial Conduct and Disability Act outlines procedures for filing complaints against federal judges, but the 1980 law does not cover Supreme Court justices.In the order, Tymkovich said that most of the complaints include allegations of false statements under oath during Kavanaugh's D.C. Circuit confirmation hearings in 2004 and 2006 as well as during his Supreme Court confirmation hearings earlier this year. Kavanaugh, President Donald Trump's second nominee to the top court, was accused of sexual misconduct before he was confirmed. He emphatically denied the allegations. Tymkovich disclosed copies of the complaints with identifying information redacted on the 10th Circuit's website.
Incoming Democrats Ready Bill That Will Criminalize Private Gun Sales - In the land of the fee and home of the slave, incoming Democrats have already drafted a bill that will criminalize private gun sales. As a “free” American, you will no longer be able to sell your own property without the government’s permission, unless you want to be labeled as a criminal if this bill succeeds and becomes a law. While this won’t prevent mass shootings, as a government study conducted by anti-gun lunatics in politically elite positions already discovered, a very vast majority of gun owners regulate themselves. Gun-hating democrats who demanded a study into the sale of guns online were smacked with a dose of reality. They wasted two years attempting to buy guns illegally on the “dark web,” and the group of Democrats failed every single time. Senator Elizabeth Warren joined with Senator Brian Schultz, D-Hawaii, and Representative Elijah Cummings, D-Md., to commission the GAO report. An embarrassing attempt to try to regulate guns further went horribly wrong when Democrats took it upon themselves to try to skirt the law to prove it can be done. Over the course of the two-and-a-half year investigation, agents tried to buy firearms illegally on the “Surface Web” and the “Dark Web,” generally by sharing their status as “prohibited individuals” or trying to buy across state lines. –SHTFPlan But the GAO revealed that every single one of their [Democrats who tried to buy guns privately] 72 attempts outside of the “dark web” were “unsuccessful.” It kind of makes one wonder where Bloomberg got his information and statistics. As if that isn’t bad enough, to humiliate those in power who think of us as less equal than them, the bulk of this rather embarrassing study is being ignored by the mainstream media.
Suozzi vying against Ocasio-Cortez for seat on Ways and Means Committee - U.S. Rep. Tom Suozzi (D- Glen Cove) is facing off with House newcomer Alexandria Ocasio- Cortez for a vacated seat on the House’s Ways and Means committee. Spokespeople Ocasio-Cortez is the congresswoman-elect for New York District 14 which comprises sections of Queens and Bronx counties. Ideologically, the opponents sit on opposite sides of the spectrum within the Democratic Party. Ocasio-Cortez is a member of the progressive insurgency that made strides during the midterms while Suozzi is the vice-chair of the Problem Solvers Caucus, a bipartisan group of 24 Republicans and 24 Democrats. The Committee on Ways and Means is typically filled by the House’s most senior members and has historically always included a New Yorker, which was most recently fulfilled by Rep. Joe Crowley (D- Queens, Bronx) whom Ocasio-Cortez upset in a primary race. Ways and Means, the oldest committee in the U.S. Congress handles tax-writing and oversees revenue-related policies, such as tariffs, and programs like Social Security and Medicare. A consortium of progressive groups on Long Island sent an email to Blank Slate Media in support of the 29-year-old congresswoman-elect. The email read “we call on Nancy Pelosi to appoint a progressive champion [Ocasio-Cortez] to the open committee seat.” It added that “when it comes to the type of issues the Ways and Means committee discusses, Tom Suozzi is far to the right of the Democratic base.” Suozzi confirmed his less liberal views to the Intercept, saying: “Am I fiscally conservative? Yes, I’m fiscally conservative” but noted his progressive leanings on a number of issues such as poverty and immigration. He told the publication that he is also in support of the Green New Deal, a proposed policy spearheaded by Ocasio-Cortez and Sen. Bernie Sanders (I-VT) that aspires to quickly cut carbon emissions to reach levels accepted by the Paris Agreement. Not only a member of the Problem Solvers Caucus, but Suozzi is also involved with the New Democrat Coalition which is a group of pro-business Democrats who support growth initiatives and a balanced budget.
Incoming Democratic frosh don't want to serve on House Financial Services panel -- The House Financial Services Committee, sitting at the nexus of Wall Street money and Washington power, is typically a magnet for incoming freshmen lawmakers looking to vault into perches overseeing a multitrillion-dollar industry. Not this year. In a twist, the biggest Democratic class since Watergate is mostly steering clear of seeking seats on what has been considered a gilded panel, top Democrats and industry sources say. The development owes primarily to a couple of factors. More than half the Democratic members of the incoming class — 36 of 63 soon-to-be lawmakers — campaigned on pledges to refuse corporate PAC money. That has diminished the allure of the Financial Services Committee as a post offering the opportunity to fundraise from the banking, insurance, and real-estate sectors. “It’s like what Dillinger said about why he robs banks,” financial services lobbyist Jason Rosenstock tells me. “If you don’t take corporate PAC money, there’s less incentive” to serve on the panel. Meanwhile, would-be members are gravitating to other committees, including the House Transportation and Infrastructure Committee. That panel is expected to work on a major infrastructure package that could be the only major initiative that advances next year — carrying with it hundreds of billions of dollars worth of projects for lawmakers to bring home to their districts. Others are lining up for posts on committees — such as Judiciary and Oversight and Government Reform — that will take the lead doing the high-profile work of investigating the Trump administration. “There are cycles to these things,” says Rep.-elect Katie Porter (D-Calif.), a University of California at Irvine School of Law professor who focuses on consumer bankruptcy and requested a seat on the Financial Services panel. She noted that most of her classmates focused on other issues in their campaigns — and pointed to the impact that the anti-PAC pledge has made dimming the panel’s draw.
Report: IRS Enforcement Could Reap Billions in Unpaid Revenue - The federal government could raise more than $1 trillion in new revenue by beefing up tax enforcement and by cracking down on carbon emissions, according to congressional budget analysts. Those two moves alone could help finance progressive lawmakers’ Green New Deal, or they could cover the lion’s share of the cost of the massive infrastructure investment package proposed by President Donald Trump.The data was included in a new report by the Congressional Budget Office released Thursday.The study found that if lawmakers reversed recent budget cuts to the Internal Revenue Service, the agency could recover tens of billions of dollars in revenue that is owed to the government — but that is not being paid. If the agency’s budget were increased by $20 billion over the next 10 years, the CBO says auditors would be able to reclaim more than $55 billion that could be used to shore up federal programs or reduce the deficit. Put another way, the analysts said that for every $2 spent on tax enforcement, the government could expect to reclaim more than $5 in unpaid taxes.“Many taxpayers who are not compliant under the current tax system would pay the taxes they owe” if the enforcement budget is increased, the CBO said.A recent ProPublica investigation found that as lawmakers have slashed the IRS enforcement budget in recent years, the agency has had far fewer resources with which to scrutinize the tax returns of corporations and high-income individuals. In all, the news organization estimated the IRS has not collected $95 billion in taxes that it may have otherwise collected, had Congress given it its previous level of enforcement resources. Audits of the wealthy and corporations have steeply declined at the same time the agency has begun withholding tax refunds for recipients of the Earned Income Tax Credit. The decreased scrutiny of the wealthy and tougher posture toward the poor has occurred even though CBO notes that “the amounts collected from audits of higher-income taxpayers are, on average, much larger than collections from audits of taxpayers with lower income.”
Mueller Finally Releases Heavily Redacted Key Flynn Memo On Eve Of Sentencing - Having initially snubbed Judge Emmet Sullivan's order to release the original 302 report from the Michael Flynn interrogation in January 2017, Special Counsel Robert Mueller has finally produced the heavily redacted document, just hours before sentencing is due to be handed down. The memo - in full below - details then-national security adviser Michael Flynn's interview with FBI agents Peter Strzok and Joe Pientka, and shows Flynn was repeatedly asked about his contacts with former Russian Ambassador Sergey Kislyak and in each instance, Flynn denied (or did not recall) any such conversations.The agents had transcripts of Flynn's phone calls to Russian Ambassador Kislyak, thus showing Flynn to be lying.Flynn pleaded guilty guilty last December to lying to the FBI agents about those conversations with Kislyak. The redactions in the document seem oddly placed but otherwise, there is nothing remarkable about the content..
Michael Flynn sentencing delayed as judge tells ex-Trump official: 'You sold your country out' The sentencing of Michael Flynn was postponed Tuesday after the judge told the former national security advisor "arguably you sold your country out" — and warned the fallen Army lieutenant general that he might be sent to jail if he did not agree to delay the hearing. Flynn was due to be sentenced Tuesday for lying to FBI agents about his conversations with Russia's then-ambassador to the United States, Sergey Kislyak, in the weeks before President Donald Trump took office. Federal guidelines recommended a sentence of zero to six months in jail. Flynn's lawyers and prosecutors from special counsel Robert Mueller's office were prepared to argue in U.S. District Court that Flynn receive either no jail time at all — given his guilty plea and extensive cooperation with Mueller — or get the low end of the guideline range. But that plan was immediately thrown into disarray at an explosive hearing at which Judge Emmet Sullivan pressed the defense hard on its recent suggestions that the case against Flynn was unfair. The judge said that looked liked "backpedaling" from the guilty plea. Sullivan, who also asked if Mueller had ever contemplated charging Flynn with "treason," later suggested that Flynn might get a less severe sentence once he was actually done cooperating with investigators. "If you want to postpone this, and come back at some later point ... that's fine with me," the judge said.
How Trump Could Get Away With It - This weekend, President Donald Trump raged against Michael Cohen, calling his former lawyer and accuser a “rat” for cooperating with federal prosecutors. Cohen has accused Trump of directing him to make secret hush-money payments to two women so that they wouldn’t tell their stories before the November 2016 election. The Department of Justice’s description of the role of Individual 1 – the president himself – leaves no doubt that career Justice Department prosecutors regard Trump as a full-blown co-conspirator. And most serious-minded criminal lawyers agree that, if these allegations are true, the president, but for his day job, would have been sitting in the dock with his long-time fixer. By all accounts, however, neither the United States attorney in Manhattan nor Special Counsel Robert Mueller is likely to indict the president so long as he remains in office. Official Justice Department policy, as set out in a 2000 opinion of the Office of Legal Counsel (OLC), holds that a sitting president may not be indicted, even if any trial is postponed until the president has left office. OLC reasoned that the mere fact of an indictment – indeed, even if the indictment is issued under seal (so that the president is not even aware of its existence) – would so distract him from the performance of his constitutional duties that no criminal charges may be brought unless the president is first impeached and removed, resigns, or leaves office following his term of service. Mueller, as a DOJ special counsel, is expected to follow this DOJ guidance, as would the U.S. attorney.But there’s the rub: The statute of limitations on the campaign finance felonies in question, as well as virtually any other felony with which President Trump might be charged, is five years, beginning with when the offenses were committed. Especially if Trump were reelected in 2020, he would still be a sitting president when those five years are up. Does that mean he might be able to run out the clock? Would he be legally free from prosecution if he serves two full terms in office?
New secret filing in case of former Trump lawyer Michael Cohen placed in NY federal court vault - What's in the vault? Someone on Wednesday filed a document saying something in connection with a criminal case against President Donald Trump's former personal lawyer, Michael Cohen. But who filed it and what it says are a mystery. The document, which is sealed from public view, was "placed in vault" at U.S. District Court in Manhattan, according to a docket entry. The filing came a week after Cohen, 52, was sentenced to three years in prison for his guilty pleas in cases brought separately by federal prosecutors in New York, and by the office of special counsel Robert Mueller. The sealed document was filed in a case brought against Cohen by the U.S. Attorney's Office for the Southern District of New York. In that case, Cohen pleaded guilty to tax evasion, making false statements to a bank, and to campaign contribution crimes related to the payments of hush money to two women who claim they had affairs with Trump. In the case filed by Mueller, Cohen admitted lying to Congress about the extent of Trump's knowledge of a plan to build a Trump Tower in Moscow, and about when that plan died. The sealed document does not appear on the docket of that case. Neither Cohen's lawyer Guy Petrillo nor a spokesman for the federal prosecutors in New York immediately responded to emails asking who filed the document or what it says. One question that has loomed since Cohen was sentenced is whether he will now try to get his prison term reduced by offering prosecutors additional cooperation beyond what he already has given them.
The Maria Butina Case Is Not About Spying - Two things stand out in this week’s plea deal of Maria Butina, the Russian citizen branded by U.S. media as an “accused spy.” The description of her offense by federal prosecutors doesn’t mention any link to Russian intelligence services and the plea agreement says she’s willing to cooperate with the U.S. authorities despite knowing she’ll almost certainly be deported to Russia.These peculiarities make Butina’s a strange case.The 30-year-old gun-rights activist and former graduate student at American University networked so inventively and tirelessly in Washington that she aroused the suspicion of U.S. counterintelligence and was arrested in July. She found herself in the media spotlight as an unlikely femme fatale until prosecutors walked back one of the original accusations — that she’d been willing to trade sex for getting ahead in her influence operation. After spending five months in jail, Butina admitted having served as an agent of the Russian government without duly notifying the U.S. attorney general. That summoned memories of 10 people accused of being Russian sleeper agents in the U.S. in 2010, including Anna Chapman, who later became a minor celebrity in Russia, who pleaded guilty to the same offense. But the U.S. government’s complaint against that group stated unequivocally that they had been sent to the U.S. to lie in wait until the Russian foreign intelligence service decided to use them. No such accusation is being made in Butina’s case. She’s only admitted that she’d been working in the U.S. at the behest of Alexander Torshin, who resigned as deputy governor of the Russian central bank last month, and that she knew that he was coordinating his instructions for her with the Russian foreign ministry. Butina isn’t being treated as a spy. If she were, any cooperation with the authorities would have been secret and she would have been offered protection, not warned bluntly of deportation — or she would have been swapped, like the 10 “sleepers.”
Comey Lashes Out At Trump, GOP Lawmakers; Refuses To Deny He Leaked Classified Info - Fired FBI Director James Comey - who put two pro-Clinton / anti-Trump FBI employees in charge of investigating both Clinton and Trump, lashed out at the president and GOP lawmakers on Monday, according to The Hill. "So another day of Hillary Clinton’s emails and the Steele dossier," Comey quipped to reporters following six hours of closed-door testimony on Capitol Hill. "This while the President of the United States is lying about the FBI, attacking the FBI, and attacking the rule of law in this country. How does that make any sense?"Comey also slammed GOP lawmakers for sitting on their hands. "Republicans used to understand that the actions of a president matter, the words of a president matter, the rule of law matters, and the truth matters. Where are those Republicans today," said Comey. "At some point, someone has to stand up and in the fear of Fox News and fear of their base, and fear of mean tweets, stand up for the values of this country and not slink away into retirement."The former FBI Director also refused to deny that he leaked classified information after he was fired as FBI Director - an assertion made by President Trump and others in April after it was revealed that Comey released what he claimed were personal memos documenting conversations with then-president-elect Trump in which he says he felt pressured to end the investigation into former national security adviser Mike Flynn.
Trump Foundation Agrees To Dissolve Amid A Shocking Pattern Of Illegality - President Trump's charity, the Donald J. Trump Foundation, has agreed to dissolve amid allegations from the New York Attorney General's office that it engaged in a "shocking pattern of illegality." However, New York Attorney General Barbara Underwood announced on Tuesday that her office will continue to pursue its lawsuit against the foundation. As WaPo reports, the attorney general’s suit alleges that Trump used his charity’s money as his own piggy bank — including to help his presidential campaign by paying for giveaways at Iowa rallies.“The Foundation was little more than a checkbook for payments to not-for-profits from Mr. Trump or the Trump Organization,” Underwood wrote in the initial suit.The Trump Foundation was never the most impressive part of Trump’s portfolio: At its peak, in 2009, it had only about $3.2 million in the bank, a small sum for a billionaire’s charity. Full Statement from AG Underwood:
Christopher Steele Admits He Was Hired To Help Hillary Challenge 2016 Election - Former UK spy Christopher Steele admitted in a London court that he was hired to help Hillary Clinton contest the results of the 2016 election in case Trump won, according to the Washington Times. Steele assembled an anti-Trump "dossier" of opposition research investigative firm Fusion GPS, which was in turn hired by DNC law firm Perkins Coie LLP. The document used "a senior Russian Foreign Ministry figure," and "a former top level intelligence officer still active in the Kremlin," according to Vanity Fair. In other words, Hillary Clinton - through Steele and other intermediaries - was working with Russians against Donald Trump. He said the law firm Perkins Coie wanted to be in a position to contest the results based on evidence he unearthed on the Trump campaign conspiring with Moscow on election interference.His scenario is contained in a sealed Aug. 2 declaration in a defamation law suit brought by three Russian bankers in London. The trio’s American attorneys filed his answers Tuesday in a libel lawsuit in Washington against the investigative firm Fusion GPS, which handled the former British intelligence officer.In an answer to interrogatories, Mr. Steele wrote: “Fusion’s immediate client was law firm Perkins Coie. It engaged Fusion to obtain information necessary for Perkins Coie LLP to provide legal advice on the potential impact of Russian involvement on the legal validity of the outcome of the 2016 US Presidential election. “Based on that advice, parties such as the Democratic National Committee and HFACC Inc. (also known as ‘Hillary for America’) could consider steps they would be legally entitled to take to challenge the validity of the outcome of that election.” -Washington Times
‘Unregistered foreign agent’: Clinton Foundation oversight panel hears explosive testimony -- Fraud investigators have exposed the Clinton Foundation’s alleged misdeeds in a Congressional hearing, describing it as a de facto “foreign agent” devoted not to charity but to “advancing the personal interests of its principals.” The Clinton Foundation acted as an agent of foreign governments “early in its life and throughout its existence,” according to testimony by former government forensic investigator John Moynihan, which, if true, would not only render it in violation of the Foreign Agents Registration Act but also would violate its nonprofit charter, putting it on the hook for a massive quantity of unpaid taxes. The foundation began acting as an agent of foreign governments early in its life and continued doing so throughout its existence, as such, the foundation should have registered under FARA.Moynihan and fellow ex-government investigator Lawrence Doyle shared 6,000 pages of evidence with the IRS over 18 months ago, only to be met with silence. They shared them with the FBI multiple times – ditto. Yet when the pair testified before the House Oversight and Government Reform Committee, they refused to turn over the documents, stating they did not want to interfere with any ongoing investigations. The committee chairman Rep. Mark Meadows (R-NC) said witnesses’ reluctance to share all the documents was hardly a “good foundation for truth and transparency,” while Rep. Jody Hice (R-GA) said he felt the duo was “using” the panel for their own benefit. “These are not our facts. They are not your facts. They are the facts of the Clinton Foundation,” said Moynihan, maintaining his interest in the case is purely financial – not political. Testifying on their findings, Doyle highlighted the Foundation’s alleged “misuse of donated public funds,” explaining that it “falsely attested that it received funds and used them for charitable purposes which was, in fact, not the case. Rather the foundation pursued in an array of activities both domestically and abroad,” which included activities “properly characterized as profit-oriented and taxable undertakings of private enterprise, again failing the operational tests of philanthropy referenced above,” referring to the equally non-charitable pursuit of funding the Clinton Presidential Library.
Russian 2016 Influence Operation Targeted African-Americans on Social Media - NYT - The Russian influence campaign on social media in the 2016 election made an extraordinary effort to target African-Americans, used an array of tactics to try to suppress turnout among Democratic voters and unleashed a blizzard of activity on Instagram that rivaled or exceeded its posts on Facebook, according to a report produced for the Senate Intelligence Committee.The report adds new details to the portrait that has emerged over the last two years of the energy and imagination of the Russian effort to sway American opinion and divide the country, which the authors said continues to this day.“Active and ongoing interference operations remain on several platforms,” says the report, produced by New Knowledge, a cybersecurity company based in Austin, Tex., along with researchers at Columbia University and Canfield Research LLC. One continuing Russian campaign, for instance, seeks to influence opinion on Syria by promoting Bashar al-Assad, the Syrian president and a Russian ally in the brutal conflict there. The New Knowledge report is one of two commissioned by the Senate committee on a bipartisan basis. They are based largely on data about the Russian operations provided to the Senate by Facebook, Twitter and the other companies whose platforms were used.
Bigoted Paternalism Behind "Russians Targeted African-Americans” NY Times Article - -- The outlandish “Russian interference” narrative just took a turn from the banal to blatantly disrespectful. For the past two years, the punditry on the supposed left have been peddling the lie that the thousands of dollars spent on Facebook and Google ads—purportedly at the behest of Putin—had more impact on the outcome of the 2016 elections than the billions of dollars that were unleashed by corporations, lobbyists and the dark moneyed oligarchs.This morning, the New York Times decided to stop insulting our intelligence and instead chose to insult decency. According to the article written by Scott Shane and Sheera Frenkel, Russians allegedly unleashed an intricate plot to targeted African-Americans in order to foment discontent and dupe “black people” to vote against their self-interest. The corporate recorders at the NY Times would have us believe that the reason African-Americans did not uniformly vote for Hillary Clinton and the Democrats is because they were too dimwitted to think for themselves and were subsequently manipulated by foreign agents. This yellow press drivel is nothing more than propaganda that could have been written by George Wallace.Sure enough, within short order, the “liberal” establishment latched on to this pathetic and racist story line to feign shock and dismay that Trump and his allies took advantage of the weak and vulnerable. With rank paternalism and bigotry worthy of David Duke, these supposed progressives are inferring that we can’t think for ourselves and that only they can act on our behalf. We are “their Negroes” and if we are not walking in lock step with Democrats, it’s not because we are critical thinkers but because we are fragile people who need to be spoken for. Where the Republican Party has perfected bigotry to cater to their base, Democrats are equally adept at belittling their supporters and being condescending to the point of outright offensiveness. The insidious undertones of the New York Times article is straight out of the COINTELPRO playbook that was deployed during the Civil Rights Era to dismiss the frustrations of African-Americans. J. Edgar Hoover would have been proud. Once again, the New York Times dusts of their blueprint from the past while Democrats channel their inner Joseph McCarthy.
Mass Media's Russia Hysteria Is Openly Acknowledging The Power Of Propaganda -- by Caitlin Johnstone - “So now the question becomes: how did Russia know to target African American voters, and especially in certain key states,” asked popular #Resistance pundit Amy Siskind in response to a New York Times article claiming Russian social media trolls targeted Sanders supporters and Black voters during the 2016 election.“I think we’ll get our answers in the coming months from the Mueller probe,” Siskind speculated. Well that’s a mighty good question there, Amy, and I think the answer is pretty obvious. Clearly Russia knew to target African American voters because Donald Trump called his boss Vladimir Putin and told him about America’s secret racial issues, which nobody in any foreign country could ever know about on their own. Then it was a simple matter of sending the trolls of St Petersburg’s Internet Research Agency to trick Black people into thinking that the American political system hasn’t been working for them, thereby ensuring the defeat of the rightful heir to the presidential throne, Hillary Rodham Clinton. It’s not disenfranchised voters’ fault that Hillary’s coronation failed to take place, it’s the fault of Russian memes on social media which confused their silly heads about who they wanted to vote for! Or, alternate theory: everything about that question is immensely stupid. This whole story is unbelievably idiotic. Not just because it’s based on a report by a private cybersecurity company that was founded by an NSA veteran, a company which would have every incentive to bend its findings in the most sensational way possible to attract clients with a viral new “bombshell” story about Russian election meddling. Not just because it infantilizes voters by implying that a smattering of cutesy memes deprived them of independent agency and caused the failure of Hillary Clinton’s historically awful presidential campaign. Not just because of the sleazy gaslighting element inherent in a narrative which insinuates that a populace meant to elect a different candidate but got confused. By far the dumbest thing about this story is the implicit suggestion that only Russian propaganda was at play during the 2016 election, and no other propaganda. As Aaron Maté noted back in February, the Russian troll farm’s total operating budget was some thousands of dollars, and most of the troll farm’s posts weren’t even about the election. Contrast that with Hillary Clinton’s $1.2 billion campaign budget and the untold billions of dollars worth of free mass media coverage she received, and even if everything we’re being told about Russia’s “influence campaign” is completely true, that’s a microscopic drop in the bucket.
Don’t Laugh : It’s Giving Putin What He Wants – Caitlin Johnstone -The BBC has published an article titled “How Putin’s Russia turned humour into a weapon” about the Kremlin’s latest addition to its horrifying deadly hybrid warfare arsenal: comedy. The article is authored by Olga Robinson, whom the BBC, unhindered by any trace of self-awareness, has titled “Senior Journalist (Disinformation)”. Robinson demonstrates the qualifications and acumen which earned her that title by warning the BBC’s audience that the Kremlin has been using humor to dismiss and ridicule accusations that have been leveled against it by western governments, a “form of trolling” that she reports is designed to “deliberately lower the level of discussion”. Turns out jokes are a Russian disinformation conspiracy. Is nothing safe? What will those barbarian Others think of next? Weaponizing our tears? https://t.co/0CFcTL65q0 — Mark Ames (@MarkAmesExiled) December 15, 2018 “Russia’s move towards using humour to influence its campaigns is a relatively recent phenomenon,” Robinson explains, without speculating as to why Russians might have suddenly begun laughing at their western accusers. She gives no consideration to the possibility that the tightly knit alliance of western nations who suddenly began hysterically shrieking about Russia two years ago have simply gotten much more ridiculous and easier to make fun of during that time. Couldn’t possibly have anything to do with the emergence of a demented media environment wherein everything around the world from French protests to American culture wars to British discontent with the European Union gets blamed on Russia without any facts or evidence. Wherein BBC reporters now correct guests and caution them against voicing skepticism of anti-Russia narratives because the UK is in “an information war” with that nation. Wherein the same cable news Russiagate pundit can claim that both Rex Tillerson’s hiring and his later firing were the result of a Russian conspiracy to benefit the Kremlin. Wherein mainstream outlets can circulate blatantly false information about Julian Assange and unnamed “Russians” and then blame the falseness of that reporting on Russian disinformation. Wherein Pokemon Go, cutesy Facebook memes and $4,700 in Google ads are sincerely cited as methods by which Hillary Clinton’s $1.2 billion presidential campaign was outdone. Wherein conspiracy theories that Putin has infiltrated the highest levels of the US government have been blaring on mainstream headline news for two years with absolutely nothing to show for it to this day. Nope, the only possibility is that the Kremlin suddenly figured out that humor is a thing. The fact of the matter is that humorous lampooning of western establishment Russia narratives writes itself. I myself recently authored a satire piece that a lot of people loved and which got picked up by numerous alternative media outlets, and all I did was write down all the various escalations this administration has made against Russia as though they were commands being given to Trump by Putin. And it didn’t take any Kremlin rubles or dezinformatsiya from St Petersburg to figure out how to write it.
Democrats Posing As Russians Executed "Elaborate 'False Flag' Operation" Against Roy Moore - A group of tech experts working as Democratic operatives were paid $100,000 to orchestrate an elaborate "false flag" disinformation campaign during the hotly contested 2017 special election between Roy Moore and Democratic Sen. Doug Jones. The group, funded by liberal billionaire Reid Hoffman, created over 1,000 Russian-language Twitter accounts that followed Roy Moore overnight in order to link the embattled Republican candidate to Russian influence campaigns, according to a Wednesday report in the New York Times. Roy Moore just picked up a whole bunch of twitter followers. But they ain't from around here, comrade. pic.twitter.com/vJBPVxqWIW — The Ostrich (@ALostrich) October 16, 2017 "We orchestrated an elaborate ‘false flag’ operation that planted the idea that the Moore campaign was amplified on social media by a Russian botnet," reads an internal report on the Alabama effort obtained by the Times, which aimed to experiment "with many of the tactics now understood to have influenced the 2016 elections." The project’s operators created a Facebook page on which they posed as conservative Alabamians, using it to try to divide Republicans and even to endorse a write-in candidate to draw votes from Mr. Moore. It involved a scheme to link the Moore campaign to thousands of Russian accounts that suddenly began following the Republican candidate on Twitter, a development that drew national media attention. -New York Times
Harvey Weinstein Criminal Case May Be Crumbling, Experts Say -- As a key hearing approaches, the disgraced mogul's defense hinges on discrediting accusers with emails and preventing "prior bad act" witnesses — which helped convict Cosby — from speaking: Is Hollywood's #MeToo movement poised for a very public letdown?On the eve of Harvey Weinstein's pivotal pretrial hearing on Dec. 20, the New York criminal case against the mogul looks to be on much shakier ground than in the court of public opinion, legal experts say."This is the prosecutor's worst-case scenario," says criminal defense attorney Mark Geragos, citing a series of setbacks in recent weeks in which Weinstein lawyer Ben Brafman undermined the credibility of the New York police department, the grand jury process, and the three women who accused the disgraced producer of rape and sexual assault. The prosecution suffered its biggest blow in October when Judge James Burke tossed a count involving allegations made by Lucia Evans, one of the original accusers in Ronan Farrow's New Yorker exposé, who said Weinstein forced her to perform oral sex on him in 2004. Evans' grand jury testimony was thrown out because an NYPD detective failed to pass along information to prosecutors that contradicted the former actress' account. In a previous motion, Brafman claimed that Assistant District Attorney Joan Illuzzi-Orbon was given information that would contradict Evans' testimony, and "it was the prosecutor who unethically withheld this information from the Grand Jury and it is they who are now lying to the Court." Perhaps most controversial, Brafman also presented a series of emails to Weinstein from accuser Miriam "Mimi" Haleyi, who wrote endearments like "Miss you too," "Lots of Love" and "xxxxx" in the years after a 2006 encounter in New York in which she says she was sexually assaulted by the producer. In October 2017, Haleyi made one of the most salacious accusations against Weinstein when she said during a press conference, with attorney Gloria Allred at her side, that the Oscar winner pulled out her tampon and orally forced himself on her."Credibility and reliability of the government's witnesses is obviously an essential consideration for any good prosecutor," says Greenberg Traurig's Mathew S. Rosengart, himself a former prosecutor. "This was particularly true in this matter because Brafman is masterful at picking apart witnesses and creating reasonable doubt based upon law enforcement or other errors. He did that in the Dominique Strauss-Kahn case against this very same DA's office."
The Latest Facebook Scandal: Netflix, Spotify Could Read Private Messages, Yandex Was Given IDs - Facebook has been giving some of the world's largest technology companies - more than 150 of them, far more intrusive access to users' personal data than it has ever disclosed according to an investigation by the New York Times. The Times interviewed over 60 people including current and former employees of Facebook and its partners, former government officials and privacy advocates - and reviewed over 270 pages of Facebook's internal documents while performing technical tests and analysis to monitor what data Facebook has been handing out like candy. The records, generated in 2017 by the company’s internal system for tracking partnerships, provide the most complete picture yet of the social network’s data-sharing practices. They also underscore how personal data has become the most prized commodity of the digital age, traded on a vast scale by some of the most powerful companies in Silicon Valley and beyond. -NYTThe discovery goes far beyond the Cambridge Analytica data harvesting scandal in which basic data was collected on up to 87 million users through a lifestyle survey app. Thanks to the United States having no general consumer privacy law, up to 400 million people's private information was freely shared with the likes of Google, Microsoft, Netflix, Spotify and other partners - and they didn't sell it; Facebook gave everyone's information away for free throughout the tech community in order to foster industry relationships and advance their own interests. The company allowed Microsoft's Bing search engine to see the names of virtually all Facebook users' friends without their consent. Netflix and Spotify were given the ability to read and delete Facebook users' private messages.
'Zuckerberg Must Resign Now': Outrage After Report Shows Facebook Let Corporate Partners Read Users' Private Messages -- Just hours after civil rights groups called on Facebook's top executives to step down from the company's board for allowing "viral propaganda" and "bigoted campaigns" to spread on the platform, demands for CEO Mark Zuckerberg to resign intensified after a bombshell New York Times report late Tuesday detailed a "special arrangement" the social media behemoth had with tech corporations that gave them access to users' data and private messages without consent. "An incredibly damning indictment of Facebook, every single paragraph," Trevor Timm, executive director of the Freedom of the Press Foundation, wrote of the Times report, which is the latest in a long line of recent revelations about Facebook's intrusive—and possibly illegal—data practices. Citing hundreds of pages of internal company records and interviews with dozens of former employees, the Times reported that "Facebook allowed Microsoft's Bing search engine to see the names of virtually all Facebook users' friends without consent" and "gave Netflix and Spotify the ability to read Facebook users' private messages." Additionally, the Times found, Facebook "permitted Amazon to obtain users' names and contact information through their friends, and it let Yahoo view streams of friends' posts as recently as this summer, despite public statements that it had stopped that type of sharing years earlier." "Facebook is a public trust that has broken our trust," wrote author and NBC political analyst Anand Giridharadas in response to the Times report. "Mark Zuckerberg must resign now." The New Republic's Jeet Heer added, "Facebook is evil, folks."
Amazon and Facebook Reportedly Had a Secret Data-Sharing Agreement, and It Explains So Much - Back in 2015, a woman named Imy Santiago wrote an Amazon review of a novel that she had read and liked. Amazon immediately took the review down and told Santiago she had “violated its policies.” Santiago re-read her review, didn’t see anything objectionable about it, so she tried to post it again. “You’re not eligible to review this product,” an Amazon prompt informed her.When she wrote to Amazon about it, the company told her that her “account activity indicates you know the author personally.” Santiago did not know the author, so she wrote an angry email to Amazon and blogged about Amazon’s “big brother” surveillance. I reached out to both Santiago and Amazon at the time to try to figure out what the hell happened here. Santiago, who is an indie book writer herself, told me that she’d been in the same ballroom with the author in New York a few months before at a book signing event, but had not talked to her, and that she had followed the author on Twitter and Facebook after reading her books. Santiago had never connected her Facebook account to Amazon, she said. A new report in the New York Times about Facebook’s surprising level of data-sharing with other technology companies may shed light on those mechanisms: Facebook allowed Microsoft’s Bing search engine to see the names of virtually all Facebook users’ friends without consent, the records show, and gave Netflix and Spotify the ability to read Facebook users’ private messages.The social network permitted Amazon to obtain users’ names and contact information through their friends, and it let Yahoo view streams of friends’ posts as recently as this summer, despite public statements that it had stopped that type of sharing years earlier. If Amazon was sucking up data from Facebook about who knew whom, it may explain why Santiago’s review was blocked. Because Santiago had followed the author on Facebook, Amazon or its algorithms would see her name and contact information as being connected to the author there, according to the Times. Facebook reportedly didn’t let users know this data-sharing was happening nor get their consent, so Santiago, as well as the author presumably, wouldn’t have known this had happened.
DC sues Facebook over Cambridge Analytica scandal - The attorney general of the District of Columbia has sued Facebook, alleging violations of local consumer protection laws. In a statement sent to reporters on Wednesday, AG Karl A. Racine said that the social media giant did not adequately protect users’ data, "enabling abuses like one that exposed nearly half of all District residents’ data to manipulation for political purposes during the 2016 election."The lawsuit is believed to be the first major regulatory lawsuit stemming from the Cambridge Analytica scandal that broke earlier this year. "It allowed Cambridge Analytica to purchase personal information that was improperly obtained from 70 million [individuals], including 340,000 District of Columbia residents," Racine said on a Wednesday call with reporters. "That’s nearly half of the people that live in the District of Columbia."Ben Wiseman, the director at the Office of Consumer Protection at the DC AG's office, said that the lawsuit is seeking restitution and damages, including "civil penalties up to $5,000 per violation." 340,000 users times $5,000 each would total $1.7 billion—but the case is likely to settle for far less than that. Racine added that other states have expressed interest in joining this lawsuit."We think that bringing suit is necessary in order to bring these issues to light," he said.In the lawsuit, Racine points out that just 852 Facebook users in DC used Aleksandr Kogan's "thisisyourdigitallife" personality quiz, but, due to the permissive data sharing that was in place at the time, hundreds of thousands of people were affected. "Furthermore, after discovering the improper sale of consumer data by Kogan to Cambridge Analytica, Facebook failed to take reasonable steps to protect its consumers' privacy by ensuring that the data was accounted for and deleted," the complaint states.
Advertising Trade Association Presses for Federal Data Privacy Regulation- Jerri-lynn Scofield -- The Wall Street Journal reported yesterday that the Association of National Advertisers (ANA) – an industry trade association – is pushing the Federal Trade Commission (FTC) to adopt a new federal law to regulate how advertisers and others collect and use consumer data.Have the people who run the ANA suddenly and collectively developed a conscience amidst recent revelations of misuse of customer data- such as the explosive NY Times allegations from earlier this week concerning Facebook’s preferential sharing of customer data with tech giants?Hardly.Instead, the ANA effort is an attempted end run around state-level efforts to regulate data broadly – an area where the federal government has thus far opted not to tread. In an ANA blog post announcing its “new privacy paradigm” – paradigm being one of those tell words that always makes me check that no one’s swiped my wallet – the organization emphasises that the legislation it envisions should be “preemptive of state laws.” At the federal level, the US lags in its data protection policies, especially compared to the EU’s new General Data Protection Regulation (GDPR) – although California has recently enacted the California Consumer Privacy Act (CCPA), which is scheduled to come into effect in 2020. According to the WSJ, the ANA argues that state-level regulation creates “costly compliance challenges and confusion for consumers”:
FCC Blasted for Opening the Door to Text Message Censorship - In a move that Democrats and electronic-rights groups worry could lead to censorship of political messages, the Federal Communications Commission (FCC) voted this week to allow wireless carriers to block unwanted or spam text messages. The vote was split along party lines in the commission, with the three Republicans supporting and the lone Democrat opposing. Republicans said the move reaffirms a tradition of allowing wireless carriers to block spam or scam text messages before they get to consumers’ phones, but Democrats and electronic- rights activists say this allows carriers to censor or block text messages, removing consumers’ right to decide for themselves.“The FCC shouldn’t make it easier for spammers and scammers to bombard consumers with unwanted texts,” FCC Chairman Ajit Pai said in a statement. “And we shouldn’t allow unwanted messages to plague wireless messaging services in the same way that unwanted robocalls flood voice services.”But who decides what is “unwanted?” The lone Democrat on the commission, Jessica Rosenworcel, said the decision means consumers “no longer have the final say on where your text messages go and what they said. That means your carrier now has the legal right to block your text messages and censor the very content of your messages.” Electronic-rights groups claim the decision will continue to allow carriers to block fundraising campaign text messages and political messages, preempting consumers’ ability to decide whether they want to receive the messages.
Former Goldman Vice President Pleads Guilty To Insider Trading - A former Goldman Sachs Vice President pleaded guilty on Wednesday to insider trading, after prosecutors alleged that he made over $130,000 in illegal profits. From 2015 through 2017, Woojae "Steve" Jung used his access to material non-public information on Goldman clients' potential parties to mergers, acquisitions and corproate restructurings to trade through an account established in the name of an associate living in South Korea. Jung, a South Korean citizen who joined the Investment Bank in July 2012 after graduating from Wharton business school, opened a trading account with Goldman when he joined the firm per company policies. The next month, an account was opened for Jung's friend - described as a student residing in Los Angeles. Investigators traced the IP addresses used to make the trades to Jung's Manhattan residence and computers in Korea. In 2015, Jung was promoted to Vice President and moved from New York to Goldman's San Francisco offices. He was put on leave following his indictment and left the firm in June, according to FINRA records. Jung was hit with seven counts; one count of conspiracy to commit securities fraud and six counts of securities fraud. In one case, Jung made $57,266 on SanDisk shares and options surrounding a rumor that Western Digital might acquire the chipmaker. Jung also netted approximately $64,000 on the October 2015 acquisition of KLA-Tencor by Lam Research. Not all of Jung's insider trading was spectacularly profitable; in March 2015 Jung bought 400 shares of Foresight Energy right before Murray Energy Corporation took a majority stake, resulting in a profit of just $362.00. Magistrate Judge Deborah Freeman of the Southern District of New York recommended that Judge Lewis Kaplan accept Jung's guilty plea. The former banker faces 18 to 24 months in prison under federal sentencing guidelines.
Goldman Partners Ignored 'Red Flags' While Pursuing 1MDB Deals- WSJ -- As the legal scrutiny facing the infamous "Vampire Squid" intensifies (and the bank's shares languish at two-year lows), slowly but surely, more details about the compliance shortcuts and - in some cases, outright negligence - countenanced by Goldman's most senior employees during the bank's pursuit of the 1MDB bond offerings that have landed Goldman at the center of one of the biggest financial fraud scandals in history are slowly dribbling out. And in its latest expose, the Wall Street Journal, which helped expose the scandal back in 2015 with a series of groundbreaking reports connecting money in a bank account controlled by former Malaysian Prime Minister Najib Razak to the bankrupt fund, has published more details about how Goldman partners - who have traditionally been given wide latitude to operate without restraint - enabled the bank's top bankers in Southeast Asia to work out a deal where Goldman would act as both financier and advisor for the fund, ignoring concerns about corruption raised by the bank's compliance committee. The first allowances were reportedly made during a meeting of senior partners in Hong Kong in 2012 where they vetted the deal. Among the concerns highlighted were "media scrutiny" due to 1MDB's lack of a track record and the potential for - get this - corruption. Goldman Sachs Group Inc.'s push for Asian business and lax oversight of partners led the bank to dismiss warning signs in its dealings with a corrupt Malaysian investment fund, internal documents and interviews with people involved in the transactions show.When the fund, 1Malaysia Development Bhd., first sought Goldman’s help raising money, the bond deal came before a committee of senior bankers in Hong Kong in 2012 for a key round of vetting. Among the concerns sketched out in the meeting’s agenda: “potential media and political scrutiny,” Goldman’s unusual role as both financier and adviser, the colossal profit earned on what should have been a modest transaction—and how much of that haul would need to be disclosed. Not up for discussion: the young fund’s scant track record. The deal happened anyway. It has ensnared Goldman in one of the largest financial frauds in history and darkened the early days of its new chief executive, David Solomon.
Malaysia Files Criminal Fraud Charges Against Goldman Sachs - In an unprecedented move that possibly foreshadows similar charges from the US DOJ - and lots of headaches for the "recently retired" Lloyd Blankfein - the Malaysian attorney general has filed criminal charges against Goldman Sachs - targeting two of the investment bank's Asian subsidiaries and two former Goldman bankers who have already been charged by the US (former Southeast Asia head Tim Leissner and banker Roger Ng) and accusing the investment bank of violating the country's securities laws by lying in bond agreements for three deals that raised $6.5 billion for 1MDB, a Malaysian sovereign wealth fund formed under former Prime Minister Najib Razak that US authorities believe was looted for upwards of $4 billion by corrupt bankers and officials. While authorities in Singapore, Switzerland and elsewhere had already filed criminal charges against various banks involved with the scandal last year, the first charges against Goldman and its employees over their involvement in the scandal materialized two months ago when the DOJ indicted Leissner and Ng. Just before 8 am ET, Goldman shares trading premarket had dropped 1.75% to new two-year lows: Shortly after the indictments, media reports revealed that senior Goldman executives - most notably, former CEO Lloyd Blankfein - were involved with the transactions. Blankfein attended at least three meetings with either Razak or disgraced Malaysian financier Jho Low, the allegedly corrupt financier who was also indicted by Malaysian authorities on Monday, even inviting Low to a private sit down at Goldman's 200 West Street headquarters. While pursuing the deal, Goldman employees - including Blankfein - brushed aside concerns raised by the bank's compliance department, and allowed Low to function as an unofficial intermediary between the bank and the Malaysian government, despite the bank's compliance department warning that Low was not to be trusted. The DOJ is also reportedly looking into the role of other senior Goldman bankers.
Malaysia puts Goldman Sachs in the dock - Malaysian authorities filed criminal charges against three subsidiaries of Goldman Sachs this week in connection with the US investment bank’s involvement in a sprawling scandal that saw billions embezzled from state fund 1Malaysia Development Berhad (1MDB). The move has shaken confidence in the Wall Street firm. While past controversies have seen the bank pay hefty legal settlements when its employees became subject to criminal charges and investigation, the charges filed by Malaysia’s Attorney General Tommy Thomas on December 17 are believed to represent the first time the New York bank has been directly blamed for wrongdoing. Tim Leissner, an ex-managing director at Goldman who was once the bank’s Southeast Asia chairman, and Ng Chong Hwa, a former bank employee, were also charged alongside 1MDB’s former general counsel Jasmine Loo Ai Swan and fugitive Malaysian financier Low Taek Jho, who authorities regard as a central player in the scandal. In a media statement, Thomas accused bank employees of conspiring with Low to bribe Malaysian state officials and claimed Goldman made false and misleading statements in order to dishonestly misappropriate US$2.7 billion from the proceeds of three bond issuances in 2012 and 2013 that raised $6.5 billion for 1MDB. Massive fees For its role as the underwriter and arranger of the bond sales, which were vetted by internal committees made up of senior bank executives, Goldman controversially collected fees for its work topping $600 million. Thomas alleged that these earnings were “several times higher than the prevailing market rates and industry norms.” Goldman’s employees and directors “received large bonuses and enhanced career prospects” as a result of the bond issuances, which he said were “planned and executed in order to defraud the Government of Malaysia and the purchasers of the bonds” and contravened the country’s securities laws. Malaysia would seek criminal fines “well in excess” of the $2.7 billion misappropriated from the bond proceeds and $600 million in fees received by Goldman, Thomas said.
Singapore declares lifetime ban for ex-Goldman Sachs Asia chief Tim Leissner - The Monetary Authority of Singapore (MAS) today banned former Goldman Sachs banker Tim Leissner for life after his plea deal with the U.S. Justice Department admitting his role in the 1MBD scandal. The MAS, Singapore's central bank and financial regulatory authority, imposed the lifetime ban following Leissner's "admission to criminal charges" in the United States. Leissner is the former chairman of Goldman Sachs in Southeast Asia. He pleaded guilty in November to FCPA and money laundering conspiracies in connection with a plot to loot the Malaysian sovereign wealth fund 1MDB, formally known as 1Malaysia Development Berhad. The Singapore order bars Leissner from any regulated activity under the Securities and Futures Act, and participating directly or indirectly in the management of any capital markets services firm in Singapore. The ban extends the 10-year prohibition the MAS issued against Leissner last year. In the United States plea deal, Leissner was ordered to forfeit $43.7 million. He'll learn the rest of his sentence later. Another ex-Goldman banker, Ng Chong Hwa, 51, also known as Roger Ng, was charged by the DOJ with conspiring to violate the FCPA and launder money. Goldman Sachs underwrote more than $6 billion in bonds issued by 1MDB in three separate bond offerings in 2012 and 2013 while Ng was a managing director.
Wall Street’s Billionaire Machine, Where Almost Everyone Gets Rich --Eric Smidt is a new kind of super-rich. He made his fortune by transforming an old-fashioned business into a giant ATM, an overhaul aided by one of the hottest plays on Wall Street: collateralized loan obligations. Meet the new aristocrats of debt—the people and companies cashing in on a record boom in these once-marginal investments whose relatively high returns have attracted yield-hungry investors. They’ve fueled a rapid buildup in corporate debt that some think could become the epicenter of the next credit crisis but has been minting money for many. From low-profile executives like Smidt to prominent banks like Credit Suisse Group AG, a host of players are getting rich off CLOs. Fees linked to the industry topped $10 billion this year alone, according to calculations by Bloomberg. That’s in addition to billions in payouts that private equity and other owners have extracted from businesses. Some, like Credit Suisse, get paid for underwriting loans to companies such as Smidt’s Harbor Freight Tools USA. Because CLOs are really a package of risky loans from various businesses like Harbor Freight, a bank like Morgan Stanley also scores a fee for structuring the parcel and then selling it to investors. That bundle of debt also needs an overseer. Enter CLO managers such as private equity firm Ares Management, co-founded by billionaire Tony Ressler, and GSO, part of billionaire Stephen Schwarzman’s Blackstone Group LP. They get a cut, too. Regulators globally are sounding alarms. For the Bank of England’s Mark Carney, the surge is reminiscent of the boom in subprime lending just before the financial crisis in 2008. Some members of the Federal Reserve are concerned that high debt levels are making the economy more vulnerable. “The risk is that if a bunch of these get downgraded, many CLOs will scramble to sell,” In recent weeks there have been increasing signs the machine is sputtering as volatility swirls through markets. Loan prices have fallen to the lowest in more than two years. Deals are increasingly being shelved or pushed to next year, a far cry from the demand seen earlier in the year. Here are the key players and what’s at stake.
Federal agencies urged to close capital rule proposal 'immediately' - A proposal issued over a year ago by federal banking agencies to simplify risk-based capital rules and ease compliance burdens for community banks has still not been finalized, and mortgage brokers and bankers are calling on them to do just that."The associations strongly support the agencies' efforts to simplify the rules in order to reduce unnecessary complexity and eliminate provisions that create unnecessary burdens and hinder financial stability and economic growth. However, it is frustrating that the proposal has not been finalized, even after almost a year after the comment period closed," the Mortgage Bankers Association and Independent Community Bankers of America wrote in a joint letter to the agencies.The MBA and ICBA urged the federal agencies to immediately close the comment review period and finalize the rulemakings, and requested a meeting to discuss the simplifications in further detail. The organizations also highlighted capital planning challenges brought on by lack of certainty on issues discussed in the proposal."Recently, the agencies issued proposed rules implementing the Community Bank Leverage Ratio (CBLR) framework — a provision that was included in the regulatory reform law passed by Congress this year," read the letter signed by MBA Senior Vice President Stephen O'Connor and ICBA First Vice President James Kendrick. "While this new provision provides an important benefit (regulatory burden relief) for qualifying community banks, including simplified regulatory capital calculations that would allow an entity to avoid the Basel III MSA rules, and therefore, not be subject to the rules under the proposal, the fact is that some community banks would not qualify for this benefit because of the strict eligibility factors that apply under the CBLR framework. In fact, many of our members would still be subject to the proposal, which is yet to be finalized," it said.
Tough standards for biggest banks not going away: Fed’s Powell — The Federal Reserve has no plans to lower or significantly alter capital and supervisory expectations for the largest banks despite lobbying by such institutions, Chairman Jerome Powell said Wednesday. Indeed, speaking during a press conference following the Federal Open Market Committee's meeting, Powell left open the possibility of an additional capital buffer on the largest banks in the near future. The Fed has focused much of its regulatory agenda to date on providing adjustments to small and midsize institutions, whereas the eight U.S. global systemically important banks, or G-SIBs, have received little in the way of attention. Powell said the rationale for this was to tailor the rules for smaller institutions so that they did not face the toughest requirements designed for the largest banks. Asked whether the Fed plans to eventually ease requirements for G-SIBs, Powell said such a move isn't imminent. “With larger institutions, we want regulation to be effective and efficient,” Powell said. “I wouldn’t want to materially change capital levels, because I think it’s important that the largest financial institutions ... be held to the highest standards and higher expectations. While we may tailor some of those regulations, those fundamentally high expectations are not going to change.” Fed Chairman Jerome Powell "That’s a tool that I am absolutely willing to use and happy to use at such a time as that test is met,” said Fed Chairman Jerome Powell, referring to the countercyclical capital buffer for the largest banks. Bloomberg News The Fed has long espoused the goal of “tailoring” its regulatory rules and supervision — that is, focusing oversight and backstops on those institutions that pose the greatest risk. That trend appears to have continued with the confirmation of Powell in February as Fed chairman and Randal Quarles as Vice Chairman for Supervision last October.
New proposal aims to ease director shortage at community banks — Federal banking regulators issued a proposal Thursday to allow more directors and management officials to serve at more than one bank or depository holding company in an effort to provide relief to community banks. The current "management interlock rules" prohibit officials at depository organizations with more than $2.5 billion in assets from serving simultaneously at a different institution with more than $1.5 billion in assets, without first seeking an exemption from the regulators. Under the proposal from the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, both thresholds would be raised to $10 billion in assets. This would exempt 764 depository institutions from the prohibition as of Dec. 31, 2017, according to the proposal. The agencies cited the increasing consolidation and growth within the financial services industry as the primary reason behind the proposed increase, and argued that the new threshold would help smaller depository organizations find qualified directors while eliminating the need to ask for an exemption from the rule. The $10 billion prohibition threshold would be small enough to prevent interlocks between larger banks, “which could present a risk of anticompetitive conduct at the national banking market level,” but would be large enough to exempt smaller community banks that do not present the same competitive risks at the national level, the regulators said. The agencies also asked for public comment on three alternative approaches to the $10 billion prohibition threshold, two of which are based on market changes and one that is based on inflation.
Will industry get what it wants on CECL? -- A plan to change the accounting standard for recording loan losses is facing heightened uncertainty. The Financial Stability Oversight Council discussed the pending Current Expected Credit Loss standard, widely known as CECL, in a closed-door executive session Wednesday that ran significantly longer than its scheduled 45 minutes. The lengthy discussion has provided CECL’s critics with renewed hope their calls to delay conversion to the new standard may be gaining traction in the halls of power. CECL detractors wasted no time seeking to spin FSOC’s scrutiny to their advantage. A group opposed to CECL issued a joint statement earlier Wednesday urging the council to press the Financial Accounting Standards Board to push back a scheduled Jan. 1, 2020, implementation date. “We urge policymakers — at a minimum — to pause, study and understand the very real impact CECL could have before deciding whether to move forward,” the group wrote. The group included the American Bankers Association, Consumer Bankers Association, Bank Policy Institute, Credit Union National Association and National Association of Federally-Insured Credit Unions. Their letter came a day after 28 Republican members of the House of Representatives “implored” Treasury Secretary Steve Mnuchin to use his influence “to delay CECL’s effective date until … comprehensive analysis on this standard has been completed.” Lawmakers in the House, including two prominent Democrats, voiced sharp criticism of CECL last week during a House Financial Services subcommittee meeting. FSOC is well within its purview to examine CECL, said Curt Long, NAFCU's chief economist and vice president of research. “I think we all appreciate that FSOC considered the issue,” Long said. “It has broad implications for all financial institutions and for the stability of the system.” Whether FSOC decides to intervene remains unclear.
U.S. Bank, Citi freed from Obama-era enforcement orders -- A federal regulator has freed the banking units of U.S. Bancorp and Citigroup from enforcement orders that left both companies in the penalty box for more than three years. The Office of the Comptroller of the Currency announced the actions on Friday. The U.S. Bank order involved problems with the firm’s efforts to prevent money laundering, while Citibank had faced sanctions because of allegedly deceptive tactics in the credit card business. Both of the orders that were lifted date back to 2015. Summary of enforcement action against U.S. Bank that was lifted The termination of the U.S. Bank order may enable the Minneapolis firm to implement more changes to its branch network than it was able to make previously. U.S. Bancorp CEO Andy Cecere said recently that when it comes to opening and closing branches, the company has been somewhat handcuffed by the enforcement order. “When that does get lifted, I think the opportunity for us is in terms of branch optimization,” Cecere said at an industry conference in early December. U.S. Bank’s order dealt with issues that have continued to bedevil the bank in the years since the OCC’s action. In February 2018, the company entered into a deferred prosecution agreement with the Department of Justice for violations of the Bank Secrecy Act. The bank agreed to forfeit $528 million as part of the deal. At the same time, the Federal Reserve Board ordered U.S. Bank to improve its compliance with the Bank Secrecy Act and anti-money-laundering rules. Even after Friday’s announcement by the OCC, the Fed’s consent order with U.S. Bank remains in effect. “We believe that the termination of the OCC’s consent order is a positive; however, it is hard to put a timeline on the resolution of the Fed’s consent order,” analysts at Keefe, Bruyette & Woods wrote in a research note. Because the Fed’s order remains in place, U.S. Bank is still restricted from acquiring banks, the KBW analysts stated. But they also noted that the company’s management has expressed more interest in nonbank acquisitions, which are permitted, than bank deals.
Corporate Buybacks Surpass $200 Billion In Q3, Hit All Time High - As US equity indexes soared to all-time highs over the summer, traders were left in slackjawed wonder by stocks' resilience to every market negative, including a burgeoning trade war with China and outflows from nearly every ownership category.At the time, analysts attributed this behavior to the robustness of the Trump economy and the profit boost of the Trump tax cuts. But we dared to posit another explanation that somehow slipped below Wall Street's radar: Citing research from Goldman and BofA, we pointed out that after notching a quarterly record in Q2, the pace of corporate buybacks accelerated in Q3. And while investors celebrated Apple's stunning market milestone, Goldman's David Kostin argued that markets were asking the wrong $1 trillion question. Four months later, the boost from Trump's tax cuts is fading, stocks can't keep a bid and S&P Dow Jones Indices just confirmed something we had long suspected (something that was driven home once again by Oracle's earnings report last night): Namely, that the most important factor in US markets this year has been the corporate bid. That's because, after clinching a quarterly records in Q1 and Q2, members of the S&P 500 went on to set another quarterly record for share repurchases in the Q3.That's right: S&P revealed on Tuesday that quarterly S&P 500 share repurchases surpassed the $200 billion mark for the first time in Q3 o a record $203.8 billion. That's the third straight quarterly record for share buybacks, displacing the prior quarterly record of $190.6 billion, set during Q2 2018. This year's Q3 figure represents an increase of 57.7% from the $129.2 billion from Q3 2017. Through the end of the third quarter, buybacks are up 52.6% to $583.4 billion from the prior year's $382.4 billion, leaving the annual total just 1% shy of the previous annual record of $589.1 billion set in 2007. And that's with another quarter left to report (though, judging by the price action, it's probably fair to assume that the pace of purchases has slackened somewhat, though Boeing and Johnson & Johnson each announced buybacks this week to boost their sagging shares). For the 12-month period ending September 2018, S&P 500 companies spent a total of $720.4 billion on buybacks, up 39.1% from $517.7 billion during the corresponding period from 2017.
New questions over Elon Musk’s use of SpaceX resources for Boring Co. - Elon Musk’s tunnel-digging venture, the Boring Co., is the latest to be drawn into the billionaire entrepreneur’s controversial tradition of spreading overlapping resources across his growing technology empire.On Tuesday, the billionaire Tesla Inc. chief is set to unveil a test tunnel developed by the Boring Co., the first of what Musk imagines as a futuristic series of high-speed underground highways to alleviate traffic. The entrance of the two-mile-long Boring test tunnel is being constructed in Hawthorne, Calif., at the headquarters of another Musk-controlled company, Space Exploration Technologies Corp., partly by SpaceX employees using equipment purchased with SpaceX funds, people familiar with the matter said.The arrangement alarmed some longtime investors in SpaceX, including its largest outside backer, Peter Thiel’s Founders Fund, some of the people said. The investors learned in recent months that despite the diversion of SpaceX resources and staffing to the fledgling Boring startup, it was Musk who was in line to receive almost all of any future profits, these people said. The investors questioned SpaceX about why their investment dollars into a company ostensibly devoted to launching satellites and carrying humans to Mars were instead partly used to start a separate company that principally benefited Musk. When the Boring Co. was earlier this year spun into its own firm, more than 90% of the equity went to Musk and the rest to early employees, the company has said.
Wall Street Turns Apocalyptic- We Just Had The Biggest Ever Rotation Into Bonds - So much has changed in the past year (at least according to respondents in Bank of America's latest Fund Manager Survey).This time in December 2017, FMS investors were super bullish and long Bitcoin (which hit $19,611 on Dec 19th 2017), global stocks, banks, and short bonds and defensives. One year later, everything has been flipped on its head: FMS investors are bearish, long cash, the US dollar, and defensives and are short global stocks, tech, industrials (oh and Bitcoin is trading around $3,000).So what else does the latest fund manager survey (which polled a total of 243 respondents with $694bn AUM in the period Dec 7-13) reveal? Not surprisingly, the survey found close to "extreme bearishness" on Wall Street, with BofA's Michael Hartnett noting that December saw the third biggest decline in inflation expectations, down 33ppt to just net 37% expecting global CPI to rise over the next year, a big reversal from the recent peak of net 82% in April.As a result of this pre-deflationary deluge, investors have flooded into bonds and out of stocks, while within equities there were large moves into defensives via energy and tech into staples and utilities. More importantly, this month’s survey found the biggest ever one-month rotation into bonds class as investors dumped equities around the globe while bond allocations rose 23ppt to net 35% underweight.... ... marking the highest bond allocation since the Brexit vote in June 2016. Meanwhile, the allocation to global equities has fallen 15ppt to a two-year low of net 16% overweight, with US equity allocation falling 8ppt to net 6% overweight, largely as a result of collapsing global GDP/EPS expectations in December...
Dow dives 420 points to end its worst week in 10 years - Stocks plunged again on Friday, bringing the Dow Jones Industrial Average's losses for the week to 7 percent and putting it on track for its worst week since the financial crisis in 2008. The Nasdaq Composite Index fell into a bear market and the S&P 500 was on the brink of one itself, down nearly 18 percent from its record earlier this year. The Federal Reserve's rate hike on Wednesday drove the losses this week and fears of an extended government shutdown only added to the pain on Friday.The Dow Jones Industrial Average fell 400 points in turbulent trading that sent the blue-chip index up as much as 300 points earlier in the day, only to trade in negative territory less than one hour later. The initial tick upward came as Federal Reserve Bank of New York President John Williams said that the central bank could reassess its interest rate policy and balance sheet reduction in the new year if the economy slows.But those gains slowly disappeared as investors used that short-term pop as a chance to sell more. The broader S&P 500 fell 2.1 percent on Friday, while the tech-heavy Nasdaq Composite shed more than 3 percent with big losses in technology stocks including Facebook, Amazon and Apple.Stocks accelerated to their lows after President Donald Trump's trade adviser, Peter Navarro, told Nikkei that it would be "difficult" for the U.S. and China to arrive at a permanent economic agreement after a 90-day ceasefire in the trade tensions. Here's a tally of the carnage:
- The Dow lost 7 percent and nearly 1,600 points on the week. It was its worst percentage drop since October 2008.
- The Nasdaq lost 8.2 percent on the week and is now 22 percent below its record reached in August, a bear market.
- The S&P 500 lost 7 percent for the week and is now down 17.7 percent from its record.
- The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 12 percent each this month.
- Both the Dow and the S&P 500 are now in the red for 2018 by at least 9 percent.
The Donald’s 60% Gone – But No Cigar for CNN - David Stockman - At Friday’s close fully 60% of the Trump Bump in the S&P 500 has been liquidated. And we have some nice round numbers to show for it. The broad market index stood at 2140 just hours before the shocking 2016 election results were reported, and rose by 800 points from there to 2940 on September 21, 2018. That was a gain of 37% on top of the already massively inflated stock market than extant.It was also Peak Trump. During the last 40 trading days 475 S&P points have gone missing in a relative heartbeat, and there’s miles to go before it’s over. And that’s also why the Donald’s sojourn in the Oval Office is heading for its sell-by date as well. It has been only the Trump Bump and the misleadingly happy jobs data attendant to the waning days of a failed, octogenarian business cycle that has kept him afloat with his enthusiastic base in the hinterlands and the grudging GOP establishment in the Imperial City.To be sure, the liquidity-crazed stock market was destined to crash anyway when the Fed finally got the gumption to begin removing the punch bowl. Or perhaps its stalwart position in favor of the thing that counts – shrinkage of its obscenely bloated balance sheet – was taken by inadvertence.Either way, and at long last, the Fed Put has been extinguished, and some sort of quasi-honest price discovery process now commences.This week’s incoming data also reminded that there has been no real recovery on main street. To wit, the industrial production index for manufacturing posted at 106.0 for November 2018, meaning that it was still 2.4% below its 108.6 level posted way back in December 2007.Likewise, single family housing starts for November came in at an 824,000 annualized rate, barely half the production level at the 2006 housing market peak; and, in fact, equivalent to the start level posted in…..December 1960! Still, the Donald’s self-initiated wars on the U.S. economy can only bring on the day of economic and financial reckoning that much sooner – thereby accomplishing his Great Disrupter’s task, albeit in a manner the opposite of what he intends.
2018 Is Officially The Worst Year On Record With 93% Of All Assets Down - Two months ago we first showed what Deutsche Bank dubbed "a quite fascinating statistic" namely that as of the end of October, 89% of assets that the German bank collects data on for its annual long-term study, had a negative total return year to date in dollar terms. This was the highest percentage on record based on data back to 1901, eclipsing the 84% hit in 1920.Commenting on this striking observation of a market in which quite literally nothing worked, Deutsche Bank said that "this is what happens when the vast majority of global assets are expensive historically due to extreme monetary policy. When the tide goes out you’re more likely to get en masse negative months rather than rotation from day equities into bonds or visa-versa."Fast forward to today, when picking up on the theme of ebbing liquidity tides, in his last Early Morning Reid for 2018, Deutsche Bank's Jim Reid writes that "2018 has been like a rebellious teenager suddenly aware of their own mind, independence, and the world around them after years of being guided and cajoled in everything they do." He also notes that for him "peak QE moving to QT and the Fed raising rates four times this year has been enough to reverse a significant amount of the liquidity-inspired asset price returns of the pre-tightening era. A bit like Road Runner galloping off the cliff only to suddenly look down."But most importantly, Reid notes that the chart in question showing the percentage of global assets down on a dollar adjusted basis each year since 1901 was "the most requested chart we’ve ever been involved in", and as updated below, 2018 continues to the be the worst year on record on this measure with 93% of assets currently down -worse than the years of the Gread Depression - and up from 89% at the end of October. The record bearish print is made all the more fascinating, considering that just one year ago, 2017, was the 'best' year ever for markets on this measure, when just 1% of assets finished with a negative total return in dollar terms (only the Philippines bond market was negative).Putting these two extreme years in context, since 1901 the average has been that 29% of assets finish a given year with a negative total return, leading Deutsche to exclaim that it's been "an amazing couple of years nonetheless as we swing from one extreme to the other. It's perhaps not a surprise that in this time major DM central banks have moved from peak global QE to widespread QT."
Blythe Masters Quits As CEO Of Fin Blockchain Startup -- A little over three years ago when bitcoin was trading in the low $200s, we first recommended purchasing the cryptocurrency for two main reasons: as we said at the time, it was only a matter of time before the Chinese started using it as a means to bypass China's capital controls firewall (this took place less than a year later, launching Bitcoin's stratospheric ascent which eventually culminated with Beijing's crackdown on crypto and bitcoin hitting a price of $20,000); the second reason was the involvement of the notorious brain behind Credit Default Swaps then at JPMorgan, Blythe Masters, whose mere presence was - to us - assurance that with such a deep "institutional" backer, it was only a matter of time before bitcoin exploded, to wit:We bring all this up in case there is any confusion why Bloomberg just carried a huge centerfold piece explaining why CDS-inventor Blythe Masters has suddenly become the digital currency's most vocal pitchman and is betting it all on bitcoin, in "Blythe Masters Tells Banks the Blockchain Changes Everything."Yes, bitcoin may be slowly but surely leaving the domain of the libertarian fringe, but in exchange it is about to be embraced as the most lucrative and commercial "blockchained" way to capitalize on what may soon become the largest capital outflow in history, with "pioneers" such as Blythe front and center to capitalize on each and every outflowing Bityuan.And just like that, a little over three years later, the fairy tale is over, at least for the person who was meant to "tell the banks Blockchain changes everything", because as Bloomberg reports, Blythe Masters is leaving her role as CEO of blockchain startup Digital Asset Holdings, slightly more than three years after arriving to run the financial technology firm and being on the cover of Bloomberg magazine to provoke curiosity in what at the time was a technology - and asset class- only a handful had previously heard of.
Waters warns Mulvaney he may be called to testify on CFPB tenure — House Democrats are warning Office of Management and Budget Director Mick Mulvaney that he may be called to testify in the next Congress on the actions he took as acting director of the Consumer Financial Protection Bureau. Rep. Maxine Waters, D-Calif., the expected incoming chair of the House Financial Services Committee, told Mulvaney — who also serves as acting White House chief of staff — in a letter Thursday that she plans to hold him accountable for decisions that were “incredibly harmful to consumers that Congress has yet to scrutinize.” “I am writing to inform you that while your time running the Consumer Bureau may be over, the time for accountability for your actions is about to begin. … Please be advised that, as part of this important oversight work, you may be called before the Committee to testify regarding your tenure at the agency,” Waters said. In the letter, Waters criticized Mulvaney for “politicizing the agency” by hiring political appointees, weakening fair-lending enforcement by stripping the Office of Fair Lending of its supervisory and enforcement powers, attempting to rename the agency to be the Bureau of Consumer Financial Protection to “diminish its stature,” and blocking payday loan cases, among other things. “These are a sample of the many troubling actions that we are currently aware of regarding the Consumer Bureau's activities during your tenure,” Waters said. “Laws are meaningless when they are not enforced, and consumers are left to fend for themselves when their government will not protect them.” Mulvaney served as acting director of the CFPB for a year, after former director Richard Cordray, an Obama appointee, resigned in November 2017.
Advocates want CFPB's Kraninger to set limits on debt collectors -- Two consumer advocacy groups will urge the new head of the Consumer Financial Protection Bureau to impose strict limits on debt collectors. In a letter they plan to send Thursday, the Americans for Financial Reform and the National Consumer Law Center will ask CFPB Director Kathy Kraninger to restrict debt collectors to having "one live conversation per week" with a borrower and up to three attempts per week to reach a consumer by phone. “We particularly ask the Consumer Bureau to focus on preventing harassment, increasing consumer privacy, stopping the collection of time-barred debt, and improving the clarity and accuracy of debt collection notices,” they said in the letter, a draft of which was obtained by American Banker. The letter is signed by other civil rights, labor and legal services groups. The CFPB is expected by March to issue a proposal to address how to update enforcement of the 40-year-old Fair Debt Collection Practices Act to keep pace with technology. The initiative is focused primarily on communication practices and consumer disclosures, since the FDCPA was enacted before cell phones and text messages. Debt collection problems are a leading source of consumer complaints to the CFPB, which received roughly 87,500 complaints about debt collection in 2017. Consumer advocates are urging far stricter limits on debt collectors than a 2016 proposal issued under former CFPB Director Richard Cordray. That plan would have limited third-party debt collection attempts to six per week while requiring confirmation of a debt before a collector could contact a consumer. “One of the most prevalent problems with debt collection is harassing communications from debt collectors that violate consumers’ privacy and can cause serious harm to individuals and their families,” the letter said. The groups also said the CFPB should let consumers decide on the form of communication with a collector. “Text and email communications should only be allowed if a consumer agrees to communicate with the debt collector electronically,” they said.
'BCFP' no more: Kraninger scraps plan to rebrand CFPB -- Consumer Financial Protection Bureau Director Kathy Kraninger has halted efforts to change the name of the agency to the Bureau of Consumer Financial Protection, according to a memo she wrote employees on Wednesday.In the memo, Kraninger said the issue was an "early priority" because implementing a name change would have impacted required reports and legal filings. An internal agency memo had said the cost to the financial services industry could be roughly $300 million if the name change went forward. “I have officially halted all ongoing efforts to make changes to existing products and materials related to the name correction initiative,” Kraninger wrote in the memo. Former acting CFPB Director Mick Mulvaney initiated the name change in March claiming the Dodd-Frank Act specified that the agency was called “Bureau of Consumer Financial Protection." Though the financial reform law also mentioned the "Consumer Financial Protection Bureau," Mulvaney said BCFP was the correct name and commissioned a seal reflecting that. Kraninger said the agency will continue to use that seal and may refer to itself as BCFP in legal filings, but it would not seek to change its name more broadly. “For statutorily required reports, legal filings, and other items specific to the Office of the Director, we will use the Bureau seal and the statutory name we were given in Dodd-Frank," Kraninger said. “The name 'Consumer Financial Protection Bureau' and the existing CFPB logo will continue to be used for all other materials."
CFPB details what mortgage data will be public in 2019 — The Consumer Financial Protection Bureau issued guidance late Friday that will shield some mortgage data from the public that lenders are required to report. The final guidance, as part of the Home Mortgage Disclosure Act, will make some new mortgage data available to the public next year. But the CFPB said it also made some changes to protect consumers’ identities, such as excluding a borrower’s credit score and address, while disclosing certain ranges on the debt-to-income ratio. “The purposes of HMDA are to provide the public and public officials with sufficient information to enable them to determine whether financial institutions are serving the housing needs of their communities,” the CFPB said in a press release. The HMDA data is also meant to “assist public officials in distributing public-sector investment so as to attract private investment to areas where it is needed; and assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes.” The CFPB solicited comments on its proposed HMDA guidance in September 2017, prior to President Trump naming Mick Mulvaney as the CFPB’s acting director. Kathy Kraninger took the helm earlier this month. The agency was required by the Dodd-Frank Act to oversee and strengthen HMDA requirements partly in response to the financial crisis and concerns that there was not enough mortgage data made available to predict the housing collapse. The CFPB finalized the additional HMDA reporting requirements in 2015, most of which took effect Jan. 1, 2018. Congress also changed that part of the Dodd-Frank Act in May by exempting many lenders from reporting the additional HMDA data. The CFPB had long received criticisms about whether it would make the additional mortgage data available to the public despite some privacy concerns. After reviewing comments from the HMDA proposal last year, the CFPB has taken steps to protect the most sensitive consumer data. “For example, the bureau intends to exclude certain data from the public HMDA data, including the property address and applicant’s credit score,” the agency said. The CFPB will disclose certain information as a range rather than a specific value for items like an applicant’s age, the loan amount and number of units in the dwelling.
Trump names OCC's Otting as acting director of FHFA — President Trump has named Comptroller of the Currency Joseph Otting as acting director of the Federal Housing Finance Agency beginning Jan. 6 after the end of the Director Mel Watt’s term. “I am honored that President Trump has designated me to be acting director of the Federal Housing Finance Agency,” said Otting in a statement. “I look forward to serving in this additional role until a permanent director is confirmed and appointed to this important position.” The White House intends to nominate Mark Calabria, the chief economist for Vice President Mike Pence, to serve as the permanent FHFA director. Otting will serve in the role until Calabria is confirmed. Under the Federal Vacancies Reform Act, the White House can either name one of Watt’s lieutenants as acting director, or appoint a temporary director which requires an acting director to have been previously confirmed by the Senate. It previously appointed Office and Management Budget Director Mick Mulvaney as acting director of CFPB under the reform act, a position he served until earlier this month when Kathy Kraninger was confirmed by the Senate.
FHA commissioner to serve as HUD's acting No. 2- — Brian Montgomery, commissioner of the Federal Housing Administration, will serve as the acting No. 2 of the Department of Housing and Urban Development following the resignation of Deputy Secretary Pam Patenaude. Secretary Ben Carson on Monday announced that Patenaude will step down in January. Patenaude plans to return to private life in New Hampshire with her husband after a 35-year career in housing, she said in a statement via Twitter. As deputy secretary, Patenaude led the department’s disaster recovery response following a series of destructive hurricanes and wildfires. Pam Patenaude Department of Housing and Urban Development Deputy Secretary Pam Patenaude will resign in January. Carson also announced in an email to HUD staff that Montgomery will serve as acting deputy secretary after Patenaude departs. “The Department and those we serve are in good hands as we have a very deep bench of political and career employees with decades of relevant experience,” Carson said to his colleagues. “Our efforts to increase the supply of affordable housing, end homelessness, enforce fair housing laws, respond to disasters, improve the fiscal condition of HUD and ensure Americans have access to safe, sanitary and decent housing will continue unabated.”
In reg relief era, appraisers become endangered species — Recent steps allowing more lenders to skip outside appraisals are seen as removing a key hurdle to closings, but appraisers say they could be collateral damage from the deregulatory policies. The Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency released a proposal last month to raise the threshold for residential real estate transactions that require an appraisal from $250,000 to $400,000. Lenders would still be required to obtain an evaluation for sales under the $400,000 limit, which the agencies say would “reduce burden in a manner that is consistent with federal public policy interests.” But appraisers are raising concern that the proposal would not only hurt their business, but also leave consumers with a less viable method for verifying home values. Evaluations don’t adhere to the rigorous standards that appraisals do, and have become increasingly automated. “The appraisal is the one aspect of a transaction where the appraiser is the independent, objective and impartial participant in the transaction,” said James Murrett, the president of the Appraisal Institute. “They don’t have a dog in the fight, so to speak, the way that the broker who wants to try and get the deal closed and the banker wants to try and get the loan approved.” The recent proposal, which the regulators issued under their authority to eliminate outdated or unnecessary rules, follows other policy steps to ease appraisal requirements. In April, regulators finalized a similar change dealing with commercial real estate transactions. And the financial regulatory relief law enacted in May provided relief from appraisal requirements in rural areas. Banks had long been concerned that appraisal exemptions were not keeping pace with home values. Smaller banks reacted positively to the CRE-related measure, saying it would help them compete with nonbank lenders that are not subject to appraisal requirements. But whereas appraisers did not object to those earlier steps, they say the latest proposal on residential mortgage transactions could significantly lower the standard on property valuations. Appraisers must meet strict credential requirements, but almost anyone with knowledge of the real estate market can perform a less rigorous "evaluation,"
Black Knight: National Mortgage Delinquency Rate Increased Slightly in November -- From Black Knight: Black Knight’s First Look: November Prepayment Activity Hits 10-Year Low as Refinances Fall and Housing Turnover Sees Seasonal Decline
• Prepayment activity fell 14 percent month-over-month and 29 percent year-over-year to its lowest level since November 2008According to Black Knight's First Look report for November, the percent of loans delinquent increased 1.8% in November compared to October, and decreased 18.5% year-over-year.
• Historically, prepayments were driven primarily by refinance activity but, more recently, the primary driver has become housing sales
• The last time the prepayment rate was this low – in the heat of the financial crisis – interest rates were above 6 percent and purchase lending had fallen by more than 50 percent in a 24-month span
• Delinquencies saw a slight seasonal increase in November, but remain 19 percent below last year’s level
• Serious delinquencies (90 or more days past due) also increased slightly for the month; now stand at 510,00
• Foreclosure starts fell by 11 percent month-over-month, with an estimated 45,200 starts in November
• A slight uptick in foreclosure inventory was offset by a month-over-month increase in the number of outstanding mortgages, resulting in a net decline in the national foreclosure rate
The percent of loans in the foreclosure process decreased 0.2% in November and were down 22.0% over the last year. Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 3.71% in November, up from 3.64% in October. The percent of loans in the foreclosure process decreased slightly in November to 0.52% from 0.52% in October.
Mortgage prepayment rate is lowest in 10 years: Black Knight - - Mortgage prepayment speeds fell to their lowest level in 10 years in November as rising interest rates took a toll on origination activity, Black Knight said. The monthly prepayment rate was 66 basis points, down 14.95% from October's 80 basis points and down 33% from 98 basis points in November 2017, according to the company's First Look report. Mortgage rates climbed as the 30-year fixed-rate loan reached a seven-year high for both the weeks of Nov. 8 and Nov. 15, according to Freddie Mac. But by the end of December, it fell 32 basis points from the high point, resulting in increased refinance activity, which could affect this month's prepayment speeds. Even though refis typically drive prepays, recently the primary driver was existing-home sales, Black Knight said in a press release. However, those rose for the second consecutive month. "The last time the prepayment rate was this low — in the heat of the financial crisis — interest rates were above 6% and purchase lending had fallen by more than 50% in a 24-month span," Black Knight said. Mortgage delinquencies rose by 1.78% from October to 3.71%, which Black Knight termed as a seasonal increase. Compared with last November, borrowers that are 30 days or more late on their payments is down 18.53%. There were 45,200 foreclosure starts during November, this is down 10.67% from October and 5.44% from one year ago. The number of properties with a delinquent loan but not yet in foreclosure is 1.925 million, up 41,000 from October, but down 399,000 from November 2017. Seriously delinquent loans — those 90 days late but not yet in foreclosure — rose by 11,000 from the previous month to 510,000. There are 268,000 properties in foreclosure, up 1,000 from October although down 69,000 from November 2017.
Risk is building in the housing market --A recent American Banker article speculated about financial system weaknesses that might lead to the next economic crisis. Some of the issues on the list, like student debt, seem unlikely to lead to a crisis but are more likely to re-emerge as a serious problem for the financial sector once an economic downturn occurs. So, too, the U.S. housing market. If the economy were to experience a downturn or worse in the next few years, home prices, which have boomed over the last six years, will surely realize a price correction and foreclosure rates will increase dramatically. This will be a surprise to many who say that this time is different and that a lack of supply will sustain prices. However, house prices adjusted for inflation are growing almost exactly as fast six years into the current price boom as over the same period in the last boom. Real prices are currently increasing around 4.2% per year through the middle of 2018 compared to 4.3% annually through the third quarter of 2003. That equates to about a 27% cumulative run up in real prices over six years. The reason this is concerning is that, in nominal terms, recent house price appreciation is far outstripping wage gains for most Americans. When house prices run way above longer run trends in wages, the gap between wage growth and house price growth constitutes territory ripe for a price correction. That gap does not exist in every major metropolitan area, but it exists in most. While we don’t know when the market will slip into a correction, we do know are that those that are “last in” with the most leverage will be the most vulnerable. First-time buyers are an increasing share of homebuyers, comprising more than 54% of purchase-money borrowers. They are younger and they have lower incomes, less savings and lower credit scores than repeat buyers. Repeat buyers, who are fortunate enough to have equity in the house they are selling, are typically able to put more down on a home, while first-time buyers typically require a bigger mortgage for the same house. Not only are first-time buyers at greater risk of default in the first place, mortgage risk has been increasing faster for this group than for repeat buyers. While getting an even higher loan-to-value mortgage can allow first-time buyers to successfully bid for a house, the issue is that home price growth is being supported by growing debt and not enough by growing incomes. Perversely, when supply is so constrained, expansive lending to first-time buyers leads to higher prices of entry-level homes and greater risk of a price correction for this market segment. A less-appreciated fact is that prices are also pushed up for everyone competing for similar homes, raising their risk as well.We see this clearly among lower price homes where supply is particularly constrained and where first-time buyers are particularly concentrated. By using more leverage (mortgage debt) over time, first-time buyers have helped push cumulative house price appreciation in the lowest quarter of homes by price up 46% over the last five and a half years, compared to the highest price homes, which have only appreciated by 30% over the same time period in nominal terms.
Total Flop- House Flipping In Chicago Goes Bust - In the third quarter, the total number of Chicago-area houses that were flipped, and the gross profits they generated have not just topped, but reversed from 2017 levels, as properties now take longer to sell with demand dropping, according to a new report published by Attom Data Solutions, a property information service.Shrinking inventory of foreclosures and other distressed properties has meant fewer rehabbed homes for investors to flip, said Crain's Chicago Business. The Federal Reserve's quantitative-tightening program, interest rate increases, and President Trump's trade war have also been huge negatives for the housing industry, which indicates the decade-long party of easy times has come to an end. The current climate has "made finding a prime home to flip almost like trying to find a needle in a haystack," Daren Blomquist, Attom's senior vice president, said in an email to Crain's Chicago Business.Investors flipped a total of 1,276 homes in the Chicago metropolitan area in the third quarter, down from 1,343 the prior year.In the first three quarters, investors made just 4,029 sales, compared to 2017's total of 7,619. 2018 will end in line with 2015 and 2016 when flipper sales topped 5,000. In other words, the house flipping industry has just experienced a blow-off top, equivalent to right before the 2008 housing market crash. Third-quarter flips from start to finish took an average of 210 days, up from 192 days a year earlier and the longest among the 20 biggest U.S. cities, according to AttomGross profits, the difference between what investors pay for the property and how much they sell it, are less than 68% during the quarter, down from 76% a year earlier. Margin compression comes from stalling property prices and President Trump's trade war, which has inflated prices of basic materials. Across the country, the number of homes flipped during the quarter collapsed 12% from last year. Gross profits were also down. Nationwide, flippers grossed 43%, down from 48% a year earlier.
Roughly Half Of Millennials Have No Money Saved For A Down Payment - Millennials are on the cusp of surpassing baby boomers as the largest generational demographic in the US, yet a startling plurality of them are woefully under prepared to assume the typical trappings of adulthood - like starting a family and buying a home. And in a detailed report published this week, analysts at ApartmentList illustrated just how wide of a gulf lies between millennials and their economic and financial goals. Perhaps the most surprising finding: Nearly half of millennial renters have zero money saved for a down payment - which doesn't bode well for the housing market, where home prices have surpassed their pre-crisis highs (though signs of weakness are starting to emerge). And just 11% say they have $10,000 saved. To wit, 72% of millennial renters cite "affordability" as the biggest factor barring them from homeownership. Student debt is another factor: While 23% of college graduates might be able to scrape together enough for a down payment, that figure falls to 12% for those who are currently paying off student loans. But these aren't the only factors holding millennials back from home ownership. A handful of macroeconomic trends are also to blame: Much of the generation came of age during or in the aftermath of the Great Recession, resulting in limited opportunities and stagnant wage growth in the crucial early stages of millennials’ careers. Construction of new single-family homes has lagged significantly in recent years, leading to a severe shortage of starter homes.Roughly 9 in 10 millennial renters want to purchase a home; but just 4.4% plan to do so within the next year:
MBA: Mortgage Applications Decreased in Latest Weekly Survey - From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey: Mortgage applications decreased 5.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 14, 2018.... The Refinance Index decreased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index decreased 10 percent compared with the previous week and was 2 percent higher than the same week one year ago. “Despite mortgage rates falling across the board last week to their lowest levels in three months, mortgage applications also declined, as more potential borrowers likely stayed away because of ongoing financial market volatility and economic uncertainty” “Purchase applications decreased almost seven percent over the week and refinances decreased around two percent, led by a larger decline in government refinances compared to conventional refinances.” “With rates continuing to slide lower, refinance borrowers with larger loan balances seemed more apt to take action. The average loan balance for refinance loans increased to its highest level since September 2017.” The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to its lowest level since September 2018, 4.94 percent, from 4.96 percent, with points decreasing to 0.43 from 0.48 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990.
Housing activity possibly on the verge of a slowdown- BuildFax - Housing could be in for a slowdown as three indicators of new- and existing-home construction activity fell year-over-year for the first time since 2011, according to BuildFax. "More so now than in years prior, the compounding effects of natural disasters, scarcity in the construction labor market and recent tariffs have impacted housing growth — not to mention systemic factors, like rising mortgage rates, that influence consumer behavior," BuildFax Chief Operating Officer Jonathan Kanarek said in a press release. "While it's natural to see some leveling off after steep growth, the next few months will be telling; whether a downturn is on the horizon or the market is simply softening is yet to be seen." New single-family housing construction authorizations fell 0.86% in November from one year prior and by 0.58% from October, the BuildFax Housing Health Report said. A bright spot, however, is that the trailing three-month outlook for September to November is up 3.68% over the previous year, because of September's growth, the company added. Maintenance volume fell by 5.85% when compared with November 2017, when the maintenance spend fell by 15.39%. Remodeling, which is a subset of the maintenance data that includes renovations, additions and alterations, saw a 12% volume decline and a 1.15% spending decline from the previous year. There were 10 occasions in the past decade where single-family housing authorizations, maintenance and remodels all declined year-over-year, with eight of those taking place during 2008 and 2009 at the height of the Great Recession, BuildFax said. New commercial construction volume fell 0.87% from November 2017, while maintenance activity fell 1.5% and remodeling fell 4.28%. But the drop in commercial activity may be more indicative of a labor shortage. Between 2013 and 2018, new construction activity rose 28.42% and maintenance was up 22.21%. Factor in that new construction costs over that period rose 68.83%, the disproportional increase when compared with activity points to a labor shortage that caused the year-over-year decline, BuildFax said.
Existing-Home Sales Up Again in November -This morning's release of the November Existing-Home Sales was up from the previous month's 5.22M to a seasonally adjusted annual rate of 5.32 million units. The Investing.com consensus was for 5.20 million. The latest number represents a 1.9% increase from the previous month and a 7.0% decrease year-over-year. Here is an excerpt from today's report from the National Association of Realtors. Lawrence Yun, NAR’s chief economist, says two consecutive months of increases is a welcomed sign for the market. “The market conditions in November were mixed, with good signs of stabilizing home sales compared to recent months, though down significantly from one year ago. Rising inventory is clearly taming home price appreciation.” [Full Report] For a longer-term perspective, here is a snapshot of the data series, which comes from the National Association of Realtors. The data since January 1999 was previously available in the St. Louis Fed's FRED repository and is now only available from January 2018. It can be found here.
NAR: Existing-Home Sales Increased to 5.32 million in November --From the NAR: Existing-Home Sales Increase for Second Consecutive MonthExisting-home sales increased in November, according to the National Association of Realtors®, marking two consecutive months of increases. Three of four major U.S. regions saw gains in sales activity last month. Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.9 percent from October to a seasonally adjusted rate of 5.32 million in November. Sales are now down 7.0 percent from a year ago (5.72 million in November 2017). Total housing inventory at the end of November decreased to 1.74 million, down from 1.85 million existing homes available for sale in October. This represents an increase from 1.67 million a year ago, however. Unsold inventory is at a 3.9-month supply at the current sales pace, down from 4.3 last month and up from 3.5 months a year ago. This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in November (5.32 million SAAR) were up 1.9% from last month, but were 7.0% below the November 2017 rate. The second graph shows nationwide inventory for existing homes. According to the NAR, inventory decreased to 1.74 million in November from 1.85 million in October. Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory. Inventory was up 4.2% year-over-year in November compared to November 2017. Months of supply was at 3.9 months in October. For existing home sales, a key number is inventory - and inventory is still low, but appears to have bottomed. ...
California Existing Homes in November: Sales Down 13.4% YoY, Inventory Up 31% -- The CAR reported: California housing market sputters in November California home sales remained on a downward trend for the seventh consecutive month in November as prospective buyers continued to wait out the market, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 381,400 units in November, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2018 if sales maintained the November pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. November’s sales figure was down 3.9 percent from the revised 397,060 level in October and down 13.4 percent from home sales in November 2017 of a revised 440,340. November marked the fourth month in a row that sales were below 400,000. Statewide active listings rose for the eighth consecutive month after nearly three straight years of declines, increasing 31 percent from the previous year. November’s listings increase was the largest since April 2014.The unsold inventory index, which is a ratio of inventory over sales, increased year-to-year from 2.9 months in November 2017 to 3.7 months in November 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate. Here is some inventory data from the NAR and CAR (ht Tom Lawler).
Comments on November Existing Home Sales - McBride - Earlier: NAR: Existing-Home Sales Increased to 5.32 million in November. Two key points:
1) The key for the housing - and the overall economy - is new home sales, single family housing starts and overall residential investment. Overall this is a reasonable level for existing home sales, and the recent weakness is no surprise given the increase in mortgage rates.
2) Inventory is still low, but was up 4.2% year-over-year (YoY) in November. This was the fourth consecutive month with a year-over-year increase in inventory, and the largest YoY increase since late 2014. The current slight YoY increase in inventory is nothing like what happened in 2005 and 2006. In 2005 (see red arrow), inventory kept increasing all year, and that was a sign the bubble was ending. Although I expected inventory to increase YoY in 2018, I also expected inventory to follow the normal seasonal pattern (not keep increasing all year). Also inventory levels remains low, and could increase much more and still be at normal levels. No worries. Existing Home Sales NSAThe second graph shows existing home sales Not Seasonally Adjusted (NSA). Sales NSA in November (406,000, red column) were below sales in November 2017 (425,000, NSA), but were the third highest since the housing bubble (behind 2016 and 2017). Sales NSA through November (first eleven months) are down about 2.3% from the same period in 2017. This is a small YoY decline in sales to-date - it is likely that higher mortgage rates are impacting sales, and it is possible there has been an impact from the changes to the tax law (decreasing property taxes write-off, etc).
Housing Starts Increased to 1.256 Million Annual Rate in November -- From the Census Bureau: Permits, Starts and Completions: Privately‐owned housing starts in November were at a seasonally adjusted annual rate of 1,256,000. This is 3.2 percent above the revised October estimate of 1,217,000, but is 3.6 percent below the November 2017 rate of 1,303,000. Single‐family housing starts in November were at a rate of 824,000; this is 4.6 percent below the revised October figure of 864,000. The November rate for units in buildings with five units or more was 417,000. Privately‐owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,328,000. This is 5.0 percent above the revised October rate of 1,265,000 and is 0.4 percent above the November 2017 rate of 1,323,000. Single‐family authorizations in November were at a rate of 848,000; this is 0.1 percent above the revised October figure of 847,000. Authorizations of units in buildings with five units or more were at a rate of 441,000 in November. The first graph shows single and multi-family housing starts for the last several years. Multi-family starts (red, 2+ units) increased in November compared to October. Multi-family starts were up 22% year-over-year in November. Multi-family is volatile month-to-month, and has been mostly moving sideways the last few years. Single-family starts (blue) decreased in November, and were down 13% year-over-year. The second graph shows total and single unit starts since 1968. The second graph shows the huge collapse following the housing bubble, and then eventual recovery (but still historically low). Total housing starts in November were above expectations (due to multi-family), and starts for September and October were revised up, combined.
Comments on November Housing Starts -- Bill Mcbride - Earlier: Housing Starts Increased to 1.256 Million Annual Rate in November - Total housing starts in November were above expectations (due to the volatile multi-family sector), and starts for September and October were revised up, combined. The housing starts report released this morning showed starts were up 3.2% in November compared to October (October starts were revised down), and starts were down 3.6% year-over-year compared to November 2017. Single family starts were down 13.2% year-over-year. This was the weakest month for single family starts since May 2017. This first graph shows the month to month comparison for total starts between 2017 (blue) and 2018 (red). Starts Housing 2017 and 2018Click on graph for larger image. Starts were down 3.6% in October compared to October 2017. Through eleven months, starts are up 5.1% year-to-date compared to the same period in 2017. That is a decent increase. Single family starts are up 3.9% year-to-date. Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment). These graphs use a 12 month rolling total for NSA starts and completions. Multifamily Starts and completionsThe blue line is for multifamily starts and the red line is for multifamily completions. The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession - but turned down, and has moved sideways recently. Completions (red line) had lagged behind - however completions and starts are at about the same level now (more deliveries). As I've been noting for a few years, the significant growth in multi-family starts is behind us - multi-family starts peaked in June 2015 (at 510 thousand SAAR) - however multi-family has picked up a little recently. Single family Starts and completionsThe second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions. Note the relatively low level of single family starts and completions. The "wide bottom" was what I was forecasting following the recession, and now I expect some further increases in single family starts and completions.
New Residential Building Permits: 1.328M in November, Better Than Forecast - The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for November new residential building permits. The latest reading of 1.328M was an increase from 1.265M in October and above the Investing.com forecast of 1.259M.Here is the opening of this morning's monthly report: Privately‐owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,328,000. This is 5.0 percent (±1.6 percent) above the revised October rate of 1,265,000 and is 0.4 percent (±1.7 percent)* above the November 2017 rate of 1,323,000. Single‐family authorizations in November were at a rate of 848,000; this is 0.1 percent (±1.4 percent)* above the revised October figure of 847,000. Authorizations of units in buildings with five units or more were at a rate of 441,000 in November. [link to report] Here is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.
November housing permits boosted by multifamily dwellings -- November was a *relatively* good month for housing permits, as in, improved *relative* to most of this year, although not at the heights of last winter. Most importantly, the least volatile number, single family permits, was flat compared with last month, and down -2% from a year ago: There's no change of trend here. Total permits did increase decently, and are up (less than 1%) YoY, although below their previous highs of January, March, and April: The improvement came in multi-unit dwellings, which had a nice pop this month: These are somewhat of an "alternative good" to single family homes, so the improvement may well reflect the stress of higher sales and mortgage costs. Starts, which tend to lag permits by a month or so, still reflect the poor readings of the last few months there: Probably some of the improvement in permits in November was due to mortgage rates, which declined a little at both the beginning and end of November: Note, however, that mortgage rates are still above where they were when we had the housing peak last winter, and prices are higher as well. So, while I expect continued improvement in December, I don't think there's enough of a boost to push housing to significant new highs.
NAHB: Builder Confidence Declines in December - The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 56 in December, down from 60 in November. Any number above 50 indicates that more builders view sales conditions as good than poor.From NAHB: Builder Confidence Drops Four Points Amid Concerns Over Housing Affordability Builder confidence in the market for newly-built single-family homes fell four points to 56 in December on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) as concerns over housing affordability persist. Although this is the lowest HMI reading since May 2015, builder sentiment remains in positive territory. “We are hearing from builders that consumer demand exists, but that customers are hesitating to make a purchase because of rising home costs,” “The fact that builder confidence dropped significantly in areas of the country with high home prices shows how the growing housing affordability crisis is hurting the market,” All the HMI indices posted declines. The index measuring current sales conditions fell six points to 61, the component gauging expectations in the next six months dropped four points to 61, and the metric charting buyer traffic edged down two points to 43. Looking at the three-month moving averages for regional HMI scores, the Midwest dropped two points to 55; the West and South both fell three points to 68 and 65, respectively; and the Northeast registered an eight-point drop to 50.
AIA: "Run of positive billings continues at architecture firms" - Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Run of positive billings continues at architecture firmsArchitecture firm billings growth expanded in November by a healthy margin, according to a new report today from The American Institute of Architects (AIA). AIA’s Architecture Billings Index (ABI) score for November was 54.7 compared to 50.4 in October. With the strongest billings growth figure since January and continued strength in new project inquiries and design contracts, billings are closing the year on a strong note. “Despite some concerns about a potential economic downturn, architecture firms continue to report strong billings, inquiries, and new design contracts,” “For the coming year, concerns about the economy among architecture firm leaders tend to be balanced by their concerns about a lack of qualified employee prospects.”
• Regional averages: Northeast (56.8), Midwest (53.1), South (50.5), West (49.0)
• Sector index breakdown: commercial/industrial (53.8), mixed practice (53.8), multi-family residential (51.2), institutional (50.8)
This graph shows the Architecture Billings Index since 1996. The index was at 54.7 in November, up from 50.4 in October. Anything above 50 indicates expansion in demand for architects' services. Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions. According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. This index has been positive for 14 consecutive months, suggesting a further increase in CRE investment in 2019.
Personal Income and Outlays - December 21, 2018 - Highlights: November was a mixed month for the consumer as personal income managed only a lower-than-expected 0.2 percent gain which is offset, however, by a solid and higher-than-expected 0.4 percent rise for consumer spending. Price data are subdued, rising 0.1 percent for both the PCE and core PCE with year-on-year rates now both below the Federal Reserve's 2 percent target, at 1.8 and 1.9 percent respectively. Looking first at the consumption side of the data, the rise in spending was driven by a strong 0.9 percent increase in durable goods that follows a 0.8 percent rise in October with both speaking strongly to health in discretionary demand. Spending on nondurables, reflecting lower gasoline prices, rose a modest 0.2 percent in November with spending on services, by far the largest component, rising 0.4 percent. The income side is soft and includes only a 0.2 percent rise for the wages and salaries component. Inflation-adjusted disposable income, an important reading on consumer health, also rose 0.2 percent and down from 0.3 percent in October. The savings rate edged 1 tenth lower to a still healthy 6.0 percent. Putting income aside, where lack of traction despite high levels of employment is the great puzzle of the expansion, today's report is very favorable and points to a third straight quarter of consumer-driven strength for the economy.
Personal Income increased 0.2% in November, Spending increased 0.4% -- The BEA released the Personal Income and Outlays report for November: Personal income increased $40.2 billion (0.2 percent) in November according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $37.8 billion (0.2 percent) and personal consumption expenditures (PCE) increased $54.4 billion (0.4 percent).Real DPI increased 0.2 percent in November and real PCE increased 0.3 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent.The November PCE price index increased 1.8 percent year-over-year and the September PCE price index, excluding food and energy, increased 1.9 percent year-over-year.The following graph shows real Personal Consumption Expenditures (PCE) through November 2018 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change. The dashed red lines are the quarterly levels for real PCE.The increase in personal income was below expectations, and the increase in PCE was above expectations. Using the two-month method to estimate Q4 PCE growth, PCE was increasing at a 3.6% annual rate in Q4 2018. (using the mid-month method, PCE was also increasing at 3.6%). This suggests solid PCE growth in Q4.
Real Disposable Income Per Capita in November - With the release of yesterday's report on November Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 0.18% month-over-month change in disposable income was trimmed to 0.12% when we adjust for inflation. This is down from the 0.47% nominal and 0.28% real increases last month. The year-over-year metrics are 4.00% nominal and 2.12% real. Post-recession, the trend was one of steady growth, but generally flattened out in late 2015. Disposable income picked up in 2018.The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013. It will be interesting to see how the recent tax legislation affects the trend over time. The BEA uses the average dollar value in 2012 for inflation adjustment. But the 2012 peg is arbitrary and unintuitive. For a more natural comparison, let's compare the nominal and real growth in per-capita disposable income since 2000. Nominal disposable income is up 86.7% since then. But the real purchasing power of those dollars is up only 32.6%.
Consumer Sentiment December 21, 2018 - Consumer sentiment ends this month at a stronger-than-expected index level of 98.3, up 8 tenths from both the preliminary estimate and from November. The gain reflects a nearly 4-point jump in the current conditions component to 116.1 which is one of the strongest readings of the year and a favorable indication for holiday spending. An offset, however, is a dip in the expectations component to 87.0 vs November's 88.1 that reflects a noticeable easing in optimism over the jobs outlook. The report notes that trouble in the stock market was not a major factor in the expectations decline. Like this morning's PCE price indexes released with the personal income and outlays report, inflation readings are very subdued, at 2.7 percent for the year-ahead outlook and 2.5 percent for the 5-year outlook which are both down 1 tenth from November. And the feeling of this report is very much like personal income and outlays, hinting at consumer spending strength at a time of limited income growth and very flat inflation.
Trump Tariff War with China Sends U.S. Retailers on Buying Binge --In the nearly 40 years she has spent in trade, Amy Magnus has never seen retailers hoarding so much inventory.Warehouses throughout the United States are at record capacity with Chinese imports of all kinds - microwaves, vacuum cleaner filters, swimwear, furniture - stacked to the ceiling, according to Magnus, who heads the National Customs Brokers & Forwarders Association of America, whose members work with over 250,000 importers and exporters.“My office is right on a land border and I can see the trucks just coming across non-stop from my window,” Magnus said, referring to her birds-eye view from Champlain, New York, of trade on the border between Canada and the United States.The buying binge is also evident in recent data from the National Retail Federation (NRF) and Hackett Associates, which show imports at major U.S. retail container ports surged 13.6 percent to a record 2.04 million containers in October. This helped push the U.S. trade deficit with China to a record high.“It’s very rare that retailers would commit to more inventory in advance,” said Neil Saunders, managing director of consultancy GlobalData Retail. “If they don’t manage to sell their holiday inventory, we’ll see a real glut of it, and some discounting, in the new year.”Storage is “full to bursting” as a result of retailers’ holiday inventory, plus the additional stocks retailers have been buying for 2019, Saunders said, and retailers are paying more for storage due to a shortage of warehousing across the country. “Our warehouse is packed with stuff,” said Mike Abt, co-president of Chicago-based appliance and furniture store Abt Electronics. “Air-conditioners are just piled up in random places where they shouldn’t be because we’re running out of room. And we did that in anticipation of 15 percent more price increases.”
Small assault-style rifle firms thriving under activists’ radar (Reuters) - A decade ago, Kentucky’s Anderson Manufacturing was a small machine shop that didn’t make firearms. By 2016, it was making more rifles than Smith & Wesson, according to the latest available data from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Anderson’s big seller: assault-style rifles that cost up to $2,100 and require no lubrication. Anderson says it made nearly 454,000 rifles that year, or about 57,000 more than Smith & Wesson. Anderson is the leader among a cluster of small, private companies that are taking market share from America’s biggest gun makers. They are doing so with catchy marketing or weapons that have, for example, more knockdown power for hunting wild pigs. Some rifles made by companies such as Patriot Ordnance Factory and Daniel Defense fire larger .308-caliber rounds instead of the .223-caliber rounds more commonly used in AR-15s. Another firm, Kel-Tec CNC Industries Inc, makes the hot-selling Sub-2000 rifle - which folds up small enough to fit into a backpack. It costs $500 and fires popular 9mm handgun ammunition. “It’s easy to conceal in some sort of bag that is not screaming, ‘Gun,’” said Cape Gun Works owner Toby Leary in Hyannis, Massachusetts. “People like it for the discreetness.” By contrast, America’s leading gun makers have struggled over the past two years, with the three biggest seeing their rifle market share slip to 44 percent in 2016 from 57 percent in 2011, according to ATF data. Over the same period, a cluster of about 30 small companies combined for 51 percent of overall rifle production, up from 37 percent. Top rifle maker Remington Outdoor Company emerged from bankruptcy in May. Net firearms sales at Sturm Ruger & Company fell 7 percent during the nine-month period that ended Sept. 30. And American Outdoor Brands Corp parent of Smith & Wesson, saw shipments of long guns, including rifles, fall 32 percent in fiscal 2018, compared to the previous year.
Durable Goods Orders 12/21/2018 - Highlights: A swing higher for the always volatile aircraft group gave an outsized lift to durable goods orders in November, rising 0.8 percent but still under consensus for 1.4 percent. When excluding aircraft and other transportation equipment, durable goods orders fell 0.3 percent which is near Econoday's low-end expectations. Under low-end expectations are core capital goods orders (nondefense ex-aircraft) which fell 0.6 percent in the month. Aircraft orders, both civilian and defense, reversed two prior months of steep declines, rising 17.7 percent for the former and 15.4 percent for the latter. Primary metals at 1.0 percent, fabrications at 0.5 percent, and communications equipment at 0.8 percent all posted solid monthly gains. Elsewhere, however, orders were weak with electrical equipment down 0.7 percent, computers unchanged, and motor vehicles down 0.2 percent. The biggest disappointment, and the heart of the capital goods group, is machinery where November orders sank a very steep 1.7 percent. The drop in capital goods orders is offset, however, by a large 5-tenths upward revision to October which now stands at plus 0.5 percent. And the upward October revision also includes core shipments which are inputs into GDP business investment and which now jumped 0.8 percent in the month in what is also a 5-tenths upward revision. Yet shipments for November, like orders, were weak at minus 0.1 percent. Unfilled orders are another weakness, falling 0.1 percent after dipping 0.2 percent in October. Total shipments bounced back with a 0.7 percent November gain that follows a 0.4 percent decline with inventories up 0.3 and 0.2 percent in the two months. November's build relative to shipments is favorable, drawing back the inventory-to-shipments ratio to a leaner 1.61 from 1.62. Certainly much of the news in today's report is favorable though the dip in the ex-transportation reading and turn lower for capital goods do echo last week's industrial production report, all pointing to a factory sector that may be losing a little steam going into year end. And a look at year-on-year change in today's report points to the same, at 5.3 percent for total orders which is strong but lower than October and September and down from a peak of 12.1 percent in August.
Headline Durable Goods Orders Up 0.8% in November -- The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau's summary on new orders: New orders for manufactured durable goods in November increased $1.9 billion or 0.8 percent to $250.8 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 4.3 percent October decrease. Excluding transportation, new orders decreased 0.3 percent. Excluding defense, new orders decreased 0.1 percent. Transportation equipment, up three of the last four months, drove the increase, $2.5 billion or 2.9 percent to $87.0 billion. Download full PDF The latest new orders number at 0.8% month-over-month (MoM) was worse than the Investing.com consensus of 1.6%. The series is up 5.3% year-over-year (YoY). If we exclude transportation, "core" durable goods came in at -0.3% MoM, which was worse than the Investing.comconsensus of 0.3%. The core measure is up 4.9% YoY. If we exclude both transportation and defense for an even more fundamental "core", the latest number is down 1.8% MoM and up 2.8% YoY.Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It is down 0.6% MoM and up 6.5% YoY. For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We've also included a dotted line to show the relative size of Core Capex.
From the NY Fed: Manufacturing "Business activity grew at a slower pace than in recent months in New York State" -- From the NY Fed: Empire State Manufacturing Survey Business activity grew at a slower pace than in recent months in New York State, according to firms responding to the December 2018 Empire State Manufacturing Survey. The headline general business conditions index fell twelve points to 10.9. … The index for number of employees jumped twelve points to 26.1, indicating very strong growth in employment levels, while the average workweek index was little changed at 8.0. This was well below the consensus forecast, and the weakest reading since May 2017.
Philly Fed Mfg "Indicators Remained Muted" in December --From the Philly Fed: December 2018 Manufacturing Business Outlook Survey: Manufacturing activity in the region continued to grow but remained subdued, according to results from the December Manufacturing Business Outlook Survey. The survey’s broad indicators were positive, but their movements were mixed this month: The general activity and shipments indicators fell from their readings last month, while the indicators for new orders and employment increased. The firms remained generally optimistic about future growth.The diffusion index for current general activity decreased from 12.9 in November to 9.4 this month, its lowest reading since August 2016 … The firms continued to report overall higher employment. Over 24 percent of the responding firms reported increases in employment this month, while 6 percent of the firms reported decreases in employment. The current employment index remained positive and edged 2 points higher to 18.3. The current workweek index fell 6 points to 0.5, its lowest reading in 26 months.Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
Kansas City Fed Manufacturing Index December 21, 2018 – Highlights: This morning's durable goods report proved no better than mixed as have many of the recent regional manufacturing reports including Kansas City's composite index for December which slowed to 3 for the lowest reading in more than two years. New orders, at 4, are one of the lowest of the last two years with export orders especially weak at minus 7. Production moved sharply into the negative column at minus 18 with the workweek flat. Employment is a positive rising 2 points to 8 as are backlog orders which came in at 9 though down from November's unusually strong rise of 18. Prices also moderated sharply including input costs and also selling prices which had been strong in this sample but are now flattening. And flattening is a reasonable description for the nation's factory sector in general, ending what was a strong 2018 with a bit of fizzle.
Weekly Initial Unemployment Claims increased to 214,000 --The DOL reported: In the week ending December 15, the advance figure for seasonally adjusted initial claims was 214,000, an increase of 8,000 from the previous week's unrevised level of 206,000. The 4-week moving average was 222,000, a decrease of 2,750 from the previous week's unrevised average of 224,750. The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971.
BLS: Unemployment Rates Lower in 6 states in November; Idaho, Missouri, New York at New Series Lows -- From the BLS: Regional and State Employment and Unemployment Summary Unemployment rates were lower in November in 6 states, higher in 2 states, and stable in 42 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Eighteen states had jobless rate decreases from a year earlier and 32 states and the District had little or no change. Hawaii and Iowa had the lowest unemployment rates in November, 2.4 percent each. The rates in Idaho (2.6 percent), Missouri (3.0 percent), and New York (3.9 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 6.3 percent.This graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 1976.At the worst of the great recession, there were 11 states with an unemployment rate at or above 11% (red).Currently only one state, Alaska, has an unemployment rate at or above 6% (dark blue). Four states have unemployment rates above 5%; Alaska, D.C., Louisiana and West Virginia. Three states were at new series lows, and a total of nine states are at the series low.
"They're Hungry And Humble" - Thanks To Tight Labor Market, Employers Are Hiring Felons In Droves - Looking past anxieties about job-killing automation replacing human workers with robots, the supremely tight US job market is creating job opportunities for Americans who had been considered virtually unemployable in the very recent past. We're talking about people with criminal convictions for violent crimes - murders, armed robbers and others. Some industries - like long-haul trucking, for example - have reached a crisis point, where employers are eager to hire anybody with a pulse, a will and a drivers' license. And as President Trump's criminal justice reform law is set to release more low-risk offenders on to the streets while simultaneously offering them more opportunities to secure job training and employment, the Wall Street Journal on Wednesday published a long-form feature chronicling the paper's attempt to follow three ex-cons as they searched for employment over the course of a year. The story showed that, even though at least one of the convicts had only recently been released after spending more than two decades in prison for murder, all three of them managed to find satisfying work. The three men benefited from living in New York State, which recently passed a law making it more difficult for employers to turn away job applicants with criminal records, while also offering tax credits to employers who hire felons. But if anything, the stories of these three men show just how much work is available in the contemporary economy, even as the work-force participation rate remains mired near all-time lows and average hourly wages have risen only modestly since the recovery from the financial crisis began.
Most Americans Received No Pay Increase In 2018 - Most Americans say they didn't get a pay raise at their current job, or start a better paying job in the last 12 months, according to a Wednesday survey from Bankrate.com. According to the poll, 62% of Americans report not getting a pay raise or better paying job in the past year - up from 52% last surveyed last year. That said, just 25% of respondents in this year's survey said they would look for a new job in the next year. Because of a pay freeze at his previous employer, the University of Texas Health hospital system, Mike Gnitecki, a licensed paramedic in Longview, hadn’t seen a pay increase for the past three years. He’s been stuck at a base pay of $43,500 a year, with the opportunity for overtime. “It basically feels like my pay has dropped each year due to normal cost-of-living increases,” Gnitecki says. “At the same time, my experience and responsibility has increased.” -Bankrate.com32% of those polled by Bankrate said they received a raise, vs. 38% last year, while just 11% of respondents got a better paying job - down from 18% last year. After feeling "frustrated," Gnitecki reached a turning point and found a similar paramedic job with a "decent increase" in pay and benefits, which he starts this month. "It feels really good because it kind of feels like I’m being paid how much I should be paid," he said, adding "I’m very glad I made the switch."As Marketwatch notes, meanwhile, the average CEO at the largest 350 companies in the US received a 17.6% increase in pay in 2017 - clocking in at an average of $18.9 million, according to an August study from the Economic Policy Institute. Bankrate Chief Financial Analyst Greg McBride says that while the economy might be doing great right now, however productivity isn't following suit and may explain the stagnation in wage growth
UPS workers describe company reign of terror in wake of Teamsters sellout --It is more than two months since the Teamsters union illegitimately ratified a sellout five-year national labor contract covering a quarter of a million United Parcel Service (UPS) workers. The union utilized a loophole in its constitution to despotically override a 54 percent “no” vote by the membership.One month later, the Teamsters forced through a separate contract on 13,000 subsidiary UPS Freight division workers, after making them vote again on virtually the same agreement they had already rejected. The Teamsters threatened the freight workers with a lockout and the loss of medical benefits if they continued to resist the company-backed deal and declared that they would instruct workers at the much larger parcel division to remain on the job if the freight workers went on strike.The outcome of the union’s gangsterism is a series of far-reaching attacks that will permanently reduce the conditions and wages of current and future UPS workers. These include the creation of a new tier of lower-paid hybrid warehouse/drivers—a first step for extending the conditions of part-time work from the warehouse to the delivery drivers—and the maintenance of poverty-level wages for hundreds of thousands of warehouse employees who remain part-time employees. As if this were not bad enough, the union’s actions have given the company a green light to press its offensive. Workers from multiple hubs who spoke to the WSWS UPS Workers Newsletter this week report that in the past two months, management has carried out a wave of layoffs and firings of workers, cut workers’ hours, and closed or idled “unprofitable” hubs.
UPS worker dies of heart attack; UPS Freight lays off part-timers over holidays - There is widespread opposition and anger among a quarter of a million UPS and UPS Freight workers over brutal conditions enforced by management and the Teamsters in the wake of the union’s imposition of sellout national contracts in October and November.A WSWS UPS Workers Newsletter report on the reign of terror by management has been widely read and shared by workers on social media, and workers have continued to send in reports documenting the conditions in their hubs.Lauren, a worker from Orlando, Florida, with a decade at UPS, described the conditions of speed-up and management harassment over the peak holiday season. “We have the revolving door of new hires,” she said, “and the closer we get to peak season the less training they get. Some of them don’t even know what can and cannot be sent across the belts. They’re being moved around the building to different positions where they have no training.”“I’m pretty sure you’ll probably find the same behavior in most hubs. Production becomes the top priority while safety goes out the window,” she said. “I know we’ve had a few people lose fingers in the load in pinch points on rollers in the midnight shift.” UPS has hired over 100,000 seasonal warehouse workers over peak season. The workers earn as little as $10 per hour, often taking the job in hopes of landing a full-time position. In early November, a driver at Lauren’s hub died of a heart attack as he was arriving at work. “He had previously had a heart attack,” she said. “He had filed several grievances against the company about being overworked… On the way into work he collapsed in the pedestrian walkway, and by the time the paramedics got here, he could not be revived. The day before he passed away, he had filed another grievance for being forced to work overtime.” She added: “We worked together.”
Amazon Denies Warehouse Workers' Request For Air Conditioning As Robots Can't Work In Cold Weather - Thanks to the notoriously brutal working conditions at its fulfillment centers, Amazon has become a lighting rod of criticism from the American labor movement and the Democratic Socialists of America, who claim to champion the rights of workers (despite the fact that most of the organization's members are college students and creative-class workers relying on handouts from their parents to pay their expensive Brooklyn rents). The e-commerce giant even won the dubious distinction of being specifically called out in a bill proposed by Socialist champion Bernie Sanders (his "Stop BEZOS" act). As investigative reporters on multiple continents have burnished Amazon CEO Jeff Bezos' reputation as a ruthless capitalist by exposing some of the company's more extreme labor abuses, like effectively forcing employees to pee in bottles to avoid taking unpaid bathroom breaks and hiring ambulances to wait outside some of its warehouses to cart away workers suffering from heat stroke. As the debate about what, exactly, Amazon owes its workers and the municipalities that host its facilities has taken on renewed relevance following the backlash to the generous tax breaks offered by NYC for Amazon to build a new headquarters in Long Island City (the city's subway is crumbling, but Amazon is getting taxpayer-funded handouts to build a helipad!), more Amazon workers are rising up to protest their brutal working conditions. This month, workers at the Amazon's MSP1 fulfillment center in Shakopee, Minnesota gathered outside the facility on a cold Friday evening to protest several of these 'abuses', including the company's refusal to accommodate Muslim workers by not providing adequate space and time for prayer as well as its refusal to accommodate workers observing the Muslim holy month of Ramadan, which this year coincided with the company's Prime Day sale. A Gizmodo story about the protest in Minnesota included an interesting detail about another demonstration at a facility in Staten Island. Workers at the Amazon facility in Staten Island who recently announced their intention to unionize complained about the company's refusal to install air-conditioning in its sweltering facility. The reason given by Amazon for refusing to provide the air conditioning? The robots in its facility can't function optimally in cold weather.
New York Subway Facing Death Spiral Without $40 Billion Upgrade - As the Metropolitan Transportation Authority, the state-controlled agency responsible for operating the New York City subway and its buses, prepares to shutter a heavily used subway line that connects Northern Brooklyn with Lower Manhattan so that it can undergo necessary maintenance to repair some of the lingering damage from Hurricane Sandy, the recently appointed head of the agency has warned that NYC and New York State are facing a stark choice: Either invest $40 billion in the subway for badly needed upgrades and improvements, or allow one of the world's most heavily used mass transit systems to sink into a "death spiral," according to Bloomberg. NYC Transit Authority President Andy Byford - who was credited with turning around Toronto's mass transit system before heading to New York - has been telling anybody who will listen (subway riders, taxpayers, business executives and the city council, the name a few) that these upgrades are needed asap. And if Albany won't allocate the money, the City must do something."You don’t get the billions you need by just going to Albany with a begging bowl," Byford, recruited a year ago to run New York City Transit, told executives at a Crain’s Magazine breakfast this month.As anybody who relies on the subway, or regularly reads the New York Times Metro Section, is probably aware, the subway has been struggling with acute signs of distress - typified by rapidly worsening service - that have intensified in the aftermath of Hurricane Sandy. So, why is Byford issuing this warning now? Well, after months of being stonewalled by the city, Byford is hoping to capitalize on a new power dynamic in Albany after Democrats won control of the State Assembly, creating a state of unified rule in Albany. The subway could be struggling with a nearly $1 billion operating deficit by 2022, which is clearly unsustainable.
Rising homelessness: The reality of life for workers in a “booming” US economy --On any given night in the United States 553,000 people experience homelessness, according to the 2018 Annual Homeless Assessment Report (AHAR) published by the Department of Housing and Urban Development (HUD) and sent to Congress on Monday. The report shows that homelessness is on the rise for the second year in a row. It underscores the harsh reality for broad sections of workers in the world’s richest and most “advanced” capitalist country, under what is routinely described as a “booming” economy.The report sheds light on many aspects of the worsening social crisis in America. Below are some of its most essential findings:
- • Some 36,000 of those experiencing homelessness on any given night in 2018 were unaccompanied youth (defined as people under the age of 25). Of this subset, almost 90 percent were between the ages of 18 and 24. Just over half of these unaccompanied youth were unsheltered—a much higher rate than for all people experiencing homelessness.
- • Homelessness declined this year for all racial groups except people identifying themselves as white, who saw an increase of four percent. White people accounted for 54 percent of the homeless overall.
- • Half of all people experiencing homelessness were in one of five states: California, New York, Florida, Texas or Washington.
- • In January 2018, 3,900 people were staying in sheltered locations specifically reserved for people displaced by presidentially declared national disasters. These people were displaced from areas struck by Hurricanes Harvey, Irma, Maria and Nate, as well as regions hit by Western wildfires and other storms or natural disasters.
Among the top factors driving the increase in homelessness is the drastic rise in housing costs in major cities. This is exacerbated by the continuation of wage stagnation, despite a near-record low official unemployment rate.According to the report, over half of all people experiencing homelessness resided in one of the nation’s 50 largest cities. The most notable increase took place in King County, Washington, which includes Seattle, the sixth most expensive city in the US. Homelessness rates there rose by 4 percent.In New York City, where the critical loss of affordable housing is well documented, homelessness increased by 2.8 percent. The report revealed that nearly three in 10 people in families that experience homelessness in the US do so in New York, which has an estimated 52,070 people in homeless families. The rise in homelessness among people in families with children increased in 12 states between 2017 and 2018. The largest increases were in Connecticut, which experienced a 44 percent increase (516 more people in homeless families with children), and Massachusetts, which saw a 17 percent rise (1,959 more people).
'Greatest Economy Ever' - Boston's Homeless Population Soared 14% Over The Year - On any given night across the US, more than 500,000 Americans are homeless, according to the 2018 Annual Homeless Assessment Report (AHAR) published by the Department of Housing and Urban Development (HUD) and distributed to Congress on Monday. The report is a sobering view that the economy is far from great, but is actually completing a turning point as the next economic downturn is in sight. Homeless trends across the country are accelerating for the second year in a row. In Massachusetts, HUD data shows homelessness jumped 14.2% from 2017 to 2018, an increase of more than 2,500 people, the most significant jump in the nation. The latest figures show an estimated 20,000 people are homeless in the state. That population has fluctuated in the last several years, — it was higher, for instance, in 2014 and 2015, said WBUR Boston. Since the 2008 stock market crash, homelessness in Massachusetts has soared by nearly 5,000 people, or 33%. The vast majority of people currently homeless are sheltered, according to HUD. Charlie Baker, Governor of Massachusetts, has made it a top priority to move homeless people from motels, tent cities, and temporary shelters to more stable housing options. Besides the real economy that is on life support, the Federal Reserve artificially juiced the real estate market by holding the federal funds rate at the zero lower bound for many years. In return, housing prices soared as wages did not keep pace. Many people were priced out of homes and could barely afford rent. The housing affordability crisis has been a significant driver of homelessness for the Greater Boston region and many parts of the state.
Innocent New York man billed $4,600 for police rectal probe - BBC - A US man wrongly suspected of hiding drugs in his colon was reportedly given a rectal probe - and billed for the unwanted examination. Torrence Jackson said he refused consent for the invasive procedure, and suffered internal injuries as a result. According to the Post-Standard, doctors in Syracuse, upstate New York, refused to carry out the examination until police obtained a warrant. The hospital sent Mr Jackson, 42, a bill for $4,595.12 (£3,600). He was stopped in his car by police after failing to signal, police say. Officers found a bag of marijuana and cocaine residue in Mr Jackson's vehicle, reports the Post-Standard. The incident happened on 16 October 2017, but has only been pieced together after a review by the newspaper of police, court and medical documents. Police officer Anthony Fiorini said Mr Jackson's posture in the car was consistent with someone hiding drugs in his rectum. One officer was reportedly injured in the ensuing struggle to arrest Mr Jackson, who has a lengthy criminal record, according to the newspaper. Police also said Mr Jackson had taunted them about having drugs concealed on his person, which he denies, reports the Post-Standard. He was taken to St Joseph's Hospital in Syracuse where an X-ray found no foreign objects in his body. Police obtained a court warrant to perform a sigmoidoscopy, using a flexible 8in (20cm) tube. Doctors initially refused to perform the procedure, until advised by a hospital lawyer that Mr Jackson did not have a legal right to refuse. He was forcibly sedated for the examination. After the procedure found no drugs, Mr Jackson was released and said he only learned what doctors had done when he found blood in his underwear.
Human rights body calls on US school to ban electric shocks on children - An international body entrusted with upholding human rights across the Americas has called for an immediate ban on the controversial use of electric shocks on severely disabled children in a school outside Boston.The Judge Rotenberg Center in Canton, Massachusetts, is believed to be the only school in the world that routinely inflicts high-powered electric shocks as a form of punishment on vulnerable children and adults. About 47 of its students are currently subjected to the “treatment”, which involves individuals being zapped with electric currents far more powerful than those discharged by stun guns. Disability rights campaigners have tried for decades to stop the practice, which the school’s administrators call “aversive therapy”. So far the institution has managed to fend off all opposition, arguing that electric shocks are an acceptable way of discouraging harmful habits. Now the Inter-American Commission on Human Rights (IACHR) has issued a rare formal notice known as “precautionary measures” that calls for immediate cessation of the electric shocks. In a seven-page resolution, the Washington-based panel says that the practice poses a “serious impact on the rights” of the vulnerable children at the school, “particularly on their right to personal integrity which may be subjected to a form of torture”. The commission cites the work in 2013 of the then UN monitor on torture, Juan Méndez, who found JRC’s electric shock technique was a potential violation of the UN convention against torture and other international laws. It also notes several federal agencies and professional groups have called for a ban on “aversive techniques” on grounds they can cause psychological trauma.The commission’s intervention was prompted by a petition from a coalition of advocacy groups led by Disability Rights International. DRI’s president, Laurie Ahern, told the Guardian the commission’s new call for a ban added to a growing body of opinion that the electric shocks amounted to a form of torture.
Trump Administration Rolls Back School Nutrition Standards - The Healthy, Hunger-Free Kids Act of 2010, which is often attributed to both President Obama and Michelle Obama, instituted certain new reforms to the way the U.S. Department of Agriculture (USDA) administers school lunch programs. Rolling back those reforms has been a major thrust of the Trump administration and Trump's USDA chief, Sonny Perdue. This week, the first of those rollbacks was announced.The HHFK Act—we're just abbreviating for the sake of ease, it isn't usually referred to that way—was a multi-pronged effort to improve childhood nutrition. The best-known provisions included limiting milk to either one percent white or nonfat flavored milks; setting maximum limits for sodium, fat and sugar; and minimum limits for fruits, vegetables and whole grains. But it also instituted new funds and resources to help schools source more local produce, increased the number of eligible kids, increased access to water fountains, and cleaned up the way eligibility is run (by using census data rather than applications).For years, Donald Trump has insisted that these rules are onerous and that more control should be given to the schools, which often operate under a strict and wildly inadequate budget. USDA Secretary Sonny Perduehas said that kids may simply be uninterested in healthy options, and that forcing schools to offer them is thus a waste of money and effort. (This is not, according to some studies, true; this study, for example, found that increasing access to healthy food does in fact increase the intake of healthy food.)This week, the USDA released a press release outlining some of the n ew rules, saying the new rules are designed to "eliminate unnecessary regulatory burdens." The first wave of these new rules include allowing flavored one-percent milk and freezing the sodium reduction requirements. Under the HHFK Act, schools were supposed to gradually reduce sodium content over the course of the decade. The new rules delay that by seven years, which could simply signal that those sodium goals may never actually be required.
A Texas Elementary School Speech Pathologist Refused to Sign a Pro-Israel Oath, Now Mandatory in Many States — so She Lost Her Job Glenn Greenwald -- A children’s speech pathologist who has worked for the last nine years with developmentally disabled, autistic, and speech-impaired elementary school students in Austin, Texas, has been told that she can no longer work with the public school district, after she refused to sign an oath vowing that she “does not” and “will not” engage in a boycott of Israel or “otherwise tak[e] any action that is intended to inflict economic harm” on that foreign nation. A lawsuit on her behalf was filed early Monday morning in a federal court in the Western District of Texas, alleging a violation of her First Amendment right of free speech. The child language specialist, Bahia Amawi, is a U.S. citizen who received a master’s degree in speech pathology in 1999 and, since then, has specialized in evaluations for young children with language difficulties (see video below). Amawi was born in Austria and has lived in the U.S. for the last 30 years, fluently speaks three languages (English, German, and Arabic), and has four U.S.-born American children of her own. Amawi began working in 2009 on a contract basis with the Pflugerville Independent School District, which includes Austin, to provide assessments and support for school children from the county’s growing Arabic-speaking immigrant community. The children with whom she has worked span the ages of 3 to 11. Ever since her work for the school district began in 2009, her contract was renewed each year with no controversy or problem. But this year, all of that changed. On August 13, the school district once again offered to extend her contract for another year by sending her essentially the same contract and set of certifications she has received and signed at the end of each year since 2009. She was prepared to sign her contract renewal until she noticed one new, and extremely significant, addition: a certification she was required to sign pledging that she “does not currently boycott Israel,” that she “will not boycott Israel during the term of the contract,” and that she shall refrain from any action “that is intended to penalize, inflict economic harm on, or limit commercial relations with Israel, or with a person or entity doing business in Israeli or in an Israel-controlled territory.”
Texas Educator Files Lawsuit After She Was Fired for Refusing to Sign an Oath to Israel — A Texas speech pathologist has filed a lawsuit against the state of Texas after she was reportedly fired for refusing to sign an oath that she would not boycott the apartheid state of Israel. A U.S. citizen born in Austria and of Palestinian descent, Bahia Amawi is a speech specialist in western Texas who works with autistic and developmentally disabled people. The educator charges that the district refused to renew her contract in August after she declined to sign paperwork pledging that she “does not” and “will not” participate in any kind of boycott or “otherwise tak[e] any action that is intended to inflict economic harm” against the Israeli state. Speaking to Democracy Now!, Amawi explained her firsthand struggle with oppression and the reasoning behind her refusal to sign the oath: “I sent an email immediately, and I stopped even reading the additional codes [referring to the additional paperwork she was asked to sign in regards to Israel]. And I sent the email to my speech coordinator telling her, ‘Listen, I cannot sign this. This is against my principles, against my constitutional rights. And it’s also against my moral and ethical values, considering that I am a Palestinian American and I have family that actually live in the Occupied Territories, so it affects me personally, as well.’ So, it affects me in both ways — as an American citizen and as a Palestinian American, too.” A lawsuit was filed in federal court on Amawi’s behalf this week alleging that the district’s refusal to renew her contract is a direct violation of her First Amendment rights as a U.S. citizen. Amawi, who worked for the Pflugerville Independent School District as a contractor for nearly 10 years, says her renewal contract contained a special document in August asking her to take an oath that she would not boycott or inflict economic harm against Israel in any fashion. This may constitute the first direct challenge to new legislation aimed at curbing support for the growing Boycott Divest Sanctions (BDS) movement in the United States, which ultimately aims to end apartheid in Palestinian and Israeli territories.
West Virginia: Task force concludes without a “fix” for public workers’ insurance After nine months, 21 statewide public hearings, and 15 committee meetings, the Public Employees Insurance Agency (PEIA) Task Force finalized its recommendations at the December 11 deadline without addressing its main task: identifying a dedicated revenue source for the state’s health insurance program covering some 230,000 West Virginians, including teachers, school service personnel, state employees, and retirees. Throughout the strike and the pro-forma hearings staffed by union heads and state politicians, teachers and public service workers repeatedly demanded that health care be funded through hiking the taxes on the state’s oil and gas industry. This was, predictably, to no avail.The 29-member PEIA Task Force is exposed for what it always was—a trap for the teachers and public employees of the state and a pretext used by the unions to falsely claim the strike was a “victory.” Created by executive order by Republican Governor Jim Justice on February 28 and dominated by politicians and industry representatives, the Task Force also included Dale Lee, president of the West Virginia Education Association, Christine Campbell, president of the American Federation of Teachers-West Virginia, and James “Joe” White, executive director of the West Virginia School Service Personnel Association. Its real purpose was not to “fix” the skyrocketing costs of health care for hard-pressed state workers, but to defuse the nine-day statewide strike of 20,000 public school teachers and support staff.
Mass demonstration by Los Angeles teachers -- Tens of thousands of Los Angeles teachers and their supporters converged in a rally and march in downtown Los Angeles Saturday to demand better pay, smaller class sizes and increased funding for the 640,000 students in the second-largest school district in the United States. The demonstration, which involved up to 50,000 protesters, was the latest indication of the resumption of resistance by educators across the US who have been involved in the largest strike wave by teachers in decades.More than 33,000 teachers and health and human service professionals in the Los Angeles Unified School District (LAUSD) have been working without a new contract since their old agreement expired in June 2017. Like state governments and school districts across the country, LAUSD officials claim there is no money to meet the teachers’ demands and have offered an insulting three percent annual pay increase to teachers who live in one of the most expensive metropolitan areas in America. Teachers voted by 98 percent in August to authorize the United Teachers Los Angeles (UTLA) union to call the first city wide strike since 1989. The UTLA has defied the strike mandate and tied up educators in months of state-supervised mediation and fact-finding. Anger among rank-and-file teachers is boiling over, however, and the UTLA has been forced to say it would call a strike sometime next month if no settlement is reached.In addition to the teachers themselves, thousands of students, parents, retirees and other workers demonstrated at Saturday’s March for Public Education. Many recognized the historically significant character of their fight, attending with children, friends and parents as well.
Los Angeles and Oakland Teachers Rally Amid Deadlocked Contract Talks -- Two California teachers unions, which are currently deadlocked in separate contract talks with their respective school districts, are on the verge of launching the West Coast’s biggest teacher walkout since 1989. What happens next will decide far more than fair wages for career educators. At stake are broader principles of equity, expressed as contract demands for smaller class sizes and less testing, the addition of sufficient health and social services staff, and an investment in community schooling and fair funding — aimed at restoring public education as a public good for all Californians, rather than as a private interest granted to the lucky few. While they await the results of a state-mediated fact-finding process, United Teachers of Los Angeles (UTLA) and the Oakland Education Association (OEA) have declared Saturday, December 15, a day of solidarity, and have invited all to join teachers in a rally to defend public education. The Oakland action kicks off at Omni Commons at 11 a.m., while L.A.’s march and rally begins at Grand Park at 10 a.m.Meanwhile, an estimated 90 Oakland Unified teachers skipped classes December 10 in a one-day wildcat sickout to protest some of the state’s lowest teacher pay — against a backdrop of California’s fast-rising living costs. But a more fundamental grievance is with the $60 millionthat Oakland Unified must cut over the next two years. It has led superintendent Kyla Johnson-Trammell to adopt a draconian district downsizing plan that could close up to 24 mostly low-income neighborhood public schools and coordinate the remainder of the 87-campus district with the city’s 45 charters on things like enrollment and transportation. The strategy has been likened to a “portfolio model,” the controversial template for privatized district governance that favors charter expansion at the expense of traditional public schools.
After 2-Year Legal Battle, School Lets Students Pass Out US Constitutions -- After a two-year battle, the Los Angeles Community College District has agreed to abolish a policy that limited student expression to “free speech zones,” available only through application. Pierce College student Kevin Shaw was handing out Spanish-language copies of the U.S. Constitution in November 2016 when an administrator told him that he would have to confine his activity to the school’s “free speech zone.” The school told Shaw that he would have to apply for access to the 616-square foot zone and that his failure to comply would result in his removal from campus.After the incident, Shaw sued the school for violating his First Amendment rights with the help of the Foundation for Individual Rights in Education. The Department of Justice then filed a statement in support of his case.Pierce College filed a motion to dismiss the lawsuit in January 2018 but a California district court ultimately rejected the school’s assertion that the public campus was a “non-public forum.”On Wednesday, the Los Angeles Community College District agreed to settle the lawsuit, as well as to revoke the unconstitutional policy that recognized all campuses within the district as “non-public forums,” effectively removing free speech restrictions placed on 150,000 students, according to the Foundation for Individual Rights in Education (FIRE).
Inclusive WSU Stocks Men's Bathrooms With Free Menstrual Products - In an effort to demonstrate its “commitment to inclusivity,” Washington State University has begun stocking men’s restrooms with free menstrual products. The initiative is one of many focusing on “improving the transgender community experience on campus,” and is currently being tested in three restrooms on the Pullman, Wash. campus. The university is in the process of “assessing similar needs” at other WSU campuses to determine which men’s rooms will receive new accommodations. Additional changes include allowing students to choose a name other than their legal name for their student identification card and a new policy requiring all new buildings to have gender-neutral single-user restrooms. Some individuals found the practice of requiring a legal name on student identification cards “alienating” for transgender students who use chosen names. “Affirming folks’ identities on their CougarCard is a really big piece for us,” Director of WSU Gender Identity/Expression and Sexual Orientation Resource Center Matthew Jeffries, who also co-chairs the Gender Inclusive and Trans* Support Working Group, a function of WSU’s Campus Culture & Climate Initiative, said. Jeffries’ working group has been tasked with addressing “inequities” on WSU campuses through collaboration with departments and other university entities. "Throughout the system, students are coming forward and advocating for change,” Nolan Yaws-Gonzalez, assistant director of WSU Vancouver Student Center, said. “We’re going to make changes that impact the whole system.”
Judges in cyberbullying case at University of Mary Washington say Virginia school did not do enough to protect students - University of Mary Washington officials could have done more to protect students from online harassment, a federal appeals court said Wednesday in a ruling with implications for free speech and anonymous social media messages on college campuses. In a 2-to-1 decision, the court said it could not “conclude that UMW could turn a blind eye to the sexual harassment that pervaded and disrupted its campus solely because the offending conduct took place through cyberspace.” The case reached the U.S. Court of Appeals for the 4th Circuit after members of a student-run feminist group sued the public liberal arts university in Virginia for fostering a hostile environment and failing to protect them from threatening, sexist posts on the now-defunct messaging app, Yik Yak. The case attracted national attention from a diverse group of organizations that raised concerns in court filings about censorship of campus speech on the one hand and the duty of colleges to respond to cyberbullying of students on the other. Mary Washington officials had argued that blocking access to a private social media app risked violating the free speech rights of other students at the Fredericksburg school, which has about 4,400 undergraduates and 400 graduate students. But the court said Wednesday that school officials, including retired president Richard Hurley, did not take meaningful action to deal with the threats. “Rather than seeking to end the online harassment and threats, Dr. Cox — as UMW’s Title IX coordinator — simply advised the Feminists United members that the University was powerless to address the offending conduct,” according to the majority opinion written by Judge Robert B. King and joined by Judge Pamela Harris. University officials are obligated, the court said, to investigate and identify students who post threatening messages and to report them to law enforcement. Anonymous online threats are no different from other types of threats that are not protected by the Constitution.
Department of Education to Cancel $150 million in Student Loans --CNN, Thursday: The Department of Education will implement a rule known as the Borrower Defense to Repayment created during President Obama’s Administration and blocked by Secretary of Education Betsy DeVos in 2016. The rule or regulation grants federal loan forgiveness automatically for students who could not complete their education due to the schools shutting down before their education was completed while they were enrolled. Unfortunately students are not eligible if they moved to another school to complete their education. The later part sounds ridiculous to me as a fraud is a fraud regardless of where you end up. Anyway, it is a partial victory for a minority of students caught up in the bad student loan environment. Given the magnitude of the issue, more than 1,400 schools closed between 2013 and 2015 stranding many students with excessive loans and an incomplete education by for-profit schools. 15,000 former students are impacted by the court’s ruling and mandate to complete the forgiveness process. The Michigan Queen of For-Profit Charter Schools who also draws on the local taxes to pay for the unaudited costs of the schools blocked this rule when she took office giving For-Profit so called colleges and mostly bankrupt a chance to challenge (why?) the ruling. 18 states and the District of Columbia took except to Betsy and the Department of Education blocking the relief to students defrauded by colleges. The Judge ruled in October against the Department of Education, Betsy, and the For-Profit College industry. In December, The Department of Education decided to begin the process and not appeal. The cancellation will take 30 to 90 days to complete or 3 -6 months? How quick they move. Meanwhile Ms. DeVos through a spokesperson says: “she ‘respects the role of the court’ but still believes that many provisions in the Obama rule are ‘bad policy.’ The department will continue the work of finalizing a new rule that protects both borrowers and taxpayers.” Ms. DeVos is promoting a new rule which would proportion the amount of education received from the school against the cost of a completed education and also compare it to earnings of those who completed their education. She conveniently forgets, no completion, no earnings at that level acquired from a complete education. Her comment justifying such actions moves from talking of “saving taxpayers money” to talking of “saving the government money.” Anything to pay down the deficit created by this administration.
Who wants to be crippled by student debt? - Quiz shows are an underrated window into history. And so, in 2018, we have Paid Off, a US tragicomedy-come-quiz in which the prize is the cancellation of your student loan debt. It is now well into its first season, with episode titles including First Generation to Grace the Halls of Higher Learning, I'm All Out of Gum, and Breaking Even is the New Rich. This is not the only competition that embraces the theme of graduate debt relief. It is now increasingly cropping up off the screens too, in the world of finance. Fifth Third Bank, headquartered in Cincinnati, Ohio, has a new special offer for its customers. Everyone who has a debit card and downloads its “Momentum” app — which helps with student loan repayments — will be entered into The Fifth Third Momentum™ Sweepstakes. The prize of the sweepstakes is up to $39,000 of debt relief, plus up to $12,315.79 towards payment of associated federal incomes taxes. (“In the event that the Winner’s outstanding student loan balance exceeds $39,000.00, the value of this Prize will NOT increase.”) This is a marketing strategy, which is why the “rules” of the Sweepstakes™ say that the winner shall “irrevocably grant” the company the right to use their “name, voice, likeness and/or biographical material for advertising, promotional and/or publicity purposes in connection with the Sweepstakes, in all forms of media and by all manners (now and hereafter known)…”. Kind of like what happened here. But it also highlights a strange paradox about the influx of smart apps designed to reduce or strategically manage graduate indebtedness. They are all located within a high-consumption ecosystem that you'd think might sit uneasily with, you know, crippling debt. The company’s website, for example, states that “every Fifth Third debit card purchase you make helps pay down your student loan”. On the other hand, every purchase has exactly the opposite effect.
The VA’s Private Care Program Gave Companies Billions and Vets Longer Waits ProPublica - For years, conservatives have assailed the U.S. Department of Veterans Affairs as a dysfunctional bureaucracy. They said private enterprise would mean better, easier-to-access health care for veterans. President Donald Trump embraced that position, enthusiastically moving to expand the private sector’s role. Here’s what has actually happened in the four years since the government began sending more veterans to private care: longer waits for appointments and, a new analysis of VA claims data by ProPublica and PolitiFact shows, higher costs for taxpayers. Since 2014, 1.9 million former service members have received private medical care through a program called Veterans Choice. It was supposed to give veterans a way around long wait times in the VA. But their average waits using the Choice Program were still longer than allowed by law, according to examinations by the VA inspector general and the Government Accountability Office. The watchdogs also found widespread blunders, such as booking a veteran in Idaho with a doctor in New York and telling a Florida veteran to see a specialist in California. Once, the VA referred a veteran to the Choice Program to see a urologist, but instead he got an appointment with a neurologist. The winners have been two private companies hired to run the program, which began under the Obama administration and is poised to grow significantly under Trump. ProPublica and PolitiFact obtained VA data showing how much the agency has paid in medical claims and administrative fees for the Choice program. Since 2014, the two companies have been paid nearly $2 billion for overhead, including profit. That’s about 24 percent of the companies’ total program expenses — a rate that would exceed the federal cap that governs how much most insurance plans can spend on administration in the private sector.
CBD and hemp are now legal in the U.S.-- Industrial hemp is now legal in the U.S., which could loosen laws around the popular marijuana extract CBD. President Donald Trump signed the 2018 farm bill on Thursday afternoon, which legalized hemp — a variety of cannabis that does not produce the psychoactive component of marijuana — paving the way to legitimacy for an agricultural sector that has been operating on the fringe of the law. The farm bill is a sprawling piece of legislation that sets U.S. government agricultural and food policy for the country and is renewed roughly every five years. This version of the bill places industrial hemp — which is defined as a cannabis plant with under 0.3% of tetrahydrocannabinol, or THC — under the supervision of the Agriculture Department and removes CBD from the purview of the Controlled Substances Act, which covers marijuana. The law also “explicitly” preserved the Food and Drug Administration’s authority to regulate products containing cannabis, or cannabis-derived compounds. The overall effect is not assured because, like cannabis — which is illegal under U.S. federal law although some states have allowed medical or recreational use — states will continue to be able to enact laws related to CBD and industrial hemp, allowing for a potential patchwork of legislation across the country. Other questions remain in terms of how exactly the Agriculture Department will regulate the plant.
It’s Time to Reform the Orphan Drug Act - That’s the title of a new piece at the New England Journal of Medicine’s Catalyst, and it’s from Amitabh Chandra, Craig Garthwaite, Ariel Dora Stern, and me. While the Orphan Drug Act has stayed the same, drug markets have changed dramatically over the past 3 ½ decades. Most significantly, the market price for orphan drugs is now remarkably high: in 2017, the average price for the top 100 orphan drugs was $147,308 a year per patient. (This is only an estimate.) Manufacturers have been accused of slicing prevalent diseases into smaller subcategories, sometimes characterized by genomic biomarkers, allowing firms to secure ODA incentives for a drug that is likely to be used in a large patient population. And the growing use of auxiliary or “surrogate” endpoints in clinical trials for orphan drugs has reduced the time and expense required for clinical research, because they set lower thresholds for indicating treatment success—e.g., slowing a tumor’s growth vs. longer survival. As a result of these trends, the Orphan Drug Act rewards some drug manufacturers for bringing drugs to market that in all likelihood would have been produced without additional incentives. The incentive structure is an especially poor fit for orphan drugs that target such rare conditions, or are so challenging to manufacture, that the market will not support similar products from multiple firms. Because these “natural monopoly” drugs will never face meaningful competition, they may be very lucrative even without the ODA benefits. With some regularity, manufacturers will also secure FDA approval for new orphan indications for a drug that’s already in widespread use. That practice has been tarred as abusive: if we already know the drug works for that particular indication, we don’t learn much from studies that drugmakers conduct to demonstrate the drug’s efficacy for that indication. We’re rewarding wasted effort.
Widespread, occasional use of antibiotics in U.S. linked with resistance - Harvard School of Public Health– The increasing prevalence of antibiotic resistance in the U.S. appears more closely linked with their occasional use by many people than by their repeated use among smaller numbers of people, according to a large new study from Harvard T.H. Chan School of Public Health. The study also found that antibiotic use varies across the nation, and that in areas where particular antibiotics are used more frequently, resistance to those antibiotics is higher. “We know that efforts to reduce inappropriate use of antibiotics are critical to addressing the problem of antibiotic resistance. We wondered whether every antibiotic prescription contributes equally to resistance, and whether, as some previous research has suggested, the most effective way to minimize antibiotic resistance would be to focus on the small fraction of people who use most of the antibiotics,” “Our results show that most antibiotic use is occasional—by people taking just one antibiotic course in a year—and that this occasional use is more closely linked with antibiotic resistance than intense, repeated use.” The study was published online December 18, 2018 in eLife. It is the first to take a population-wide look at the link between distribution of antibiotic use and resistance to those antibiotics.
12 People Hospitalized With Infections From Stem Cell Shots - Twelve patients became seriously ill after receiving injections that supposedly contained stem cells from umbilical cord blood, according to the Food and Drug Administration, which issued a warning to the California company, Genetech, that made the blood product they were given. (The company has no connection with Genentech, the biotechnology corporation.) The F.D.A. said on Thursday that it had also written to 20 clinics that offer unapproved stem cell treatments, warning them that such products are generally regulated by the agency and encouraging the clinics to contact federal regulators before November 2020, when enforcement will tighten. The names of the clinics have not been released. Hundreds of clinics have sprung up around the country, offering treatments supposedly containing stem cells, to treat a wide variety of ailments, including arthritis, eye disorders, Parkinson’s disease and lung problems. The treatments are marketed as having curative or healing properties, but there is no proof that they work or are safe. In May, the F.D.A. sought permanent injunctions against two stem cell clinics. One, U.S. Stem Cell Clinic L.L.C. of Sunrise, Fla. had treated three patients who lost their sight after stem cells were injected into their eyes. The people who became ill after receiving the Genetech products had been given injections into their knees, shoulders or spines to treat painful conditions like arthritis or injuries. They contracted infections in their bloodstreams or joints, and all were hospitalized. One patient spent 58 days in the hospital with a bloodstream infection, a spinal abscess and other spinal problems. Another, with an infected knee, was hospitalized for 30 days. The shortest stay was four days; others lasted 12, 15 or 35 days. Tests of unopened vials of the cord-blood products taken from clinics giving the shots found the same types of microbes that had infected the patients, which included E. coli and other fecal bacteria.
Ebola outbreak reaches city of 1 million residents - The Ebola outbreak in the Democratic Republic of the Congo has spread to a city of nearly 1 million residents. There are now 30 confirmed cases and 15 deaths in the city of Butembo reported in the latest update provided by the World Health Organization (WHO). The number of cases in the city center is still low, according to Doctors Without Borders, but that number is rising quickly in more outlying districts and suburbs. The outbreak, which has been going on since August, has so far resulted in 467 confirmed cases and a further 48 probable cases. More than half of the cases have resulted in death (including those of 17 health workers), while 177 patients have recovered, including a newborn baby. The rate of transmission is beginning to slow down in Beni, a smaller city approximately 36 miles north of Butembo that has the highest number of reported cases so far. But “the outbreak is intensifying in Butembo and Katwa,” writes the WHO, “and new clusters are emerging elsewhere.” The outbreak is occurring in multiple locations across the DRC’s highly populated North Kivu and Ituri provinces, near the country's borders with South Sudan, Uganda, Rwanda, and Burundi. Operations to prepare for handling and containing the outbreak must “continue to be upscaled to rapidly detect and respond to any potential cases” in other DRC provinces as well as neighboring countries, the WHO warns. The risk of the outbreak spreading further geographically is “very high,” reports the WHO, “highlighted this week by the movement of several contacts of confirmed cases from Beni to Kisangani and Goma.” Tracing and monitoring contacts of people with confirmed infections plays an essential role in containing the outbreak. While these individuals were traced and have returned to Beni, keeping tabs on this remains tricky. The outbreak is being fought in challenging conditions, with the affected provinces currently ravaged not just by conflict and a humanitarian crisis, but also by outbreaks of cholera, measles, and monkeypox. The internal displacement of people, as well as movement of Congolese refugees to neighboring countries, increases the risk of transmission. The necessity of a “safe and dignified burial” conducted by a team trained to prevent transmission while handling the body has also been a source of difficulty, with “recurrent aggression” to safe and dignified burial teams, the WHO reports.
A New Disease Is Testing Us for the Next Global Epidemic - LAST SPRING, AS it does every year, the World Health Organization released a list of infectious diseases that its experts think are especially high-risk—ones that could blow up into epidemics and for which there are no treatments or vaccines. In the four years that the list has been published, no emerging infection has been serious enough to rise to the level of Disease X: a pathogen that could sweep the world before science catches up. But a new syndrome, acute flaccid myelitis, or AFM, is providing the first proof of the need for that warning. As perplexing to diagnose as it is to treat, AFM is demonstrating how difficult it can be to understand and predict any new disease. And the challenge of tracking an uncommon illness is giving us a glimpse of how our surveillance systems will struggle to counter the world-spanning epidemic that Disease X may turn out to be. AFM IS A polio-like paralysis that has affected almost 500 people in the United States since it first spiked in the late summer of 2014. The victims are overwhelmingly children, and their cases follow a consistent pattern: The victims come down with a mild illness that looks like a cold, recover, and then develop floppy weakness in at least one limb. This paralysis also can affect their breathing or swallowing and the muscles of their neck and face. Imaging studies show lesions in the spinal cord that correspond to the area of the body where the paralysis occurs. The damage seems to be long-lasting: At least some of the children who came down with the first cases four years ago haven’t recovered use of their limbs.Beyond these known symptoms, AFM poses mystifying questions. Authorities haven’t been able to link it to a single disease organism. The 2014 cases occurred during an outbreak of a virus known as EV-D68, but this year some cases have been attributed to another virus called EV-A71, while many patients have no virus in their systems at all. (Those viruses are distantly related to polio; to be clear, no polio virus has been found in AFM patients.)There’s no explanation for why the disease occurs in waves: 2014, 2016 and this year were bad years, but there were very few cases in 2015 and 2017. And no one has a solution for its randomness. AFM is a rare disease in the US, affecting 1 to 2 people per million nationwide. That makes ramping up research to understand it, or to treat it, unusually challenging.
Johnson & Johnson Knew About Asbestos in Baby Powder for Decades, Reuters Investigation Finds - A Reuters investigation published Friday charges that Johnson & Johnson, a multi-billion dollar companyknown for its healthcare products, knew for decades that its iconic talcum baby powder "was sometimes tainted with carcinogenic asbestos," but concealed the information from regulators and the public. Asbestos, "the name given to six minerals that occur naturally in the environment as bundles of fibers," has been used in North America's automotive, construction and shipbuilding industries since the late 1800s,according to the National Cancer Institute. The World Health Organization (WHO) warns that "all types of asbestos cause lung cancer, mesothelioma, cancer of the larynx and ovary, and asbestosis (fibrosis of the lungs)."Because asbestos sometimes occurs in the earth along with talc, contamination is possible. Reuters—along with attorneys for more than 11,000 plaintiffs currently suing Johnson & Johnson, claiming the company's products caused their cancer—examined memos, internal reports, and other confidential documents as well as deposition and trial testimony.That mountain of evidence, according to Reuters, revealed: ... that from at least 1971 to the early 2000s, the company's raw talc and finished powders sometimes tested positive for small amounts of asbestos, and that company executives, mine managers, scientists, doctors, and lawyers fretted over the problem and how to address it while failing to disclose it to regulators or the public.The documents also depict successful efforts to influence U.S. regulators' plans to limit asbestos in cosmetic talc products and scientific research on the health effects of talc.
Trump Plan to Protect Kids From Lead Falls Far Short -- The long-awaited plan by the Trump administration to "wage a war against lead" and protect children from exposure to the potent neurotoxin is a woefully unacceptable response to this public health crisis, said Environmental Working Group. The administration's Lead Action Plan—announced Wednesday by Andrew Wheeler, acting administrator of the U.S. Environmental Protection Agency (EPA)—is nothing but a series of broad and lofty goals, including reducing children's exposure to lead sources and communicating more effectively with stakeholders. It provides no details, enforcement deadlines or additional resources with which to achieve them. "The goals laid out in the Trump administration's plan aren't worth the paper they're printed on," said EWG President Ken Cook. "If you're going to claim to be waging war against lead exposure among children, it will require a serious investment of money, enforcement and leadership from the top at both the White House and the EPA. Everything we know about where children's environmental health falls on the priority list of Andrew Wheeler and President Trump indicates it's near the bottom." Earlier this year, Wheeler abruptly and with no reason dismissed the official at the agency in charge of children's health. Dr. Ruth Etzel, a leader in children's environmental health for 30 years, was tapped in 2015 by President Obama to run the Office of Children's Health Protection, whose stated goal is to "ensure that all EPA actions and programs address the unique vulnerabilities of children." In his first budget proposal, in 2017, President Trump pushed to cut $16.6 million and at least 70 staff from two EPA programs put in place to tackle lead exposure, including eliminating more than $14 million in grants to help states eradicate lead-based paint hazards in housing.
Cancer in Pittsburgh: Prevention lags as pollution persists -- Around one in three Americans gets a cancer diagnosis during their lifetime. Almost everyone knows at least one person who's been touched by the disease. In Pittsburgh, most people know more than one. "Over the course of 10 years, me and my husband had four parents diagnosed with six different cancers," Wendy Myers, a therapist who lives in a Pittsburgh suburb, told EHN. These days, she said, it's not uncommon to encounter patients with family stories like her own, or patients who've been diagnosed with three or four different cancers throughout their lives. "A lot of my patients are just depleted emotionally and physically," Myers said. "And they're often angry. I felt the same way... I understand that feeling of, Why would this happen again and again?" Pennsylvania has the third highest cancer incidence rate of all U.S. states, behind only Kentucky and Delaware, according to the U.S. Centers for Disease Control and Prevention. Approximately half of all Pennsylvanians will be diagnosed with cancer at some point in their lifetime, and about one in five Pennsylvanians will die of cancer, according to the Pennsylvania Department of Health. Allegheny County, which encompasses Pittsburgh, has significantly higher incidence of several types of cancer than expected based on national averages, including lung cancer, colon cancer, breast cancer, bladder cancer and non-Hodgkin lymphoma. And in 2013, a groundbreaking report from the University of Pittsburgh's School of Public Health put Allegheny County in the top 3 percent of all U.S. counties for risk of cancer caused by air pollution. Cancer survival rates are increasing with new medical advances. But the U.S. is lagging behind in another critical part of the fight against cancer: Prevention. This lack of focus on prevention is particularly troublesome in industrial cities like Pittsburgh— especially when it comes to reducing our exposure to widespread cancer-causing chemicals.
Now we know: Air Pollution Makes You Stupid - While the toll that breathing polluted air exacts on health and physical wellbeing is richly documented, lesser known is its impact on human intelligence. In a first-of-its-kind study, conducted with our colleague Xin Zhang of Beijing Normal University, we found that continued exposure to air pollution lowers human intelligence, with the effects becoming more pronounced with age. Developing countries, which dominate the list of the world’s most polluted cities, are most at risk from such effects. The quality of life in some of the world’s busiest cities and hubs of rapid economic growth has been hijacked by air pollution, and their residents are unwillingly and unconsciously afflicted by diseases as a result. As our research showed, the damage goes even deeper than that. Conducted in China, which has long struggled with extreme levels and extended bouts of air pollution, our study revealed the impact of air pollution on human intelligence. With a sample size of nearly 32,000 people, we examined the relationship between verbal and mathematics test scores, taken from the nationally representative China Family Panel Studies longitudinal survey conducted in 2010 and 2014, and short- and long-term air pollution exposure calculated from official air pollution index values. Both verbal and math scores decreased with increasing cumulative air pollution exposure, with a steeper decline for verbal scores than math scores. The decline in verbal scores was more pronounced among males than females. Among males, the decline in verbal scores became more pronounced with age, and this age dependence was greater in those with less than a middle school education compared to those with a middle school education or more. The damage air pollution does to aging brains could incur substantial health and economic costs, as cognitive decline or impairment is a risk factor for Alzheimer’s disease and other forms of dementia that often plague the elderly. Despite their important policy implications, air pollution’s effects on cognition have thus far been neglected in policy discourses.
The contest for the worst air pollutant - In its report published on June 28, 2018, the French Agency for Health Safety (ANSES) presented a list of 13 new priority air pollutants to monitor.Several air pollutants that are harmful to human health are already regulated and closely monitored at the European level (in accordance with the guidelines from 2004 and 2008): NO2, NO, SO2, PM10, PM2,5, CO, benzene, ozone, benzo(a)pyrene, lead, arsenic, cadmium, nickel, gaseous mercury, benzo(a)anthracene, benzo(b)fluoranthene, benzo(j)fluoranthene, benzo(k)fluoranthene, indeno(1,2,3,c,d)pyrene and dibenzo(a,h)anthracene. While some pollutants like ozone and PM10 and PM2.5 particles are famous and often cited in the media, others remain much less known. It should also be noted that this list is still limited, considering the significant number of substances emitted into the atmosphere. So, how were these 13 new pollutants identified by ANSES? Identifying new priority substances to monitor in the ambient air is a long but exciting process. It’s a little like choosing the right candidate in a beauty contest. First, independent judges and experts in the field must be chosen. Next, the rules must be determined for selecting the best candidates from among the competition. This final list included 557 candidates – just imagine the stampede. Gas 1,3-Butadiene ranked number one out of the 13 new air pollutants to monitor, according to ANSES. It is followed by ultrafine particles and carbon soot, for which increased monitoring is recommended. 1,3-Butadiene is a toxic gas that originates from several combustion sources including exhaust-pipe emissions from motor vehicles, heating, and industrial activities (plastic and rubber). Several temporary measurement campaigns in France revealed that the pollutant frequently exceeded its toxicological reference value (TRV)–a value that establishes a relationship between a dose and the effect.
Invisible pollutants and the tipping point for endocrine disruption -- This is the story of how the introduction and inundation of hundreds if not thousands of chemicals have literally changed—and by that I mean damaged—the bodies and brains of millions of people.It's the story of how many of the diseases may not yet visibly affect adults but will impact their offspring a generation or more in the future. It's a story that shows how the surface of the communities we call home —regardless of whether these communities are urban, suburban, or rural—hides a pernicious threat to the health and futures of our children and grandchildren. Many of these diseases have been attributed to sedentary lifestyles; processed, sugar-laden hyperpalatable foods; lack of exercise; and lack of access to fresh fruits and vegetables. Sequencing the human genome has made it possible to identify some of the origins of chronic diseases such as diabetes and obesity; brain disorders such as ADHD and autism; and reproductive conditions including endometriosis, low sperm count, and both male and female infertility.However, the closer we look, the more complicated the picture appears. Studies have shown that environmental exposures can modify the expression of genes (without changing the coding sequence), leading to diseases and dysfunctions. This suggests that there are other factors, so far hidden, triggering such a profound increase in these so-called lifestyle disorders.What we now know, through rich and varied research from all over the world, is that among the hidden factors are environmental exposures to chemicals that have leached into our soil, farms, and food supply; cosmetics, hygiene products, and household furniture; and our outdoor spaces such as gardens, lawns, fields, and recreational parks.The evidence linking cause and effect is strongest for four major categories of chemicals, but we know of at least a thousand more chemicals that are endocrine disruptors. And this is an underestimate; many chemicals have not been tested and so fly under the radar of both scientists and the medical community. The chemicals with the strongest evidence of health effects are pesticides, flame retardants, plasticizer chemicals, and bisphenols, which are used to line food and beverage cans.
Scientists Combine House Plant With Rabbit Gene to Form 'Green Liver' Against Indoor Air Pollution - Scientists at the University of Washington (UW) may have found an unexpected way to tackle persistent indoor air pollution: a common houseplant modified with rabbit DNA. Researchers wanted to find a way to remove the toxic compounds chloroform and benzene from the home, a UW press release explained. Chloroform enters the air through chlorinated water and benzene comes from gasoline and enters the home through showers, the boiling of hot water and fumes from cars or other vehicles stored in garages attached to the home. Both have been linked to cancer, but not much has been done to try and remove them. Until now."People haven't really been talking about these hazardous organic compounds in homes, and I think that's because we couldn't do anything about them," senior study author and UW civil and environmental engineering department research professor Stuart Strand said in the release. "Now we've engineered houseplants to remove these pollutants for us."To achieve this, the scientists set out to create something Strand calls a "green liver." That's because they used a protein called 2E1 that exists in the human liver to help us process alcohol. It turns benzene into phenol and chloroform into carbon dioxide and chloride ions. This protein is also present in all mammals, including rabbits. Researchers made a synthetic version of the rabbit gene that produces this protein and introduced it to the common houseplant pothos ivy. According to lead author Long Zhang, pothos ivy was chosen because "it's a robust houseplant that grows well under all sort of conditions." It is also a tropical plant unlikely to flower in the temperate Pacific Northwest and spread the modified genes via pollination. The results, published in Environmental Science and Technology Wednesday, showed that the gambit paid off. The researchers put both regular and modified plants in test tubes with the offending gases. The gas levels in the tubes with the unaltered plants didn't change at all. But the concentration of benzene in the tube with the rabbit-enhanced plant decreased by 75 percent in eight days. Chlorine levels fell even faster: by 82 percent after three days and to almost undetectable levels by day six.
Legal plastic content in animal feed could harm human health, experts warn - Plastic traces in animal feed could pose a risk to human health and urgently need to be the subject of more research, experts have told the Guardian. Their comments came after British farmer Andrew Rock contacted the Guardian, having noticed plastic shreds in his animal feed. Rock was told by the suppliers that this was a legal part of the recycling process that turns waste food, still packaged, into animal feed. Rock runs a small-scale pig farm in Lincolnshire, and had been spotting tiny pieces of plastic in his pigs feed for several months. “In the back of my head I thought maybe it was people dropping gloves into the feed mill. I took a kilo scoop out of the bag and I did this over several weeks. I laid it out in the light and I found plastic in nearly every scoop.”He contacted the suppliers who had sold him the feed and was shocked to discover that the fragments were not a mistake, but in fact a legal part of the recycling process that turns waste food, still packaged, into animal feed. More than 650,000 tonnes of unused food, from loaves of bread to Mars bars, are saved from landfill each year in the UK by being turned into animal feed. The system that strips off the plastic wrappings can’t capture it all, and so in the UK a limit of 0.15% of plastic is allowed by the Food Standards Agency. The official EU level for plastic permitted in animal feed is zero although in reality many other countries operate within the same 0.15% limit. In response to his questions about whether even these limits were safe for consumption, the suppliers told him that the product was within legal limits and came from a third-party mill accredited by Ufas, the Universal Feed Assurance Scheme.
Chickens freezing to death and boiled alive: failings in US slaughterhouses exposed - Chickens slowly freezing to death, being boiled alive, drowned or suffocating under piles of other birds are among hundreds of shocking welfare incidents recorded at US slaughterhouses, according to previously unpublished reports. Among them are “inexcusable” violations, say campaigners, who ask if the US Department of Agriculture’s (USDA) current system, where inspectors issue reports when they see violations, really works. One inspector, who asked to remain anonymous, questioned the impact of those reports. An investigation by the Guardian and the Bureau of Investigative Journalism looked at hundreds of inspection logs from the USDA detailing incidents in poultry plants across the country. In recent years, inspectors recorded numerous incidents where:
- chickens suffocated to death beneath other chickens when they piled up on a conveyor belt that had stopped due to a mechanical failure.
- chickens drowned after entering the scalding tank while conscious.
- machines failed or there were incidents of staff being inadequately trained.
- thousands of birds died of heat stress after travelling or being left waiting in trucks in temperatures above 90 degrees F, or alternatively, freezing to death in extremely low temperatures.
In one incident in January, more than 34,000 chickens froze to death while being kept overnight outside a slaughterhouse in a truck.The Guardian’s findings have fuelled concerns that a post-Brexit trade deal with the US could see the UK flooded with chicken produced to lower welfare standards. This follows last year’s transatlantic row over chlorinated chicken, which prompted political interventions in both countries.The records include hundreds of instances in which groups of chickens and turkeys were bludgeoned, suffocated, scalded, frozen or heated to death. Inspectors note repeatedly that the plants have not put in place adequate protection from the weather while the animals wait. However, they also note that after many reports the plants do carry out retraining for workers.The violations were witnessed between 2014 and this year at some of the largest poultry processors in the country as part of the national inspection system. The records, kept by the USDA’s Food Safety and Inspection Service (FSIS), were originally obtained through Freedom of Information Act requests by the nonprofit Animal Welfare Institute (AWI).
A Bad World for Migrants (and I Don’t Even Mean Human Ones) - It’s not been a good era for migrants—and no, I’m not talking about those “caravans” of desperate human beings from Central America heading for the U.S. I’m thinking about birds—shorebirds, in fact, which are surely the greatest migrants on the planet. The Hudsonian godwit, for instance, flies more than 9,000 miles yearly to its Arctic breeding grounds. Since 1974, however, populations of that bird have taken a 70% nose (or beak) dive, part of the great shorebird die-off of this era. In fact, bird populations of many sorts are dropping across the planet. These include mountain birds that have nowhere higher to go as global temperatures increase and the common farmland birds of France whose populations have fallen by a third, though some like the meadow pipit (at 68%) have experienced far more precipitous drops. Then, there are the birds of the Mojave Desert in California and Nevada. In those largely protected national park or preserve areas, according to a recent study, bird populations are down 42% in the last century, possibly thanks to climate change. And none of this is out of the ordinary, since it’s now estimated that 40% of all bird species are in decline globally and one of every eight is threatened with extinction. A bird I used to see every summer but no longer do—has suffered a stunning 82% decline in this country. I’ve always remembered John Jay Audubon’s 1813 description of a vast flock of passenger pigeons flying unceasingly overhead for three days. “The light of noon-day,” he wrote, “was obscured as by an eclipse.” Such flocks were once estimated to have more than a billion birds. A single Wisconsin nesting area was, in the nineteenth century, said to contain 136 million of them. Thanks to habitat destruction and overhunting the last of those birds, “Martha,” died in a Cincinnati zoo in 1914. Now, it seems many other species of birds, including snowy owls are following in Martha’s wake or at least suffering severe declines. According to Audubon researchers, the bobwhite, for instance—a bird I used to see every summer but no longer do—has suffered a stunning 82% decline in this country. It couldn’t be sadder to imagine that someday so many of the birds I saw may no more be there for my grandchildren and great-grandchildren than the passenger pigeon was for me.
The Unsettling Reason Why We're Seeing More Snowy Owls - For birders and fans of Hedwig from the Harry Potter series, spotting a snowy owl in the wild is a special treat as these great white raptors spend most of their lives in the Arctic. But sightings further south have become more common in North America in recent winters. As the Ottawa Citizen reported this week, sightings of the charismatic owl have soared in Eastern Ontario for the last six years. This "irruption"—an influx of a species to areas they aren't usually found—could be a sign that there's not enough food for the snowies around their usual home. Because of climate change, the Arctic is warming at twice the rate of the rest of the planet, causing dramatic shifts to ecosystems. This warmth has caused the region to become more green. As a result, rodents have more vegetation to graze on, thus increasing the prey base for snowy owls. This abundance in prey, a bird expert suggested to Ottawa Citizen, has resulted in successful breeding seasons for the snowy owls. But with more owls hunting in the same area, the less successful hunters end up traveling south in search of food.
We’re losing monarchs fast—here’s why - The epic 3,000-mile monarch butterfly migration may become a thing of the past. Each fall, monarchs travel from their summer homes in the northern U.S. and Canada to winter habitats in California and Mexico. But the 2018Western Monarch Thanksgiving Count found that the number of west-coast monarchs spending the winter in California had plunged to only 20,456 butterflies—a drop of 86 percent since last year. And the number of eastern monarchs overwintering in Mexico this year has dropped 15 percent since last year, for a total decline of more than 80 percent over the past 20 years,according to the National Wildlife Federation. This year’s count is only the latest in a string of bad news for the charismatic butterfly that makes one of the longest known insect migrations. The culprit? Humans. The twin forces of human-caused climate change and habitat loss are now threatening North American monarch butterflies with extinction. Increasing carbon dioxide levels may be making milkweed—the only food monarch caterpillars will eat—too toxic for the monarchs to tolerate. And higher temperatures may also be driving summer breeding areas further north. That means the monarchs’ migration routes will get longer and therefore more difficult. (Learn how monarch butterflies make their epic migration.) “A lot of environmental threats can pile up on top of each other,” says University of Wisconsin entomologist and director of the UW-Arboretum Karen Oberhauser. And the consequences can be hard to predict. Creating new monarch habitat by planting native milkweed species may provide crucial fuel and rest stops for the traveling butterflies, as will taking more action to address climate change. The creation of herbicide-resistant corn and soybeans meant that farmers could eradicate weeds and other understory plants, including milkweed, that competed with their crops. “In a very short period of time, monarchs took a tremendous hit, with tremendous consequences,”
Major Health Study Shows Benefits of Combating Climate Change - Climate change is the biggest global health threat of the 21st century, and tackling it could be our greatest health opportunity,” according to the medical journal The Lancet. The Lancet Countdown: Tracking Progress on Health and Climate Change, by 150 experts from 27 academic institutions and intergovernmental organizations, including the World Health Organization and the World Bank, is blunt: “A rapidly changing climate has dire implications for every aspect of human life, exposing vulnerable populations to extremes of weather, altering patterns of infectious disease, and compromising food security, safe drinking water and clean air.” The report examines the association between health and climate change, including resilience and adaptation, financial and economic implications, the health and economic benefits of addressing the crisis, and the need for political and societal engagement, with a greater role for health professionals. Sadly, the researchers conclude that a lack of concerted effort from governments is compromising human health and health infrastructure and services. They note some progress has been made, including a global decline in coal use, rapid growth in renewable energy installation and increasing fossil fuel divestment. But it’s far short of what’s needed to keep global average temperature from rising more than 2 C, let alone the more ambitious target of 1.5 C. People in more than 90 percent of cities breathe air that is toxic to cardiovascular and respiratory health, and it appears to be getting worse, “particularly in low-income and middle-income countries.” Pollutants from burning coal and other fossil fuels are causing millions of premature deaths every year. A World Health Organization report, released at this year’s COP24 climate summit in Katowice, Poland, echoes the Lancet findings, noting that at least seven million people a year die prematurely because of pollution, and millions more become ill. It concludes that health gains from meeting Paris Agreement commitments would more than make up for the financial costs of global efforts to achieve those goals, “and would exceed that in countries such as China and India by several times.”The Lancet report shows the costs of inaction are rising: “About 712 climate-related extreme events were responsible for $326 billion of losses in 2017, almost triple the losses of 2016,” with 99 percent of losses in low-income countries uninsured. Deadly heatwaves, prolonged drought, increased flooding, agricultural losses, spreading transmission of infectious diseases from insects and contaminated water, mental health issues and water shortages are among the costly health impacts of climate change.
December 2018 ENSO Update – NOAA”s ENSO blog - The surface of the tropical Pacific Ocean is nice and warm, but the atmosphere just doesn’t seem interested. Will these two crazy kids get in sync and qualify as El Niño conditions? Forecasters think there’s a 90% chance that will happen soon and continue through the winter. Following our “Is it El Niño conditions?” decision tree, once we have a monthly average surface temperature anomaly in the Niño3.4 region above 0.5°C (currently near 1.0°C), and it’s forecast to stay that way for the next several months (it is; more on that later), we need signs of an atmospheric response before we can change our relationship status to “El Niño Advisory.”While warmer-than-average surface waters in the equatorial Pacific are an essential element of El Niño, the atmospheric response is just as critical. In the case of El Niño, those warmer-than-average waters in the central and eastern Pacific warm the air above them, leading to more rising air, clouds, and rain. So much more rising air, in fact, that the entire circulation over the equatorial Pacific—the Walker circulation—is changed. The average Walker circulation is driven by strong rising air over Indonesia, leading to west-to-east winds aloft, sinking air over the Eastern Pacific, and returning east-to-west winds (the trade winds) near the surface of the Pacific. More rising air in the central and eastern Pacific weakens this circulation, slowing the trade winds along the surface. Like any good partner, the slower trade winds help to sustain El Niño, keeping the surface waters warmer.
El Niños to strengthen because of global warming, will cause 'more extreme weather', study says - El Niños will be stronger and more frequent in the decades ahead because of global warming, causing "more extreme events" in the United States and around the world, a study said Wednesday.. Rather than once every 15 years, powerful El Niños will occur roughly once every 10 years, said study lead author Wenju Cai, a scientist with the Commonwealth Scientific and Industrial Research Organization in Australia. Researchers used 17 climate models to determine how ocean temperatures will increase by 2100 as levels of carbon dioxide and other greenhouse gases increase in Earth's atmosphere. They found that the physical processes in the ocean and atmosphere that produce strong El Niños will be supercharged by human-caused climate change. The entire natural climate cycle is officially known as El Niño – Southern Oscillation (ENSO), which swings between warmer and cooler seawater in the tropical Pacific. Cooler-than-average ocean water is known as La Niña. The cycle is the primary factor government scientists consider when announcing their winter weather forecast. Strong El Niños can lead to floods in the western United States, Ecuador and northeast Peru and to droughts in nations that border the western Pacific Ocean, the study finds. During extreme El Niños, marine life in the eastern Pacific can die off, and mass bleaching of corals across the Pacific and beyond can occur. The study was published in Nature, a peer-reviewed British journal.
A larger issue looms over short-term Colorado River plan: climate change — With the water level in Lake Mead hovering near a point that would trigger a first-ever official shortage on the Colorado River, representatives of California, Arizona and Nevada are trying to wrap up a plan to prevent the water situation from spiraling into a major crisis. The plan is formally called the Lower Basin Drought Contingency Plan. But at an annual Colorado River conference this week, many water managers stressed that it’s merely a stopgap plan to get the region through the next several years until 2026. It might also rightly be called a temporary rejiggering of the rules, a quick fix to stave off a reckoning, or an initial step toward planning for a future with less water. Looming over the negotiations is a long-term issue that is intensifying the strains on the river: climate change. Some of the water wonks at the Colorado River Water Users Association conference called the proposed drought plan a temporary “bridge” solution, or a first step toward larger efforts to address the river’s pattern of over-allocation and adapt to climate change in the seven states that depend on the river. “It will be a short-term solution to stave off the immediate impacts of the problems that we’re seeing,” said Cynthia Campbell, a water adviser for Phoenix. “Lake levels are going down just too fast.” The idea is simply to stop the free-fall, she said, and provide a short window of time to begin to plan bigger steps. “If this plan is successful, I think the whole idea is to kind of give us a ledge, you know, to stand on for just a while,” Campbell said, “until we can come up with a better way of actually addressing the more institutional problems that we have, of over-allocation and aridification.”
Sierra Nevada Snowpack On Track To Collapse 79%, New Study Warns - A new report by the Department of Energy's Lawrence Berkeley National Laboratory (Berkeley Lab) examined the headwater regions of California's ten major reservoirs, representing half of the state's surface storage, discovered each could experience a 79% decline in peak snowpack water volume by 2100. Berkeley Lab used supercomputers to investigate current warming trends and carbon emissions.Scientists analyzed how a future warmer world would affect "snowpack upstream of 10 major reservoirs — three in Northern California, three in Central California, and four in Southern California. The reservoirs are Shasta, Oroville, Folsom, New Melones, Don Pedro, Exchequer, Pine Flat, Terminus, Success, and Isabella," said The Mercury News.By 2039 to 2059, the snowpack runoff could drop by 54%, the study determined, and then 79% from 2079 to 2099. The study noted that three northernmost reservoirs, Shasta, Oroville and Folsom, could see an 83% reduction, by 2100.Alan Rhoades, a postdoctoral fellow at Berkeley Lab and lead author of the study, said his team of researchers found that peak runoff could come four weeks earlier by 2100, at the beginning of March rather than April 01. Mountain snowpack is a significant source of water for California: "Our precipitation is really intermittent and extremes-driven," Rhoades said. "We get 50% of our annual precipitation in five to 15 days, or one to two weeks. Our water demand is highest during the summer months when we don't get a lot of precipitation, so we really rely on mountain snowpack as a stopgap for our water supply."
Hike in record-dry months for Africa's Sahel worries scientists - Climate change is driving much drier conditions in Africa's Sahel belt, which has experienced a 50-percent hike in record dry months in recent decades, scientists said.Shifting climate patterns, meanwhile, have made parts of the United States, northern Europe and north Asia wetter, driving worsening flooding and extreme rainfall, said the Potsdam Institute for Climate Impact Research in Germany. Over the 1980-2013 period the scientists studied, record wet months rose by 25 percent in the east and central United States, for instance.Lead author Jascha Lehmann told the Thomson Reuters Foundation the researchers had been "a little bit surprised by the very strong signal" on drying in Africa.The findings suggest efforts to cut planet-warming emissions faster are crucial, he said, as "there are limits" to how much people can adapt if drought continues to worsen in the Sahel, a semi-arid zone that lies south of the Sahara desert. While occasional record-setting months are not unusual, the uptick in record dry months was significant, he said."By injecting huge amounts of greenhouse gases into the atmosphere, humankind has loaded the dice," he added.The research, published this week, looked at data from about 50,000 meteorological stations around the world, and found tropical and sub-tropical areas were hitting more records for dry weather.Countries in higher latitudes in the northern hemisphere, however, saw more wet weather over the same period. In the Sahel, about one in three dry-month records would not have occurred without long-term climate change, said Dim Coumou of the Dutch Institute for Environmental Studies. Worsening droughts are making life far more precarious for herders and farmers in the region, and is putting growing strain on the budgets of Sahel nations. A catastrophic drought across broad areas of sub-Saharan Africa could cost as much as $3 billion in emergency aid to address, according to an analysis by ARC.
India is ‘planting forests’ to forestall the impending water crisis. It is a fool’s errand - India is again wasting valuable time, effort and resources on a national scale as it races to forestall an impending water crisis. The Ministry of Environment, Forest and Climate Change is conducting massive afforestation drives, planting native species. But a forest is a self-sown, self-regenerating community of plants and dependent organisms, from microbes to elephants. A forest, by definition, cannot be “planted”. Since afforestation is interpreted to mean the planting of forests, it is an oxymoron. What is created when one plants trees, native or exotic, is a plantation. Shiva’s dreadlocks are the perfect analogy for the dense forests that once covered not only the Himalaya but also the headwaters of peninsular India’s rivers. Our rapacity and mismanagement of these rivers and streams after independence have reduced them from perennial to seasonal, leaving us on the brink of water wars. The dreadlocks have been shaved and, according to prevailing wisdom in the environment ministry as well as the governmental research community, combed, trimmed hair – plantations – is equivalent to Shiva’s dreadlocks in controlling surface and groundwater systems. That this is false and will have disastrous consequences for the nation is studiously ignored. The environment ministry, in its various avatars, has planted forests since independence, with no results to show for the vast sums of money spent. By 1995, the money spent on planting forests in what is now Uttarakhand was equivalent to what it would cost putting the entire state under four layers of trees. On the other hand, when my father settled on a forest estate in Uttarakhand’s Bhimtal in 1951, he set aside five acres of what was then a tea plantation to grow back into a forest. Seventy years later, it is the finest forest for miles around. Not a single tree there was planted; the land was merely protected and the forest permitted to grow. No cattle or humans were allowed in. This is all it takes to regrow forests anywhere in India.
Small island nations, threatened by rising seas, want stronger action at the climate-change summit in Poland - Leaders of several small island nations started a high-level debate session Tuesday by reminding delegates that their countries could be swallowed by rising seas if climate change is not checked. “The prosperity enjoyed by a few developed countries has become the tragedy and misery of the masses in the developing countries and particularly those most vulnerable to climate change,” said Kiribati’s president, Taneti Mamau. Over the following two days, groups of vulnerable nations publicly demanded that the conference produce meaningful results. The Small Island Developing States group (SIDS) issued a list of conditions Wednesday it says the international community must meet by the end of the summit, according to E&E News. On Thursday, the Alliance of Small Island States (AOSIS) and the Least Developed Countries released a statement saying they are “deeply concerned over the direction in which the outcomes of COP 24 are heading” and calling for the “immediate ratcheting up of climate ambition.” “What is at stake is actually the very existence of small nations like the Maldives and others,” said Hussain Rasheed Hassan, the environment minister for the Maldives and head of the AOSIS, in a telephone interview with The Washington Post on Wednesday. These small states had major industrialized nations on their side in 2015, when the Paris climate agreement was signed. But at this year’s summit, those key countries are no longer helping push the small states' message. This year’s climate summit is supposed to be where technical experts draft the “rule book” for implementing the pledges countries made under the Paris climate accords. That may still happen, but there has been little progress so far.
Warming warning over turtle feminization - Up to 93% of green turtle hatchlings could be female by 2100, as climate change causes "feminisation" of the species, new research suggests. The sex of turtle hatchlings is determined by temperature, and at present about 52% of hatching green turtles—one of seven species of sea turtle—are female. But a study by the University of Exeter and the Marine and Environmental Sciences Centre (Portugal) shows that in warmer temperatures predicted by Intergovernmental Panel on Climate Change (IPCC) scenarios, 76-93% of hatchlings would be female. The figures are specific to the study site in Guinea-Bissau, West Africa, but researchers say they expect a similar picture globally. They say the changing gender ratio would initially lead to more females nesting, increasing the population, before by a decline "as incubation temperatures approach lethal levels". They also predict rising sea levels will submerge 33-43% of current nesting areas used by green turtles on the beaches where the study was carried out. "Green turtles are facing trouble in the future due to loss of habitats and increasing temperatures,"
Japan Expected to Withdraw From IWC to Resume Whale Hunting - Despite a global ban on commercial whaling more than 30 years ago, Japan has caught about 200-1,200 whales every year since 1987—including pregnant and juvenile ones—under the exception of "scientific research." Opponents have fiercely criticized this research program as just a cover so the whales can be killed for human consumption. Now, the national broadcaster NHK reports that the Japanese government wants to fully resume commercial whaling by pulling out of the International Whaling Commission (IWC). Commercial whaling was paused in 1986 by the IWC because some whales were hunted to near extinction. On Thursday the government said that the recovery of some whale stocks justified its withdrawal from the commission, according to NHK. The government is said to be making preparations to restart commercial whaling in Japan's nearby seas and exclusive economic zones. Even though most of Japanese citizens no longer eat whale meat, whaling proponents say that eating the mammals is part of their culture. Conservationists condemned the Japanese government's reported plans. "This is a grave mistake which is out of step with the rest of the world," Sam Annesley, executive director at Greenpeace Japan said in a press release. "We hope that Japan will reverse its decision and take its place beside the nations trying to undo the damage human activities have done to whale populations." The BBC noted that despite the widespread reporting in Japanese media, there has not yet been an official announcement. "If Japan leaves the International Whaling Commission and continues killing whales in the North Pacific it will be operating completely outside the bounds of international law," Nicola Beynon, head of campaigns at Humane Society International in Australia, said in a press release. "This is the path of a pirate whaling nation, with a troubling disregard for international rule. We're going to continue to press the international community to bring an end to the unjustified persecution of whales for commercial profit wherever it occurs."
Huge barrier isn’t trapping plastic waste in Pacific Ocean (AP) — A floating device sent to corral a swirling island of trash between California and Hawaii has not swept up any plastic waste — but the young innovator behind the project said Monday that a fix was in the works.Boyan Slat, 24, who launched the Pacific Ocean cleanup project, said the speed of the solar-powered barrier isn't allowing it to hold on to the plastic it catches."Sometimes the system actually moves slightly slower than the plastic, which of course you don't want because then you have a chance of losing the plastic again," Slat said in an interview with The Associated Press. A crew of engineers will reach the U-shaped boom Tuesday and will work for the next few weeks to widen its span so that it catches more wind and waves to help it go faster, he said.
California Devastated Utility Proposes $2 Billion Rate Hike To Fund Wildfire Safety - One month after the stock and bonds of troubled California Utility Pacific Gas & Electric cratered after the company hinted of a liquidity crisis as a result of mounting legal obligations following California's destructive Camp Fire, shocking and infuriating its investors... ... PG&E is now set to reap the ire of its clients as well after a demand for a rate hike of almost $2 billion from customers, saying more than half will go toward wildfire safety. In a proposal submitted late last week to the California Public Utilities Commission, PG&E asked for $1.1 billion in new revenue in 2020, including $576 million for the Community Wildfire Safety Program, $273 million toward liability insurance, and $209 million for core gas and electric operations. The proposal also asks for another $454 million in 2021 and $486 million in 2022.If the commission approves the hike, California clients of PG&E could see their bills jump more than $10 a month, a troubling development for Californians who already pay one of the highest prices in the nation for electricity. According to the US Energy Information Administration, last year’s average monthly bill was $101.49. PG&E claims the money for the Community Wildfire Safety Program would go toward reducing wildfire threats. According to Fox6, parts of those efforts will include installing "stronger poles, introducing technology to respond faster to fallen power lines, enhancing weather forecasting models, and increasing coverage in high-threat areas by adding close to 600 cameras."
California Knew the Carr Wildfire Could Happen. It Failed to Prevent it. The fire burned for 39 days and charred over 229,000 acres, and when the last embers died on Aug. 30, the fight to contain it had cost $162 million, an average of $4.15 million a day. Almost 1,100 homes were lost. Eight people died, four of them first responders. Dozens of interviews and a review of local, state and federal records show that virtually every aspect of what came to be known as the Carr Fire — where it ignited; how and where it exploded in dimension and ferocity; the toll in private property — had been forecast and worried over for years. Every level of government understood the dangers and took few, if any, of the steps needed to prevent catastrophe. This account of how much was left undone, and why, comes at a moment of serious reassessment in California about how to protect millions of people living in vulnerable areas from a new phenomenon: Firestorms whose speed and ferocity surpass any feasible evacuation plans.The government failure that gave the Carr Fire its first, crucial foothold traces to differences in how California and the federal National Park Service manage brush along state highways. Transportation officials responsible for upgrading Route 299 had appealed to Whiskeytown officials to clear the grass, shrubs and trees lining the often superheated roadway, but to no avail. At the federal level, the park service official responsible for fire prevention across Whiskeytown’s 39,000 acres of forest had been left to work with a fraction of the money and staffing he knew he needed to safeguard against an epic fire. What steps the local parks team managed to undertake — setting controlled fires as a hedge against uncontrollable ones — were severely limited by state and local air pollution regulations. And both the residents and elected officials of Redding had chosen not to adopt or enforce the kind of development regulations other municipalities had in their efforts to keep homes and businesses safe even in the face of a monstrous wildfire.
Wildfires may soon be uninsurable risks for homeowners - Homeowners in wildfire-prone areas of California and other Western states now have yet another worry: Insurers have issued an ominous warning that they could be facing a "wildfire deductible" in coming years or, even worse, the prospect of having their home insurance canceled altogether.The surprising scenario came in part from Aon, the largest insurance broker in the U.S., where meteorologist Steve Bowen pointed out that fire losses have exceeded $10 billion for the second year running. In California, the Camp Fire alone has killed 86 people and damaged or destroyed nearly 20,000 homes.House fires of almost any kind have traditionally been covered under home insurance policies -- no questions asked. But "risks that were once insurable … will become uninsurable," said Birny Birnbaum, executive director of the Center for Economic Justice. "Insurers have long excluded wind in coastal states and earthquake and flood everywhere from homeowners' policies."Perils such as hurricanes, earthquakes and flooding are what insurers consider "primary" risks, which puts them in a category of being insurable only under special circumstances. Earthquakes generally require a separate policy or a separate endorsement. Flood insurance is handled by the federal government (although surplus carriers will insure above the federal minimum). But home fires have always been "secondary" risks. "The standard assumption of wildfire being a 'secondary' peril may evolve in the future," Aon's Bowen said. He added that this "may lead to a shift in mindset that causes industries [like insurers] to alter their view of fire risk."
California's Next Calamity- Storms Compounded By High Tides - The wildfires that have taken their toll on California could be just the beginning of the state’s calamities. Now, the high tides of winter are coming and if those tides are worsened by an incoming storm, they could devastate entire cities on the coasts. On December 10, the National Oceanic and Atmospheric Administration (NOAA) released a report stating there is an 80 percent chance of an El Niño event this winter. Such events are associated with wetter and more intense winter storms. However, NOAA does caution that its data are from September through November and the intensity of the El Niño will not be known for quite some time still. Tides are determined by the sun and moon’s gravitational pull on the oceans. This warning from NOAA comes as heavy storms bear down on California’s Pacific Northwest. In central and northern California on Monday, waves were as high as 30 feet, with 40- to 50-foot breaks. Coastal flooding and erosion were reported. And sn even-more-powerful storm smacked the region yesterday, prompting flood watches, high-wind alerts, and winter storm warnings across nine states. According to ABC News, holiday travelers along I-5, which runs north to south through Washington, Oregon, and California, can expect to be drenched with heavy rains. Although that storm has mostly passed and is headed to the Rocky Mountains, California is not out of the woods just yet. High surf warnings were issued by the National Weather Service from Point Conception, California, north of the Los Angeles Basin, to the coast of southwestern Washington, highlighting an especially heightened threat to life and property within the surf zone, reported Weather.com. This new storm system comes just a week after a surfer was killed by big swells at San Francisco’s Ocean Beach. The waves that killed the surfer were only 10 feet high. Should the tides interact with a storm of that magnitude, devastation on the West Coast would be imminent.
Rising Waters Are Drowning Amtrak's Northeast Corridor - By the middle of this century, climate change is likely to punch a hole through the busiest stretch of rail in North America. Parts of Amtrak’s Northeast Corridor route, which carries 12 million people each year between Boston and Washington, face “continual inundation.” Flooding, rising seas, and storm surge threaten to erode the track bed and knock out the signals that direct train traffic. The poles that provide electricity for trains are at risk of collapse, even as power substations succumb to floodwaters. “If one of the segments of track shuts down, it will shut down this segment of the NEC,” warned members of Amtrak’s planning staff. “There is not an alternate route that can be used as a detour.” That was the conclusion of a three-volume, multi-year climate study undertaken with first Booz Allen Hamilton Inc. and then Stantec Inc. Although the report was completed in April 2017, its conclusions were kept private until this November, when a partially redacted version was obtained by Bloomberg through a public records request. Titled “Amtrak NEC Climate Change Vulnerability Assessment,” the document outlines the severe threat facing one 10-mile section of the 457 miles of track, much of which runs perilously close to water.On a recent afternoon near Wilmington, Del., the danger already seemed imminent. North of the city, the distance between the tracks and the Delaware River was alarmingly narrow, even at low tide. Closer to downtown, puddles dotted the West Yard Substation, which powers this section of rail, as well as the Wilmington maintenance yard, one of the few in the country that can repair electric locomotives. Only a slender cobblestone footpath separated Amtrak’s Consolidated National Operations Center, which monitors and controls traffic along the corridor, from the edge of the Christina River. The single access road leading to Amtrak’s only training center for engineers was underwater on a day with no rain.Kristina Dahl, a senior climate scientist at the Union of Concerned Scientists, has projected which portions of the corridor will experience what she calls “chronic inundation,” defined as flooding an average of at least twice a month. Dahl provided Bloomberg with data showing when chronic inundation is expected to reach portions of the Northeast Corridor.
Why is sea level rising faster in some places along the US East Coast than others? - Sea levels are rising globally from ocean warming and melting of land ice, but the seas aren't rising at the same rate everywhere. Sea levels have risen significantly faster in some U.S. East Coast regions compared to others. A new study led by the Woods Hole Oceanographic Institution (WHOI) reveals why. Over the 20th century, sea level has risen about a foot and a half in coastal communities near Cape Hatteras in North Carolina and along the Chesapeake Bay in Virginia. In contrast, New York City and Miami have experienced about a 1-foot rise over the same period, while sea levels farther north in Portland, Maine, rose only about half a foot. The reason is a phenomenon called "post-glacial rebound," explains Chris Piecuch, lead author of a study published on Dec. 20, 2018, in the journal Nature. Essentially, land areas in the Northern Hemisphere that once were covered by mammoth ice sheets during the last Ice Age—such as Canada and parts of the Northeast U.S.—were weighed down like a trampoline with a boulder on it. At the same time, land around the periphery of the ice sheets—along the U.S. mid-Atlantic coast, for example—rose up. As the ice sheets melted from their peak at the Last Glacial Maximum 26,500 years ago, the weighed-down areas gradually rebounded, while the peripheral lands started sinking, creating sort of a see-saw effect. Even though the ice sheets had disappeared by 7,000 years ago, the see-sawing of post-glacial rebound continues to this day. The research team found that post-glacial rebound accounted for most of the variation in sea level rise along the East Coast. "Post-glacial rebound is definitely the most important process causing spatial differences in sea level rise on the U.S. East Coast over the last century. And since that process plays out over millennia, we're confident projecting its influence centuries into the future," Piecuch explains.
NOAA releases 2018 Arctic Report Card -NOAA released its 2018 Arctic Report Card on December 11. This year’s report shows – once again – how the climate of Earth’s north polar region is changing. Measurements include warmer air and ocean temperatures and declines in sea-ice that are driving shifts in animal habitats.The annual Arctic Report Card – now in its 13th year – is a peer-reviewed report that provides an update on the region and compares these observations to the long-term record. The 2018 report was compiled from the research of 81 scientists working for governments and academia in 12 nations. This year’s report shows that the Arctic region experienced the second-warmest air temperatures ever recorded; the second-lowest overall sea-ice coverage; lowest recorded winter ice in the Bering Sea; and earlier plankton blooms due to early melting of sea ice in the Bering Sea.Here are some highlights from the report:
- – Surface air temperatures in the Arctic continued to warm at twice the rate relative to the rest of the globe. Arctic air temperatures for the past five years (2014-18) have exceeded all previous records since 1900.
- – Atmospheric warming continued to drive broad, long-term trends in declining terrestrial snow cover on land, melting of the Greenland Ice Sheet and lake ice, increasing summertime Arctic river discharge, and the expansion and greening of Arctic tundra vegetation.
- – Despite increase of vegetation available for grazing, herd populations of caribou and wild reindeer across the Arctic tundra have declined by nearly 50 percent over the last two decades.
- – In 2018, Arctic sea ice remained younger and thinner, and covered less area than in the past. The 12 lowest extents in the satellite record have occurred in the last 12 years.
- – Warming Arctic Ocean conditions are also coinciding with an expansion of harmful toxic algal blooms in the Arctic Ocean, threatening food sources.
- – Microplastic contamination is on the rise in the Arctic, posing a threat to seabirds and marine life that can ingest debris.
Unparalleled warmth is changing the Arctic and affecting weather in US, Europe - The Arctic is experiencing a multi-year stretch of unparalleled warmth "that is unlike any period on record," according to the 2018 Arctic Report Card, a peer-reviewed report released Tuesday morning from the National Oceanic and Atmospheric Administration, an agency within the United States Department of Commerce.The report states that human-caused climate change is transforming the Arctic, both physically through the reduction of sea ice, and biologically through reductions in wildlife populations and introduction of marine toxins and algae.The report is yet another study from part of the US government indicating that climate change is real and having a profound impact, despite denials from the President and senior members of his Administration.Temperatures in the Arctic are warming more than twice as fast as the overall planet's average temperature, with temperatures this year in the highest latitudes (above 60 degrees north) coming in 1.7 degrees Celsius (3.1 degrees Fahrenheit) above the 1981-2010 average. These were the second warmest (behind 2016) air temperatures ever recorded during the Arctic year, which runs from October through September to avoid splitting the winter season. The five years since 2014 have been warmer than any other years in the historical record, which goes back to 1900. Although Arctic temperatures have been subject to wild swings back and forth through the decades due to natural variability, they have been consistently warmer than average since 2000 and at or near record since 2014, the report states.
The Coast Guard turned down a request for an Arctic exercise out of concern the US’ only heavy icebreaker would break down and Russia would have to rescue it - Countries are jockeying for position as the changing climate makes the Arctic more amenable to shipping and natural-resource extraction. Conditions in the high north are still formidable, requiring specialised ships. That’s felt acutely in the US, mainly because of the paucity of its ice-breaking capability compared with Arctic countries – particularly Russia. Moscow, which has the world’s largest Arctic coastline, has dozens of icebreakers, some of which are heavy models for polar duty, and others that are designed to operate elsewhere, like the Baltic. The US has just two, only one of which is a heavy icebreaker that can operate in the Arctic and Antarctica. That heavy icebreaker, the Polar Star, is more than 40 years old and clinging to service life – something former Coast Guard commandant Paul Zukunft was well aware of when he was asked to send the Polar Star north.“When I was the commandant, the National Security Council approached me and said, ‘Hey, we ought to sent the Polar Star through the Northern Sea Route and do a freedom of navigation exercise,'” Zukunft, who retired as an admiral in 2018, said this month at a Wilson Center event focused on the Arctic.“I said, ‘Au contraire, it’s a 40-year-old ship. We’re cannibalising parts off its sister ship just to keep this thing running, and I can’t guarantee you that it won’t have an catastrophic engineering casualty as it’s doing a freedom of navigation exercise, and now I’ve got to call on Russia to pull me out of harm’s way. So this is not the time to do it,'” Zukunft said.
UN climate accord 'inadequate' and lacks urgency, experts warn - The world has been put on notice that its best efforts so far will fail to halt the devastation of climate change, as countries came to a partial agreement at UN talks that failed to match up to the challenges faced. Leading figures in climate science and economics said much more must be done, and quickly, to stave off the prospect of dangerous levels of global warming. “It is clear that the progress we are making is inadequate, given the scale and urgency of the risks we face. The latest figures show carbon dioxide emissions are still rising.” Johan Rockstrom, director designate at the Potsdam Institute for Climate Impact Research, said: “My biggest concern is that the UN talks failed to align ambitions with science. We continue to follow a path that will take us to a very dangerous 3-4C warmer world within this century. Extreme weather events hit people across the planet already, at only 1C of warming.”The two-week-long UN talks in Poland ended with clarity over the “rulebook” that will govern how the Paris agreement of 2015 is put into action, but the crucial question of how to lift governments’ targets to reduce greenhouse gas emissions was left unanswered.Countries will meet again next year. The annual climate talks have been going on since 1992 when the UN framework convention on climate change was signed, binding governments to avoid dangerous levels of climate change. That agreement followed years of scientific predictions on global warming, culminating in a landmark report in 1988 that warned of the dangers. Since then, the warnings have grown clearer and scientists have eliminated the possibility that the global warming observed in recent decades has been due to natural forces. It is a manmade problem arising from the use of fossil fuels, which has poured the heat-trapping gas carbon dioxide into the atmosphere.
Morally Unacceptable’: Final Deal Out of COP24 Sorely Lacking in Urgency and Action, Climate Campaigners Say - Climate action groups slammed the outcome of the 24th annual Conference of the Parties (COP24) in Katowice, Poland on Saturday, calling the agreement reached by about 200 diplomats and negotiators "barely adequate" as a plan to ensure that countries will follow through with their emissions reduction pledges.Concluding two weeks of talks on how countries can implement the Paris climate agreement to keep global warming below 1.5 degrees Celsius (2.7 degrees Fahrenheit), the diplomats reached a deal standardizing how countries measure their carbon emissions and ostensibly ensuring that world leaders will be more aggressive in reaching their emissions targets in time for the next global summit next September.The final agreement left out directives on specific reductions in emissions by 2030. While it calls on wealthier countries to clarify how they will provide aid to less well-off nations, many of which are on the front lines of the climate crisis, more in-depth talks about developing countries needs were put off until next year. Advocates for bold, concrete reforms and directives—outlined in the People's Demands for Climate Justice—said the required sense of urgency for avoiding the climate catastrophe that the world's top scientists warn could take hold by 2030, was missing from the deal.
Cargo Ships Are the World’s Biggest Polluters — but No One Wants to Fix It - Maritime shipping transports 90 percent of the goods traded around the world by volume. Moving large amounts of goods such as oil, computers, blue jeans, and wheat across oceans drives the global economy, making it cheaper and easier to buy almost anything.But hauling goods around by sea requires roughly 300 million tons of very dirty fuel, producing nearly three percent of the world’s carbon dioxide emissions, giving the international maritime shipping industry roughly the same carbon footprint as Germany. At summits like the COP24 meeting held in Poland in December of 2018 and in agreements such as the one struck in Paris in 2015, national governments have largely ignored the carbon dioxide emissions from international shipping entering the atmosphere.This is a real problem because if no country is held responsible for emissions, no government will try to reduce them. We believe as scholars of global environmental cooperation that one way forward is to make international maritime shipping emissions the responsibility of specific countries with the goal of increasing pressure to encourage emission reductions.In international climate change negotiations, countries are in charge of reducing their own greenhouse gas emissions. Carbon dioxide emissions from international shipping could be added to this responsibility. Figuring out whose emissions they are, however, is no easy task.Perhaps no industry is as globalized as maritime shipping. The ships themselves have international webs of owners, operators, and registrations. They carry goods sourced in multiple places as they traverse the high seas, stopping in many countries. A single ship might be connected to dozens of companies. It can be built by one company, owned by a group of other companies, and operated by a group of yet more companies. It may carry cargo for many hundreds of businesses destined for many ports run by different companies, be crewed by an outsourced staffing firm, and insured by another company.
Blind, Burrowing, Thin-Skinned Worm Named After Climate-Denier Trump - To those patriots who consider our Pretender-to-the-Throne a reptilian shape-shifter, mazel tov: Now he officially is one. A small, blind, shiny, worm-like amphibian newly discovered in Panama which buries its head in the ground will henceforth be named Dermophis donaldtrumpi in recognition of his namesake's climate change denial.The naming rights for the 10-centimeter creature—a Caecilian, or legless amphibian—were auctioned off in a fundraiser for the 30th anniversary of the Rainforest Trust. The auction gave bidders the chance to name 12 species—four frogs, four orchids, a forest mouse, a trap-jaw ant, a salamander and the caecilian—identified in Latin American reserves created by the Trust and local partners, with proceeds going to protect and preserve the species' habitat.While protecting the world's rainforests is one of the most effective ways to mitigate climate change, the Trust estimates almost 70,000 acres are destroyed almost daily, causing devastating damage.Among the new species, the caecilian garnered the largest bid: $25,000 from Aidan Bell, the head of sustainable building company EnviroBuild. While Trump and his ludicrous hair piece have inspired other facsimiles—a golden pheasant, a venomous caterpillar, a yellow-haired moth—Bell argues his creature and his new moniker are an ideal match. "It is the perfect name," he says. "Caecilian is taken from the Latin caecus, meaning 'blind,' perfectly mirroring the strategic vision (Trump) has consistently shown towards climate change." Bell cites other fabulous likenesses: Caecilians can only detect light or dark, so see the world in simplistic black and white; thin-skinned, they grow an extra layer of skin their young peel off and eat before going on to jobs in the Oval Office; they live largely underground, thus helping them avoid scientific consensus; they have tentacles they use to catch prey; as amphibians, they're especially susceptible to global warming, and thus to extinction; and they are soulless, slithering, primordial worms, so ... yeah.
Democrats Just Blocked Alexandria Ocasio-Cortez's Push For A Green New Deal Committee - Democratic leaders on Thursday tapped Rep. Kathy Castor (D-Fla.) to head a revived U.S. House panel on climate change, all but ending a dramatic monthlong effort to establish a select committee on a Green New Deal. Castor’s appointment came as a surprise to proponents of a Green New Deal. The move also kicked off a controversy as the six-term congresswoman dismissed calls to bar members who accept money from fossil fuel companies from serving on the committee, arguing it would violate free speech rights. Despite weeks of protests demanding House Democrats focus efforts next year on drafting a Green New Deal, the sort of sweeping economic policy that scientists say matches the scale of the climate crisis, Castor told E&E News the plan was “not going to be our sole focus.” She then suggested that barring members who have accepted donations from the oil, gas and coal industries from serving on the committee could be unconstitutional. “I don’t think you can do that under the First Amendment, really,” she said. That reasoning echoed arguments Exxon Mobil Corp. made in court as recently as this year to defend its funding of right-wing think tanks that deliberately produced misinformation about climate science to stymie government action on global warming. The restoration of the select committee on climate change puts an end to a month-long effort to replace it with a panel focused specifically on crafting a Green New Deal, an umbrella term for a suite of policies that would include shifting the United States to 100 percent renewable energy over the next decade and guaranteeing high-wage, federally backed jobs to workers in outmoded industries.
If you ever wondered what life will be like when climate change makes outside unlivable, Dubai can give you a good idea - As I hung out in Dubai last month, it struck me that the city's severe climate and its adaptation to that climate was a good approximation of what I imagine living with the severe effects of climate change to be.During Dubai's long summer, stretching from mid-April through October, temperatures make it unbearable to be outside for more than a few minutes. Temperatures are regularly around 105 degrees Fahrenheit (41 degrees Celsius) and have gone as high as 119 degrees Fahrenheit (48 degrees Celsius), with plenty of humidity.The city's adaptation to that climate? A proliferation of interconnected climate-controlled spaces, including more than 65 malls, residential and office buildings with entire indoor cities attached, metros, and indoor parking lots. For a certain social millieu — I'm talking native Emiratis and the wealthy expats with white-collar jobs — one could go entire days or weeks during the summer without stepping outside. You go from your air-conditioned apartment in a residential skyscraper to the indoor parking lot, and then drive to your office, park in the indoor lot, and head upstairs to the office skyscraper.If you need to do grocery shopping or pick up a present, there are likely retail stores, grocery stores, or an entire retail complex attached to your office building or apartment building. If you want to spend a Saturday out with your family, grab coffee with a colleague, or enjoy an "al fresco" dinner and a movie, you are likely doing it inside at The Dubai Mall, a $2 billion complex with 1,200 stores, hundreds of restaurants, a movie theater, a luxury hotel, an Olympic-size ice-skating rink, a virtual-reality theme park, and an aquarium. Or, perhaps you'll visit one of Dubai's dozens of other megamalls with similar amenities that blur the line between mall and city block. Dubai is getting so good at simulating the outdoors inside that its next megaproject is dedicated to just that. Dubai Square, set to become the world's largest mall, is built around a four-lane "boulevard" that mimics a wide city street, a piazza, and an entertainment center for concerts and theater shows. It will even have the Middle East's largest Chinatown.
The economic impacts of climate change could limit climate change - Estimates of the economic impact of climate change have generally been perceived as conservative, failing to capture the full damage. The percentage of global GDP lost due to future global warming varies widely in the different economic models that have been used. Some simpler ones have projected the cost of unmitigated warming at just a few percentage points by 2100, while a 2015 study put that number at around 20 percent. This would be mirrored by emissions for a number of reasons. Most simply and most morbidly, more people would die early. Labor productivity would drop for other reasons, as well, and resources would have to be diverted to dealing with things like natural disasters, rather than building useful things like infrastructure. There are, however, ways that warming could also increase emissions: the balance of energy demand for heating and cooling buildings, for example, or the lower efficiency of electrical transmission lines at higher temperatures. Combining estimates of all these processes, the researchers built a simple mathematical model using human emissions from the high-end scenarios of climate model simulations. The average result showed that economic feedbacks reduced emissions enough to keep the CO2 concentration about 85 parts per million lower in 2100, shaving about 0.3°C off global warming. (Using the highest and lowest estimates, the temperature difference ranged from zero to about 0.75°C.) For every degree Centigrade of warming, lower economic growth cut about three percent off emissions.
Geoengineering: Should India Tread Carefully or Go Full Steam Ahead? - In April 1991 Mt Pinatubo in Philippines saw the second largest volcanic eruption of the century. Millions of tonnes of magma erupted. Ash clouds reached 35 km up into the sky. Around 20 million tonnes of sulphur dioxide escaped. Then, some time after the eruption, the temperature of the air around the world fell by 0.5°C. Scientists later realised the sulphur vented into the atmosphere behaved like aerosols, and had reflected ~1% of Earth’s incident sunlight back into space. If humans had deliberately released such sunlight-reflecting material into the air, it would’ve been called geoengineering. It describes large-scale human efforts to mitigate the impact of global warming by ‘engineering’ natural processes to have palliative effects. In 2016, 194 countries and the European Union pledged to keep global surface warming below 2º C and to make that 1.5º by 2030. But this hasn’t been happening. The UN-organised multilateral climate talks that just concluded in Katowice, Poland, revealed a “lack of political will” among member countries to limit their carbon emissions and uphold the 2015 Paris Agreement. This renders the 1.5º goal nearly unattainable. Perhaps it’s time for more drastic measures – such as bouncing sunlight away from Earth. But somehow, policymakers haven’t been grabbing at this solution.Probably because there’s a catch. A 2007 study found that, after Pinatubo went up, the temperature of the world’s air fell – as did the amount of rainfall around the globe. In fact, precipitation levels were the lowest between 1979 and 2004. There were also widespread cases of moderate to severe drought that could be directly attributed to the temperature dip. Other studies have shown that once we commit to managing solar radiation, we’ve to keep at it. Sudden termination can increase the global average surface temperature by 4º C within 30 years. This can be catastrophic for everyone involved. At the same time, geoengineering remains an attractive idea because of the lower investment and its quick-fix nature. Some believe that if we prepare better to mitigate its side-effects, it’s an eminently workable option. Indian researchers are beginning to investigate the possible effects of geoengineering on summer monsoon cycles and heat.
Warning of Solar Geoengineering’s Dangers, Group Recommends a Global Ban - A Harvard research team recently announced plans to perform early tests to shoot sunlight-reflecting particles into the high atmosphere to slow or reverse global warming.These research efforts, which could take shape as soon as the first half of 2019, fall under the banner of a geoengineering technology known as solar radiation management, which is sometimes called “sun dimming.”However, less than two weeks after the announcement, the climate science and policy institute Climate Analytics took aim at these ambitions in a new briefing titled ”Why geoengineering is not a solution to the climate problem,” which goes as far as recommending a global ban on solar geoengineering.The group’s briefing warns about the dangers of proceeding with solar radiation management (SRM) in particular. The basic idea behind SRM is to release particles into the Earth’s stratosphere, the atmospheric layer approximately 6–30 miles above the surface, where they would then reflect some of the sun’s light (and heat) away from Earth, resulting in atmospheric cooling.
China and Russia perform controversial experiments to modify atmosphere - China and Russia have modified an important layer of the atmosphere above Europe to test a controversial technology for possible military application, according to Chinese scientists involved in the project. A total of five experiments were carried out in June. One, on June 7, caused physical disturbance over an area as large as 126,000 sq km (49,000 square miles), or about half the size of Britain. The modified zone, looming more than 500km (310 miles) high over Vasilsursk, a small Russian town in eastern Europe, experienced an electric spike with 10 times more negatively charged subatomic particles than surrounding regions. In another experiment on June 12, the temperature of thin, ionised gas in high altitude increased more than 100 degrees Celsius (212 degrees Fahrenheit) because of the particle flux. The particles, or electrons, were pumped into the sky by Sura, an atmospheric heating facility in Vasilsursk built by the former Soviet Union’s military during the cold war. The Sura base fired up an array of high-power antennas and injected a large amount of microwaves into the high atmosphere. The peak power of the high frequency radio waves could reach 260 megawatts, enough to light a small city. Zhangheng-1, a Chinese electromagnetic surveillance satellite, collected the data from orbit with cutting-edge sensors. The pumping and fly-by required precise coordination to achieve effective measurement. The results were “satisfactory”, the research team reported in a paper published in the latest issue of the Chinese journal Earth and Planetary Physics.
Climate change: The massive CO2 emitter you may not know about – BBC - Concrete is the most widely used man-made material in existence. It is second only to water as the most-consumed resource on the planet. But, while cement - the key ingredient in concrete - has shaped much of our built environment, it also has a massive carbon footprint.Cement is the source of about 8% of the world's carbon dioxide (CO2) emissions, according to think tank Chatham House.If the cement industry were a country, it would be the third largest emitter in the world - behind China and the US. It contributes more CO2 than aviation fuel (2.5%) and is not far behind the global agriculture business (12%). Cement industry leaders were in Poland for the UN's climate change conference - COP24 - to discuss ways of meeting the requirements of the Paris Agreement on climate change. To do this, annual emissions from cement will need to fall by at least 16% by 2030. A mix of sand and gravel, a cement binder and water, concrete is so widely embraced by architects, developers and builders because it is a remarkably good construction material. "It's affordable, you can produce it almost anywhere and it has all the right structural qualities that you want to build with for a durable building or for infrastructure," explains Felix Preston, deputy research director at the Energy, Environment and Resources Department at Chatham House. Despite known durability problems with using steel reinforcement, which can crack concrete from the inside, it is still the go-to material across the world.
Record-Breaking Massachusetts Offshore Wind Auction Reaps $405 Million in Winning Bids -- A record-breaking auction buoyed the U.S. offshore wind industry last Friday when a “bidding bonanza” for three lease areas offshore Massachusetts yielded $405 million in winning bids.After 32 rounds of bidding spread across two days, provisional winners were announced for lease areas covering 390,000 acres (see map) in federal waters located south of both Martha’s Vineyard and Nantucket.According to the Bureau of Ocean Energy Management (BOEM), which conducted the auction, the three lease areas can support 4.1 gigawatts of wind generation capacity. The three winning bids each came in at $135 million. Provision winners are: Equinor Wind US, LLC, the U.S. arm of the Norwegian oil major; Mayflower Wind Energy, LLC, a 50-50 joint venture between Shell and EDP Renewables; and Vineyard Wind, LLC, a 50-50 joint venture between Copenhagen Infrastructure Partners and Avangrid Renewables.
Ryan Zinke, ‘Worst Interior Secretary in History,’ Resigns -- Embattled Interior Secretary Ryan Zinke resigned Saturday, a month-and-a-half after an investigation into a potential conflict of interest involving oil-giant Halliburton was referred to the Justice Department, The Washington Post reported. Zinke has been a controversial figure during his time at the Department of Interior (DOI), both for his ethically questionable use of his office and for his commitment to opening up public lands and waters to oil and gas drilling. "Ryan has accomplished much during his tenure and I want to thank him for his service to our Nation," President Donald Trump tweeted, announcing the resignation Saturday. However, officials close to the situation told The Washington Post that Zinke had been given until the end of the year to either resign or be fired. Two officials further said Zinke's fall from grace occurred when the Halliburton investigation was passed on to the Justice Department. Zinke had met with Halliburton Chairman David Lesar while in office to discuss a real estate deal in Zinke's hometown that is owned by Lesar's son and could raise the value of nearby property belonging to a foundation started by Zinke and his wife. As a major energy producer, Halliburton is regulated by the DOI.
Former fossil fuels lobbyist to head interior department as Zinke exits - Ryan Zinke’s exit as interior secretary elevates a former lobbyist to the job, meaning the top two US environmental agencies will now be run by people previously paid by industry. The deputy secretary, David Bernhardt, will take over at least temporarily when Zinke steps down at the end of the year. He also could be in the running to head the department permanently. And at the Environmental Protection Agency, the acting administrator, Andrew Wheeler, who was a coal lobbyist, will be nominated to keep the post. Bernhardt was a fossil fuels and water industry lobbyist at the law firm Brownstein Hyatt Farber Schreck before he joined the Trump administration. He was previously the chief lawyer at the interior department under the George W Bush administration . In an ethics pledge, Bernhardt said he would wait until August 2019 to have certain interactions with his former firm and some major oil and gas companies he represented. But many of the industry-friendly changes he has ushered in as the No 2 official were on the wishlists of the companies who employed him. “It’s not so much who has he helped. It’s who hasn’t he helped in industry so far,” said Bobby McEnaney, who works on western US energy issues for the Natural Resources Defense Council. “The notion that he could extricate himself from benefiting his former clients is impossible.”
Zinke's Deputy: The Former Fossil Fuel Lobbyist Running the Interior Dept. --While Zinke was making headlines that distracted from Trump's fossil fuel-focused policy, his department was working busily to implement it under the leadership of his deputy, former energy industry lobbyist and agency veteran David Bernhardt. In just the week leading up to Zinke's speech, Bernhardt met with senior executives of ExxonMobil and with the head of the oil industry's chief lobby group, the American Petroleum Institute, and visited the U.S. Chamber of Commerce's Energy Institute, according to his calendar and the agency's visitor logs. Bernhardt is now expected to take the helm of Interior—at least on an interim basis—when Zinke steps down at the end of this year amid at least 17 investigations of his taxpayer-funded travel and other expenses and business dealings. Any successor would be hard-pressed to match Zinke's brio—whether outfitting his office for $139,000 doors, having the government pay for his wife's travel, or becoming involved in a land deal funded by the former chief executive of Halliburton. But observers are convinced that Bernhardt will follow in Zinke's footsteps in one important way: carrying out the Trump administration's drive to open federal lands to oil, gas and coal development without restriction. The Interior Department has either begun or completed at least 19 policy actions requested or supported by at least 16 of Bernhardt's former lobbying clients, including oil, gas and mining companies and their trade associations, since he joined the administration in August 2017, according to a tally by the Center for Western Priorities. Those policies include rolling back regulations on fracking and methane leaks, rescinding royalties regulations, approving a pipeline right-of-way, reducing protections for endangered species and expanding areas for offshore drilling. According to the ethics rules adopted by the Trump administration, Bernhardt would have been limited for two years from participating in matters related to his work for the Independent Petroleum Association of America, Halliburton, Noble Energy, Statoil and any other of the more than two dozen clients named in his ethics disclosure forms. But that cooling off period can be sidestepped with a waiver from agency ethics officials.
The Dirty Scheme to Make Americans Buy More Gasoline - It's not often that an industry chieftain brags to investors about picking the pockets of American families with help from the White House.That's what happened, though, after Big Oil schemed with the Trump administration last summer to ensure higher gasoline consumption—to the tune of $16 billion a year—and more climate-disrupting carbon pollution from our cars, vans and pickup trucks.An important investigative story by the New York Times lays bare this craven sellout of the public interest and details the hammerlock the oil industry has on domestic policy under President Trump. The article details how the Trump administration bowed to the major oil companies to try and gut commonsense rules that were already saving consumers billions of dollars a year at the pump and helping clean up our dirty tailpipe emissions.In a cynical confession, Gary Heminger, chairman of Marathon Petroleum, boasted to analysts last week that weakening the clean car rules would boost gasoline sales by up to 16.8 million gallons a day.At $2.65 a gallon, the national November average, that comes to $44.5 million a day, or more than $16 billion a year, money that American workers won't be able to spend on their families' needs because it will go, instead, to the oil industry. "However," Heminger warned investors, "you have another side who doesn't want to pivot away" from the fuel savings and pollution reductions the rules support. "So we have a lot of work to do to keep this momentum going."That so-called "work" doesn't come cheap. In the national elections of 2016 and 2018, campaign contributions from the oil and gas industry totaled $176 million, with 87 cents of every dollar going to Trump's party. It's paying off for the industry—at the country's expense.
Airlines ignoring efficient planes in blow to carbon targets – study - Airlines are failing to take up the most efficient planes in sufficient numbers to make a significant dent in their carbon dioxide emissions, a new study has found.The most efficient new aircraft models, such as the Boeing 787-9 and Airbus A350-900 and A320neo, can achieve substantial carbon savings over older models, but no airlines have invested sufficiently in the new types to reach the top levels of energy efficiency, according to a ranking by Atmosfair, a German NGO.In the annual Atmosfair Airline Index for 2018, published on Saturday, no airlines received an A for efficiency, and only two airlines were ranked in efficiency class B. TUI Airways, the British holiday airline, came top of the rankings for the second year running, reaching just under 80% of the possible optimum level of carbon emissions. TUI Fly, the company’s German counterpart, came in fourth. Atmosfair also found that only one in 10 airlines worldwide were succeeding in keeping their greenhouse gas emissions constant while achieving economic growth. Among these were Thai Airways, Finnair, American Airlines and All Nippon Airlines. British Airways was placed at 74th, with an efficiency rating of D, behind companies such as Aeroflot and Aeromexico. It fell behind many of Europe’s other flag carriers, including Alitalia, Lufthansa, Air France, KLM and Iberia.
Exclusive: Oil giant Exxon secured U.S. hardship waiver from biofuel laws – sources (Reuters) - The U.S. Environmental Protection Agency granted oil major Exxon Mobil Corp (XOM.N) a financial hardship waiver this year temporarily freeing its Montana refinery from U.S. biofuel laws, three sources familiar with the matter told Reuters. Exxon, which reported earnings of almost $20 billion in 2017, became the largest known company to be awarded a such a waiver by the Trump administration’s EPA under a program meant to protect the smallest fuel facilities from going bust. Farm state lawmakers have complained that the hardship waivers are being overused in a way that is killing demand for corn-based ethanol, and they were likely to criticize the waiver awarded to one of the world’s biggest and most profitable companies. The U.S. Renewable Fuel Standard requires refiners to blend biofuels like ethanol into their fuel each year or buy compliance credits from competitors that do. But it allows the EPA to exempt plants of less than 75,000 barrels per day if they show complying would cause financial hardship. The EPA has vastly expanded the program under President Donald Trump, but is reviewing how it handles further requests as it seeks to balance the competing interests of refiners and ethanol producers. Exxon’s waiver was granted before the review began, and covers its 60,000 barrel-per-day refinery in Billings, Montana, for the 2017 compliance period, said the sources, who asked not to be named. EPA spokesman Michael Abboud declined to comment on whether the refinery received a waiver, but pointed out that the waiver program requires the agency only to consider the financial situation of the refinery and not its owner. “This was a decision Congress made when drafting the Renewable Fuel Standard and EPA implements the small refinery exemption program consistent with that explicit direction,” he told Reuters in an emailed statement. ExxonMobil declined to comment.
Utilities Admit Coal Plants in 22 States are Violating Federal and State Pollution Standards by Leaking Toxic Chemicals into Groundwater – — Numerous utilities have just disclosed that toxic waste from 67 coal-fired power plants have led to harmful amounts of chemicals in nearby groundwater in excess of state and/or federal standards in Alabama, Alaska, Arizona, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Mississippi, Missouri, Montana, New Mexico, North Carolina, Pennsylvania, South Carolina, Utah, Virginia, West Virginia, and Wyoming (see list of plant locations in the table below and in a spreadsheet).On December 14, Earthjustice discovered the admissions made on major utilities’ websites. The information was buried on company websites, and only someone knowing what to look for could discover the notices. Toxic waste from 67 coal-fired power plants have led to harmful amounts of chemicals in nearby groundwater in excess of state and/or federal standards in 22 states. The companies that made the admissions include Duke Energy, Southern Company, Alabama Power, Ameren, APS, Berkshire Hathaway Energy, Big Rivers Electric Corporation, Dominion, Georgia Power, Golden Valley Electric Association, Grand Haven Board of Light and Power, Gulf Power, Jacksonville Electric Authority, Lakeland Electric, LG&E (KU), Mississippi Power, NRG, PacifiCorp, Talen Energy, and Westar.This news illustrates that we still haven’t solved the problem of coal ash as we approach the 10-year anniversary of the Kingston coal ash spill — one of the worst environmental disasters in our history. On Saturday, a memorial service will be held in Harriman, Tennessee, to honor the sacrifice of the more than 30 workers who died following the cleanup of toxic ash and more than 200 workers who are suffering injuries as a result of the cleanup. Just this fall, flood waters from hurricane Florence carried toxic chemicals from a Duke Energy coal ash landfill into a lake in North Carolina.
Dominion seeks to recover $300M from Virginia ratepayers for coal ash efforts --Dive Brief:
- Dominion Energy seeks to recover $302.4 million from its Virginia ratepayers for upgrading three coal plants and corresponding ash ponds, according to the utility's Friday filing with the State Corporation Commission (SCC).
- Dominion's proposal would increase customer bills about $2.15 starting November 2019 to carry out projects "necessary to comply" with state and federal regulations in Virginia and West Virginia. Average households across Virginia could see bills raise by $3.30 a month for 20 years, according to an SCC deputy director, as reported by the Richmond Times Dispatch.
- Most of the costs would go to update the Chesterfield coal-fired station to the requirements set by the Environmental Protection Agency (EPA) and Virginia Waste Management Board. Earlier this month, regulators rejected Dominion's long-term Integrated Resource Plan for having unrealistically-high forecasts
Dive Insight: Despite the utility's increasing investment in clean emission resources, "coal remains an important element of Dominion Energy's diverse mix of power generation resources," according to the application.Virginia's largest utility plans to build a new, sophisticated landfill, sedimentation ponds and water treatment facilities for the toxic residuals of coal generation in order to comply with the EPA's Coal Combustion Residuals (CCR) rule. Work is currently underway at a trio of plants including one in West Virginia:
TVA told Jean Nance coal ash was safe. Now, she's dead. - When disaster struck at a TVA plant in Roane County a decade ago, Jean Nance didn’t hesitate. A 40-year veteran of TVA, Nance left her Alcoa home and her family on Christmas Eve 2008 and headed to the Kingston Fossil Plant, where 7.3 million tons of coal ash was spilling from a busted dike. Six years later, Nance was dead — poisoned, her family says, by coal ash dust her bosses said was safe. Now, on the 10th anniversary of the nation’s largest coal ash spill, Nance’s family is calling on TVA and its clean-up contractor, Jacobs Engineering, to pay for medical testing and treatment for all clean-up workers. More than 30 workers at the clean-up site are now dead, and more than 250 are sick. Hundreds more may be sick but unaware, Nance's family says, just like she was. “She was real concerned with all the people out there, that they get tested, so the other employees might can catch theirs early. She was worried about them,” Dunn said of Nance’s dying wish. TVA refuses to talk about the sickened workers or the work of Jacobs Engineering, the firm accused in a federal lawsuit of lying about the dangers of coal ash, denying workers protective gear and tampering with safety testing. Nance knew nothing about coal ash, though she worked in the safety division of the largest producer of coal ash in the nation. Neither did her bosses, who were summoned to the Dec. 22, 2008, environmental disaster to ensure the safety of the community and relief workers. Nance’s family says she trusted TVA when the agency told the public coal ash was safe. A healthy, vibrant woman, Nance devoted four more years to TVA, working mostly inside an unventilated trailer at the disaster site.
Europe's Largest Insurers Move To Limit Coal And CO2-Related Risks - Just as 200 nations are meeting in Poland to discuss their climate initiatives, Europe’s insurance sector is unleashing its own plan: it is increasing the pace of its investments in green energy while divesting of some businesses that are carbon intensive. Will American insurers make similar moves? It’s largely a business decision for the Europeans — that the insurance sector does not want to get caught holding the bag when it comes to climate risks. But it is also responding to public pressures from activist investors and environmental groups, reasoning it will positive for their brands to be perceived as green. That is why AXA, Europe’s second largest insurer, has said it would stop covering coal power-related projects as well as oil pipelines that would transport tar sands, a gooey and thicker fuel that is dirtier and harder to clean up. AXA said the decision would cost it $100 million, in the short run. The company earned close to $100 billion in revenues in 2017. “As a global insurer, we see the long-term risks for people and society with climate change. This is why AXA decided a few years ago to use every lever possible to tackle climate change” says Thomas Buberl, chief executive of AXA, in an email response to this reporter's questions. “We also stopped insuring projects to build coal-fired power plants or any operation for oil sands mining and associated pipelines.” Europe’s four biggest insurers have now placed restrictions on coal. That includes the continent’s biggest carrier, Allianz, as well as Generali and Zurich Insurance Group. Meantime, Reinsurance giants Swiss Re, Munich Re and SCOR have underwriting restrictions on such projects. And at least 19 European insurers have divested in coal-related assets.
Divestment is now considered a ‘material risk’ by fossil fuel industries - It's been amazing to watch how the fossil fuel divestment movement has grown in a few short years. When Harvard students voted to divest back in 2012, for example, the conversation was mostly about undermining Big Energy's social license to operate. A year later, when Bill McKibben made the case for divestment he focused mostly on the idea of churches, universities and other symbolic institutions making these companies 'pariahs'. Now, in honor of the 1,000th institution signing up to divest (bringing the total value to nearly $8 trillion) Bill McKibben has an excellent update on the state of the movement over at The Guardian. While the symbolism of all this still matters, says the maestro, it's also becoming clear that divestment has become a very real financial force in and of itself: Peabody, the world’s biggest coal company, announced plans for bankruptcy in 2016; on the list of reasons for its problems, it counted the divestment movement, which was making it hard to raise capital. Indeed, just a few weeks ago analysts at that radical collective Goldman Sachs said the “divestment movement has been a key driver of the coal sector’s 60% de-rating over the past five years”. [...] Now the contagion seems to be spreading to the oil and gas sector, where Shell announced earlier this year that divestment should be considered a “material risk” to its business. Indeed, no sooner does McKibben write this piece and Cleantechnica reports that Westmoreland, the 6th largest coal company in the US, is filing for bankruptcy too. True, divestment is hardly the only reason certain fossil fuel companies are in trouble. 42% of coal plants are losing money already, and that figure is only going to get worse as renewables get cheaper and polluting gets more expensive. Similarly, Big Oil may not be sweating the Tesla Model 3 just yet, but there's a growing list of diverse threats that could soon converge to put a dent in demand. As Mark Carney, Governor of the Bank of England, has said: Most fossil fuels are unburnable. And that makes them basically worthless. Investors would do well to take note.
Coal demand will remain steady through 2023, International Energy Agency says - In its latest annual report, the IEA forecasts global coal demand will remain essentially stable over the next five years, inching up by just over 1 percent between 2017 and 2023. The reason for coal's stagnation remains unchanged from recent years: Developed nations are ditching the fossil fuel, while India and other emerging economies are turning to coal to quickly scale up electric power generation."In a growing number of countries, the elimination of coal-fired generation is a key climate policy goal. In others, coal remains the preferred source of electricity and is seen as abundant and affordable," said the IEA, a Paris-based agency that advises developed nations on energy policy.The IEA's forecast comes on the heels of a series of reports that the world is falling short of commitments to prevent catastrophic impacts from climate change and running out of time to take action. Burning coal for electric power and industrial purposes such as steelmaking is a major contributor to global warming."Fossil fuels are going to be with us for a long time," IEA Executive Director Fatih Birol said in the report. "That is why the only way to tackle our long-term climate goals and address the urgent health impacts of air pollution, while also ensuring that more people around the world have access to energy, will require an approach that integrates strong policies with innovative technologies."In 2023, the IEA sees the world consuming just over 5.4 billion tons of coal equivalent.At that level, coal would provide 25 percent of the world's energy, down from 27 percent today. The agency sees cheap, cleaner-burning natural gas and renewable energy sources continuing to eat into coal's share of the global energy mix. Falling consumption in China, the world's biggest market for coal, will be a major headwind for the fuel in the coming years. The nation's coal consumption is poised to fall by about half a percent each year through 2023, the IEA projects.That's due to policies aimed at improving the nation's notoriously poor air quality, as well as China's ongoing transformation from an energy-hungry industrial behemoth to a services-oriented economy.
Black lung disease is still killing miners. The coal industry doesn't want to hear it - Dr James Brandon Crum was alarmed. For months, unemployed coalminers had been coming into his clinic in Coal Run Village, Kentucky, seeking chest radiographs. One patient in 2015 stood out. He was in his early 40s, about the same age as Crum, and had three children at home, just like him, but he could barely walk. The 68ft hallway between the x-ray room and Crum’s office might as well have been Mount Everest’s summit. The miner repeatedly stopped to catch his breath. Crum, who had worked in his family’s coalmine as a youth, knew that this man, who was suffering from progressive massive fibrosis – the severe or complicated form of black lung disease – could just as easily have been him.Back in his office, where papers, folders and Post-it Notes cover practically every available surface, Crum started asking his patients detailed questions. There was a mystery: why was he suddenly seeing so much severe black lung – an old man’s disease – thought to be an illness of the past, appearing in younger men with significantly less time in the mines? Between the miners visiting his clinic and the cases coming to him as a federally certified B-reader, or expert in special x-ray readings to classify dust diseases affecting the lungs, Crum was shocked. Coal workers’ pneumoconiosis, commonly known as black lung disease, an incurable but entirely preventable illness caused by inhaling coalmine dusts, was showing up in x-rays at his clinic far above rates reported by the National Institute for Occupational Safety and Health (Niosh). After interviewing the miner, Crum started tracking every case of simple and complicated black lung that he was seeing. What he observed beat Niosh’s updated statistics by a country mile. “The media here buried this thing,” says Linda Adams, 53, who recently lost a fifth family member to the disease this past July. She and others affected by black lung’s resurgence held rallies and tried to get legislators to confront the crisis as far back as 2014. “But then Brandon Crum came in here and blew the lid off of this whole thing.”
With funding set to be cut, Kentucky miners, advocates rally for black lung benefits - The “Black Lung Disability Trust Fund” pays for healthcare and disability benefits for some retired miners with the disease. The fund is replenished by coal companies by means of an excise tax, but the current federal tax rate is set to expire in a little more than a week, leaving the fund to dwindle. But those who have lost loved ones to black lung say they won’t sit idle. "The men that has black lung are being forgot like a child on the street that's been thrown down,” said Patty Amburgey. “They need some help and we've been waiting for some justice." Amburgey, like many others in London, lost her husband to black lung. Today she gathered with others outside of Senator Mitch McConnell’s London office with signs and songs, urging congress to extend the black lung excise tax at its current rate, before it’s cut in half next year. “We have coal miners walk into our office everyday disabled due to black lung, and the trust fund is important to provide for these people. And we need to make sure that it'll be there for the future,” said Evan Smith, an attorney at the Appalachian Citizens’ Law Center. A spokesperson from Senator McConnell’s office did not say whether or not McConnell supports extending the tax at its current rate. But the spokesperson did note that even if the excise tax is cut, benefit levels will remain the same. But multiple government reports show the trust fund is in financial trouble. So facing the uncertainty of a deadly disease, miners at today’s demonstration said they are worried for what’s in store. The Kentucky Coal Association says it believes miners with black lung do deserve their benefits, but that raising the excise tax against Kentucky’s coal companies could do “unintended damage” to the region.
Nevada lawmakers appear to block funding for Yucca Mountain — Nevada lawmakers appeared to block a “Hail Mary” pass by Yucca Mountain plan supporters who tried to slip funding into a stopgap spending bill, although the final form of the legislation remained in disarray late Thursday. The spending bill was caught up in swirling political undertows as conservative House Republicans and President Donald Trump rejected a stopgap Senate bill that did not include $5 billion for a border wall or “steel slat” barrier with Mexico. As Republicans grappled with final versions of the government-funding legislation, Nevada lawmakers were hopeful they had stopped efforts to revive licensing for a Yucca Mountain nuclear waste repository. “It’s not in there,” said Rep. Dina Titus, D-Nev., who had urged House leaders to ignore eleventh-hour requests for Yucca Mountain funding. Still, Titus cautioned that a last-minute attempt by conservative GOP members to rewrite another spending bill could become a vehicle for funding projects and programs other than border security. Earlier this year, Trump signed into law a bill to fund the Department of Energy. Senate negotiators had stripped funds to revive Yucca Mountain licensing from that bill. Nuclear energy industry officials argued that losing the funding would set back the licensing process for another year and urged Congress to slip money into the final spending bill to revive hearings on DOE’s application to construct the nuclear waste repository. Rep. John Shimkus, R-Ill., chairman of the House Energy and Commerce subcommittee on environment, urged the Rules Committee to allow a provision in the final spending bill, an aide said. The earlier Senate spending bill, opposed by Trump because it lacked money for wall construction, did not include money for Yucca Mountain. Energy Secretary Rick Perry, a proponent of the Yucca Mountain plan, met with senators and laid out a scenario under which unused energy project funds could be reprogrammed for Yucca Mountain licensing, but Senate Democrats shunned that offer, according to a source with knowledge of the meeting.
Some waters would lose protections from coal mining under rule change - Ohio coal interests welcome the Trump administration proposal to narrow the definition of federal waters. Proposed changes to rules under the Clean Water Act would expose Ohio waters to greater risk from coal mining, according to environmental advocates. The Dec. 11 proposal would limit federal protection by changing the definition of “waters of the United States,” or WOTUS, to exclude many wetlands and streams whose flow depends on rainfall. Ohio’s coal industry welcomes the new rule, which “reopens the door” to argue that a given small stream doesn’t fall under the law, said attorney Trent Dougherty of the Ohio Environmental Council. What would the proposed rule do? The Environmental Protection Agency and Army’s proposed rule would limit protections to six categories of waters, including traditional navigable waters, their tributaries, certain ditches, some lakes and ponds, some impoundments of covered waters, and wetlands next to covered waters. The proposal would exclude so-called ephemeral streams that flow mainly after heavy rains or snowmelt, as well as some other water bodies. Language in the proposal also invites comment on whether to exclude intermittent streams that don’t flow steadily year round. “Many Ohio communities get their drinking water from intermittent streams to fill their reservoirs,” especially in Southeast Ohio’s coal country, said natural resources policy advocate Kristy Meyer, also at the Ohio Environmental Council. How can coal mining affect streams and wetlands? “Surface mining is a bigger problem than underground mining as it relates to this rule rollback because of the numbers of acres impacted and the number of stream miles that surface mining fills and degrades,” Dougherty said.
Settlement with Patriot Water might be end of gas and oil wastewater treatment in city -- Though a lawsuit filed by an environmental group against the company Patriot Water is still pending, the recent settlement by Warren would suggest Patriot’s experiment in treating wastewater from the gas and oil industry and have it end up in the Mahoning River might be over. An attorney for Freshwater Accountability Project of Grand Rapids, Ohio, and Warren Law Director Greg Hicks say Warren resolved its part of the case by agreeing to pay $116,616 of Freshwater’s legal fees and no longer allowing Patriot to discharge “drilling mud,” which is wastewater from the gas and oil industry, into the city sewer system, as it did starting in 2011. Patriot, which is located on Sferra Avenue in the Warren Industrial Park, stopped discharging wastewater into Warren sewers June 16, 2017, after the Freshwater suit was filed June 27, 2017, and has not resumed. The plant is still open, however, its president, Andrew Blocksom, said earlier this month. Blocksom said he could not comment on the matter because legal action with Freshwater Accountability is still pending. Hicks said he does not believe Patriot will ever be able to resume discharging gas and oil wastewater into Warren’s treatment facility. Atty. Megan Hunter of Akron, who represents Freshwater, said the settlement with Warren bars the city from accepting total dissolved solids, total suspended solids and barium from Patriot above a certain limit. That effectively stops the city’s wastewater treatment plant from receiving drilling muds, which were causing significant problems for the treatment plant. The plant was not equipped to treat wastewater with total dissolved solids and total suspended solids in those quantities, Hunter said. By failing to treat those wastewaters effectively, the city violated its U.S. Clean Water Act permit regarding water it discharged into the Mahoning River.
Rig Count Stands at 19 in Ohio's Utica – The number of oil and gas rigs operating in Ohio’s Utica shale stood at 19 for the week ended Dec. 15, according to the latest data from the Ohio Department of Natural Resources. Meanwhile, nine new permits for horizontal wells were awarded to two energy companies exploring in the Utica during that week, ODNR reported. Ascent Resources secured six new permits for wells in Belmont and Jefferson counties, while Gulfport Energy Resources was awarded three permits for new wells in Harrison County. As of Dec. 15, ODNR has awarded 2,953 permits for horizontal wells in the Utica shale. Of that number, 2,469 wells have been drilled and 2,092 are in production, ODNR said. There were no new permits issued for Mahoning, Trumbull or Columbiana counties in the northern section of Ohio’s Utica, according to ODNR. No new permits were issued in neighboring Lawrence and Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.
Utica Shale well activity as of Dec. 15 - Nine horizontal permits were issued during the week that ended Dec. 15, and 19 rigs were operating in the Utica Shale.
- DRILLED: 245 (246 as of last week)
- DRILLING: 132 (133)
- PERMITTED: 484 (481)
- PRODUCING: 2,092 (2,088)
- TOTAL: 2,953 (2,948)
TOP 10 COUNTIES BY NUMBER OF PERMITS
- 1. BELMONT: 596 (591 as of last week)
- 2. CARROLL: 525 (525)
- 3. HARRISON: 437 (437)
- 4. MONROE: 421 (421)
- 5. GUERNSEY: 251 (251)
- 6. NOBLE: 223 (223)
- 7. JEFFERSON: 205 (205)
- 8. COLUMBIANA: 159 (159)
- 9. MAHONING: 30 (30)
- 10. WASHINGTON: 22 (22)
- 14. STARK: 13 (13)
TOP 10 COMPANIES BY NUMBER OF PERMITS
- 1. CHESAPEAKE: 895 (895 as of last week)
- 2. ASCENT RESOURCES UTICA: 503 (498)
- 3. GULFPORT: 406 (406)
- 4. ANTERO: 260 (260)
- 5. ECLIPSE: 204 (204)
- 6. RICE: 128 (128)
- 7. XTO: 75 (75)
- 8. HILCORP: 59 (59)
- 9. CNX GAS: 52 (52)
- 10. PENNENERGY RESOURCES: 40 (40)
Utica Oil and Gas Production Soars During Third Quarter – Natural gas and oil production across the Utica shale soared during the three months ended Sept. 30, according to the most recent data made available by the Ohio Department of Natural Resources. The bulk of production comes from wells located in the southern tier of the play, the so-called “sweet spot” of eastern Ohio’s Utica. Oil and gas production, however, slowed slightly in the northern tier of the Utica, which includes Mahoning, Trumbull and Columbiana counties,Most when compared to the previous quarter, according to records. Seventy-four wells reported production in Columbiana County during the period, which together yielded 7.953 billion cubic feet of gas. In the second quarter, the county’s wells delivered 8.992 billion cubic feet of gas. The most productive well in Columbiana County during the third quarter was Chesapeake Energy Corp.’s Paige 3H well in Franklin Township, which produced 727.584 million cubic feet of natural gas over 92 days. Hilcorp Energy Co.’s seven wells in Poland Township in Mahoning County yielded just 336.760 million cubic feet of gas during the period, Northwood Energy Corp.’s three wells in Jackson and Ellsworth townships produced 39.77 million cubic feet, and Pin Oak Energy Partners’ two wells in Jackson Township yielded 23.794 million cubic feet of gas. In Trumbull County, Pin Oak’s six wells together produced 90.891 million cubic feet of gas, while Enervest Operating Co.’s Lennington well in Johnston Township produced 10.468 million cubic feet. Oil production throughout the three-county region was negligible, according to ODNR. During the third quarter, Ohio’s horizontal wells produced 605.7 billion cubic feet of natural gas. This is compared to 554.3 billion cubic feet produced during the previous quarter and 460.8 billion cubic feet produced during the third quarter of 2017. ODuring the third quarter of 2018, Utica wells pumped out 5.545 million barrels versus 4.888 million barrels during the previous quarter. Production of natural gas during the third quarter jumped 31.4% compared to year ago figures, while oil output rose 31.8% versus the third quarter of 2017, according to ODNR. ODNR lists 2,242 shale wells, of which 2,198 reported production during the third quarter. The most productive gas well during the quarter was the Cermak NE 5H, owned by Ascent Resources. The well, located in Jefferson County, yielded 2.986 billion cubic feet of natural gas during a 92-day period. .
Ohio Natural Gas Production Continues Growth - -- According to the Ohio Department of Natural Resources, Ohio Natural gas production has grown every quarter since 2013.Our state currently has over 60-thousand active oil and gas wells.And there are currently more than 2-thousand Utica shale wells in production and 18 active drill rigs.Ohio is number five in the nation in natural gas production and ranked as the 12th oil producing state in the country. According to a recent report by the Ohio Department of Job and Family Services, shale related jobs have increased over the past seven years, nearing 200,000 employees. And since 2011, the shale industry has invested more than $60-billion dollars in our state. “We are seeing more rigs move into town. We're seeing those rigs being more efficient. More effective, drilling faster, better wells. And the trend is still to the south in those hot areas. So that I believe has lived up to the hype. Particularly that's where you're seeing a lot of the assignment with the processing plants like Markwest. The possible ethane crack plant in Belmont County. So that's really the heart of the play, is in Appalachia,” says Ohio Oil and Gas Association spokesperson Mike Chadsey. Despite the positive news, many groups around the country including Frackfree America National Coalition say the hydrofracturing process remains a serious risk to resident's health and does irreparable harm to the environment.“Hydrofracturing is a process that cannot be used. It's not sustainable. It uses way too much water, and permanently pollutes it. It's an insane amount of return on a horrible amout of environmental damage. Stop doing it,” says Frackfree America National Coalition member Lynn Anderson. Chadsey admits there have been some recent challenges with injection wells in Mahoning and Trumbull County.
BLM Auctions 75 Acres in OH's Wayne Natl Forest for $209/Acre - Last week the Bureau of Land Management’s (BLM) Eastern States Office ran another oil and gas lease auction for federal land on the eastern side of the country. Up for auction was 2,456 acres in Ohio, Michigan and Mississippi. Only half of the property listed for auction actually brought bids and sold. Of the 2,456 acres offered, a piddly 75 acres, in two parcels, was located in Ohio’s Wayne National Forest (WNF)–in Monroe County. That is, 3% of all the acreage in the BLM sale was in the Ohio Utica–and yet that 3% brought in 69% of the revenue from the sale: $15,720 total. However, the amount paid per acre for the WNF parcels seems to be small–just $209 per acre. So who picked up the 75 acres for a song? The winner for all of the acreage sold in the most recent BLM eastern auction, including the acreage in Monroe County, OH, was Texas-based R&R Royalty Ltd.Nearly half of the roughly 2,456 acres in Ohio, Michigan and Mississippi auctioned for oil and gas development last week by the Bureau of Land Management’s (BLM) Eastern States Office received no bids.Instead, about 1,313 acres in all three states were leased by Texas-based R&R Royalty Ltd. The rest of the acreage in Muskegon County, MI, and George County, MS, attracted no bids. The sale generated only about $22,636, but the bulk of those profits came from just 75 acres in Ohio’s Wayne National Forest (WNF).The parcels, in the Utica Shale hotspot of Monroe County, earned about $200/acre and took in nearly $16,000, including bonus payments and other fees.**NGI’s Shale Daily (Dec 18, 2018) – BLM Auctions More Land in Ohio’s Wayne National Forest Here’s a list of the most recent auction and the parcels that sold:
Can Shale Gas Rebuild Ohio's Manufacturing Base? – WOSU - Along the Ohio River, anticipation is mounting for the next phase of the natural gas industry. Beyond cheap electricity, Ohio is looking to use shale gas to rebuild its manufacturing base.The Ohio Valley has long been known for coal and making steel, but the future, according to some predictions, is natural gas and plastics. Richard Regula, a commissioner in Stark County, Ohio, is working to expand the petrochemical industry. “What’s going to happen in this region in the Utica and Marcellus Shale plays is going to impact us positively for the next 100 years in my opinion, at least 50,” Regula said. More than 2,400 gas wells have been drilled using hydraulic fracturing in Ohio since 2012. Regula is talking not only about the cheap gas from that, but the spinoff industries and development many expect. Excitement has been building since the announcement in 2016 that Shell should be building an ethane cracker plant in Beaver County. Right now, the ethane, which is a component of the natural gas that’s produced at the region’s wells, is exported to China, Europe or piped to the Gulf Coast. Shell’s $6 billion facility along the Ohio River in Pennsylvania will “crack” the ethane at very high temperatures to make ethylene locally. “Ethylene is a major raw material that goes into the making of polyethylene,” Polyethylene is used to make everything from plastic bags to car parts to medical devices. A study by the American Chemistry Council looked at the ethane supply in Ohio, Pennsylvania, West Virginia, and Kentucky. They concluded that there could be up to five ethane crackers supported in the region, creating an Appalachian petrochemical hub as an alternative to the Gulf Coast. Supporters of this idea like to repeat these numbers: 12,000 manufacturers who use plastics are already located within a day’s drive (600 miles) of the region. But those manufacturers don’t have access to a local supply of polyethylene.
Injection rejection - More than 60 people gathered at the Athens Community Center on Tuesday evening to voice strong objections to a company’s plan to build a new oil-and-gas waste injection well facility in eastern Athens County. The new well would be the fourth operated in the Torch area by K&H Partners, LLC.Opponents of the well argue that fracking-waste injection wells, in general, could poison the community and that this well should be stopped before environmental and health concerns become reality.Meanwhile, the owner of the K&H site, Jeff Harper, has said that the concerns many activists have regarding injection well’s potential dangers are based on misinformation and are unfounded.K&H Partners, LLC, of Parkersburg, West Virginia, has applied for a 4th Class II injection well within a half mile of the existing K&H facilities in Torch. According to a fact sheet provided at the meeting, the application for the well states that it will take up to 840,000 gallons, or 20,000 barrels, of oil-and-gas fracking waste every day, which is 306.6 million gallons of waste per year.The Athens County Commissioners convened the public meeting as an opportunity for concerned residents to share comments to be forwarded to the Ohio Department of Natural Resources.Board President Lenny Eliason said at the start of the meeting that ODNR representatives had informed him that it was “premature” in the permit application process to hold a public hearing on the matter, so no one from ODNR was present. Regardless, Eliason said all comments from the meeting will be submitted to ODNR for the public comment period, which ends Dec. 22, and to “other elected officials” in Columbus, and that another public meeting will be requested once ODNR is willing to approve one. More than 20 Athens County residents spoke at the meeting, all voicing opposition to the proposed well, some of it angry and emotional. Many expressed frustration that ODNR has yet to send representatives to Athens County for a public hearing on the subject.
Pieces of Pennsylvania ethane plant move through the region - Another component of a multibillion-dollar petrochemical plant being built in Pennsylvania passed through the Tri-State Monday. The Gulf Coast tugboat Tristen pulled while a towboat pushed a barge carrying one of many parts of the ethane cracker being built by Shell Polymers along the Ohio River at Monaca, Pennsylvania. Since April, a steady stream of tugboats and towboats has moved equipment assembled along the Gulf Coast and has delivered it to Monaca.There, they are placed in final assembly for what will be the largest industrial installation in Appalachia to deal mainly with ethane, a natural gas liquid found in parts of the Marcellus and Utica shale region of West Virginia, Ohio and Pennsylvania.Often the equipment is moved with a tugboat-and-towboat combination, with the tugboat pulling the barge with a hawser line and the towboat pushing. Often, the towboat pilot sees nothing ahead but the equipment because it is so large and bulky. The cracker plant at Monaca will use high temperatures to crack, or break apart, ethane's large molecules and rearrange the carbon and hydrogen atoms in them to create ethylene. The ethylene will be further processed to create different types of polyethylene pellets. The pellets will be shipped by rail and truck to manufacturers who will use them to make plastic products for commercial and consumer use.
Fracking for Plastics – DeSmog - Fracking continues to open up a huge supply of oil and gas in America, and investors are looking to create a new market for some of those fossil fuels, including so-called “natural gas liquids,” close to the Marcellus and Utica shales. As a result, companies have begun pumping hundreds of billions of dollars into creating a new petrochemical corridor in the Rust Belt and expanding a heavily polluted corridor along the Gulf Coast known as “Cancer Alley.” The wave of construction plans means fossil fuels from fracked wells will increasingly be turned into plastics, petrochemicals, and other consumer products. This is a DeSmog investigation into the proposed petrochemical build-out in the Rust Belt and the major players involved, along with the environmental, health, and socio-economic implications. We'll explore the claims of how clean and safe the American chemical industry really is, health risks for chemical industry workers, the bait-and-switch argument that bills fracking as moving the U.S. toward energy independence rather than plastic dependence, and the groups involved in pushing for and against stronger health and environmental regulations of this industry.
Two huge pipeline projects in Pennsylvania and Ohio are almost done — but at what cost- In a race to build two of the largest natural gas pipelines in the world, projects stretching across Pennsylvania and Ohio have racked up over 800 state and federal violations — costing millions of dollars in fines and leaving state officials to scrutinize future projects. Energy Transfer's Rover and their subsidiary Sunoco's Mariner East 2 are expected to carry natural gas and gas liquids from Pennsylvania, Ohio and West Virginia — an area that would account for more than a third of U.S. gas production. What's next?
- The Rover Pipeline Project was placed into service in sections, with the first section going into service August of 2017. The full 713-mile project was placed into service November of this year.
- Energy Transfer spokeswoman Lisa Dillinger said the Mariner East 2 pipeline is in the final stages of construction required to put the line in service, which is anticipated to be completed by the end of the year.
- New jobs should be emerging in the industry as the Mariner East project is anticipated to create more than 9,500 construction-related jobs a year during construction, and between 360 to 530 permanent jobs.
Violations and fines: The projects racked up over 800 violations, and the Rover alone acquired over 681 violations. According to analysis from Reuters, Energy Transfer's violations include:
- 279 violations for insufficient run-off/erosion controls
- 102 violations for improper or unauthorized use of areas or equipment
- 86 violations for inadequate environmental restoration/damage mitigation practices
- 25 violations for lack of infrastructure
- 18 violations for spills/leaks
- 12 violations for improper disposal techniques
Pipeline firms plagued by accidents, fines — While having success in court, it’s been a rough week in the field for Pennsylvania pipeline companies, with six injuries and recommended fines. Six pipeline employees were injured, in two separate accidents, and the PUC’s Bureau of Investigation and Enforcement recommended that Sunoco pay a $225,000 fine. A fire broke out Thursday night at parent company Marathon Petroleum’s MarkWest natural gas processing plant in Washington County, injuring four workers. The fire broke out in a tank holding 200 barrels of liquid Ethylene Glycol, plus hydrocarbons. In addition, two workers were sent to the hospital following an accident during testing of the Mariner East pipeline site in Westmoreland County. George Alexander, spokesperson for Del-Chesco United for Pipeline Safety said that this was at least the third accident on the Mariner East 1 line in less than a year. Mariner East 1 is an older, smaller pipeline that is already in use carrying ethane, butane and propane from the Marcellus Shale regions to Marcus Hook. Mariner East 2 will utilize a larger, 20-inch pipe, except in spots that have been delayed by work stoppages and other problems. In those areas, Sunoco is planning to use another old, smaller pipeline to fill in the gaps. Opponents have questioned the safety of the move. Sunoco says the old lines have been tested and prove safe. Sunoco ‘tested’ the pipeline multiple ways — right before it failed,” Alexander said. “And, as usual, Sunoco failed to detect that a leak was occurring, so we still don't know how long it had been leaking, or how much explosive material was released.”
PUC panel sees ‘statewide concern’ with pipeline corrosion after ME1 leak -- Investigators at the Public Utility Commission blamed corrosion for a leak of natural gas liquids from Sunoco’s Mariner East 1 pipeline in April 2017, and said they are concerned about the company’s corrosion-control program throughout the ageing statewide line. The PUC’s Bureau of Investigation and Enforcement issued a formal complaint late Thursday saying that ethane and propane leaked from the line at Morgantown in Berks County, and the leak was discovered by a resident who reported “bubbling” out of the ground on April 1. Two days later, Sunoco workers dug up that section of the pipe, and concluded that it was corroded at the bottom. That was later confirmed by a laboratory that examined an eight-foot section of the pipe, the complaint said. The company said at the time that about 20 barrels of liquids leaked. The bureau faulted Sunoco’s use of cathodic protection – a technique to prevent metal corrosion – saying that its level did not meet official requirements for minimum protection. And it said the incident raised questions about possible corrosion elsewhere along the line, which was first installed in about 1931 to carry refined petroleum products, and in recent years has been repurposed for highly volatile natural gas liquids. “While the data reviewed was largely specific to the site of the leak, SPLP’s procedures and overall application of corrosion control and cathodic protection practices are relevant to all of ME1 and thus I&E alleges that there is a statewide concern with SPLP’s corrosion control program and the soundness of SPLP’s engineering practices with respect to cathodic protection,” the bureau wrote in the 16-page complaint.
PUC investigators: We didn’t say the 12-inch Mariner East 2 line was safe -- Investigators at the Pennsylvania Public Utility Commission said on Tuesday they didn’t confirm that the 12-inch pipeline component of Mariner East 2 was safe, despite a statement by Sunoco that they had done so. The PUC’s Bureau of Investigation and Enforcement contradicted a claim by Sunoco in the company’s response to seven eastern Pennsylvania residents who filed an emergency petition to the regulator to shut down the Mariner East project. The bureau issued its denial in an intervention to the residents’ case before the PUC, for the limited purpose of clarifying its position on whether the 12-inch line is safe. “Sunoco mischaracterized I&E’s position in this matter in its answer to petitioners’ petition for emergency relief, claiming that I&E acknowledged that respondent’s 12-inch pipeline is ‘safe,’” the bureau said in a five-page filing. “I&E made no such assertion.” Still, the bureau stressed that the filing doesn’t mean that it thinks the pipeline is unsafe. “The purpose of this clarification should also not be construed as a testament that the 12-inch line is unsafe,” it said. The filing said Sunoco based its statement on a letter from Paul Metro, head of the bureau’s safety division, to three school district superintendents on Nov. 1, saying that no leaks were discovered in two tests of the 12-inch line. But Metro’s letter did not mean that the pipeline was characterized as “safe,” the bureau said. “Rather, Mr. Metro stated that it was the responsibility of the I&E Safety Division to monitor and enforce compliance with state and federal regulations while it is ‘Sunoco’s responsibility to operate and maintain their pipeline facilities in a safe manner,’” the bureau said. The safety of the 12-inch line, which was built in the 1930s, has been a focus of Mariner East opponents because of its age and history of leaks, most recently of 33,000 gallons of gasoline into Darby Creek near Philadelphia in June. A section of the pipeline in Delaware and Chester counties is being temporarily repurposed to carry natural gas liquids as part of the Mariner East project so that Sunoco can start to meet customer orders with the long-delayed pipeline. Sunoco says it will start operating Mariner East 2 by the end of 2018.
Prosecutor opens investigation on Mariner East pipeline work (AP) — A county prosecutor in Pennsylvania said Wednesday that he has opened a criminal investigation into construction on three natural gas liquids pipelines that have drawn blame for causing sinkholes and polluting drinking water and waterways across southern Pennsylvania. Tom Hogan, Chester County's district attorney, sent the company that owns the Mariner East pipelines a five-page letter demanding it hand over and preserve a list of documents and electronic records. In a statement, he said he will demand that "every aspect of these pipelines be conducted safely, or we will bring into play all of the tools of the criminal justice system." Hogan also suggested that Gov. Tom Wolf and state utility regulators had not done their jobs. "Quite frankly, I thought the governor or the Public Utility Commission would step in and make sure it's being done safely, and it became apparent to us that it was not," Hogan said in an interview Wednesday. Hogan also accused the company of treating Chester County residents poorly, frightening people who had complained with "subtle and not-so-subtle bullying." Hogan is targeting Sunoco Pipeline's Mariner East 1, 2 and 2X projects stretching across southern Pennsylvania. The projects have weathered more than $13 million in fines and at least two temporary shutdown orders from state agencies, while residents living along the pipelines are suing the parent company, Energy Transfer LP of Dallas, Texas, in federal court. The pipeline construction is blamed for sinkholes that developed within 50 feet (15 meters) of homes and near an Amtrak rail line in southeastern Pennsylvania, drawing a temporary shutdown order. At another point, the state Department of Environmental Protection accused Sunoco Pipeline of a "lack of ability or intention" to comply with environmental regulations after citing it for dozens of violations involving polluting waterways.
Man injured in energy facility explosion dies (AP) — A man who was injured in an explosion at a MarkWest energy facility in Pennsylvania last week has died. The Allegheny County Medical Examiner's Office says 61-year-old Jeffrey Fisher, of Salem, West Virginia, died Tuesday at a hospital burn unit. Fisher was one of four injured in the explosion and subsequent fire at the facility in Chartiers Township Dec. 13. The conditions of the other three people have not been released. MarkWest previously said the explosion happened near two temporary tanks. The company gathers and processes natural gas and stores chemicals related to fracking. Parent company spokesman Jamal Kheiry said Wednesday they are "deeply saddened" about Fisher's death.
Judge rules gas pipeline company can start taking land (AP) — A natural gas pipeline company seeking to build a line from Pennsylvania into New Jersey can go ahead with taking property and compensating landowners as part of the roughly $1.1 billion project, a federal judge in New Jersey ruled Friday. U.S. District Judge Brian Martinotti said Friday that PennEast can begin taking immediate possession of properties in New Jersey along the roughly 120-mile proposed pipeline. The route would stretch from northeastern Pennsylvania to Mercer County, New Jersey. The 50-page ruling says PennEast offered $3,000 for access to parts of land where the pipeline would travel. The judge specifies the order isn't final and that PennEast first has to satisfy environmental conditions laid out by federal regulators. But the ruling is a setback for towns, landowners, the state and environmental groups, who all sought to stop the company's use of eminent domain. "Although disappointed, we are even more steadfast in our resolve to stop this project by proving that this it is not needed," said Vincent DiBianca in a statement. He's a resident of Delaware Township and owns a small farm along the potential pipeline's path.
PennEast now faces tough scrutiny from DEP after winning court battle -- Now comes the hard part for PennEast. While the pipeline company won a long-awaited federal court ruling on Friday, allowing it access to private and public lands in New Jersey, it must next meet a long list of permit requirements from other agencies, notably the Department of Environmental Protection, which is expected to provide the sternest test yet over whether the pipeline can be built. To build its proposed 120-mile natural gas pipeline through New Jersey, the company must satisfy the DEP that it will not violate federal water-quality standards, and that it complies with many other state rules including those on flood hazards, storm water and endangered species. In the hope of meeting those standards, PennEast must conduct surveys for environmentally sensitive features such as streams and wetlands on the properties of 136 landowners who have previously refused access but are now required by the ruling to allow PennEast officials on their land for surveying purposes. U.S. District Judge Brian Martinotti granted PennEast the right of eminent domain over the properties some eight months after hearing oral arguments over whether it has the right to take properties from landowners, including the state, which have rebuffed its offers of compensation. Martinotti rejected the landowners’ arguments that a federal certificate approving the $1 billion pipeline was not final, and that the company could not “condemn,” or take possession of, portions of the properties immediately. The New Jersey Attorney General’s office, which earlier this year asked FERC to suspend its approval for PennEast, said it was reviewing Martinotti’s ruling, and would have no comment.
PennEast pipeline: Malinowski, Congressmen join homeowners in opposition - A bipartisan group of local, state and federal officials on Wednesday joined conservation leaders and landowners opposing a federal court ruling that paved the way for PennEast to acquire land for a natural gas pipeline through eminent domain. The federal court in Trenton ruled Friday that PennEast, which is proposing to build a the pipeline through western Hunterdon and Mercer counties, can have access to properties on the pipeline route to perform surveys in preparation for the acquisition of the land through condemnation. Wednesday's event, which took place at a property in PennEast's proposed route, included mayors, municipal leaders and members of Congress. The property belongs to Loretta Varhley, one of more than 100 homeowners whose property was approved for surveying by PennEast in the court decision, according to a news release. PennEast officials have said that it would allocate "millions of new dollars to new open space preservation" because the project would mitigate existing preserved space.The speakers strongly denounced the decision in the U.S. District Court in Trenton, and vowed their continued opposition to the pipeline project that still needs approval from the state Department of Environmental Protection and Delaware River Basin Commission.
Franklin Park Council Tables Vote On Fracking Lease (KDKA) — Shale Gas drilling rigs have sprouted up throughout the region in recent years, but few companies have actually drilled inside Allegheny County. A groundswell movement of folks in Franklin Park are opposing the drilling of a new well in adjoining Economy, Beaver County. “There will be a significant amount of gases released at the well sites that will drift into Franklin Park and potentially cause respiratory problems and other health problems,” resident Robert Davis said. The Franklin Park Borough Council was set to vote to approve a lease with the PennEnergy Resources gas exploration company Wednesday night, allowing their fracking laterals to burrow under Franklin Park and frack the shale rock strata below. But, the proposal was facing headwinds and residents like Davis say not so fast. “They are ignoring the will of the people and are trying to rush this through six days before Christmas when they know that people are going to be busy with their holiday activities,” Davis said. The resident said they would show up in large numbers Wednesday to ask council to deny the lease, which would allow PennEnergy to tunnel underneath Linbrook Park. While PennEnergy did not return phones calls requesting an interview, environmentalist Doug Shields of the Food and Water Watch says council has over-stepped its authority. “This park belongs to the public. It is not there for the council or any other entity to do with it what it will. The council has not consulted with the community. There have not been public hearings,” Shields said. Franklin Park Council decided at Wednesday’s meeting to table a vote on whether to allow fracking underneath the borough. The issue was postponed to a meeting on Jan. 14. But, the crowd of about 200 people who had jam-packed the meeting room still wanted to speak out. “I will not hesitate to move out of this borough if this decision goes forward,” one man said.
Environmental groups ask BPU, Pinelands Commission to order stop to pipeline construction -— Two environmental groups have asked the New Jersey Board of Public Utilities and the state Pinelands Commission to order a utility company to stop construction of a controversial natural gas pipeline through northern Burlington, Monmouth and Ocean counties. Both agencies already have approved construction of the 30-mile pipeline, but those decisions are under appeal, and the Pinelands Preservation Alliance and the New Jersey Sierra Club want the two agencies to suspend their approvals until the litigation is resolved. If either agency consents, it could force New Jersey Natural Gas to halt construction of the pipeline, which began earlier this month in Plumsted, Ocean County, and is proceeding at the company’s “own risk,” meaning the utility will accept responsibility for the expense of restoring any disturbed property if the courts end up scuttling the project. The transmission feed, called the Southern Reliability Link, is planned to run from a compressor station another utility company has built off Route 528 in Chesterfield and travel west through North Hanover, Joint Base McGuire-Dix-Lakehurst and other towns in Monmouth and Ocean counties to a connection with the utility’s distribution system in Manchester, Ocean County. New Jersey Natural Gas insists the project is critically important to the reliability of gas delivery to its more than 1 million customers, mostly in Ocean and Monmouth counties, because it will provide a second transmission feed to its territory. But opponents have waged an unrelenting battle against the project, arguing that the close proximity of the compressor station and pipeline route to residences and businesses in Bordentown Township, Chesterfield and North Hanover will pose a significant safety and pollution risk. Environmental groups also argue the infrastructure promotes hydraulic gas drilling in Pennsylvania, which they say pollutes water and contributes to climate change.
Williams Gets Final FERC Approval For Gateway Project -- Bringing in pleasant news for the company, the Federal Energy Regulatory Commission (FERC) recently approved Williams Companies Inc.’s WMB Gateway project, which is an expansion of the firm’s Transco pipeline. Notably, the Transco pipeline delivers almost half of the natural gas consumed in New York and New Jersey. With the existing Transco pipeline capacity being fully utilized, the expansion will allow additional gas volumes to be delivered to the northeastern markets. Notably, the company had applied for the Gateway expansion project’s FERC permit in late 2017. In July 2018, FERC released its Environmental Assessment for the Gateway project, citing that it meets the requirements of the National Environmental Policy Act and the approval of the project is not likely to prove detrimental to the environment. Very recently, the FERC completed its review process and gave the final go-ahead to the project. Upon the receipt of the required regulatory approvals, the company is scheduled to commence the construction of the project in spring 2019. The Gateway expansion project is expected to come online by November 2020. With the Gateway expansion project, Williams will be able to fulfill its commitment to supply an incremental 65,000 dekatherms per day of firm transportation capacity and the mounting natural gas needs of customers in the Northeast during the winters of 2020 to 2021. The project will help provide additional natural gas service to UGI Corporation’s UGI affiliate UGI Energy Services LLC and utility firm Public Service Enterprise Group Inc.’s PEG unit, PSEG Power, LLC. Importantly, the Gateway Expansion development is expected to add 27,500 horsepower of electric motor at the New Jersey compressor station of Transco. The project also calls for the upgradation of two meter stations of Transco. The company believes that the Gateway Expansion development will provide customers with cost-effective clean energy, significantly reducing carbon dioxide emissions. The pipeline is also expected to add value to its existing energy infrastructure, which will provide it with a steady flow of revenues in the future.
Massachusetts senators press Columbia Gas on whistleblower’s warning -- U.S. Sens. Edward J. Markey and Elizabeth Warren are demanding answers from Columbia Gas after a whistleblower claimed job cuts in the crew that monitored the system’s pressure may have contributed to the September explosions. Whistleblower Bart Mederios, a retired Columbia Gas employee, claims he told the company that the cuts could lead to disaster. “We want to know who knew that at Columbia Gas. What was their response to the warning from Bart Maderios, so that we can get right to the bottom of how this accident occurred,” Markey told the Herald on Monday. “This could have been a preventable accident. It never had to happen if Bart Maderios had been listened to.”Attorney General Maura Healey’s office said they find the claims concerning and will be reaching out to Maderios to get more information, but couldn’t otherwise comment on the issue. They also pointed to orders from the AG’s office requiring that Columbia Gas and NiSource preserve documents for a potential state investigation. Maderios, a 42-year employee, told NBC10 recently that he warned the utility about the dangers of their policy changes and drastic cuts to the meters and regulation department, which is responsible for monitoring the pressure of the gas distribution system, according to NBC10 Boston. As the former manager of the meters and regulation department, Maderios said he asked for more resources for Greater Lawrence “multiple times,” and that the company cut his department from four employees to one. That particular department also maintains maps detailing the gas pipeline system and was not consulted in preparing the work plan that led to the Merrimack Valley disaster. Maderios also said the company’s decision to no longer have a technician on site to monitor gas pressure – which could have prevented the Sept. 13 explosions – was driven by a lack of resources.
Powerless. What it looks and sounds like when a gas driller overruns your land. -- Lee Martin loved her 104-acre farm in Wetzel County, West Virginia. The family raised chickens there and rode horses. The kids played in mud puddles. They all took walks in the woods. Then, starting in about 2012, Martin had to begin sharing the farm with Stone Energy. . Stone built a new bridge across the creek and a new road right in front of the Martins’ house. The company told Martin it needed the road to reach the new natural gas wells it drilled on the new well pad for which it flattened an area she used to go to pray, bucolic hills forested with huge oak trees. Soon, hundreds of trucks rumbled past her house every day, spewing exhaust. Martin had asked the company to build the bridge farther up the creek, away from her house, and the well pad away from the oaks. But Martin didn’t have a say over any of this. While she owns the house and the surface land it sits on, she doesn’t own the natural gas underneath. And that gave Stone Energy not only the right to access her property, but also the right to tear down trees, build structures and send as much traffic as it deemed appropriate onto it. “It took the very core out of me to watch this pristine farm get torn up like this,” Martin said. “It just hurt.”. In West Virginia, century-old legal doctrines have allowed gas companies that have leased those minerals to do what's “reasonably necessary” to get to them, even if the surface owners object. The underground horizontal wells often cross surface property lines.
Stream crossing issues are complicating work on the Mountain Valley Pipeline — The clear, cold waters of Little Stony Creek cascaded over granite bedrock as Rick Sizemore watched from the banks and wondered. How will the company building the pipeline, after taking his land and water, return them to their natural state? “How do you put something back that God did?” Sizemore said. The developers of the Mountain Valley Pipeline have a plan to part the waters — “kind of like Moses,” in the words of a federal judge — long enough to bury a 42-inch diameter steel pipe under Little Stony Creek and more than 1,000 other streams and wetlands in the project’s path. Or they had a plan, until the 4th U.S. Circuit Court of Appeals intervened. In October, the court threw out a federal stream-crossing permit for the pipeline, creating what is perhaps the largest legal obstacle to face the deeply divisive project since it was proposed four years ago. Another potential roadblock popped up unexpectedly last week, when Virginia’s State Water Control Board voted to reconsider its earlier decision to grant a water quality certification to Mountain Valley. With no action likely until next year, construction crews still have state authorization to clear land, dig trenches and bury the pipeline in earth away from water bodies. But before it can complete the 303-mile pipeline, Mountain Valley must again obtain the approval of the U.S. Army Corps of Engineers for stream crossings. And that may prove to be more complicated the second time around. Under the federal Clean Water Act, the Army Corps is required to review the company’s plan to use dams and pumping systems to temporarily divert streams and rivers, dig trenches along their dry beds, bury the pipe some six feet deep and then restore the current to its original flow. Last December, the agency issued what’s called a Nationwide Permit 12 for the pipeline, a kind of general authorization for utility construction projects that are not expected to have a major environmental impact. Critics said the one-size-fits-all approach failed to analyze each water body the pipeline will cross. In a lawsuit against the Army Corps, the Sierra Club and four other environmental groups argued that the Nationwide Permit contained a fatal flaw: It overlooked a requirement by West Virginia regulators that pipeline stream crossings must be completed with 72 hours. With Mountain Valley conceding that it would take four to six weeks to span four major rivers in West Virginia, a three-judge panel of the 4th Circuit vacated a permit issued by the Army Corp’s Huntington district.
US District Court Vacates Forest Service Approval of the Atlantic Coast Pipeline - The Fourth Circuit Court of Appeals vacated on December 13 the U.S. Forest Service’s approval for the Atlantic Coast Pipeline (ACP) to cross two national forests and the Appalachian Trail. The Court’s 60-page opinion came on a case brought by several ABRA members and others that was argued on September 28 (see ABRA Update #200 for details).The plaintiffs, represented by Southern Environmental Law Center, were Cowpasture River Preservation Association, Highlanders for Responsible Development, Shenandoah Valley Battlefields Foundation, Shenandoah Valley Network, Sierra Club, Virginia Wilderness Committee and Wild Virginia.The Court concluded that the Forest Service’s decisions amending its Forest Plans and granting a Special Use Permit (SPU) for the ACP violate the National Forest Management Act (NFMA) and National Environmental Policy Act (NEPA), and that the Forest Service lacked statutory authority pursuant to the Mineral Leasing Act (MLA) to grant a pipeline right of way across the Appalachian National Scenic Trail. In its opinion, the Court detailed how the Forest Service initially expressed serious skepticism about the ACP’s ability to be constructed through the steep slopes of the central Appalachian mountains in West Virginia and Virginia. In an October 24, 2016 letter to the Atlantic Coast Pipeline, LLC (Atlantic), the Court noted that the Forest Service had requested ten site-specific stabilization designs for selected areas of challenging terrain to demonstrate the effectiveness of Atlantic’s proposed steep slope stability program, which Atlantic called the “Best in Class” (“BIC”) Steep Slopes Program” because the agency needed to be able to determine that the project was consistent with the Forest Plans of the George Washington National Forest(GWNF) and the Monongahela National Forest (MNF). The ACP would cross a combined 21-miles of National Forest lands in the two forests. Then, the Court noted, the Forest Service changed its mind and without explanation ultimately approved the project without requiring the requested ten stabilization designs for the project. The Court ruled that the Forest Service, in amending the GWNF and MNF plans, did not follow its own criteria and procedures for doing so.
Panel Delays Vote on Pipeline Compressor Station (AP) — A Virginia air pollution panel delayed a closely watched vote Wednesday on whether to approve a key permit for a planned multistate natural gas pipeline. The State Air Pollution Control Board decided instead to open up another public comment period on a proposed permit to build a natural gas compressor station in a historic African-American community about an hour west of Richmond. The vote was 3-1. Board members said they wanted to let the public weigh in on new information about the project's potential impact. State officials said they were still determining when the vote will be scheduled. The delay is the latest setback for the planned 600-mile (966-kilometer) Atlantic Coast Pipeline, which would carry fracked natural gas from West Virginia into Virginia and North Carolina. Last week a federal appeals court threw out a permit for the pipeline to cross two national forests, including parts of the Appalachian Trail. "While we're disappointed with the additional delay, we're confident the board will approve the permit after considering all of the facts," said Dominion Energy spokesman Aaron Ruby.
Virginia regulators unexpectedly delay decision on controversial gas project — State regulators unexpectedly postponed action Wednesday on a permit for a gas compressor station in a historic African American community. And at the heart of the delay is a strange disagreement about identity. The decision marked the second time members of the State Air Pollution Control Board have delayed action over questions about whether the project, being proposed by Dominion Energy as part of its Atlantic Coast natural-gas pipeline, amounts to environmental racism. More than 100 protesters, many of them residents of the Union Hill community in Buckingham County, chanted and turned their backs on board members Wednesday for what they said was an attempt to impose a dangerous industrial facility on a community of color, including many elderly residents. With two rows of Dominion executives sitting in reserved front-row seats, staffers from Virginia’s Department of Environmental Quality told the board that there is no cause for concern. They presented an analysis showing that the area around the proposed compressor is sparsely populated and has no greater concentration of minorities than the rest of the state. In addition, the staffers said, Union Hill has few historic resources of any significance. So how can two depictions of the same community be so different? That question is part of the reason board members delayed their vote and called for an extended public comment period. Lakshmi Fjord, a visiting scholar in anthropology at the University of Virginia, said Dominion and the state are trying to downplay its significance. “They actively have erased the key evidence,” she said. Union Hill was settled after the Civil War by freedmen and emancipated slaves. Dominion bought the land for the compressor station from white descendants of a plantation owner.
Pipeline company sues Nelson County over zoning decision— Following the denial of permitting requests at the local level this month, Atlantic Coast Pipeline LLC took an unprecedented step in an attempt to move the project forward, filing a lawsuit against a locality — Nelson County — for the first time in the years-long approval process.Three days after Nelson’s Board of Zoning Appeals denied the company’s variance requests for floodplain crossings, ACP filed suit against Nelson County and its Board of Supervisors.The lawsuit, filed in the U.S. District Court’s Western District of Virginia on Dec. 6, is seeking a judgment stating the Natural Gas Act “preempts” the requirements of Nelson’s floodplain ordinance, which would include “obtaining any zoning permits for any of the floodplain crossings.”According to officials from Dominion Energy, lead partner of the ACP, the suit against Nelson County is the first of its kind for the project — a 600-mile natural gas pipeline that will stretch from West Virginia to North Carolina and through Virginia.“While it was not our preference, now that the Nelson County Board of Zoning Appeals has denied our applications, we have no choice but to take the next step of seeking preemption from the federal courts,” Dominion spokesman Karl Neddenien said in a statement Monday. “… There is a well-established process for resolving conflicts between the decisions of a local governing authority and a federal agency, in this case the [Federal Energy Regulatory Commission].”FERC approved the route and issued a Certificate of Public Convenience and Necessity for the ACP in October 2017.The denial of four variance requests, thanks to a 3-2 vote of the BZA on Dec. 3, also represents the first time a locality has denied floodplain crossing requests, according to project officials. Elsewhere along the route, ACP also was required to obtain local permits for floodplain crossings, but Nelson County was unique in its review of the requests.
Ingram- Natural Gas Pipeline Puts Pittsylvania at Risk - Pipeline companies have been working on the Atlantic Coast Pipeline and the Mountain Valley Pipeline (MVP) since 2015; both are proposed to transport fracked gas from West Virginia, through Virginia to the coast. A third pipeline, the Southgate pipeline, a 72-mile extension of the MVP, has now been proposed to transport 300 million cubic feet of natural gas per day from the compressor station in Chatham to North Carolina. While some people are fine with allowing millions of cubic feet of dangerous natural gas to be pumped through their land for an easement that will diminish their property values and put them at the mercy of energy companies including Dominion and Duke Energy — many of the landowners along the pipeline are not fine with it. Unfortunately, for those who are not fine with it, it barely matters. Those who continue to resist pipelines will eventually have their land taken through eminent domain.Thousands of acres of farmland, pastures, rivers and streams that have been cared for by the same families for generations will be heavily damaged for no public benefit. The pipelines will also put the health and safety of landowners and their families at risk. Since 2010, there have been 137 fires and explosions along interstate pipelines.Once a pipeline crosses your property, the door is open for additional pipelines. This is also true for compressor stations. With the Southgate pipeline, Pittsylvania County (ground zero for compressor stations) is now slated for a second compressor station — a second enormous industrial facility that has huge impacts on air quality. Contrary to popular belief, the pipeline companies have not proven that these pipelines will provide public benefits. Analysis shows that demand for gas-fired electricity is not growing in our region and is not expect to grow significantly for the foreseeable future. The lack of need has been supported by the North Carolina Department of Environmental Quality, whose letter in November to Federal Energy Regulatory Commission or FERC, the body (composed of mostly former energy officials) that issues federal pipeline permits, stated it questioned whether the Southgate pipeline met the criteria to “deem it in the public interest.” Even two of FERC’s own commissioners stated in August that neither the MVP nor the ACP is in the public interest.
Watchdog Finds Shortfalls in US Pipe Security-- Government auditors found widespread shortfalls in how the Transportation Security Administration protects the U.S. network of pipelines carrying natural gas, petroleum products and other hazardous liquids. A Government Accountability Office report released Wednesday said TSA’s guidelines on pipelines don’t reflect the latest best practices for physical security and cyber protections. Action is needed to address the problem, the auditors said. “A successful pipeline attack could have dire consequences on public health and safety, as well as the U.S. economy,” the report said. “Recent coordinated campaigns by environmental activists to disrupt pipeline operations, and the successful attempts by nation-state actors to infiltrate and obtain sensitive information from pipeline operators’ business and operating systems, demonstrate the dynamic and continuous threat to the security of our nation’s pipeline network.” Out of the 100 top pipeline systems by volume, which were classified as the highest risk, at least 34 hadn’t done an assessment to determine their most critical facilities, GAO found. The number of security reviews conducted by TSA has varied considerably since 2010, ranging from about 180 to fewer than 40 a year, according to the GAO report. Staffing for TSA’s Pipeline Security Branch has also been inconsistent, going from 14 positions in 2010 to only one in 2014. In response to the report, a pipeline group said a number of initiatives had been undertaken since the study was commissioned. But the group stressed that “flexibility” is key to addressing future threats. “Experience shows that mandatory standards are all too often outdated almost as soon as they are introduced,”
Groups sue Trump administration for ‘harassing’ whales with seismic blasting -- There’s one kind of “gun” control that many south Carolinians seem to agree on — stopping the use of seismic airguns to search for oil and gas deposits in the Atlantic ocean. Even before any new offshore drilling can take place in the Atlantic, this type of oil and gas exploration could be devastating to coastal communities and marine life — including endangered right whales. Seismic airgun blasting works like this: a ship tows an array of airguns, which release powerful bursts of compressed air through the water and into the seabed approximately every 10 seconds. The blasts can continue 24 hours a day for weeks at time. By documenting the reverberations sent back up to the ship, surveyors can figure out what’s beneath the sea floor. In November, the National Marine Fisheries Service, a federal agency responsible for conserving resources and preventing lost economic potential associated with unsustainable fishing practices, authorized five geophysical services companies to use sonic blasting off the shores of east coast states stretching from New Jersey to Florida. The permits give the companies permission to “incidentally, but not intentionally harass marine mammals” as they use airguns to search for fossil fuels along the ocean floor. That harassment has a lot to do with the deafening noise associated with the blasts. “Imagine a hand grenade going off around your house every 10 to 15 seconds,” says Scott Kraus, vice president and chief scientist of marine mammal conservation at the New England Aquarium. The blasts can continue to raise noise levels even miles away, he says. The North Atlantic right whale could be extinct in as little as two decades. Scientists fear that allowing seismic airgun blasting now — which hasn’t been done in the region for over 30 years — could keep the species from bouncing back. Right whales are already under stress from ship strikes, commercial fishing (they get tangled in fishing lines), and climate change. “We need to minimize all potential stressors for it to recover and noise is a significant stressor,” says Kraus. There were no calves born during right whales’ last breeding season. Kraus points to recent research from Syracuse University that shows that communication between mother right whales and their calves is extremely quiet, and a change in ambient noise levels could disrupt that communication.
SC Lawmakers look to file offshore drilling bill - South Carolina lawmakers plan to present a bill that could prohibit offshore drilling in South Carolina during legislative session. Earlier this month, President Trump's administration approved 5 permits for companies to complete seismic airgun testing from New Jersey to Central Florida. This testing allows companies to harrass and harm sea animals while searching for oil and gas. With South Carolina smack dab in the middle of New Jersey and Central Florida, state lawmakers are making it their mission to avoid offshore drilling at all costs. "We have to stand up for our community," Charleston County State Representative, Leon Stavrinakis, said. Stavrinakis said many SC lawmakers have made it clear they are against testing and infrastructure for offshore drilling, and offshore drilling as a whole. "People of the Lowcountry strongly oppose offshore drilling and seismic airgun blasting," said Congressman-elect, Joe Cunningham. State representatives are proposing a pre-filed bill that could prohibit any state agency or local government from approving anything as it relates to offshore drilling. "Any kind of infrastructure, permitting that would facilitate testing or drilling on South Carolina land or in our waters," Stavrinakis said. The goal is to make it difficult, or even impossible, for companies to want to drill off the coast.
Nine U.S. states seek to stop Trump administration's Atlantic oil testing (Reuters) - Attorneys general from nine U.S. states sued the Trump administration on Thursday to stop future seismic tests for oil and gas deposits off the East Coast, joining a lawsuit from environmentalists concerned the tests harm whales and dolphins. Seismic testing uses air gun blasts to map out what resources lie beneath the ocean. Conservationists say the testing, a precursor to oil drilling, can disorient marine animals that rely on fine-tuned hearing to navigate and find food. The tests lead to beachings of an endangered species, the North Atlantic right whale, they say. New York Attorney General Barbara Underwood said the tests would harm marine species, jeopardize coastal ecosystems and pose a “critical threat” to the natural resources, jobs and lives of New Yorkers. “The Trump administration has repeatedly put special interests before our environment and our communities,” Underwood said in a statement. The lawsuit, which names Commerce Secretary Wilbur Ross and the National Marine Fisheries Service as defendants, says the prospect of seeing marine mammals is an important draw for tourists to the states and helps coastal economies. The Department of Commerce declined to comment. Last month the fisheries office of the National Oceanic and Atmospheric Administration, part of the Commerce Department, issued permits to WesternGeco LLC, a subsidiary of Schlumberger Ltd, and CGG to harass, but not kill, marine mammals with air gun blasts in a region of the Atlantic from Delaware to Cape Canaveral, Florida. Jennie Lyons, a spokeswoman at the fisheries office declined to comment on the lawsuit but said the department only authorized harassment, not outight killing, of the marine animals in issuing the permits. A marine biologist at the office told reporters last month that no seismic tests have been known to cause whale beachings.
Florida lawmaker tries again with bill to ban fracking - After failed attempts to pass such a bill in the past, a Senate Democrat filed a proposal Thursday that would ban the controversial oil- and natural-gas drilling process known as “fracking.” Sen. Linda Stewart, D-Orlando, filed the proposal (SB 146) for consideration during the 2019 legislative session, which will start in March. Environmental groups and some lawmakers have long wanted to block potential fracking in Florida, but bills have died. During the 2018 session, a Senate version was approved by two committees, while a House version was never heard. Fracking, in part, involves injecting water, sand and chemicals underground to create fractures in rock formations, allowing natural gas and oil to be released. While supporters say fracking increases production and holds down energy costs, opponents argue it threatens water supplies and can cause environmental damage.
Are Russians Secretly Backing US Enviros? Lawsuit Intends To Find Out -An open records lawsuit filed against the State Department is attempting to uncover whether Russian entities attempted to financially support U.S. environmentalist causes.The Institute for Energy Research (IER) — a free-market energy group based in Washington, D.C. — filed the lawsuit on Monday. IER has requested that the State Department hand over correspondence concerning hydraulic fracturing, environmental advocacy and Russia that was exchanged to and from high-ranking employees.The lawsuit follows a Freedom of Information Act request filed by IER back in October. However, the free-market group claims State Department officials are dragging their feet on providing the requested information.“Any foreign attempts to covertly influence U.S. energy policy must be exposed and met with full consequences,” read a Monday statement from IER President Thomas Pyle. “Particularly given what we have already learned, the State Department’s evident lack of interest in examining this issue of obvious concern to congressional oversight, or in bothering with a substantive response to our request even when pressed, is deeply concerning.”The State Department failed to hand over responsive records to IER by Nov. 23, despite a legal obligation to do so, according to the free-market group’s press release. Department officials have cited a “backlog” as reason for their slow pace, and have only acknowledged receipt of the request.“We hope State corrects this matter immediately by providing the necessary records to document what has been happening behind the backs of the American people. The State Department must be clear: foreign meddling in U.S. energy policy or markets will not be tolerated under any circumstances,” Pyle continued in his statement.
VIDEO: Police dashcam captures massive, deadly gas explosion in Wisconsin — Authorities in Wisconsin this week released new dashcam video showing a deadly explosion that occurred in July. The video shows emergency crews standing near an evacuated zone in downtown Sun Prairie, Wisconsin, when the blast rocks the area. Debris shoots into the air as people run to take cover. Officials said the explosion happened after a private contractor hit a natural gas main. Volunteer firefighter Cory Barr, 34, was killed by the blast. Several others were injured in the incident. VIDEO: Police dashcam captures massive, deadly gas explosion in Wisconsin
Frac sand producers spent millions and filled wetlands for now underused rail yards - In 2016, the startup frac sand producer Smart Sand began construction on a state-of-the-art rail yard along the Union Pacific line in Monroe County, claiming it is the largest private industrial rail loop in the state. The company already had a rail loading facility a few miles away at its Oakdale mine, but according to an application to fill almost 2.5 acres of wetlands at the site, it needed access to Union Pacific, the sand industry’s line of choice because of its direct connection to the booming oil fields in Texas. Later expanded, the facility has more than 6 miles of track in spurs and concentric loops on about 70 acres. It was built to handle multiple “unit trains” — chains of 110 or more cars of bulk cargo all heading to the same destination, faster and cheaper than regular rail, and by some accounts a necessity for survival in an increasingly competitive industry. But less than a year after the first unit train rolled out of Smart Sand’s new Byron facility, Union Pacific has phased them out for Wisconsin sand customers as part of a new strategy to cut costs to keep locomotives moving by picking up cars more frequently. It’s a change that industry analysts say could increase costs for already struggling Wisconsin sand producers, and it calls into question the need to fill ecologically sensitive wetlands, including some at projects still under development.
What’s next for Line 5: studies, permits and ‘inevitable’ lawsuits - A three-member board overseeing the tunnel project for the state is scheduled to hold its first meeting Wednesday. With a legislative and legal framework in place to build a tunnel for Enbridge’s Line 5 pipeline in the Straits of Mackinac, attention now shifts to a board overseeing the project, geological studies, and potential lawsuits. Michigan’s Republican governor, Rick Snyder, last week swiftly approved legislation, appointed members to the newly created Mackinac Straits Corridor Authority, and presented two draft agreements meant to lock in the project before his Democratic successor takes office next month. Public comments on the agreements will be taken through Dec. 18 — five days after the agreements were announced. As outlined in an earlier agreement between the state and Enbridge, the authority would ultimately be required to approve the “tunnel agreement” if it meets a set of criteria under legislation passed on Dec. 12. The authority — which would own the tunnel after it’s built and lease it to Enbridge — holds its first meeting Wednesday in the Upper Peninsula. At least one appointee to the Mackinac Straits Corridor Authority — a three-member board overseeing construction and operation of the tunnel — said permitting, geotechnical studies, economic and political considerations will take place before construction begins. A geotechnical report is required by the end of 2019, according to the agreement. Though he expects the process to move forward as planned, circumstances could change in the coming months and years. “There are some things that have to be done between now and actually starting to dig a tunnel that could stop it,” said Anthony England, dean of the University of Michigan-Dearborn’s College of Engineering and Computer Science. “Permitting and the public concern must be taken into account. It’s not the authority’s business to do that, but it is a political question.”
Michigan panel approves Line 5 oil pipeline tunnel beneath Straits -- A newly created state panel gave a green light Wednesday to a controversial oil pipeline tunnel beneath the Great Lakes. The Mackinac Straits Corridor Authority, at its inaugural meeting in St. Ignace, approved an agreement with Canadian energy giant Enbridge Energy LLC to build a tunnel beneath the Straits of Mackinac that will house a replacement segment for Enbridge's Line 5 pipeline and other utilities, state officials announced. The authority approved a transfer of property rights that will allow Enbridge to construct the tunnel in bedrock. Gov. Rick Snyder and leaders of the state departments of Natural Resources and Environmental Quality also inked an agreement with Enbridge that requires the company "to undertake an enhanced inspection and stewardship regimen," according to a news release from the state. The agreement includes financial penalties for Enbridge for missed construction deadlines. Line 5 carries oil and natural gas liquids between Superior, Wisconsin, and Sarnia, Ontario. Environmental groups have strongly opposed the tunnel and want Line 5 shut down.
A submerged oil pipeline triggers a winter of frigid protest --- The modest camp in the woods of northern Michigan is the symbolic base for protesters battling an aging oil pipeline that crosses one of the most environmentally critical locations in the country. A short drive up the highway, some 23 million gallons of oil flow daily through the Straits of Mackinac, an iconic waterway that connects Lake Michigan and Lake Huron and the state’s two peninsulas. Line 5, operated by the Canadian multinational company Enbridge, has been enveloped in controversy for months. And even as calls for a shutdown have increased, Michigan’s outgoing governor has pressed for a new agreement to ensure it continues. The “water protectors,” as those at the camp call themselves, vow to stay until the pipeline is decommissioned. “I’m doing it for my people,” said Patrick Deverney, a 39-year-old member of the Grand Traverse Band of Ottawa and Chippewa Indians. “Without that water, we’re going to die.” Enbridge’s Straits of Mackinac operation represents only a tiny fraction of an extensive system that originates at the tar sands of northern Alberta. The network, built in 1953, starts in Superior, Wis., and transports a daily average of 540,000 barrels of light crude and natural gas liquids east and south across Michigan before arriving at a distribution center in the border city of Sarnia, Ontario. The company provided 102 jobs in Michigan last year, according to Enbridge data, and nearly $62 million in property and other taxes. Line 5’s twin metal pipes also deliver much of the state’s propane, heating thousands of homes in the Upper Peninsula. But the route primarily serves as a shortcut across the Great Lakes to help meet Canadian demand. “The value of this pipeline almost exclusively goes to Enbridge Energy,” said Mike Shriberg, who heads the National Wildlife Federation’s regional center for the Great Lakes and sits on the Michigan Pipeline Safety Advisory Board. “Yet it’s risking arguably our most valuable asset.” The stakes could hardly be higher. The larger Great Lakes system supplies drinking water for some 40 million people, sustains thousands of plant and animal species and supports vital industries such as fishing, logging and tourism. (The Straits of Mackinac, where an expanse of dazzling blue freshwater ripples below one of the world’s great suspension bridges, offers one of Michigan’s most famous images.)
Enbridge moving ahead with St. Clair River line replacement -- A section of a controversial pipeline will be replaced starting next year. Enbridge Energy says their line five beneath the St. Clair River is in the process of receiving the necessary regulatory approvals. Spokesperson Ryan Duffy says the oil pipeline will be drilled horizontally below the river between Marysville and Sarnia, with work expected to begin next fall. Meanwhile to our north, an agreement between the State of Michigan and Enbridge have been reached which would create a state-owned utility corridor in the Straits of Mackinac. The tunnel would run underneath the water between Mackinac City and St. Ignace. Duffy says that project could take up to a decade to complete and in the meantime the utility will closely monitor the existing pipeline. However many in Lansing are speculating that opponents of line five will file a lawsuit against the state’s new pipeline authority, halting its construction. Enbridge Energy’s line five runs from Superior, Wisconsin to Sarnia, Ontario.
Line 3 pipeline opponents file suit challenging state approval -- Several environmental groups and two northern Minnesota Native American tribes have filed separate lawsuits to try to block the state's recent approval of the Line 3 oil pipeline replacement project. The White Earth and Red Lake Ojibwe, together with the Sierra Club and Honor the Earth environmental organizations, filed a joint appeal Wednesday at the Minnesota Court of Appeals. The northern Minnesota-based group Friends of the Headwaters filed a separate challenge. They're asking the court to overturn the Minnesota Public Utilities Commission's June 28 decision to grant the Line 3 project a certificate of need, a crucial approval signifying that the project is needed by the state of Minnesota. The Calgary-based Enbridge energy company needed the PUC's approval in order to build the $2.6 billion project across the northern half of the state. In that decision, the PUC determined that the safety benefits of allowing Enbridge to replace the old, corroding Line 3 pipeline with a larger, modern line outweighed the risks of allowing the old pipeline to continue to operate. In their court challenges, the groups argued that reasoning is flawed. The groups argued that Enbridge failed to provide a long-term energy forecast to prove that the increased capacity the new pipeline would provide is needed in Minnesota. The Minnesota Department of Commerce also pressed that argument before the Public Utilities Commission.
North America LNG Rebound to Continue in 2019 - North America should lead an expected record year for global liquefied natural gas (LNG) project sanctions in 2019, Wood Mackenzie reported Tuesday. According to Wood Mackenzie’s latest quarterly North America LNG projects update, three U.S. Gulf Coast developments – Sabine Pass Train 6, Golden Pass and Calcasieu Pass – are expected to reach final investment decision (FID) in the first half of 2019. In addition, the consultancy contends that two additional U.S. projects should follow shortly thereafter and another two projects in Canada and Mexico are “on the horizon.”“With FID imminent on three U.S. Gulf Coast LNG projects, North America is set to lead an expected record year for LNG project sanctions,” Alex Munton, principal analyst for Americas LNG with Wood Mackenzie, said in written statement emailed to Rigzone. “With at least two other Gulf Coast projects – Freeport Train 4 and possibly Driftwood LNG – also not far behind, the first half of 2019 will be an especially busy one for the U.S.”Recalling that the North American LNG market experienced a “lull in investment” before 2018, Wood Mackenzie noted that the market has “sprung back to life.” Since September of this year, it pointed out that:
- Six LNG project developers – Cheniere Marketing (CMI), Venture Global, Sempra, Tellurian, Freeport and Woodfibre – have announced long-term offtake agreements
- 13 million tonnes per annum (mtpa) of sales have been announced, raising the total sales figure for the year above 20 mtpa
“2018 was a stellar year for sales of North American LNG, and U.S. LNG in particular,” said Munton. “Renewed confidence in the outlook for LNG, combined with the choice, flexibility and competitiveness of the U.S. market offers, facilitated this surge in interest.” Wood Mackenzie stated that the construction of the three Gulf Coast LNG facilities, representing up to 30 mtpa of capacity, could translate into $20 billion worth of investment for the region over the next four years. Outside the United States, Wood Mackenzie’s analysis finds that Canada’s Woodfibre LNG could reach FID in 2019; but, it observes that FID hinges on the execution of an engineering, procurement and construction (EPC) contract. In Mexico, the Costa Azul Phase 1 export terminal still needs a final EPC contract, binding offtake agreements, permitting and financing arrangements, stated Wood Mackenzie. However, the firm noted that a 2019 FID for that project is achievable as well.
US Department of Energy softens LNG reporting requirement, faces pressure over study that backed exports — The US Department of Energy on Wednesday eased reporting mandates for LNG exporters, scrapping a requirement that they track down the ultimate end use of the natural gas. Energy Secretary Rick Perry said the move would help "better provide reliable US LNG to our friends and allies abroad." The shift was welcomed by the LNG sector as adding certainty for potential buyers. Some companies had worried their export authorizations would be at risk if they failed to comply with the requirement, which they found to be impractical or impossible in some cases, according to the policy published in the Federal Register. The policy change came as DOE separately drew further pressure from a manufacturing group over a study used to justify approvals for increasing volumes of exports to countries without free trade agreements. That report is important to advancing a dozen pending projects that would provide over 20 Bcf/d of additional export capacity, on top of the 23 Bcf/d of long-term exports already backed by the department. DOE is responsible for making a determination on whether such exports are in the public interest. A NERA Economic Consulting report issued in June on behalf of DOE found even extreme scenarios of high LNG exports correlate with higher economic performance than lower export levels. The Industrial Energy Consumers of America wrote to the Office of Management and Budget to say DOE failed to respond within the required 60 days to the group's request for a Data Quality Act correction for the report. The group contended that third-party economists found the results of the study were not reproducible, a requirement of the act it said prompted the need for a correction. IECA also sought evidence about whether individuals and entities involved in the study were adequately independent from the gas and LNG sector. When it comes to the altered reporting requirements, DOE said exporters will still be required to report on the destination to which the LNG is originally delivered, but not to report the final country of the end use. While the policy would affect future exports, DOE simultaneously struck the end-use requirement from existing export authorizations.
Qatar Petroleum to invest $20 billion in US in major expansion --Qatar Petroleum (QP) is looking to invest at least $20 billion in the United States over the coming few years, its chief executive told Reuters, after the Gulf Arab state quit OPEC, freeing Doha from potential legal risks in the United States. Saad al-Kaabi, who holds the energy portfolio of the world's top liquefied natural gas (LNG) producer, also said on Sunday QP aimed to announce its foreign partners for the new LNG trains it is building by the middle of next year.But he added QP could carry out the project alone, with no international oil company at its side, if no good offers were made."Mark my words, if I don't get a good deal, we go alone," Kaabi said in an interview at his office in Doha.
Petronas LNG purchase deal with Cheniere to support sixth train at Sabine Pass — Malaysia's Petronas will buy LNG from Cheniere Energy under a 20-year agreement that will support building a sixth liquefaction train at the exporter's Sabine Pass terminal in Louisiana. The long-term offtake deal for approximately 1.1 million mt/year of LNG will be shipped on a free-on-board basis beginning following the date of first commercial delivery from Train 6. Cheniere CEO Jack Fusco told S&P Global Platts in October that the company hoped to make a final investment decision on the train by early next year.In a statement announcing the sale and purchase agreement with a unit of Petronas, Cheniere said the deal is expected to support the continued progress toward an FID in 2019. The purchase price for the LNG will be indexed to the monthly Henry Hub price, plus a fee."We think SPL6 is money-good, and the real questions are really at what price/contract structure and when," Wells Fargo Securities analyst Michael Webber said in a note to clients after the announcement. "With execution of the EPC contract with Bechtel (November), the one milestone they now need to sort out over the next 3-4 months is financing."Despite market uncertainty and continuing US trade tensions with China, Cheniere has projected a confident market outlook in recent months, and on both the financial and commercial fronts it has managed to outmaneuver many of its US peers, thanks in part to being first to market among major US LNG exporters when Sabine Pass started up in 2016. Cheniere has been stressing to the Trump administration the importance of US LNG in the global marketplace and encouraging it to ease tensions with Beijing. China imposed tariffs on imports of US LNG starting September 24, and with less than two weeks before the end of 2018 there is no sign of the duties being lifted anytime soon.
Exxon Becomes Permian Drill Chief- Exxon Mobil Corp. has overtaken rivals to become the most active driller in the Permian Basin, showing the urgency with which the world’s biggest oil company by market value is pursuing U.S. shale. After a slow start in the West Texas and New Mexico basin, Exxon is now operating more drilling rigs than Concho Resources Inc., which merged with RSP Permian Inc. earlier this year to create one of the biggest Permian-focused explorers, according to statistics from RigData Inc. supplied to Bloomberg Intelligence. It’s not hard to see why the Permian has become so important to Exxon. A series of strategic mistakes sent the oil giant’s overall production careening to a 10-year low by the middle of this year. Drilling wells in the the Permian, the world’s premier shale field, yields low-cost oil in months rather than the years required for megaprojects to begin producing crude. “They need to get the production and returns back up, and the Permian is where you can ramp up the fastest,” said Fernando Valle, a New York-based analyst at Bloomberg Intelligence. Exxon isn’t alone in tapping U.S. shale after years of pursuing overseas resources. Chevron Corp. will spend the highest portion of its capital budget at home in at least a decade. The Permian now accounts for about 10 percent of Chevron’s overall production. BP Plc this year agreed to spend $10.5 billion on BHP Billiton Ltd.’s shale assets to gain access to the Permian while Royal Dutch Shell Plc is mulling a bid for one of the basin’s largest private companies, people familiar with the matter said Monday. For Exxon, the Permian is still small when placed in the context of its global reach. In the third quarter of this year it produced just a fraction of the oil titan’s total production. But CEO Darren Woods expects strong growth each year through 2025. By then, he’s targeting as much as 800,000 barrels a day from the Permian and the Bakken in North Dakota, which would be about 20 percent of today’s overall production.
Weak demand, falling prices signal new troubles for oilfield services - (Reuters) - The recent drop in U.S. oil prices to around $46 a barrel and insufficient demand are throwing into doubt the prospects for oilfield service companies in 2019 and may portend a wave of restructuring and consolidation of an industry still recovering from the 2014 downturn in energy markets. Despite record U.S. oil production and exports, producers are reducing their spending and learning to do jobs with fewer crews. There has not been the wholesale staff cutbacks such as the ones that occurred three years ago, but investors and analysts expect consolidation in the services sector as work dwindles and share prices fall. Even service companies that have strong businesses have been unable to get contract prices back to pre-crash levels. At onshore driller Scandrill Inc, all of its 15 rigs are active in U.S. oilfields. When two clients decided to stop drilling, new customers picked up the slack. However, the rates that Scandrill charges for its rigs are below where they were at the depths of the 2014 oil price crash, said President Paul Mosvold. “We won’t see an increase in daily operating margin or the daily rig contracting rate soon,” he said in a phone interview this month. Some oil producers have cut services work. Diamondback Energy FANG.N this month released two of its 10 hydraulic fracturing crews and next year plans to operate between 18 and 22 drilling rigs, down from 24 rigs at work earlier this month. Oilfield services company investors are cutting their holdings. The Philadelphia SE Oil Service Index .OSX, which tracks some of the largest oilfield service companies, this week fell below 81, the lowest since 2003 and below where it traded when oil prices crashed to near $26 a barrel in 2016. With oil prices at their lowest level in over a year, the services sector should brace for a wave of restructurings and consolidation, analysts and attorneys told Reuters in interviews. “The oilfield sector has the largest group of struggling companies within the energy industry. I think these companies need to consolidate, no matter what,” said Sean Wheeler, a mergers and acquisition attorney at law firm Kirkland & Ellis. Wheeler has been fielding inquiries from service providers wanting to evaluate options for restructuring if prices do not recover. Contract driller Parker Drilling PKDSQ.PK in December filed for pre-arranged bankruptcy after failing to earn an annual profit since 2014, when oil prices started a long decline. One problem is the number of companies operating in the market, attorneys and analysts said. Competition for fewer jobs is making it hard for service companies to raise prices - something that is benefiting shale producers.
US rig count rebounds after three-week decline, up three to 1175 - The US oil and gas rig count rose by three this week to 1,175 on Thursday, reversing three weeks of declines from the recent peak a month ago, S&P Global Platts Analytics said Thursday. Oil rigs were up by three to 936, while gas rigs were unchanged. Rigs that were classified as chasing both oil and gas were up one to 17. Platts data in this report covers eight large US unconventional oil and gas basins and does not reflect all domestic activity. A handful of rigs not detailed also are used for coal bed methane and steam injection, and some others, mainly offshore, are classified as both oil and gas. The DJ Basin in Colorado gained the most rigs this week -- five, for a total 38 -- while the Williston Basin in North Dakota and Montana rose by three as the Bakken Shale play continued to gain traction again after losing rigs and production during the 2015-16 downturn when oil prices dropped. Production in North Dakota, from which most Bakken output comes, hit an all-time high of 1.392 million b/d in October, that state's officials said last Friday. The Permian Basin of West Texas and New Mexico, which has multiple more rigs working than any other basin, added a rig in the past week for a total of 481 as did the Haynesville Shale in Northwest Louisiana and East Texas, for a total of 60. The Haynesville is a gas-weighted basin as is the Utica Shale in mostly Ohio, which gained two rigs last week for a total of 16. Also, the Eagle Ford Shale of South Texas lost three rigs, leaving 90, while the SCOOP/STACK plays in Oklahoma combined lost two rigs for a total of 106. The giant Marcellus Shale gas basin of mostly Pennsylvania and surrounding states was unchanged at 61. In addition, there were 201 more US permits issued this week than last week, for a total of 1,730, although permitting was down in six of those eight large basins. Permits in the Eagle Ford were up by 11 to 78, and the SCOOP/STACK saw permits rise by eight for a total of 29 permits. Otherwise, permitting was down by double-digits in the Marcellus, where it was down by 29 to 30; in the Haynesville, where it was down by 27 permits to 11; and the Permian, where it was down by 19 to 197. Overall gains in rig count and permitting came during a week where oil and gas prices fell. WTI dropped $2.16 from the prior week to average $49.42/b, while WTI Midland was down $1.25 to an average of $41.74/b. The Bakken Composite price was $46.51/b, down $0.75. Also, the Henry Hub gas price averaged $3.80/MMbtu, down 62 cents for the week, while Dom South price averaged $3.54/MMbtu, down 65 cents. Click here for full-size graphic.
US shale oil production to rise to 8.166 million b/d in January: EIA — US shale oil production in January is expected to rise 134,000 b/d month on month to 8.166 million b/d, the Energy Information Administration said Monday. January's expected growth is one of the more robust monthly increases of late. In November, EIA predicted December's oil output would be 7.944 million b/d, an increase of 113,000 b/d month on month. EIA also forecast monthly increases of 98,000 b/d for November and 79,000 b/d for October. Earlier in December, EIA raised its projection for this month to 8.032 million b/d, the first time the monthly average will have crossed the 8 million b/d threshold. US oil production generally is weighing in higher than expected in recent months, surpassing earlier targets, as drilling has become progressively more efficient as operators continue to employ better technology to eke more oil and gas out of each well, EIA analyst Jozef Lieskovsky said. The agency predicts 2018 production to average 10.88 million b/d, including 11.5 million b/d for the fourth quarter, and 12.06 million b/d next year. That compares with estimates of 10.79 million b/d for 2018 and 11.76 million b/d for 2019 just six months ago. "We could probably take 100 rigs out and still keep up with the completions we're doing right now." EIA eyes production in the Permian Basin at 3.8 million b/d in January, up 73,000 b/d, even though additional takeaway capacity is about full. In addition, EIA forecasts oil production from the Bakken Shale of North Dakota/Montana at 1.461 million b/d, up by 18,000 b/d, and from the Eagle Ford Shale of South Texas at 1.427 million b/d in January, up by 19,000 b/d. Both the Niobrara Shale and the Anadarko Basin should see their production rise by 10,000 b/d each in January, to 679,000 b/d and 599,000 b/d respectively, the agency said.
America's top oil-producing region has a new problem: $40 crude -- If Tuesday's collapse in U.S. crude prices below $46 a barrel looked ugly, try being a driller in the Permian Basin, the epicenter of the U.S. shale oil boom. Crude is trading at about $40 a barrel in the western Texas region that sits atop most of the Permian Basin. At that price, oil is selling for less than the cost of developing new wells, raising concerns for a region that emerged from a bruising downturn just two years ago. "When you get down below $40 a barrel in the Permian, you are talking about a potential recession in a sector that you probably never ever thought might be prone to a recession in 2019," said Tom Kloza, global head of energy analysis at fuel price service OPIS. That is a stark prospect for a region where oil production is booming and energy companies can't seem to find enough workers. Surging output from the Permian has powered American production to all-time highs above 11 million barrels a day, making the United States the world's top crude oil producer. But all that new supply has created bottlenecks in a region with too few pipelines to bring the crude to market. That has caused the regional crude grade in the Midland, Texas, area to trade at a steep discount to benchmark U.S. West Texas Intermediate crude futures, which are based on deliveries at the storage hub in Cushing, Oklahoma. On Tuesday, Midland-based WTI was trading at about $7.25 to $7.60 below benchmark U.S. crude prices, according to OPIS. The lowest transaction confirmed by OPIS saw Midland crude sell for $40.10 per barrel. "Those are really weak numbers, and they're not very good for people who had debt in the Permian Basin as well as operations there," Kloza said. "If you're producer that drilled a long time ago and has some mature assets and doesn't owe any money to private equity, it's not that big of a deal. But they're not real happy about it."
Despite falling oil prices, the 'glory days for US shale are far from over' --Oil prices stabilized on Wednesday after a "toxic mix" of market forces triggered one of the biggest falls for years.However, despite a protracted sell-off in crude futures, the meteoric rise of U.S. shale should continue undeterred over the coming months, analysts told CNBC. "In short, as much as the recent price slump has injected a fresh dose of uncertainty, it is unlikely to derail the U.S. shale engine," Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note published Wednesday."The fact is that U.S. tight oil supply is expected to expand by at least 1 million bpd in 2019. In doing so, it will go a long way to cementing America's newfound position as the world's biggest oil producer." "For now, when it comes to the U.S. shale patch, the glory days are far from over," Brennock said.Since climbing to four-year highs in early October, crude futures have tumbled by more than a third. The latest wave of heavy selling comes at a time when the energy market as well as the global economy is gripped by a flurry of bearish factors.Heightened concerns of oversupply, reports of swelling inventories, forecasts of record U.S. and Russian output and intensifying concerns about a slowing global economy have all placed downward pressure on the value of a barrel of oil.International benchmark Brent crude traded at around $56.61 on Wednesday, up around 0.6 percent, while U.S. West Texas Intermediate (WTI) stood at around $46.59, more than 0.75 percent higher.OPEC and allied non-OPEC oil producers including Russia agreed earlier this month to curb output by 1.2 million barrels per day (bpd). That's equivalent to more than 1 percent of global demand, in a bid to drain tanks and boost prices.But, the cutbacks do not go into effect until January, and Russia has warned that it will only gradually taper off output. Meanwhile, production has been at or near record highs in the U.S., Russia and Saudi Arabia. And the White House has said shale production could climb to more than 8 million bpd for the first time by the end of December.
Cushing -- still the preeminent crude oil hub for the US. - The Cushing, OK, storage and trading hub plays critically important roles in both the physical and financial sides of the crude oil market. Located at a central point for receiving crude from a wide range of major production areas — Western Canada, the Bakken, the Rockies, SCOOP/STACK and the Permian among them — the hub also has numerous pipeline connections to Gulf Coast refineries and export docks, and to a large number of inland refineries. And, with Cushing’s 94 MMbbl of storage capacity and status as the delivery point for NYMEX futures contracts for West Texas Intermediate, the hub’s inventory levels and the WTI-at-Cushing price are closely watched market barometers. But like a lot of other U.S. energy infrastructure in the Shale Era, Cushing’s place in the energy world has been in flux. Most importantly, Permian production has been surging, the ban on U.S. oil exports is a fading memory, and the Gulf Coast — not Cushing — is where most U.S. crude production wants to go. Today, we discuss Cushing’s changing role and highlights from RBN’s new Drill Down Report on the U.S.’s most important crude hub.
Kansas lawmakers could face debate over earthquake damage(AP) — Kansas lawmakers are likely to face renewed debate in the next legislative session about how or whether to hold oil and gas companies accountable for property damage caused by earthquakes in Kansas.Earthquakes have increased in Kansas since 2013 when fracking, or hydraulic fracturing, became more common for oil and gas exploration, although the intensity has been reduced in recent years. Some researchers believe injection of wastewater from the explorations into underground wells contributes to the quakes — a claim that industry officials dispute, The Topeka Capital-Journal reported . Joe Spease, chairman of the Legislative, Energy, and Hydraulic Fracturing committees for Kansas Sierra Club, said the Legislature should impose a fee on companies using injection wells to dump wastewater. He suggested the rate could be based on volume of material injected with the money distributed to property owners with damage. “We want some type of justice for these people,” Spease said. “KIOGA attacks us. But people understand most of us concerned about ‘frackquakes’ are not out to get the oil and gas industry.” Ed Cross, executive director Kansas Independent Oil and Gas Association, said companies would go out of business and jobs would be lost if such fees were imposed on the industry. He said it is not possible to link specific damage to a particular injection well. “I don’t think there’s any proof out there that says it was this or that injection well,” Cross said. New research, which is challenged by the oil industry, concluded wastewater injection was responsible in 2017 for several earthquakes felt hundreds of miles from injection hot spots. The disposal of hundreds of millions of barrels of salty water from oil and gas corporations increased pressure within rock formations and that pressure migrated north along faults through Kansas, causing quakes felt in Hutchinson, Hays and Salina, with some felt as far as Jewell County near the Nebraska border. “The people around here shouldn’t have to deal with it. It scares people and damages their property.”
Where water goes after fracking is tied to earthquake risk - - In addition to producing oil and gas, the energy industry produces a lot of water, about 10 barrels of water per barrel of oil on average. New research led by The University of Texas at Austin has found that where the produced water is stored underground influences the risk of induced earthquakes.Beyond supporting the link between water disposal and induced seismicity, the research also describes factors that can help reduce earthquake risk."If we want to manage seismicity, we really need to understand the controls," said lead author Bridget Scanlon, a senior research scientist at UT's Bureau of Economic Geology.The research was published Oct. 31 in the journal Seismological Research Letters. Co-authors include Matthew Weingarten, assistant professor at San Diego State University; Kyle Murray, adjunct professor at the University of Oklahoma; and Robert Reedy, research scientist associate at the Bureau of Economic Geology. The bureau is a research unit at the UT Jackson School of Geosciences. The researchers found that the increased pressure that is caused by storing produced water inside geologic formations raises the risk of induced seismicity. The risk increases with the volume of water injected, both at the well and regional scale, as well as the rate of injection. Researchers specifically looked at water stored near tight oil plays, including the Bakken, Eagle Ford and Permian shale plays, and Oklahoma overall, which has high levels of induced seismicity in concentrated areas. Researchers found marked differences in the degree of seismic activity associated with underground water storage. The study reported that the different levels of induced seismic activity relate to, among other reasons, how the water is managed and where it is stored underground. In Oklahoma, the tendency to store water in deep geologic formations -- which are often connected to faults that can trigger earthquakes when stressed -- has increased the risk of induced seismicity. In the other areas, water is stored at shallower depths, which limits exposure to potentially risky faults. In conventional energy production, water is usually injected back into the reservoir that produced the oil and gas, which stabilizes pressure within the reservoir. However, water produced during hydraulic fracturing -- the method used to access energy in tight oil plays -- cannot be returned because the rock pores are too small for the water to be injected back into the rock. That water is usually injected into nearby geologic formations, which can increase pressure on the surrounding rock.
Living Near Oil and Gas Wells Linked to Increase in Cardiovascular Disease - People who live near oil and gas operations are more likely to have early indicators of cardiovascular disease than those who don’t, according to a recent study. Cardiovascular disease resulted in 900,000 deaths in 2016 and is the leading cause of mortality in the US, and more than 17.4 million Americans now live within one mile of an active oil and gas well. The small pilot study, which was published in the journal Environmental Research on December 6, found that those who live in areas with more intense oil and gas development, including fracking, showed more early signs of cardiovascular disease including high blood pressure, changes in the stiffness of blood vessels, and markers of inflammation. Researchers at the Colorado School of Public Health examined 97 relatively healthy adults living in an area of Northeastern Colorado with pockets of dense oil and gas activity, including extensive truck traffic, pipelines, and both fracking and traditional well pads. “To date most of the research on the health impacts of oil and gas development has used data from existing health registries,” lead author and assistant research professor at the Colorado School of Public Health Lisa McKenzie told Environmental Health News. “For this study, we actually went out and took direct measurements from people, which meant we knew a lot more about them.” Study participants were selected carefully: None of them smoked or had jobs that exposed them to dust, fumes, solvents or oil or gas development activities, and none had histories of diabetes, chronic obstructive pulmonary disease or chronic inflammatory diseases like asthma or arthritis. Throughout the study, they were regularly asked about their stress levels and recent life events in an attempt to ensure that researchers would be made aware of any factors that could influence test results. Each participant made three visits to the researchers’ clinic over a nine-month period to be tested for signs of cardiovascular disease including higher blood pressure, markers of inflammation, and changes in the stiffness of their arteries — referred to as the “augmentation index.” “We found that people living in the areas with the highest levels of oil and gas activity around their homes had a higher augmentation index by about 6 percent,” McKenzie explained. “For blood pressure, we didn’t notice too much of a difference when we looked at everyone, but when we looked only at people not taking any prescribed medication, we did observe higher blood pressure among those living in areas with the most oil and gas development.”
Colorado regulators OK bigger buffer zone for oil, gas drilling near schools -- The Colorado Oil and Gas Conservation Commission voted unanimously Tuesday to approve bigger buffer zones for oil and gas drilling near schools. New wells will have to be at least 1,000 feet from school buildings and childcare centers as well as outdoor areas used by schools, including sports fields and playgrounds. It’s the areas around the building that the policy change takes into account. The old regulation required a 1,000-foot setback from the building itself, which meant wells could be closer to playgrounds and other school outdoor facilities. The new setback will take effect Jan. 30. The vote comes six weeks after Colorado voters rejected Proposition 112, a ballot proposal that would have required a buffer of 2,500 feet between wells and occupied buildings as well as areas described as vulnerable. Those included parks, creeks and irrigation ditches. Efforts to increase the setbacks from school property have been in the works for at least a year. The League of Oil and Gas Impacted Coloradans — LOGIC — made the proposal to state regulators, said Travis Duncan, spokesman for the Colorado Department of Natural Resources. “It is past time the COGCC consider the health and safety of kids. Implementing a 1,000-foot setback from all school-use areas and child care centers where kids learn and play is the least the COGCC can do,” Sara Loflin, LOGIC executive director, said in a statement. “It is ridiculous that we have had to fight to get oil and gas sites further away from kids and the places where they learn and play.”
GOP lawmakers push Trump to take ‘any appropriate action’ to save Keystone XL -- Dozens of Republican lawmakers are pushing President Trump to save Keystone XL after a court ruling last month blocked the controversial oil pipeline’s construction. Forty-four lawmakers, led by Sen. Steve Daines (Mont.) and Rep. Greg Gianforte (Mont.), wrote to Trump on Friday, saying the court decision by the District Court for the District of Montana “has brought real and immediate consequences, halting critical preconstruction activities and invalidating the analysis that underlies the approval issued by your administration.” They asked Trump to “take any appropriate action necessary to move construction forward.” The lawmakers didn’t specify what they want that action to be. Judge Brian Morris, nominated to the bench by former President Obama, ruled last month that the State Department under Trump didn’t conduct a proper environmental review of the planned Canada-to-Texas pipeline. He went on to say officials “simply discarded” climate change concerns related to the project, and should have better explained the reversal from Obama’s 2015 rejection of the project. Trump quickly slammed the ruling as a "political decision" and a "disgrace." Later, Morris rejected TransCanada Corp.’s request to continue “preconstruction” activities like maintaining rights-of-way and hauling pipe in preparation for building. The State Department hasn’t notified the court if it intends to appeal the ruling, fix the problems the judge identified or take some other action. State or TransCanada would have to notify the court by Feb. 5 if they intend to appeal.
State board gives natural gas company time to comply with permits -- After years of violating contracts with the state, a company operating 40 natural gas wells in northwestern South Dakota is getting one last chance. The Department of Environment and Natural Resources’ Board of Minerals and Environment met on Thursday in Pierre to discuss the fate of Spyglass Cedar Creek LP. The board was originally scheduled to conduct a contested enforcement hearing to possibly rescind the company’s permits, but ultimately gave them one more month to turn their operations around. Prior to the board’s meeting, a lawyer for Spyglass negotiated with the state’s Office of Attorney General a consent agreement that requires Spyglass to obtain a $200,000 bond by Jan. 15, which will be financed by investors, according to Deputy Attorney General Richard Williams, who presented the negotiated agreement to the board. Spyglass also agreed to make improvements to bring their wells back into compliance by July 1 and to bring a total of 20 wells back into production by Sept. 1. Spyglass owns and operates 40 wells in South Dakota. Spyglass also admitted fault in the agreement to several violations of its permits, including leaving unproductive wells unplugged and having wells improperly signed or suffering “erosion issues.” The Texas-based company also caught heat when they cashed out a previous $20,000 bond, saying they did not remember the purpose of the money. The board unanimously approved the agreement by a roll call vote Thursday, with chairman Rexford Hagg calling it “the last straw.”
US miscalculated benefit of better train brakes (AP) — President Donald Trump’s administration miscalculated the potential benefits of putting better brakes on trains that haul explosive fuels when it scrapped an Obama-era rule over cost concerns, The Associated Press has found. A government analysis used to justify the cancellation omitted up to $117 million in estimated future damages from train derailments that could be avoided by using electronic brakes. Revelation of the error stoked renewed criticism Thursday from the rule’s supporters, who called the analysis biased. Department of Transportation officials acknowledged the mistake after it was discovered by the AP during a review of federal documents. They said a correction will be published to the federal register. But transportation spokesman Bobby Fraser said the decision not to require the brakes would stand under a Congressional act that said the costs couldn’t exceed the rule’s benefits. “This was an unintentional error,” Fraser. “With the correction, in all scenarios costs still outweigh benefits.” Safety advocates, transportation union leaders and Democratic lawmakers oppose the administration’s decision to kill the brake rule, which was included in a package of rail safety measures enacted in 2015 under President Barack Obama following dozens of accidents by trains hauling oil and ethanol in the U.S. and Canada. The deadliest happened in Canada in 2013, when an unattended train carrying crude oil rolled down an incline, came off the tracks in the town of Lac-Megantic and exploded into a massive ball of fire, killing 47 people and obliterating much of the Quebec community’s downtown. There have been other fiery crashes and fuel spills in Alabama, Oregon, Montana, Virginia, West Virginia, North Dakota, Illinois and elsewhere.
Energy boom, carbon cost -- Lisa DeVille lives in the heart of the Bakken oil formation. DeVille is a member of the Mandan Hidatsa Arikara Nation and lives in Mandaree on the Fort Berthold Reservation. Living in the Bakken, she and her family see natural gas flares almost daily. “We witness it, we live with oil and gas,” DeVille said. “The night sky is lit up like day. You can feel the earth rumble under you when those flares happen, you can hear it and smell it.” The air quality is poor in this area because the flares put off toxic chemicals, DeVille said. The oil and gas industries have other adverse effects on the land and health of the people living there. According to an Earthworks study done in the Mandaree area, “visible and concerning” emissions were found at sites near Williston and the Fort Berthold Reservation. “If they don’t get it under control, it’s going to be worse than what it is today,” she said. “Things need to happen now.” North Dakota produced more than 2.5 billion cubic feet of natural gas per day in September. With all of the economic benefits oil and gas production bring to North Dakota, there is also a downside to this level of production. Last year, there were 392 million barrels of oil produced in North Dakota. Approximately 168.6 million metric tons of carbon dioxide are emitted from consuming that much oil, according to data from the Environmental Protection Agency. That is equivalent to carbon dioxide emissions from 36,105,912 cars. North Dakota has been the second-largest oil-producing state since 2012. North Dakota has also become one of the biggest carbon dioxide emitters in the country. The region produces 10 billion to 15 billion metric tons of carbon dioxide, according to the EPA.
North Dakota oil output averages record 1.39 million b/d in October - North Dakota's oil output averaged over 1.39 million b/d in October, up nearly 32,600 b/d from September and another monthly production record, the North Dakota Pipeline Authority reported Friday. The record production could be short-lived as producers slow investment, according to Lynn Helms, the state's top oil and gas regulator. Helms told reporters Friday that a combination of low oil prices, limited gas capture infrastructure and cold weather could slow future production. Helms said that investment in drilling, hydraulic fracturing and well completions are all expected to decline, at least through April 2019, causing statewide output to stagnate or dip going forward. Helms said that investment in gas gathering and pipelines will likely increase going forward. North Dakota's oil output has posted a record in five months so far this year: in May, when the December 2014 record was broken, and in July, August, September and, now, October. Oil production has risen nearly 215,000 b/d since January, according to state data. State natural gas production averaged more than 2.56 Bcf/d, also an all-time high, according to the state's Department of Mineral Resources. The state had 15,344 producing wells in October, up 57 from September and also a new record, the DMR reported Friday. There were 183 drilling permits issued in October, up from 113 in September, well below the all-time high of 370 in 2012. There were 116 drilling permits issued in November, the DMR said. At the end of October, there were 959 wells waiting on completion, up 31 from the end of September.
Fracking in 2018: Another Year of Pretending to Make Money - 2018 was the year the oil and gas industry promised that its darling, the shale fracking revolution, would stop focusing on endless production and instead turn a profit for its investors. But as the year winds to a close, it’s clear that hasn’t happened.Instead, the fracking industry has helped set new records for U.S. oil production while continuing to lose huge amounts of money — and that was before the recent crash in oil prices. But plenty of people in the industry and media make it sound like a much different, and more profitable, story.Going into this year, the fracking industry needed to prove it was a good investment (and not just for its CEOs, who are garnering massive paychecks). In January, The Wall Street Journal touted the prospect of frackers finally making “real money … for the first time” this year. “Shale drillers are heeding growing calls from investors who have chastened the companies for pumping ever more oil and gas even as they incur losses doing so,” oil and energy reporter Bradley Olson wrote.Olson’s story quoted an energy asset manager making the (always) ill-fated prediction about the oil and gas industry that this time will be different.Is this time going to be different? I think yes, a little bit,” said energy asset manager Will Riley. “Companies will look to increase growth a little, but at a more moderate pace.”Despite this early optimism, Bloomberg noted in February that even the Permian Basin — “America’s hottest oilfield” — faced “hidden pitfalls” that could “hamstring” the industry.They were right. Those pitfalls turned out to be the ugly reality of the fracking industry’s finances. And this time was not different.
PG&E falsified gas pipeline records for years after deadly explosion, regulators say - Pacific Gas & Electric Co. continued to commit pipeline safety violations in the years after a gas explosion that killed eight people in the Bay Area suburb of San Bruno, regulators said Friday as they launched a new investigation into California’s largest utility. The fresh accusations add to growing uncertainty over PG&E’s viability as the power provider for 16 million people from Humboldt to Santa Barbara counties. The company could face bankruptcy if its infrastructure is found to have sparked the Camp fire, which killed 86 people last month. Critics have called for state regulators to break up the utility monopoly. The California Public Utilities Commission said Friday that a staff investigation found PG&E had violated rules requiring utilities to locate and mark natural gas pipelines to make sure other companies or people don’t accidentally damage them during construction and other projects that involve digging. The commission’s investigation found that PG&E didn’t have enough employees dedicated to that work and that PG&E supervisors, facing pressure from their bosses, falsified data “so requests for pipeline locating and marking would not appear as late.” The violations occurred from 2012 to 2017, the commission said. PG&E’s safety practices and culture have been subject to enormous scrutiny since 2010, when one of the company’s gas pipelines exploded in San Bruno near San Francisco International Airport, killing eight people. “This Commission would expect that after such a tragedy, caused by multiple proven violations of law, PG&E would have sought to vigorously enhance and increase its effectiveness in all aspects of its gas safety,” the commission said in an order announcing the new investigation, which could lead to additional financial penalties for the embattled utility. PG&E was fined $1.6 billion by the commission and $3 million by a federal judge after the San Bruno explosion.
PG&E natural gas storage system enters heating season well below average - — Inventories on the Pacific Gas & Electric storage system entered the heating season at historically low levels, which could likely lead to upward pressure on prices this winter. Entering the winter, PG&E storage inventories were 145 Bcf, which was 66 Bcf below 2017 and 65 Bcf below the five-year average. Despite inventories being so depressed, stockpiles still appeared sufficient to withstand a normal or colder-than-average winter. However, sustained high demand so far this winter may lead to steep storage deficits later this winter and strong upward pressure on PG&E balance of winter prices.PG&E on-system demand has averaged 2.63 Bcf/d winter to date, the strongest level this early in the season since 2013, according to data from S&P Global Platts Analytics. The elevated early season demand has caused PG&E to pull a total of 25.4 Bcf from storage, which is also the largest early season storage withdrawal since 2013.With current inventories at 120 Bcf and following along the same withdrawal patterns as the winter of 2013/2014, storage inventories stand to lose another 103 Bcf, which would place season-ending inventories at their lowest levels in history by more than 50 Bcf. The likelihood of both demand and storage activity following the polar vortex winter exactly is unlikely; however, it does paint a concerning picture for inventory levels exiting the winter. Using the last two winters as guides, storage withdrawals from now until the end of the season ranged from 51 Bcf to 81 Bcf. If either the low or high case were to happen this year, storage inventories would exit the season at a high of 69 Bcf or 39 Bcf, both of which would be a 10-year low for PG&E storage.
2018-19 winter preview: narrowing US demand growth to allow supply to overwhelm balances this winter despite atypically low storage - US demand for the 2018-19 winter is apt to breech the 100 Bcf/d mark for the first time ever, barring mild temperatures. Even so, Y/Y gains will continue to narrow, with growth anticipated to be limited to ~2.3 Bcf/d — well below this summer’s gain of ~6.8 Bcf/d and a far cry from the ~9.3 Bcf/d increase posted during the 2017-18 winter. With US-production led supply growth poised to continue to yield outsized Y/Y gains in the area of ~8 Bcf/d, bullish price concerns tied to the still massive storage deficit will fade as the heating season unfolds — without extended and sustained cold weather. Despite our caution, the risk of bullish weather still leaves NYMEX futures and Henry Hub cash exposed to upward price spikes and heightened volatility in the weeks ahead, given the US storage deficit in general, and the large shortfall in the EIA South Central region in particular as partly reflected by Platts Southeast and Texas cell regions. The bullish price risks, though, have a “shelf life” given that the US storage deficit (as well as regional shortfalls) will be cut nearly in half before end-year even, if temperatures are merely normal. With that in mind, there is a decided premium on heating demand-supportive weather in the early months of the heating season, given the entrenched supply momentum in place. Without such weather support, net US storage builds could carry well into November, led by injections in the pivotal South Central region. All told, beyond the storage carry-in and related consideration of probabilities surrounding the end-March carry-out tied to weather, the obligation to ensure a high enough maximum daily withdrawal rate to meet daily demand peaks will color near-term price perceptions. Additionally, our stress testing of US balances show that protracted cold-conditions during the winter could result in gas-scarcity issues in terms of end-March 2019 storage levels. As a result, Henry Hub price risks remain asymmetrical to the upside — at least for the next several weeks.
Prices Collapse On Moderating Weather Forecasts --Sunday, 12/16/2018 - Highlights of the Natural Gas Summary and Outlook for the week ending December 14, 2018 follow..
- Price Action: The January contract fell 66.1 cents (14.7%) to $3.827 on a 87.9 cent range ($4.666/$3.787.
- Price Outlook: Continuing the extreme volatility witnessed in recent weeks, this week posted both a new high and high. With weather forecasts still fluctuating and meaningfully impacting end of season storage projections, the volatility is likely to continue until the end of winter comes into view. CFTC data indicated a (10,161)contract reduction in the managed money net long position as longs liquidated and shorts added. Total open interest rose 11,432 to 3.745 million as of December 11. Aggregated CME futures open interest rose to 1.290 million as of December 14. With December 31 on a Monday and liquidity already low, if more traders take a 4-day weekend price moves on that day may be extreme. The current weather forecast is now warmer than 7 of the last 10 years. Pipeline data indicates total flows to Cheniere’s Sabine Pass export facility were at 2.9 bcf. Cove Point is net exporting 0.8 bcf.
- Weekly Storage: US working gas storage for the week ending December 7 indicated a withdrawal of (77) bcf. Working gas inventories fell to 2,914 bcf. Current inventories fall (712) bcf (-19.6%) below last year and fall (727) bcf (-20.0%) below the 5-year average.
- Storage Outlook: The EIA weekly implied flow was 2 bcf from our EIA storage estimate. Over the last 5 weeks, the EIA has reported a total withdrawal of (294) bcf compared to our (295) bcf estimate.
- Supply Trends: Total supply rose 0.3 bcf/d to 81.6 bcf/d. US production rose. Canadian imports rose. LNG imports fell. LNG exports rose. Mexican exports fell. The US Baker Hughes rig count fell (4). Oil activity decreased (4). Natural gas activity was unchanged +0. The total US rig count now stands at 1,071 .The Canadian rig count fell (12) to 174. Thus, the total North American rig count fell (16) to 1,245 and now exceeds last year by +77. The higher efficiency US horizontal rig count fell (6) to 927 and rises +126 above last year.
- Demand Trends: Total demand rose +2.0 bcf/d to +92.6 bcf/d. Power demand rose. Industrial demand rose. Res/Comm demand rose. Electricity demand rose +3,109 gigawatt-hrs to 79,147 which exceeds last year by +1,481 (1.9%) and exceeds the 5-year average by 3,017 (4.0%%).
- Nuclear Generation: Nuclear generation rose 390 MW in the reference week to 89,654 MW. This is (4,042) MW lower than last year and (1,676) MW lower than the 5-year average. Recent output was at 91,527 MW.
The heating season has begun. With a forecast through December 28 the 2018/19 total cooling index is at (1,102) compared to (998) for 2017/18, (804) for 2016/17, (683) for 2015/16, (961) for 2014/15, (1,132) for 2013/14, (932) for 2012/13 and (938) for 2011/12.
Why we might see $10 Henry Hub gas this winter – Platts pdf - The US gas market is finely balanced entering the winter. US storage is forecast to peak at 3.2 Tcf, its lowest mark in the past 10 years. More specifically, Southeast and Texas storage levels, which play a critical role balancing swings in demand around Henry Hub because of their quick cycling ability, enter the winter with deficits well below their 5-year low. As weather forecasts for November trend colder, the market appears to be growing more concerned about having sufficient gas to meet demand this winter, as evidenced by the +25 cent move on Monday. However, this rally may be the start of something bigger. With SE/TX storage limited in its ability to meet sustained, elevated demand given current low stockpiles, and with elasticities in the power sector reduced by structural shifts in the generation stack away from coal to gas, the destruction of LNG exports and exports to Mexico could be the final market balancing mechanism in the event more supply needs to be retained domestically. Shutting off either demand source won't come cheap. US storage levels stand at 3.14 Tcf as of the week ending October 25 and look set to start the withdrawal season at 3.23 Tcf after upcoming injections the next two weeks, roughly 600 Bcf below the 5-year average. But what matters to Henry Hub prices is the deficit in the Southeast and Texas. The Southeast has 437 Bcf in the ground, 40 Bcf below the 5-year low inventory for this time of year and almost 100 Bcf below the 5-year average. Texas stands at 332 Bcf, 45 Bcf lower than the 5-year low and more than 100 Bcf below the 5-year average. Bottom line, the cushion provided by these largely salt dome fields in the Gulf simply is not what it has been historically entering the winter, which becomes a big problem should sustained, elevated demand materialize.
The Gas Crash Continues --The natural gas crash continued today, with the January contract giving back almost 8% on the day after a solid gap down last evening. The entire natural gas strip got sold hard today, but losses were by far the most significant for the next few winter months, as forecasts remained warm and the winter premium from storage concerns is rapidly getting priced out of the market. This is of course best seen on the H/J March/April spread, which encapsulates the "stockout" fear (or fear that natural gas stocks get dangerously low before the end of high demand/storage withdrawal season in March). The spread is not yet where it was before prices spiked in November, but it is moving much closer to those levels and is over $1 off the highs. This comes on continued confidence that warmth dominates through Week 2 and into the end of December, as seen in the latest Climate Prediction Center forecast here. Then this morning in our Morning Update we highlighted that "we do not see much reason for prices to move much below $3.75, and would look for $3.5 to be firm..." as weekend models fit our expectations well. Sure enough, the January contract spiked up to $3.742 this morning before reversing and selling off through the day, setting a low at $3.516 and fitting our expectations almost exactly. We noted that though models were actually a touch cooler than we had forecast on Friday in our "Monday Expected" forecast, Week 3 forecasts in our Morning Update had trended even more bearish and we forecast that 12z model runs today would continue that trend. Warmer PM model runs, and especially very warm European model guidance, seemed to help keep prices right near support and limit any rallies as we continued to see widespread warmth in the medium-range on American GEFS guidance as well (images courtesy of Tropical Tidbits).
Gas Short Squeezes Right Back Up --If you're having trouble keeping track of all these daily natural gas moves, you're not alone. After falling almost 8% yesterday the January natural gas contract shot back higher almost 9% today to settle a cent above where it settled last Friday as long-range models began to hint at colder risks to start off January. Once again today's rally was front-led with the January contract logging the largest gain on the day. This comes as the January/February F/G spread was just finally beginning to move closer to past historical levels. If you're looking for evidence of today's rally on Climate Prediction Center products it would be hard to come by, as warmth through Week 2 remained on most model guidance. Rather, as noted in our Morning Update, Week 3 trends were solidly less bearish on overnight weather model guidance and overnight GWDDs were generally steady. We saw this as putting short-term upside to $3.75 resistance in play. The market continues to shoot around on the extrapolated Week 3 weather forecast as traders attempt to judge when cold weather can return and how that could impact natural gas stockpiles that will still be dangerously low even after this warm December limits drawdowns. Thursday's EIA print should offer clues as to how storage draws will look in upcoming cold shots; much of our research today dove deeper into our expectations for that print and where gas price risk is accordingly skewed around it.
Natural Gas Bulls May Get What They Wanted After All - A January Cold Blast - We expect a -130 Bcf change in the storage report for the week ended Dec. 14. A storage report of -130 Bcf would compare with -182 Bcf last year and -144 Bcf for the five-year average. Natural gas bulls may get what they wanted after all... a January cold blast Are you surprised by the move up today? You shouldn't be if you saw what the ECMWF-EPS long-range forecast for January yesterday. Let's just say it was a "cold" reaction. Natural gas bulls for the past few weeks have been banking on the idea that 2019's January may be a repeat of 2002 and 2014 as we wrote here. The issue at the time was that it was far too early to have any confidence in a forecast that far out. With the ECMWF-EPS long-range posted last night, natural gas bulls just got a bit more confidence. Combine this with the fact that weather models turned more bullish in the 11-15 day range as we noted yesterday (thanks to King Euro), and natural gas prices are once again off to the races. But are bulls getting a bit too excited too early? Yes, we think so. One of the big reasons is that if you break down the forecast into the two clusters above, what the natural gas bulls really need is that nice deep red or known as a ridge in Alaska to form starting Jan 7. Without that signal, the outlook may just be slightly neutral to bullish at best. This still leaves participants with plenty of time (up to a week) to validate the data via the daily model updates before buying into the idea that the cold blast arrives by the second week of January.Again, prices could never pull back and we are fine giving up this trade opportunity, but the risk that participants are taking betting on a guaranteed cold blast is just as silly as people who accuse us of being too conservative.
Weekly Gas Storage: Winter Draw Accelerates - The EIA released its weekly Natural Gas Storage Report today, outlining how national natural gas stocks have changed in the last week. In total, the EIA reports natural gas stocks fell by 141 Bcf last week, decreasing to 2,773 Bcf from 2,914 Bcf. This is 20.1% below the 3,470 Bcf that was in storage at this point last year and is 20.6% below the five-year average of 3,493 Bcf. This week’s storage draw was in line with expectations, as analysts predicted a draw of 136 Bcf.Every region saw a draw this week, with the largest in the East and Midwest region where stocks fell by 40 Bcf and 44 Bcf. Stocks in every region are below the five-year average. Gas in storage in nonsalt stocks in the South Central region is the farthest from normal, 29.1% below the 5 year average.
Gas Retests Lows On Warmer Mid-Day Weather Trends --Volatility remains the name of the game in natural gas, with at the money implied volatility continuing higher through this past week for the January natural gas contract which shot higher early this morning. It then plunged to re-test lows into the settle, and is now bouncing post-settle yet again. At the settle prices were down almost 4% on the day after being up even more than that earlier this morning. Again it was the January contract logging the largest loss on the day, with significant losses for the February and March contracts as well. Each of the moves seemed to have a reason today too. Overnight and early this morning traders were speculating that we could see a significantly bullish EIA print at 10:30 AM Eastern, and we noted small GWDD gains overnight too. Then the EIA announced that 141 bcf of natural gas was withdrawn from storage last week, which was a bit bullish to our estimate of 133 bcf. Yet despite this bullish miss to our expectations we highlighted to clients immediately after that we still only saw the print as "Neutral" for natural gas prices today as next week's print should be looser and weather remained in charge with more mixed risks. Sure enough, right after the print prices pulled back to the $3.75 level that we had highlighted in our Morning Update prices were likely to test. We then released our intraday Note of the Day highlighting that prices seemed fairly valued there, but much warmer afternoon model guidance would put $3.6 in play while colder guidance would put $3.9 back in play again today. American model guidance trended significantly warmer, and that was the impetus for the price move down to the $3.6 level that we settled near (model images courtesy of Tropical Tidbits). However, European model guidance post-settle trended colder, allowing prices to recover many of their losses and bounce back up. Climate Prediction Center forecasts showed these decreased warm risks in the long-range too. Just recently in our Afternoon Update we broke down the differences in modeling guidance and which we favored to win out over the coming week. We highlighted how that skewed natural gas price risk as well as what the latest balance readings indicated for end of draw season storage estimates. This comes after our Note of the Day looked at the latest weather-adjusted power burns and demand and our EIA Rapid Release showed whether today's EIA print was tight or loose to the 5-year average.
Despite Volatility, January Gas Ends Week Flat - It was another wild week in the natural gas space, with prices gapping down and plunging Monday before shooting back higher Tuesday and falling Wednesday into Thursday. We then shot higher again today before a warmer European ensemble model run pulled prices lower into the settle where we are set to go into the electronic close right in the middle of the weekly range. Price settled on the highs for the day, though, and the result was actually a week that was basically flat for the January and February contracts. More weakness in the March contract meant that the January/March F/H contract spread settled near its highs for the week too. Generally, trading through the week fit our expectations. When prices were off significantly on Monday we highlighted that our Weekly Sentiment was still neutral as prices could test $3.5 but that early in the week prices should set a bottom with more impressive cold risks on model guidance later in the week likely allowing prices to bounce. This verified well as weather models trended colder through the week for early January, with forecasts in our Morning Update today showing much of Week 2 with GWDDs around to slightly above average. Yet we were cautious all week, warning that model guidance can still trend warmer into the end of December and that models can sometimes rush these colder changes as we highlighted in that Monday Report. This led to the overall Neutral sentiment, which we held into our Morning Update today while also explaining that "...risk increasing looks to be skewed upwards from these levels..." as "Under $3.75 gas seems relatively cheap." Sure enough, prices bounced through the day to settle above that level, but noted model volatility was enough to keep prices in check post-settle and verify our daily Neutral sentiment with Week 3 forecasts ticking a bit more bearish. We saw these mixed risks on Climate Prediction Center forecasts this afternoon too which kept some warmth across the East but showed a bit more cold risks in the center of the country. We expect choppy trading next week with low volume on a half day Monday for the Christmas Holiday. But traders will be closely watching the latest weather developments in the first half of January while also awaiting Friday's delayed EIA print, which will demonstrate just how much the market has loosened in warmth through the past week.
US shale oil production to rise to 8.166 million b/d in January: EIA— US shale oil production in January is expected to rise 134,000 b/d month on month to 8.166 million b/d, the Energy Information Administration said Monday. In November, EIA predicted December’s oil output would be 7.944 million b/d, an increase of 113,000 b/d month on month. EIA also forecast monthly increases of 98,000 b/d for November and 79,000 b/d for October. Earlier in December, EIA raised its projection for this month to 8.032 million b/d, the first time the monthly average will have crossed the 8 million b/d threshold. US oil production generally is weighing in higher than expected in recent months, surpassing earlier targets, as drilling has become progressively more efficient as operators continue to employ better technology to eke more oil and gas out of each well, EIA analyst Jozef Lieskovsky said. The agency predicts 2018 production to average 10.88 million b/d, including 11.5 million b/d for the fourth quarter, and 12.06 million b/d next year. That compares with estimates of 10.79 million b/d for 2018 and 11.76 million b/d for 2019 just six months ago. EIA eyes production in the Permian Basin at 3.8 million b/d in January, up 73,000 b/d, even though additional takeaway capacity is about full. In addition, EIA forecasts oil production from the Bakken Shale of North Dakota/Montana at 1.461 million b/d, up by 18,000 b/d, and from the Eagle Ford Shale of South Texas at 1.427 million b/d in January, up by 19,000 b/d.Both the Niobrara Shale and the Anadarko Basin should see their production rise by 10,000 b/d each in January, to 679,000 b/d and 599,000 b/d respectively, the agency said. Also, Appalachian oil production from the Marcellus and Utica shales in Pennsylvania and Ohio should be up in January by 4,000 b/d, while Haynesville Shale oil output from northwest Louisiana/East Texas is estimated at 43,000 b/d, unchanged on the month. Last week, a total 1,172 drilling rigs were drilling in oil and gas plays, up about 11% from the same week last year, according to S&P Global Platts Analytics data. Of last week’s rigs, 80% were located in oil-weighted plays. The number of actual domestic drilled but uncompleted (DUC) wells also rose in November, to 8,723, up by 287 from the previous month, EIA said. Of those, 248, or 86%, came from the Permian, where DUCs rose to 4,039 – a record level and the first time the number has surpassed 4,000.
Interior Dept. Moves Toward Selling Oil Leases in Arctic Refuge-- The Interior Department on Thursday took a key step toward allowing oil and gas drilling in a pristine wildlife refuge in Arctic Alaska, putting forth proposals it said would protect the animals there but that would end decades of environmental protections. The four possible plans, which would determine what parts of the coastal plain of the Arctic National Wildlife Refuge could be opened to drilling, were included in a draft environmental report prepared by the Bureau of Land Management. After a 45-day public comment period, the bureau is expected to select one of the alternatives and approve a final report early next summer. If the process survives expected court challenges by environmental and conservation groups, as well as efforts by the incoming Democratic majority in the House of Representatives to slow it down, lease sales for rights to drill for oil and gas could be held before the end of 2019. Oil company exploration and development plans would require additional studies and approvals, however, so any actual drilling could be a decade or more away. The draft report, called an environmental impact statement, was issued exactly a year after Congress approved legislation opening the refuge to oil and gas development. “We have undertaken a rigorous effort here,” said Joe Balash, an assistant Interior secretary. Mr. Balash, who oversees the bureau, said each of the four proposed alternatives had “built-in protections” for the coastal plain, known as the 1002 Area, where the migrating porcupine caribou herd goes to give birth. Of the alternatives, two would exclude one-third of the 1.5 million acres of the coastal plain from any lease sales, while the other two would have no exclusions. In all four, some acreage would be subject to operating restrictions.
Trump Administration Sued Over Controversial Arctic Drilling Project - Conservation groups are suing the Trump administration to halt construction of a controversial oil production facility in Alaska's Beaufort Sea, the first offshore oil drilling development in federal Arctic waters. Hilcorp Alaska received the green light from the Interior Department in October to build the Liberty Project, a nine-acre artificial drilling island and 5.6-mile underwater pipeline, which environmentalists warn could risk oil spills in the ecologically sensitive area, threaten Arctic communities and put local wildlife including polar bears at risk.In the lawsuit filed Monday, the Center for Biological Diversity, Friends of the Earth, Greenpeace, Defenders of Wildlife and Pacific Environment—all represented by the environmental law nonprofit Earthjustice—claim the administration's approval violated federal laws and ignores the causes and effects of climate change."We can't let this reckless administration open the Arctic to offshore oil drilling. It threatens Arctic wildlife and communities and will only make climate chaos worse around the world," said Kristen Monsell, oceans legal director with the Center for Biological Diversity in a press release. "Liberty is the bad step down a very dangerous path. An oil spill in the Arctic would be impossible to clean up in a region already stressed by climate change."The Arctic is warming at twice the rate of anywhere else on Earth, and the region's air temperatures in the past five years between 2014-2018 have exceeded all previous records since 1900, government scientists warned in a report earlier this month. Ironically, the Liberty Project has already been delayed because of the effects of climate change. The region's unusual warmth has resulted in unstable land-fast sea ice, meaning that the ice simply isn't thick enough to transport construction materials.
Groups sue to block oil production in Alaska's Beaufort Sea - Five conservation groups filed a lawsuit Monday seeking to block oil production from a proposed artificial gravel island in federal Arctic waters.The groups asked the 9th U.S. Circuit Court of Appeals to review an offshore production plan approved for the Liberty project in the Beaufort Sea off Alaska's north coast.The groups said the plan violates federal law governing outer continental shelf drilling, the environment and endangered species. The Trump administration failed to consider impacts of an oil spill in remote Arctic waters or effects of drilling on polar bears and other endangered species, said Kristen Monsell of the Center for Biological Diversity, one of the groups that sued."An oil spill in the Arctic would be impossible to clean up in a region already stressed by climate change," she said.Drilling law requires the administration to reject development if the risks to the human and marine environment outweigh the benefits of oil extraction. That includes both spills and climate change, Monsell said."Here the agency used the totally inadequate analysis that actually found that the 'no action' alternative — not approving the project — would actually result in more greenhouse gas emissions, which is just completely ridiculous on its face, and also ridiculous given the modeling they used," Monsell said.The Bureau of Ocean Energy Management did not immediately respond to an email request for comment Monday.BOEM in October approved a plan submitted by Houston-based Hilcorp for production wells on an island proposed in 19 feet (5.8 meters) of water about 5.6 miles (9 kilometers) off shore. The site is 15 miles (24 kilometers) east of Prudhoe Bay, North America's largest oil field. Hilcorp plans to extract oil from federal leases sold in the 1990s. BP Exploration Alaska drilled at the site in 1997 and sold 50 percent of the assets to Hilcorp in 2014. The base of the gravel island would cover 24 acres of ocean floor, about the size of 18 football fields, with sloped sides leading to a work surface of 9 acres, the size of nearly seven football fields. To create the island, trucks would travel by ice road to a hole cut in sea ice and deposit 83,000 cubic yards (63,450 million cubic meters) of gravel. The surface would have room for 16 wells. Hilcorp anticipates extracting 80 million to 130 million barrels over 15 to 20 years. Hilcorp proposes to move oil to shore by buried pipe.
GOP Economic Outlook For Arctic Wilderness Drilling Is A ‘Pipe Dream,' Report Finds - If the environmental risks of opening Alaska’s fragile Arctic National Wildlife Refuge to oil and gas development weren’t enough cause for concern, a new analysis has found that the economic benefits the Trump administration and Republican lawmakers have touted to push the plan are unattainable. The report, published Wednesday by conservation nonprofit The Wilderness Society, comes as the Trump administration weighs a proposal to allow seismic surveys in the refuge. The surveys would be a key first step in the administration’s push to approve drilling leases as early as 2019.Late last year, GOP lawmakers passed a wildly unpopular tax bill that included a provision introduced by Sen. Lisa Murkowski (R-Alaska) requiring the Interior Department to approve at least two lease sales ― each consisting of at least 400,000 acres ― in the refuge’s 1.5 million-acre coastal plain, also known as the 1002 Area. The Interior Department, which has prioritized opening the area as part of the administration’s fossil fuel-focused “energy dominance” agenda, has said the leases would generate an estimated $1.8 billion in federal revenue over a decade. The Congressional Budget Office has pegged the figure at closer to $1.1 billion. “It is a pipe dream to say that they’re going to reach those estimates,” Ben Gruel, the Arctic refuge campaign director at The Wilderness Society, told HuffPost by phone Wednesday. CBO’s estimate assumes that all 800,000 acres are leased for $7,500 per acre, according to The Wilderness Society report, which is based on research conducted by Virginia-based Key-Log Economics and funded by The Wilderness Society. But in recent years, the average acre on Alaska’s North Slope has sold for around $41, the analysis found. And oil prices are forecast to fall in 2019, according to the U.S. Energy Information Administration.
ExxonMobil shelves Canada LNG export project (Reuters) – U.S. oil major Exxon Mobil Corp has withdrawn its WCC liquefied natural gas (LNG) export terminal in Canada from the environmental assessment process, it said on Thursday, signaling that the project has been shelved. The decision to pare its LNG project portfolio follows the go-ahead of a giant Royal Dutch Shell-led project in British Columbia, and Exxon’s focus on LNG projects in Asia, the Middle East and the United States. Global LNG demand is expected to double to 550 million tonnes per annum (mtpa) by 2030, as countries like China move away from coal to cleaner fuels. The top import market for LNG is northeast Asia. Exxon’s West Coast Canada (WCC) LNG export project, located in northern British Columbia, was expected to produce around 15 million tonnes per year of LNG to serve Asian buyers, with plans for further expansion up to 30 million tonnes per year. The project was being jointly reviewed by the province and Canadian environmental regulators, an assessment that had been underway since 2015, though no major documents have been filed since 2016. Exxon formally withdrew from the process in a Dec. 5 letter to the British Columbia Environmental Assessment Office, posted on the regulator’s website. “After careful review, ExxonMobil and Imperial (Oil Resources Ltd) have withdrawn the WCC LNG project from the environmental assessment process,” a spokeswoman for ExxonMobil confirmed in an email. Exxon’s decision signaled it is concentrating on LNG projects with Qatar Petroleum [QATPE.UL] and a proposed expansion of its chilled-gas operation in Papua New Guinea, said Jason Feer, head of business intelligence at Poten & Partners, LNG tanker brokers and consultants. “They have got a pretty robust pipeline of liquefaction projects globally. It would be natural to review that and see which would be competitive,” he said.
Arctic LNG Contract Goes to Saipem - Arctic LNG 2 has awarded a joint venture (JV) of Saipem and the Turkey-based oil and gas services company Renaissance a 2.2 billion-euro onshore engineering and construction contract in Russia, Saipem reported Wednesday. According to Saipem, the 2.2 billion-euro contract calls for the construction of three 6.6-million ton per annum (mtpa) liquefied natural gas (LNG) trains installed on concrete gravity-based structures and LNG storage facilities with 687,000 cubic meters of capacity. Novatek JSPC and Ekropromstroy Ltd. own 60-percent and 40-percent interests, respectively, in the project, which will be built in the western part of Gydan Peninsula in the Tazovsky District in Russia’s Yamal-Nenets autonomous administrative region. The project relies on the hydrocarbon resource of the Utrenneye field, whose reserves (Russian classification) total nearly 2 billion cubic meters of natural gas and 105 million tons of liquids, according to Novatek’s website. Saipem noted that the Arctic LNG 2 contract forms part of a strategic partnership deal that it signed with Novatek in 2016 for LNG-related activities. Each company in the 50/50 Saipem-Renaissance JV will receive approximately 1.1 billion euro for the project.
AMLO Earmarks $23B to Boost National Oil Industry - -- Mexican President Andres Manuel Lopez Obrador is boosting Petroleos Mexicanos’ budget to 464.6 billion pesos ($23 billion) next year to reverse flagging oil production and increase domestic fuel output. Lopez Obrador is proposing that Pemex invest 211 billion pesos in exploration and production ($10.4 billion) in 2019. That’s a 26 percent increase compared to last year, when Pemex planned to invest 168 billion pesos in the unit, according to the finance ministry. Oil production is expected to stabilize at 1.847 million barrels a day in 2019 with Mexico’s oil mix estimated at $55 a barrel, the ministry said. The budget reflects Lopez Obrador’s ambition to wean Mexico from foreign fuel imports, which have been rising due to growing demand and lack of investment in refineries. To do that, the president plans to build a new refinery and refurbish the run-down existing ones, while increasing domestic oil production to feed the plants. Pemex is importing light oil from the U.S. for the first time to make up for the crude shortfall at its refineries. “It’s an embarrassment that we are buying light oil for our refineries. If we don’t have the primary material, we can’t do anything,” Lopez Obrador told a crowd of oil workers on Saturday morning at the port of Ciudad del Carmen, Campeche, an oil hub that the president has promised will be the new Pemex headquarters. “We are going to rescue our dear Mexico and the national oil industry.” Lopez Obrador has shrugged off investor concerns that his government will worsen Pemex’s fiscal situation. The beleaguered Mexican driller is the largest Latin American corporate borrower, with $106 billion in financial debt. “We are going to invest where we know there’s oil and where it costs less to extract it,” he said. “We are going to reduce costs.” Under a new six-year business plan, Pemex’s oil production will rise 52 percent to 2.624 million barrels a day by the end of 2024, up from 1.730 million daily barrels today, the company’s new chief executive officer, Octavio Romero, said at the event in Campeche alongside Lopez Obrador. Pemex’s output has declined every year since 2004, almost halving in that time.
Mexico targets 50 percent jump in oil output under 'Pemex rescue' - (Reuters) - Mexico aims to lift oil and gas production by almost 50 percent in the next six years and in January will award infrastructure and drilling contracts to develop 20 fields, state oil firm Petroleos Mexicanos said on Saturday. Octavio Romero, chief executive officer of the company generally known as Pemex, said the new government would increase exploration investment by around 10 percent annually to reverse dwindling output as he presented a new plan for the industry. President Andres Manuel Lopez Obrador, who took office on Dec. 1, wants to revive Pemex, which has become heavily indebted as crude output fell from a peak of nearly 3.4 million barrels per day (bpd) in 2004 to less than 1.8 million in October. “It’s a new Pemex rescue,” Lopez Obrador said alongside Romero in the port of Ciudad del Carmen in the southern Gulf of Mexico shortly before his government was due to present its first budget with Pemex’s finances under close scrutiny. Under the plan, Mexican crude output is due to climb to some 2.624 million barrels bpd by the end of 2024, while gas production will also rise by about 50 percent. Output will stabilize in the coming months and start to pick up toward the end of next year, the Pemex CEO said. However, projections presented in the government’s first budget later on Saturday suggested output would continue falling until 2020. Mexico’s previous government sought to increase production by opening up production and exploration to private capital. But the decline has yet to bottom out.
Mexico's plan to revive their crude oil refining sector - While U.S. refineries are again running hot and heavy after the end of this year’s seasonal fall maintenance period, Mexico’s refineries have continued to struggle to operate at more than 30% of their capacity, a decline that is exacerbated by that country’s tumbling oil production. In recent years, Mexico’s dismal refinery utilization rate has been a boon for U.S. refiners on the Gulf Coast who can ship, pipe or truck gasoline to America’s southern neighbor in short order. Now, Mexico’s new president, Andrés Manuel López Obrador (AMLO), is pushing to solve Mexico’s refinery problems by building a new one. Today, we discuss Mexico’s growing dependence on U.S. gasoline, and whether building a new refinery south of the border will change things. As we mentioned in our recent blog Going to Mexico, Mexican crude production has fallen sharply in the past 10 years. At 1.76 MMb/d in October 2018, total output is less than half what it was in 2005. [It’s worth noting here that the majority of that crude — nearly 61% of the 1.76 MMb/d total in October — is categorized as “heavy” or low in API gravity, according to Mexico’s state-run oil company, Petróleos Mexicanos (Pemex)]. Much like Pemex’s oil production rates, refining rates have collapsed, too. And to make matters even worse, Mexico’s refineries are relatively simple — that is, not complex — and configured to process lighter, sweeter crudes, the exact quality that’s getting harder and harder to come by in Mexico. AMLO has a plan to revive oil output alongside refinery rates — he presented a national oil production plan in Campeche last week, in which he pledged to boost production to 2.4 MMb/d in the next six years.
Fracking stopped by 'red event' off Preston New Road after seven earthquakes in two hours - Fracking has been halted in Lancashire following a series of seven small earthquakes in less than two hours. The earthquakes all took place close to the Preston New Road site, where oil and gas exploration company Cuadrilla commenced fracking in October. Work has paused and the site will be monitored by Cuadrilla for at least 18 hours in line with rules set out by the Oil and Gas Authority. A Cuadrilla spokesman said: "A series of micro seismic events in Blackpool have been recorded on the British Geological Survey website today. The largest recorded was 0.9ML at about 2pm. This occurred while we were hydraulically fracturing at the Preston New Road exploration site. "Detected by Cuadrilla's sophisticated monitoring system, and verified by BGS, it will be classed as a 'red' event under the traffic light system operated by the Oil and Gas Authority. "Cuadrilla has paused and will continue to monitor micro seismicity for at least 18 hours after the event was recorded, in line with the traffic light system regulations. Well integrity has been checked and verified." The first quake took place at 1.05pm with a magnitude of -0.6. Two earthquakes, with magnitudes of -0.2 and -0.5, took place at 1.06pm. Three minutes later, at 1.09pm, a quake with a magnitude of 0.1 took place. At 1.18pm a tremor with a magnitude of -0.1 occurred. This was followed at 1.41pm by a tremor with a magnitude of 0.9 - the biggest of the day. The last tremor, with a magnitude of 0.1, took place at 2.51pm.
Fracking equipment leaves Blackpool site - but it will be back - Shale gas exploration company Cuadrilla has demobilised some equipment from its Lancashire site before Christmas. But the fracking firm is already looking forward to bringing it back in 2019. The team, which is based in Bamber Bridge, near Preston and operates the UK’s first horizontal shale gas exploration wells in Preston New Road, near Blackpool, said 2018 had been a landmark year. Chief Executive Officer Francis Egan provided an update as equipment prepared to demobilise from Preston New Road today.. He revealed that gas had been flowing back to the surface. He said: “It has been an amazing year. We drilled the first two horizontal wells into UK shale, both safely and successfully completed, secured the country’s first ever hydraulic fracture consent and agreed the associated operation plans and then hydraulically fractured our first well. “In recent weeks we have repeatedly seen natural gas flowing back to surface along with the water injected during the fracturing process and this flow of gas is in fact earlier than expected. "Whilst there have been undoubted challenges and restrictions in operating within what is acknowledged to be a very conservative micro-seismic traffic red light threshold (set at just 0.5 on the Richter Scale) this early gas flow is a hugely encouraging signal of the potential locked up in this natural gas resource to heat our homes and businesses for many years to come. “All of the above was achieved with a relentless focus on safety and environmental performance.” Russia's Gazprom Export sells huge volumes in latest natural gas auction - Russia's Gazprom Export sold another huge volume of gas on its Electronic Sales Platform (ESP) on Friday for Q1 2019 delivery, with a total of 123 million cu m sold. It is the biggest volume sold so far in the second wave of auctions that began on November 26 and the second-biggest sale since the first ESP auction in late September.It brings the sales for Q1 2019 delivery so far to 572 million cu m and total ESP sales to 1.61 Bcm. Auctions for delivery in Q4 ended on November 16, with 1.04 Bcm sold.
Poland's goal of ditching Russian natural gas bolsters American LNG and Trump's energy agenda - Poland took another step towards weening itself off Russian energy supplies on Wednesday by signing a 20-year agreement with San Diego-based Sempra Energy to import U.S. liquefied natural gas. The signing marks the third long-term contract the state-controlled Polish Oil and Gas Company, or PGNiG, has inked with an American LNG company this year. In the coming years, Warsaw plans to replace Russian gas with pipeline supplies from Norway and shipments of LNG, or gas super-chilled to liquid from for transport by sea. That is opening an opportunity for the U.S. energy industry, which is on the cusp of a opening a second wave of LNG export terminals. The Trump administration, eager to dominate the global energy market, has been pitching the supplies in trade talks from Beijing to Warsaw. Eastern and Central European nations, which have a complicated and frequently antagonistic relationship with Moscow, have been a receptive audience. Assistant Secretary Francis Fannon and other Department officials were on hand on in Warsaw when Poland's PGNiG signed the deal with Sempra on Wednesday. The agreement commits PGNiG to buy 2 million tons per year from Sempra's Port Arthur Texas terminal, which is slated to enter commercial operation in 2023. That is enough LNG to cover about 15 percent of Poland's yearly natural gas consumption, according to PGNiG. It also moves Sempra closer to making a final decision to finance the Port Arthur facility. In October, PGNiG signed another 20-year agreement to buy 2 million tons a year from Venture Global's planned LNG export facility in Plaquemines Parish, Louisiana. In August, the Polish firm signed on for 1.45 million tons a year for two decades from Cheniere Energy, with smaller shipments starting next year. Poland is preparing for a major shift in its energy imports after 2022, when Warsaw says it will allow a contract with Russia's Gazprom to expire. That plan also includes boosting imports from top LNG exporter Qatar and building a pipeline link with Norway. Polish President Andrzej Duda does not hide his disdain for Poland's reliance on Russian natural gas. In a press conference with President Donald Trump in September, he said Moscow uses its grip over the European gas market for "political blackmail."
Indigenous Group Sues Exxon, Energy Majors Over Fracking Waste Contamination in Patagonia - A major indigenous group in the Argentine Patagonia is suing some of world's biggest oil and gas companies over illegal fracking waste dumps that put the "sensitive Patagonian environment," local wildlife and communities at risk, according to Greenpeace.The Mapuche Confederation of Neuquén filed a lawsuit against Exxon, French company Total and the Argentina-based Pan American Energy (which is partially owned by BP), AFP reported. Provincial authorities and a local fracking waste treatment company called Treater Neuquén S.A. were also named in the suit.The Mapuche accused the companies of contaminating the environment with "dangerous waste" due to "deficient treatment" close to the town of Añelo, according to AFP.The waste comes from operations in the Vaca Muerta field, one of the largest deposits of shale oil and gas in the world that lies in the Neuquén province."We denounce the company Treater Neuquén S.A., responsible for environmental contamination with hazardous waste, for deficient treatment and disposal of the oil industry's waste," said Héctor Jorge Nawel, coordinator for the Xawvn Ko area of the Mapuche Confederation of Neuquén, in a press release. "It is critical that the state authorities and oil company executives who allowed this happen be held accountable, and that our right to a healthy environment be respected."On Monday, Greenpeace claimed Total and Royal Dutch Shell (which was not named in the lawsuit) are "dumping thousands of tonnes of toxic oil and industrial waste" from their fracking operations into illegal open waste ponds in Patagonia. "The Vaca Muerta reserves house approximately 830 fracking wells, each one generating between 600 to 850 cubic meters of waste in a month of operation. To be transported to treatment plants, much of that waste must pass through cities, communities, drinking water sources, and agricultural fields," Greenpeace said.
Outlook 2019: Venezuela's oil minister, a general with no industry experience, is now OPEC's president --OPEC enters a pivotal third year of production cuts in a volatile oil market with its least experienced minister at the helm. Venezuela's Manuel Quevedo, a former brigadier general in the country's National Guard, will take over the group's rotating presidency in 2019. The timing of his ascendency could not be worse. Brent crude has plummeted 40% since reaching $86/b in October, despite OPEC and its allies agreeing in December to 1.2 million b/d of cuts. As concerns grow over the strength of global demand, Quevedo will be responsible for keeping the peace within OPEC and ensuring its members keep their promises. His task is complicated by Venezuela's own collapse as a major force in the oil industry. The crisis-wracked country -- with its crumbling oil production, runaway inflation and crushing debt -- is in a weak position at the head of OPEC's top table. Quevedo, a fervent Marxist, may struggle to be heard as the group's main ministerial mouthpiece.OPEC watchers say the rhetoric coming from Venezuela -- often anti-US and out of touch with the real challenges facing the country -- may present a challenge for the organization, as it tries to keep US President Donald Trump at bay and maintain vital ties with Russia to shore up oil prices."Today Venezuela needs some soft-spoken person to improve their image rather than an aggressive approach," said Kamil al-Harami, an independent oil analyst based in Kuwait. Quevedo, who also heads state energy company PDVSA, is loyal to President Nicolas Maduro, who appointed him in late 2017. The government in Caracas has emerged as a geopolitical focus for the Trump administration alongside Iran, which has also been targeted with sanctions. Despite concerns, Quevedo insists his main focus as OPEC president will be to maintain the bloc's tenuous solidarity. "We are looking to maintain the unity between OPEC and non-OPEC countries, to continue with the cooperation we already have and to have sustainable prices for crude oil," Quevedo said in an interview with S&P Global Platts on the sidelines of this month's fraught meeting in Vienna. "This cooperation has been successful."
OPEC's Sequel to Oil Deal Faces Struggle - OPEC’s bold strategy to revive oil markets proved a surprise success last year, but the sequel they’ve unveiled for 2019 is getting a cooler reception. Oil prices have slumped in the two weeks since the cartel and its allies announced they will cut production to prevent a surplus, in contrast to the rally that greeted their previous intervention. From Wall Street oil-watchers to Russia’s central bank, speculation is growing that booming U.S. shale output and shaky fuel demand may thwart the coalition’s efforts. Saudi Arabia’s assurance on Wednesday that the agreed six months of cuts will probably be extended -- a pledge that comes before the deal has even started -- only underscored the prevailing anxiety. “The concern is that even if OPEC+ faithfully implement those cuts, it still might not be enough,” said Mike Wittner, head of oil market research at Societe Generale SA in New York. Oil is trading at the lowest in a year despite the pledge from the Organization of Petroleum Exporting Countries and its allies to remove 1.2 million barrels a day of crude from the market for six months starting in January. The group’s own data gives an indication why this hasn’t halted the price slump. While their cut should roughly balance supply and demand in the first half of 2019, less crude will be needed from the group in the second as a slowing global economy reins in demand and U.S. shale producers keep breaking records. By the fourth quarter, the coalition may need to almost double their planned cutback just to keep markets in equilibrium. Brent crude futures have slipped about 10 percent since OPEC and its partners met on Dec. 7, trading for $55.44 a barrel as of 8:56 a.m. London time. In contrast, in the two weeks after the group first agreed joint cuts in November 2016 prices jumped about 20 percent. This is a relief for consumers, in particular U.S. President Donald Trump, who urged OPEC to keep the taps open and cheered the recent price drop as a “big tax cut” for consumers. But it’s a gloomy situation for Saudi Arabia and other major exporters, whose 2019 budgets would be strained at current prices.
Iraq gets 90-day Iran sanctions waiver from Washington — Iraq can continue electricity and gas imports from Iran without violating US sanctions under an extension granted Wednesday, senior officials close to negotiations told S&P Global Platts. Washington appears satisfied with Baghdad's intention to reduce electricity and gas imports, among other actions, and gave a 90-day waiver just as the previous 45-day waiver expired. This provides additional time for Iraq to determine ways to pay Iran for the imports in non-dollar denominations and avoiding Iranian banks. The financial transactions technically violate sanctions, not power or gas purchases. Iraq stopped trading in crude with Iran prior to the November 5 snapback of American sanctions, which otherwise would have violated sanctions. Iraq does not produce enough power itself or have enough feedstock for existing power plants. Imports from Iran account for nearly 30% of Iraq's 14,000 MW of daily electricity consumption. Cutting that supply would be devastating for Iraq's economy and, considering the ferocity of summer power protests, would likely destabilize an already fragile political balance. Around 1.25 Bcf/d is imported by pipeline feeding three power plants in Diyala and Baghdad provinces. Another 350 Mcf/d is sent by pipeline to a power plant in Basra. Hayan Abdulghani, the director general of the South Gas Company, told S&P Global Platts last week that he's overseeing projects that replace that line in two years. Iraq also is fed a total of 1,000 MW of electricity via power lines from Iran. Negotiations began after the Trump administration made clear it would re-impose sanctions. While the specific violations were of primary concern, American officials alluded to additional requirements, multiple officials confirmed to S&P Global Platts. Washington wanted to see a plan by Iraq to eventually become self-sustaining in power and gas, thereby reducing the need for Iranian imports. Iraqi and Kurdistan region officials were also pressed to strike a deal to restart oil exports from federally controlled Kirkuk fields through the Kurdistan-controlled pipeline to Turkey, which began at nearly 100,000 b/d in mid November. It's unclear what specifically will be required of Iraq when the 90-day waiver expires.
Oil Bulls Cut Bets to Lowest Since 2016 - -- Hedge funds aren’t buying into OPEC’s oil-production cuts just yet. They slashed net wagers on a rally of West Texas Intermediate crude to the lowest in more than two years, while short-selling of Brent oil climbed for a record 11th week. Both benchmarks ended the week lower as the cartel’s efforts were overshadowed by concern about booming shale production and waning global demand. It’s mostly up to Saudi Arabia now to try to win investors over. “Demand is now decreasing and you have a problem with Chinese growth,” said Tariq Zahir, a commodity fund manager at Tyche Capital Advisors LLC. “Right now, everything is dependent on what Saudi Arabia does.” Saudi Arabia clearly knows that. The oil-rich kingdom has plans to slash exports to the U.S. in coming weeks in an effort to dampen visible build-ups in crude supplies, telling local refiners to expect much lower shipments in January, according to people briefed on the plans. That could bolster confidence among traders that OPEC’s de facto leader is serious about rebalancing supply and demand. “We should be at just about the end of the cycle where longs have gotten wiped out,” said John Kilduff, a partner at New York-hedge fund Again Capital LLC “In the medium term, the Saudis exporting less to the U.S. should help us head higher.” The biggest challenge for the Saudis is the concern that growth in prolific U.S. fields could surpass supply curbs by OPEC and its allies. North Dakota’s Bakken shale play produced a record 1.4 million barrels a day in October, while the Permian Basin of West Texas and New Mexico is forecast to surpass 4 million next month. On Friday, traders continued to sell off oil, as Brent futures for February delivery fell 1.9 percent to settle at $60.28 a barrel in London, putting it down 2.3 percent on the week. WTI for January closed down 2.6 percent on the day, closing out the week down 2.7 percent. Hedge funds’ net-long position on WTI -- the difference between bets on higher prices and wagers on a drop -- slid 6.7 percent to 119,675 in the week ended Dec 11, the U.S. Commodity Futures Trading Commission said Friday. That was the least bullish since August 2016. Longs-only fell 0.8 percent to the lowest since March 2013, while shorts rose 7.8 percent. Brent net-longs edged up from a three-year low over the same period, rising by 2.3 percent to 139,597 contracts, ICE Futures Europe data showed. Longs rose 3.1 percent, while shorts rose 3.9 percent to the highest since July 2017.
Oil Prices Tick Higher to Start the Week -- Oil prices ticked higher on Monday, staging a modest rebound after falling by more than 2% in the prior session amid indications that U.S. drilling activity fell to its lowest level in about two months. Offering a hint on U.S. production activity, Baker Hughes on Friday reported that the number of active domestic rigs drilling for oil fell by four to 873, the lowest since mid-October. That helped ease worries about oversupply in the market. U.S. West Texas Intermediate crude futures tacked on 16 cents, or roughly 0.3%, to $51.63 a barrel by 9:00 AM ET (14:00 GMT). International Brent crude oil futures were at $60.58 per barrel, up 30 cents, or about 0.5%. Oil prices sank on Friday as weak data from China and Europe stoked fears of a global economic slowdown. With just about two weeks to the end of 2018, WTI remains down about 15% on the year and some 32% lower from four-year highs of nearly $77 per barrel hit in early October. Brent is down about 10% on the year and nearly 32% lower from four-year highs of nearly $87 per barrel hit two months ago. In other energy trading, gasoline futures rose 0.1% to $1.443 a gallon, while heating oil added 0.3% to $1.850 a gallon. Natural gas futures plunged 3.4% to $3.697 per million British thermal units as forecasts for warmer-than-normal temperatures to the end of the month weighed.
US crude drops 2.6% to 14-month low, settling at $49.88, on oversupply concerns - Oil prices fell to a 14-month low on Monday on signs of oversupply in the United States and as investor sentiment remained under pressure from concern over the prospects for global economic growth and fuel demand.U.S. light crude ended Monday's session down $1.32, or 2.6 percent, to $49.88, settling below $50 for the first time since October 2017. The contract fell 4 percent towards $49 a barrel after the settlement, hitting the lowest level on an intraday basis since Sep. 13, 2017.Brent crude oil fell 67 cents, or 1.1 percent, at $59.61 per barrel.U.S. crude futures fell after inventories at the storage hub of Cushing, Oklahoma rose by more than 1 million barrels between Dec. 11 and Dec. 14, traders said, citing data from market intelligence firm Genscape.Traders and market participants closely watch supplies at the hub because it is the delivery point for the futures contract and underpins nearly all other regional crude grades."The Cushing number came in higher than anticipated ... it's definitely pointing to the concern that there's more supply and demand is weakening," said Phil Flynn, analyst at Price Futures Group in Chicago."The market is still very nervous about that."Both benchmarks fell by about 30 percent through October and November as a supply glut inflated global inventories but have stabilized over the last three weeks, trading within fairly narrow ranges as oil producers have promised to cut production.Some investors doubt planned supply cuts by OPEC and other producers such as Russia will be enough to rebalance markets.OPEC and its allies have agreed to reduce output by 1.2 million barrels per day (bpd) from January, in a move to be reviewed at a meeting in April.UAE energy minister Suhail al-Mazrouei told reporters in Dubai on Monday that the global oil market was "correcting" and he expected "everyone" to cut oil supply under the agreement reached earlier this month in Vienna. But OPEC and its allies have an uphill task. U.S. shale output is growing steadily, taking market share from the big Middle East oil producers in OPEC and making it harder for them to balance their budgets.
Oil falls, U.S. crude dips below $50 on oversupply fears (Reuters) - Oil prices fell more than 2 percent on Monday, with U.S. crude tumbling below $50 a barrel, on signs of oversupply in the United States and as investor concern over global economic growth and fuel demand grows. A gas station worker pumps fuel into a motorbike at a gas station of the Venezuelan state-owned oil company PDVSA in Caracas, Venezuela November 2, 2018. REUTERS/Marco Bello Brent crude oil LCOc1 fell 67 cents, or 1.11 percent, to settle at $59.61 a barrel after dropping to a session low of $58.83 a barrel. U.S. crude CLc1 dropped $1.32, or 2.58 percent, to end the session at $49.88 a barrel and tumbled to a low of $49.09 a barrel. Benchmark U.S. crude futures settled below $50 for the first time since October 2017. U.S. crude futures fell after inventories at the storage hub of Cushing, Oklahoma, rose by more than 1 million barrels from Dec. 11 to 14, traders said, citing data from market intelligence firm Genscape. Traders and market participants closely watch supplies at the hub because it is the delivery point for the futures contract and underpins nearly all other regional crude grades. “The Cushing number came in higher than anticipated. ... It’s definitely pointing to the concern that there’s more supply and demand is weakening,” said Phil Flynn, analyst at Price Futures Group in Chicago. “A lot of the shale producers can’t make money where prices are right now, let alone below $50, so we’re going to see a cutback in some of the production estimates, but it takes time for that to happen .... right now we’re definitely following the continued weakness in momentum.” Increasing concerns about weakening growth in major markets such as China and Europe have also dampened the mood in oil and other asset classes.
Oil Prices Fall Below Key Thresholds - West Texas Intermediate (WTI) and Brent crude oil futures on Monday settled below the psychologically significant $50 and $60 marks, respectively. WTI crude oil for January delivery fell by $1.32 to settle at $49.88 a barrel. The U.S. benchmark peaked at $51.87 and bottomed out at $49.09. The February Brent crude oil futures prices moved in the same direction as the WTI but at a more modest rate. The Brent settled at $59.61 a barrel, losing 67 cents overall during the early-week session. “Oil prices stayed down Monday, following last week’s losses that saw the Brent contract fall 2.3 percent week-over-week and WTI slip 2.7 percent,” said Delia Morris, Houston-based commodity pricing analyst. “Along with equity markets, the front-month contracts for both Brent and WTI were weighted down by global growth fears and uncertainty around the upcoming Fed policy meeting, which will outline economic expectations for 2019.” The U.S. Federal Reserve will hold its Federal Open Market Committee (FOMC) meeting Tuesday and Wednesday of this week. “With bearish sentiment lingering in the market – net long positions are at their lowest levels since 2016, according to the Commodity Futures Trading Commission (CFTC) – much of this can be ascribed to doubts around the efficacy of OPEC+’s commitment to cut 1.2 million barrels per day of crude production in order to balance global oil markets,” continued Morris. “The specter of an upsurge in U.S. production in the back half of 2019, when additional oil pipeline capacity will come onstream, presents another negative catalyst for oil.” The price of a gallon of reformulated gasoline (RBOB) also ended the day lower. The January RBOB contract price declined by more than two cents to settle at $1.41.
Libya's biggest oil field is being held hostage, but even that won't boost prices -- Libya's state-owned National Oil Corporation (NOC) declared force majeure on operations at its biggest oilfield late Monday night amid a stand-off with armed protesters, expecting a loss of 315,000 barrels per day (bpd) for the OPEC member. The protest group, known as the Fezzan Rage Movement, shut down the El Sharara oil field in Libya's impoverished southwest earlier this month with the help of security personnel the Petroleum Facilities Guard, a militia known for its clashes with the Islamic State. The movement of tribesmen is demanding better services, health sector support, monetary stimulus for the southern region and better protection from the government, which it claims has marginalized those living in Libya's south. But while oil prices saw a slight rebound of about 2 percent one week ago on news of the shutdown, crude output from the U.S. is so high it's practically drowned out what would otherwise be a notable disruption in the oil market. Brent crude was trading at 58.54 at 2 p.m. London time on Tuesday, down 1.8 percent on the previous day."In terms of the impact on prices, at present it is struggling to overturn the prevailing bearish bias," Stephen Brennock of PVM Oil Associates told CNBC on Tuesday. However, he noted, "any further unexpected outages could inject some much needed bullish impetus into the oil complex." Oil prices have fallen some 30 percent since hitting year-highs in October on concerns of global oversupply and slowing demand growth. The Energy Information Agency (EIA) projects U.S. shale oil output to top 8 million bpd by the year's end and average a record 12.06 million bpd in 2019. While the crisis does heighten geopolitical risk, said Ehsan Khoman, head of Middle East and North Africa research at MUFG, "markets remained focused on the more structural concerns that U.S. oil production growth is well north of, and expected to stay, above global demand growth heading into 2019." Libya's NOC said that production at El Sharara will only restart after "alternative security arrangements," the Monday statement said, without elaborating.
Shale Under Pressure As WTI Flash-Crashes Below $50 For 2nd Time Today - Xi's speech did not help (with no growth measures revealed) but oil markets seem extremely fragile this morning having broken below $50 and flash-crashed for the second time in a few hours. WTI is trading extremely ugly this morning... And as, OilPrice.com's Nick Cunningham notes, the OPEC+ cuts still are not doing very much to boost oil prices, dashing hopes for many U.S. shale producers. With companies in the process of formulating their budgets for 2019, the prospect of $50 oil sticking around raises questions about the heady production figures expected from the shale patch.The IEA expects U.S. oil production to grow by 1.3 million barrels per day (mb/d) in 2019. But oil prices could significantly impact those projections.“Total U.S. shale oil growth is highly sensitive to WTI prices in the $40-60 range,” Morgan Stanley wrote in a December 13 note. The investment bank said that shale producers are growing more sensitive to prices below $60 but less sensitive to price spikes above $60. “If WTI remains around current levels (~$50/bbl), US growth should start to slow.”The investment bank said that larger companies, such as ConocoPhillips or Occidental Petroleum, are less sensitive to price swings than smaller E&Ps. On the other hand, some companies could begin to slow production if prices linger at low levels. Morgan Stanley pointed to Apache Corp., Murphy Oil, Newfield Exploration, Oasis Petroleum, Whiting Petroleum and Chesapeake Energy. “With low oil prices, we see these companies slowing production growth in 2019 to spend within cash flow (or minimize outspend), [free cash flow] levels fall or turn negative, and leverage metrics move higher.”Other analysts also see price sensitivity from the shale sector. “We expect 5-10% capex growth on average at $59 WTI, which should yield production growth of nearly 1.3mn b/d,” Bank of America Merrill Lynch wrote in a note. “However producers may budget for lower oil prices given the recent decline in prices and increase in uncertainty.”
US crude plunges 7.3% to $46.24, lowest settle since August 2017, on oversupply concerns - Oil prices plunged about 7 percent to a more than 15-month low on Tuesday as the United States and Russia continue to pump at record levels even as analysts warn that signs of faltering demand are emerging. U.S. West Texas Intermediate crude fell below $47 a barrel to its lowest since August 2017, after settling under $50 for the first time in over a year in the previous session. WTI was last down $3.66, or 7.3 percent, at $46.22 a barrel.Brent crude, the international benchmark for oil prices, tumbled to a 14-month low below $57 a barrel. It was trading $3.33 or 5.6 percent, lower at $56.28 a barrel around 2:29 p.m. ET.Oil prices are now trading in a zone that could trigger a plunge towards U.S. crude's 2017 low near $42 a barrel, according to John Kilduff, founding partner at energy hedge fund Again Capital. From peak to trough, WTI has lost about 39 percent of its value since hitting a roughly four-year high in early October. The slump has brought WTI's year-to-date losses to nearly 22 percent. Brent has fallen as much as 34 percent since its October high and is down about 14 percent in 2018. This month, oil output from U.S. shale fields is set to rise above 8 million barrels per day for the first time ever, the U.S. Energy Information Administration reported on Monday. Production from the seven key regions is forecast to rise by nearly 134,000 bpd in January, the biggest increase since September. U.S. crude futures fell sharply lower on Monday after energy data firm Genscape reported that crude stockpiles at a closely watched storage hub in the Cushing, Oklahoma rose by more than 1 million barrels. Meanwhile, sources tell Reuters Russia is pumping at 11.42 million bpd this month, a level that would mark an all-time high if confirmed.
'The only way is down': Oil's slump could get much worse amid oversupply concerns, analysts say - Oil prices are likely to fall even further over the coming weeks, analysts told CNBC Tuesday, as a sharp sell-off in global equities combines with intensifying fears about a market that could soon to be awash with crude.The latest wave of energy market selling comes amid reports of swelling inventories and forecasts of record U.S. and Russian output. Heightened worries of a possible economic slowdown in 2019 have also added downward pressure to the value of a barrel of oil."The only way is down," Tamas Varga, senior analyst at PVM Oil Associates, said in a research note published Tuesday."There are lots of variables regarding next year's oil balance but based on available data, information and sentiment, it is fair to say that any price rally will be met by fierce resistance from the sellers' side," Varga said.Brent crude fell as much as 4 percent to as low as $57.20 a barrel on Tuesday, on track to register its third consecutive session of declines. The international benchmark has since trimmed some of its losses to trade down 2.7 percent.Meanwhile, U.S. West Texas Intermediate (WTI) dipped further below $50 a barrel on Tuesday, after settling below the psychologically important level for the first time in more than a year in the previous session. U.S. crude stood at $47.94 at around 11:00 a.m. ET, trading 4 percent lower. Both oil benchmarks have crashed more than 30 percent since reaching a peak in early October, largely because of swelling global inventories.
WTI Extends Losses After Surprise Crude Build - After a bloodbath in the energy markets (as economic jitters and surging supplies from the US to Russia dragged benchmark crude prices to their lowest levels in 15 months) traders held WTI around $46.50 ahead of the API inventories data. API:
- Crude +3.45mm (-3.25mm exp)
- Cushing +1.063mm (+1.3mm exp)
- Gasoline +1.76mm
- Distillates -3.442mm
After two weeks of draws, API reports a surprise crude build (expectations were for a 3.25mm draw), sending WTI Crude lower... WTI hovered around $46.50 ahead of the print and dropped modestly on the surprised crude build... “This is all about fears of a recession,” said Bill O’Grady, chief market strategist at Confluence Investment Management LLC in St. Louis. “It’s risk-off everywhere.”
US oil prices climb after tumble, but oversupply worries drag -Oil bounced on Wednesday after one of its biggest falls for years, but remained under pressure from oversupply and concern that a slowing global economy would depress demand for fuel.Benchmark Brent crude oil was up 54 cents, or 1 percent, at $56.80 a barrel by 9:35 a.m. ET (1435 GMT), after dropping 5.6 percent on Tuesday and at one point hitting a 14-month low.U.S. light crude was up 58 cents, or 1.3 percent, at $46.82, after plunging 7.3 percent in the previous session when it touched its lowest since August 2017. Both benchmarks have fallen more than 30 percent since the beginning of October as crude supply from the Middle East, Russia and the United States has outstripped demand, filling oil tanks.Tuesday's sell-off was encouraged by a sharp fall in world stock markets after signs that economic growth, and hence demand for energy, was slowing.There were also worries that higher U.S. interest rates could slow U.S. growth. The U.S. Federal Reserve is expected to raise interest rates on Wednesday. The central bank is due to announce its decision at 2 p.m. EST (1900 GMT).Adding to worries about oversupply, the American Petroleum Institute said on Tuesday that U.S. crude stocks rose unexpectedly last week, while gasoline inventories increased.If the build in U.S. crude stockpiles is confirmed by U.S. government data on Wednesday, it will be the first increase in three weeks.OPEC and other oil producers including Russia agreed this month to curb output by 1.2 million bpd, equivalent to more than 1 percent of global demand, in an attempt to drain tanks and boost prices. But the cuts will not happen until next month and production has been at or near record highs in the United States, Russia and Saudi Arabia.
Saudi Arabia is reportedly cutting oil output by more than expected - OPEC is reportedly planning to release a table detailing voluntary supply cut quotas among its members and allies, Reuters reported Thursday, as the influential oil cartel steps up its efforts to put a halt to one of the biggest oil price falls in years. OPEC Secretary General Mohammad Barkindo said to reach the proposed cut of 1.2 million barrels per day (bpd), the effective reduction for member countries would need to be 3.02 percent. That is higher than the initially discussed 2.5 percent discussed earlier this month."In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available," This is also vital to underpin trust in our decisions and to buttress ourselves from any naysayers who may doubt our commitment." Since climbing to four-year highs in early October, crude futures have crashed by more than a third. The latest wave of heavy selling comes at a time when the energy market as well as the global economy is gripped by a flurry of bearish factors.Heightened concerns of oversupply, reports of swelling inventories, forecasts of record U.S. and Russian output and intensifying concerns about an economic slowdown have all placed downward pressure on the value of a barrel of oil. OPEC and allied non-OPEC oil producers including Russia agreed at the start of December to curb output by 1.2 million bpd. That's equivalent to more than 1 percent of global demand, in a bid to drain tanks and boost prices.The 15-member organization said it would reduce its output by 800,000 bpd, while Russia and the allied non-OPEC producers will contribute a 400,000 bpd reduction.However, the cutbacks — which are not scheduled to go into effect until January — have failed to put a halt to tumbling oil prices. The table of voluntary supply cuts shows Saudi Arabia taking 322,000 bpd off the market effective from January 2019 — that's compared to reference production levels of 10.6 million bpd from October 2018.Meanwhile, non-OPEC heavyweight Russia is seen cutting 230,000 bpd next year.OPEC production cuts were seen at 812,000 bpd, while 383,000 bpd worth of voluntary adjustments from non-OPEC partners bring the combined total of cutbacks to 1.2 million bpd. OPEC is expected to publish the full list of voluntary supply cuts by the end of the week.
WTI Bounces Above $48 After 3rd Weekly Crude Draw In A Row -A surprise crude build from API sent WTI briefly lower but as the dollar has tumbled this morning, crude prices have rallied back above $47.50, helped by optimistic jawboning from Saudi Arabian Energy Minister Khalid Al-Falih.“We will meet in April and I’m certain that we will extend it,” Al-Falih told reporters in Riyadh, referring to the next meeting of OPEC+ members to discuss whether to extend the December agreement to reduce output. “We need more time to achieve the result.”Additionally, Al-Falih said the current price dip isn’t based on supply and demand of oil, and has plenty of blame to go around:“What has happened in my opinion recently is a confluence of many non-oil fundamental issues including the geopolitical issues, especially around the sanctions and the waivers that were granted by the United States,” Al-Falih said.“It also includes the trade tension between the U.S. and China.”But for now inventories are what is driving price action. DOE:
- Crude -497k (-3.25mm exp)
- Cushing +1.091mm (+1.3mm exp)
- Gasoline +1.766mm
- Distillates -4.237mm - biggest draw since March
After two weekly draws, last night's build from API surprised traders, and DOE reported only a small crude draw of 497k (well below the 3.25mm draw expected). Distillates saw the biggest draw since March.
Oil prices finish higher as U.S. supplies fall a third straight week - Oil futures finished higher Wednesday, buoyed by a third straight weekly decline in U.S. crude supplies and a drop in distillate stocks, after a price plunge a day earlier pushed the U.S. benchmark down to its lowest finish in nearly 16 months.January West Texas Intermediate crude rose 96 cents, or 2.1%, to settle at $47.20 a barrel on the New York Mercantile Exchange after a high of $48, with the contract paring some of its earlier gains after the Federal Reserve announced its decision Wednesday to raise a key interest rate, as expected. The contract settled at $46.24 a barrel on Tuesday, the lowest finish for a front-month contract since Aug. 30, 2017, according to Dow Jones Market Data. The January futures contract expired at the day’s settlement. February WTI crude which is now the front-month contract, settled at $48.17, up $1.57, or 3.4%. Meanwhile, February Brent, the global benchmark, added 98 cents, or 1.7%, to $57.42 a barrel on ICE Futures Europe. It tumbled 5.6% to $56.26 Tuesday, for the lowest finish since October 12, 2017. The Energy Information Administration reported Wednesday that domestic crude supplies fell by 500,000 barrels for the week ended Dec. 14. Analysts polled by S&P Global Platts expected a larger decline of 3 million barrels in crude supplies, but the American Petroleum Institute on Tuesday reported a climb of 3.5 million barrels. Gasoline stockpiles rose by 1.8 million barrels last week, while distillate stockpiles, which include heating oil, dropped 4.2 million barrels, according to the EIA. The S&P Global Platts survey had shown expectations for supply increase of 2.6 million barrels for gasoline and a fall of 900,000 barrels for distillate inventories. “The draw to distillate inventories means they are now more than 14% lower since mid-September, providing the biggest bullish element” of the report,
Oil prices resume drop, shed most of last session's gains - Brent crude oil fell more than 4 percent on Thursday, hitting its lowest in more than a year on worries about oversupply and the outlook for energy demand as a U.S. interest rate rise knocked stock markets. Stock markets dropped worldwide after the U.S. Federal Reserve raised rates and maintained most of its guidance for additional hikes over the next two years, dashing investor hopes for a more dovish policy outlook.North Sea Brent dropped by 4.5 percent to $54.64 a barrel, its lowest since September 2017. Brent last traded at $55.50, down $1.74, for a loss of 3 percent. U.S. light crude oil fell by $2.35 a barrel, or 4.9 percent, to a low of $45.82 overnight. It recovered some ground to trade down $1.67, or 3.5 percent, at $46.50 by 11:09 a.m. ET (1609 GMT).Both major oil futures contracts rallied sharply on Wednesday but are now at or close to their lowest levels for over 15 months, more than 35 percent below multi-year highs reached at the beginning of October. "Wednesday's recovery was short-covering," said Xi Jiarui, chief oil analyst at consultancy JLC."Investors quickly moved their attention to deteriorating fundamentals in the oil markets, including more signs of slowing economic growth next year, record production and the lack of confidence with OPEC's pledge to curb production."OPEC and other oil producers including Russia agreed this month to curb output by 1.2 million barrels per day (bpd) in an attempt to drain tanks and boost prices. But the cuts will not happen until next month, and production has been at or near record highs in the United States, Russia and Saudi Arabia. Saudi Energy Minister Khalid al-Falih said he expected global oil stocks to fall by the end of the first quarter, but added that the market remained vulnerable to political and economic factors as well as speculation.OPEC plans to release a table detailing voluntary output cut quotas for its members and allies such as Russia in an effort to shore up prices, OPEC Secretary-General Mohammad Barkindo said in a letter seen by Reuters on Thursday. U.S. inventory data offered some support. U.S. crude inventories fell by 497,000 barrels in the week to Dec. 14, the U.S. Energy Information Administration said, smaller than the decrease of 2.4 million barrels analysts had expected. Distillate stockpiles, which include diesel and heating oil, dropped by 4.2 million barrels, the EIA said, versus expectations of a 573,000-barrel increase. Distillate demand rose to the highest since January 2003, which bolstered buying, particularly in heating oil futures, the market's proxy for diesel.
Oil prices tumble to lowest in more than a year as equities sell off (Reuters) - Oil prices fell about 5 percent on Thursday, hitting their lowest level in more than a year on worries about oversupply and the outlook for energy demand as a U.S. interest rate rise knocked stock markets. Brent crude
US crude tumbles 4.8% to 17-month low, settling at $45.88, as stock market slides -- Oil prices plunged to their lowest levels in over a year on Thursday, deepening a sell-off fueled by concerns about oversupply as stock markets slumped on rising U.S. interest rates. U.S. West Texas Intermediate crude ended Thursday's session down $2.29, or 4.8 percent, at $45.88, the lowest closing price since July 2017. WTI is now down about 24 percent this year. Brent crude, the international benchmark for oil prices, fell $2.89, or about 5 percent, to $54.35, its weakest settle since mid-September 2017. Brent has shed nearly 19 percent in 2019. Crude futures staged a rally in the previous session on signs of strong fuel demand in the United States. However, bearish reports out of Asia overnight added to worries on both the supply and demand sides of the oil market ledger. "There's just a really negative narrative out there," said John Kilduff, founding partner at energy hedge fund Again Capital. "The stars are just aligned right now in a bearish way." In India, crude oil imports in November registered their biggest year-over-year decline in almost four years, Reuters reported. Meanwhile, Asian oil buyers reported robust purchases of Saudi crude in January after the kingdom cut prices into the region, according to S&P Global Platts.Oil recouped some of the losses through the morning, but dropped sharply around noon, mirroring a pullback in the stock market. TheDow Jones Industrial Average dropped more than 450 points as equities were buffeted by the U.S. Federal Reserve's decision to raise its benchmark interest rate on Wednesday.Crude futures have now fallen more than 35 percent from their 52-week highs in early October. The market is grappling with surging supply from the world's top three producers — the United States, Russia and Saudi Arabia — at a time when demand for oil is expected to grow less than previously expected. To prevent a price-crushing glut, OPEC and 10 other producers including Russia agreed earlier this month to remove 1.2 million barrels per day from the market. But the production cuts do not take effect until January, and the announcement has so far done little to stop the collapse in crude prices.
OPEC+ Battles To Halt Oil Price Slide - Stocks fell yet again on Thursday, following the Federal Reserve’s decision to hike interest rates and maintain a rate tightening course in 2019. The S&P 500 fell 1.6 percent and the Dow Jones Industrial Average was off 2 percent. The Euro Stoxx 50 fell by 1.4 percent on Friday, and the index is set to enter a bear market after falling 20 percent from its November 2017 peak. The global financial upheaval, which could presage a growing economic slowdown, presents a major threat to oil prices. At the time of this writing, the U.S. was hurtling towards a government shutdown over budget disagreements, with a midnight deadline Friday. An agreement is still possible, but the potential shutdown was seen as another contributor to financial turmoil this week. Saudi Arabia could increase the size of its production cut after watching oil prices spiral downwards. According to the Wall Street Journal, Saudi Arabia will cut by 322,000 bpd from October levels, rather than 250,000 bpd. That would limit output to 10.311 mb/d for six months. The report offers a mixed message, however, since Saudi Arabia has already signaled that it could lower output to 10.2 mb/d in January. OPEC+ is set to release country-specific production quotas, recognizing that the lack of detail in Vienna earlier this month has hurt its efforts to convince the market. “In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available,” OPEC Secretary-General Mohammad Barkindo told OPEC members in a letter.The Wall Street Journal reported that the Trump administration has granted Iraq a waiver extension, allowing it to continue to import natural gas from Iran for another three months. In return, Iraq has seemingly pledged to allow American energy companies greater access in the country. With Brent in the mid-$50s, the budgets for OPEC members will come under strain, and perhaps only Kuwait can see its budget breakeven. Low prices could sow unrest in several OPEC member states. “At current prices, too much attention on shale, not enough on OPEC,” Libya and Algeria, for instance, need oil prices above $100 per barrel. Even Saudi Arabia needs oil north of $80 per barrel for its budget to breakeven.
Oil hits 17-month low as downbeat mood persists -- Oil struggled to claw back gains after falling to its lowest since the third quarter of 2017 on Friday, as global oversupply kept buyers away from the market ahead of the long festive break. Crude futures briefly ticked higher as U.S. stocks rallied after Federal Reserve Bank of New York President John Williams signaledthe central bank could alter its interest rate policy and balance sheet reduction if economic growth slows. U.S. West Texas Intermediate crude oil was up 7 cents at $45.95, on course for a decline of 10.3 percent for the week. WTI earlier fell to $45.13, its lowest intraday price since mid-July 2017. Brent crude was down 36 cents at $53.99 per barrel by 12:04 p.m. ET, bouncing from the session's 15½-month low at $52.79. Brent is set for a loss of around 10.4 percent this week. Crude has lost ground along with major equity markets as investors fret about the strength of the global economy heading into next year. Further concerns were raised as the United States, the world's biggest oil consumer, may have a government shutdown later on Friday. Falls were exaggerated by thin trade and risk aversion ahead of Christmas and the New Year holidays, traders said. Since reaching multi-year highs at the beginning of October, both crude oil benchmarks have lost more than a third of their value in their steepest collapse for three years. Driving the sell-off has been sustained oversupply as the United States has emerged as the world's biggest crude producer thanks to the success of its shale industry. The United States now pumps 11.6 million barrels per day of crude, putting it ahead of Saudi Arabia and Russia. The big oil producers in OPEC, dominated by Middle East Gulf states which mostly rely on energy exports, have agreed to reduce production to try to push up prices. But those output cuts — a reduction with Russia and other non-OPEC producers of 1.2 million bpd — do not kick in until next month, and meanwhile global inventories are filling up fast.
U.S. drillers add oil rigs for first week in three: Baker Hughes (Reuters) - U.S. energy firms added oil rigs for the first time in the past three weeks despite sharp declines in crude futures prices to their lowest since the summer of 2017. Drillers added 10 oil rigs in the week to Dec. 21, bringing the total count to 883, General Electric Co’s (GE.N) Baker Hughes energy services firm said in its closely followed report on Friday. . This was the biggest weekly gain in rig numbers since early November. More than half the total U.S. oil rigs are in the Permian Basin, the country’s biggest shale oil formation. Active units there held steady this week at 486, the lowest since early October. Drillers added 2 rigs in the Niobrara shale in Colorado and Wyoming, bringing the total there up to 30, the most since Sept. 2017, and three rigs in Williston in North Dakota and Montana, bringing the total up to 56. The U.S. rig count, an early indicator of future output, is higher than a year ago when 747 rigs were active as energy companies have spent more to capture higher prices. U.S. crude futures were trading around $46 a barrel on Friday, down about 10 percent for the week, as global oversupply kept buyers away from the market ahead of the end of year holidays. Earlier Friday, the contract fell to its lowest since July 2017. [O/R] Crude futures were trading around $49 a barrel for calendar 2019 and $50 for calendar 2020. U.S. financial services firm Cowen & Co this week said the exploration and production (E&P) companies it tracks have provided guidance indicating a 23 percent increase this year in planned capital spending. Cowen said the E&Ps it tracks expect to spend a total of $88.9 billion in 2018. That compares with projected spending of $72.2 billion in 2017. Cowen said early 2019 capital spending budgets were mixed. Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, this week forecast the average combined oil and natural gas rig count would rise from 876 in 2017 to 1,031 in 2018, 1,092 in 2019 and 1,227 in 2020. Year-to-date, the total number of oil and gas rigs active in the United States has averaged 1,031. That keeps the total count for 2018 on track for the highest since 2014, which averaged 1,862 rigs.
US crude ends the week down 11% at $45.59 for worst performance since January 2016 Oil prices extended this week's sell-off on Friday, posting the worst weekly performance in nearly three years, as global oversupply kept buyers away from the market ahead of the long festive break. U.S. West Texas Intermediate crude oil ended Friday's session down 29 cents at $45.59, the lowest closing price since January 2016. WTI earlier fell to $45.13, its lowest intraday price since mid-July 2017. Brent crude was down 40 cents at $53.95 per barrel by 2:30 p.m. ET, bouncing from the session's 15½-month low at $52.79. Brent was on pace for a decline of more than 10 percent for the week. Crude has lost ground along with major equity markets as investors fret about the strength of the global economy heading into next year. Further concerns were raised as the United States, the world's biggest oil consumer, may have a government shutdown later on Friday. Falls were exaggerated by thin trade and risk aversion ahead of Christmas and the New Year holidays, traders said. "To say things are a bit negative (is) a significant understatement," said Stephen Innes, head of trading for Asia-Pacific at OANDA. Since reaching multi-year highs at the beginning of October, both crude oil benchmarks have lost more than a third of their value in their steepest collapse for three years. Driving the sell-off has been sustained oversupply as the United States has emerged as the world's biggest crude producer thanks to the success of its shale industry. The United States now pumps 11.6 million barrels per day of crude, putting it ahead of Saudi Arabia and Russia. The big oil producers in OPEC, dominated by Middle East Gulf states which mostly rely on energy exports, have agreed to reduce production to try to push up prices. But those output cuts — a reduction with Russia and other non-OPEC producers of 1.2 million bpd — do not kick in until next month, and meanwhile global inventories are filling up fast.
Oil Suffers Worst Week in Almost 3 Years Amid Broader Malaise -- Oil capped its biggest weekly decline since 2016 on concerns that weakening economic growth and surging U.S. supply will lead to a surplus next year, overwhelming OPEC's efforts to stabilize the market. Futures sank 11 percent this week in New York, the most since January 2016. Crude joined a sell-off in wider financial markets after an interest rate increase by the Federal Reserve and the threat of a U.S. government shutdown added to economic uncertainty. Meanwhile, investors remain skeptical that cuts agreed by OPEC and its allies are sufficient to avert a looming oil glut. "Traders are still concerned with the global slowdown and assets selling off as well," said Kyle Cooper, a Houston-based consultant at Ion Energy Group LLC. "There's also concern about the government shutdown looming." Crude has slumped on fears the relentless expansion in American shale will undermine efforts by OPEC and its partners to balance the market. Concerns over growth persist even as Fed Chairman Jerome Powell promised to be more cautious on raising rates next year, while a closely watched speech by Chinese President Xi Jinping offered no new reforms to stimulate the world's second-largest economy. West Texas Intermediate for February delivery fell 29 cents to settle $45.59 a barrel on the New York Mercantile Exchange. The U.S. benchmark is down 38 percent this quarter. Brent for February settlement slipped 53 cents to $53.82 a barrel on London's ICE Futures Europe exchange. Prices were down 10.7 percent for the week and have lost 35 percent since September. The global benchmark crude traded at an $8.23 premium to WTI. Oil's slump persisted this week on broader market turmoil spurred by a plunge in global equities after the U.S. central bank lowered the forecast for 2019 economic growth to 2.3 percent from 2.5 percent in September. The S&P 500 Index sank as much as 1.4 percent, reversing an earlier gain fueled by conciliatory comments on interest rates from a Federal Reserve official.
Outlook 2019: Russian oil output poised to jump post-OPEC cut deal — Russia's crude production is poised to increase quickly once restrictions imposed by the OPEC-led oil output cut deal are lifted. Before energy minister Alexander Novak signed up to cutting production along with the 24-member alliance, output increased by 445,000 b/d to a record high of 11.418 million b/d in October from May. The surge in output gave a glimpse of Russia's potential to boost output rapidly. "Russia's rapid production growth from May through October demonstrated its ability to be a key swing producer, at a level below that of Saudi Arabia but as high as any other country in the world," Although it is unclear how long the production cap last, Russia's potential to increase output may continue to surprise on the upside, at least in the near future. Oil producers had plans to launch full-scale production at a whole string of greenfield projects in 2019 before the OPEC deal required Russia to gradually cut up to 228,000 b/d in the first quarter. For example, four of Rosneft's fields were set to increase production by nearly 200,000 b/d by the end of the year. Other companies such as Gazprom Neft, Lukoil and Tatneft, also saw potential to boost liquids production from their high-margin fields. Those plans may now be delayed to 2020, also pushing back a projected peak in the country's oil output. Russia's energy ministry forecasts output will peak at around 11.445 million b/d in 2021, before falling to possibly as low as 6.2 million b/d by 2035. The decline is expected due to the depletion of existing fields and a significant drop in the quality of newly discovered reserves. The International Energy Agency noted a risk of decline after 2020 "if Russian companies are unable to secure the technology and financing necessary for the next generation of projects and the government fails to offer more extensive tax breaks to encourage investment." In contrast, Platts Analytics argues Russia will beat expectations. "We take any doomsday scenarios with a grain of salt. Betting on any decline in Russian production has been a losing proposition since 1999,"
Middle East Leads Global Supply of Conventional Oil -Conventional oil makes up around two-thirds of the world’s recoverable oil resources and accounts for 93 percent of today’s oil mix. More than half of this oil comes from oil fields that are past their peak and declining, revealed by a loss of about 3 million barrels of output last year. To accommodate this yearly natural decline from old wells and to satisfy rising demand, the world needs a fresh supply of 5.7 million barrels each year according to the International Energy Agency (IEA). Rystad Energy analysts expect Middle Eastern oil production to grow by 2.7 MMbpd by 2025, driven largely by supply additions of 1.5 MMbpd from Iraq and another 1.2 MMbpd from the re-opened Neutral Zone—the area between Saudi Arabia and Kuwait—as well as the UAE and Iran. OPEC countries hold nearly 82 percent of the world’s crude oil reserves of which the bulk 65 percent are in the Middle East, led by Saudi Arabia, Iran, Iraq, Kuwait and the UAE. The world’s cheapest oil producers, with costs between $9 and $10 a barrel in 2016, were respectively Saudi Arabia, Iran and Iraq because their oil lies close to the surface and is pooled in mega fields. Moreover, the Middle East's producing countries have some of the lowest oil decline rates in the world, which matters greatly since, as one estimate suggests, the difference between a 5.7 percent (2017) and a 7.5 percent (2016) decline rate yields another 900,000 barrels online. Rystad Energy notes that output from conventional fields beyond the Middle East peaked in 2010 and they expect it to continue falling to 45.6 million barrels a day, a 2.3 million barrel decline from current levels. This is largely due to the oil price collapse in 2014, which triggered fierce cuts to exploration budgets in 2015 and 2016, flat investment during 2017, and only a slight uptick this year. In essence, capital investment fell from $750 billion to $460 billion in 2016 and has yet to recover, says the IEA. The impact is seen in discoveries of new oil, which fell to a record low in 2017 with less than 4 billion barrels of crude, condensate and NGLs. Discoveries in 2018 are led by offshore Guyana with an estimated 4 billion barrels of oil equivalent, the Barents Sea, the north slope of Alaska, the Dorado field offshore Australia and new finds in Oman and by Norway. However, unlike oil fields in the Middle East and U.S. tight oil for that matter, conventional offshore oil fields are huge, complex and expensive projects that take years to come to fruition. This has encouraged big energy companies in recent times to invest in acreage, drilling wells and hydraulic fracturing in U.S. shale, especially in the premier Permian Basin stretching from Texas to New Mexico. Drilling a tight oil well costs between $5 and $10 million, is fast—measured in days rather than years—and brings a return on investment within months.
Saudi Arabia's new budget will boost spending and continue royal handouts — even as oil prices drop - Despite falling oil prices, Saudi Arabia will continue paying its citizens cost-of-living allowances, the country's King Salman announced during the unveiling of its 2019 budget on Tuesday.The budget will boost spending even as Saudi Arabia endeavors to close its budget deficit, indicating Riyadh's priority to spur growth in an economy hurt by lower oil prices. State spending will increase by more than 7 percent next year to 1.106 trillion riyals ($295 billion) from 1.030 trillion riyals, in line with a September pre-budget statement, according to the country's finance ministry.Analysts believe the continued cost-of-living allowances, first established in January 2018 and estimated by officials to cost more than $13 billion, are intended to stimulate sluggish growth and shore up support for the royal family and Crown Prince Mohammed bin Salman after a controversy-ridden few months.The royal allowances of 1,000 riyals a month ($266) are paid to civil servants and military personnel, and other allowances will continue for pensioners and those living on social security. Riyadh will also increase student benefits by 10 percent for the next fiscal year, the king announced.The International Monetary Fund previously forecast the country's budget deficit to shrink to less than 2 percent of gross domestic product (GDP) next year in the event that the allowances were scrapped. The budget deficit for 2019 will now be 4.2 percent of GDP, according to the government's statement Tuesday.Saudi Arabia's economy shrank for the first time in nearly a decade last year as headwinds batter its private sector. Businesses have struggled to deal with higher electricity and fuel prices and a 5 percent value-added tax (VAT) introduced at the start of the year. Unemployment, hovering just over 12 percent as of last summer, is at its highest level in a decade.And new quotas and fees on foreign workers have triggered an exodus of more than 900,000 expatriates from the country in the last two years. This caused the labor market to contract, leaving gaps that the local population, lacking vital skills and training, cannot yet fill, analysts and executives say. Saudi officials have said they are now reconsidering the fees on foreign labor, which charge private businesses between $80 and $107 monthly for each foreign worker they hire.
Saudi Arabia Is Going Bankrupt Taleb Exclaims After Seeing Kingdom's Latest Budget - In all the noise surrounding the latest market moves, political news and frenzy over the Fed's rate hike (or pause), an important development was missed by many when Saudi Arabia released its budget for 2019 on Tuesday, which at 1.106 trillion riyals, or $295 billion - the largest in the kingdom's on record - represents a 7% increase from 1.030 trillion in 2018. During the unveiling of the budget, Saudi King Salman said his country will continue paying public sector cost-of-living allowances for citizens and will boost spending to stimulate growth even as Saudi Arabia toils to close its deficit, which it won't do yet again as the kingdom forecasts a 6th consecutive budget deficit in a row, estimated to hit $35 billion in 2019. "We are determined to go ahead with economic reform, achieving fiscal discipline, improving transparency and empowering private sector," the King said. While state-funded Saudi "generosity" to keep its citizens happy - and not, say, thinking radical, revolutionary thoughts - is well known, analysts believe the continued cost-of-living allowances, first established in January 2018 and estimated by officials to cost more than $13 billion, are intended to stimulate sluggish growth but mostly shore up support for the royal family and Crown Prince Mohammed bin Salman after a controversy-ridden few months. The royal allowances of 1,000 riyals a month ($266) are paid to civil servants and military personnel, and other allowances will continue for pensioners and those living on social security. Riyadh will also increase student benefits by 10 percent for the next fiscal year, the king announced. There is just one problem: for Saudi Arabia to be able to meet its projected revenue and fund these generous payments it will need oil prices to rise higher. Much higher. To hit 662 billion riyals in oil revenue, or $177 billion, up from $162 billion in 2018, Saudi Arabia expects near record oil output of 10.2 mmb/d sold at a price of $80/barrel, while Saudi Aramco won’t increase its allocations to the government. For reference, Brent settled just above $56 today, which means that oil has to rise at least 40% for the Saudi budget revenue assumption to be hit. Brent would have to rise an additional $15 to $95 a barrel for the kingdom to balance its budget deficit according to Bloomberg chief Middle East economist Ziad Daoud.
Qatar foreign minister: No progress has been made on solving the Saudi-led Gulf blockade yet - Qatar's foreign minister expressed a host of grievances over his Gulf counterparts' regional activities on Sunday, calling out Saudi Arabia and the United Arab Emirates (UAE) in particular — and not just for their blockade of his country. "We cannot blame one country on the destabilization of the region right now because the situation which we are suffering from is the result of a series of policies of different countries," Sheikh Mohammed bin Abdulrahman al Thani told CNBC's Hadley Gamble in Doha, when asked if Riyadh were to blame for increased turbulence in the Middle East."We are disagreeing with [Saudi Arabia] currently when they are blockading Qatar, when they continue the war on Yemen without reason, the way they kidnapped the Lebanese prime minister," the foreign minister said. But he did not limit his criticism to Saudi Arabia, which in 2017 spearheaded an economic and diplomatic blockade against Qatar over accusations Doha supports terrorism, something the Qataris deny."We disagree also with the Emiratis' policy when they go and supported brutal regimes, supported military coup in Libya, supported a destabilization in Somalia, supported the separation and division of Yemen. And it's just these policies which are destabilization."Under the shadow of a more aggressive Saudi Arabia, the UAE has been active in a number of African and Middle Eastern conflicts, often pursuing its own agenda independent of its Saudi and American allies. It wields a significant military presence on the ground in Yemen, where it's trained and supported southern separatist groups in the war-ravaged country as a fighting force against al-Qaeda in the Arabian Peninsula (AQAP) and Yemen's Houthi rebels. "Most countries are supporting terrorism in other places, where they see it is fine for them to justify their means," al Thani said, lamenting what he described as a double standard and blasting Saudi and Emirati accusations that Qatar supports terrorism. "In Yemen, when al-Qaeda had been paid to leave the place for them and have claimed a victory, this is not a support for terrorism? It is a support for terrorism." The minister was referring to reports alleging UAE forces paid off al-Qaeda militants to leave certain areas of Yemen, often letting them depart with weapons, munitions and wads of cash. The reports also alleged that the Saudi-led coalition recruited hundreds of members of the terrorist group as foot soldiers to fight the Iranian-backed Houthi rebels, who seized the capital Sanaa in late 2014. The war has become what the UN calls the world's worst humanitarian crisis.
Qatar is 'counting on' Kuwait and other allies to resolve Gulf crisis, foreign minister says - Kuwait maintains an important role in reuniting the Gulf Cooperation Council (GCC) countries amid the ongoing blockade of Qatar, Qatari foreign minister Sheikh Mohammed bin Abdulrahman al Thani said Saturday. "The (Kuwait) Emir has had a big leadership role in calming the situation which is highly appreciated by Qatar. We continue to count on the role of Kuwait and on the countries in the region to bring it back together," the minister told attendees at the annual Doha Forum. Relations between the oil-rich states of the GCC have been fraught since Saudi Arabia, joined by Egypt, Bahrain and the United Arab Emirates, imposed an economic and diplomatic blockade on Qatar in 2017. Riyadh and its allies accuse Qatar of supporting terrorism, which Doha consistently denies. Kuwait, however, did not take part in the blockade. Its government maintains smooth relations with Doha and has made several attempts to mediate between Qatar and its Gulf neighbors to help quell the conflict — thus far to no avail. "Kuwait has shown willingness to play a diplomatic role in some of the most complex contexts in the region including Qatar and Yemen," Cinzia Bianco, GCC analyst at London-based Gulf State Analytics, told CNBC earlier this month. On December 3, Qatar announced its planned departure from OPEC, the 15-member cartel of oil-exporting countries whose largest producer is Saudi Arabia. Qatar and the Saudi-led bloc both blame one another for preventing a solution from being reached. "We believe that we are more relevant as a bloc for those countries than we are separate and fragmented," the minister added. Qatar saw foreign deposits in its commercial banks drop by $13 billion in the six months following the blockade; it's now regained about $9 billion of that, according to Fitch ratings. Analysts at the ratings agency say the blockade forced Qatar to diversify its revenue sources, ultimately making it more self-sufficient.
The $13 Billion Saudi Purge - The Numbers Are In From Last Year's Riyadh Ritz Arrests - How much did Saudi crown prince MbS line his pockets state coffers with following the so-called "corruption crackdown" which involved scores of top officials and rival princes held prisoners in Riyadh's Ritz-Carlton Hotel through and after November of last year? The official figures are in: the "purge" was a shakedown to the tune of more than $13 billion.And now the Saudis are positively bragging about it (perhaps shielding the disappointment of not grabbing the full hoped-for $100bn), with Finance Minister Mohammed al-Jadaan announcing Tuesday that his government "collected more than 50 billion riyal ($13.33 billion) so far this year from settlements reached with detainees in a crackdown on corruption launched at the end of last year," according to Reuters.Saudi authorities stated previously this year that their goal was to seize some $100bn overall, thus it appears MbS' ambitions fell far short. At the time 381 Saudis were hauled in and locked up a span of 3 months at the Ritz-Carlton super-luxury hotel which boasts nearly 500 rooms and 52 acres of land, with 62,000 feet of conference space, and a 4,575-square-foot royal suite to boot which held one of the world's richest men for the longest detention, Prince Alwaleed bin Talal.Though Prince Alwaleed was among the "big fish" held the longest at 83 days, his story was representative of many who cut "secret deals" to fork over untold hundreds of millions each in order to obtain freedom.
Jailed Saudi Women Activists Tell Of Waterboarding, Electrocution, And Rape During MbS Reforms - For critics of the mainstream media's prior fawning over MbS' supposed "reform-minded" agenda involving everything from opening the kingdom up to women driving to co-ed cinemas to late-night pop concerts, this week's bombshell human rights report in the Wall Street Journal will come as no surprise. Men surrounding bin Salman, who prior to Jamal Khashoggi's murder was dubbed "Crown Prince charming" and Saudi Arabia's "reform-minded royal" by Western press, are now being investigated for torturing and threatening to rape prominent Saudi women's rights activists who've been detained for months. Perhaps to be expected, the prime MbS top aide under investigation by a human rights committee is none other than Saud al-Qahtani — already the chief fall guy for Khashoggi’s death as Riyadh tries to stem international outrage — accused of a stomach churning litany of abuses against women driving activists who were detained last Spring and early summer.Notably, the commission reports directly to King Salman, which no doubt suggests MbS will be carefully shielded from any wrongdoing in the inquiry.According to the WSJ:A human-rights commission reporting to Saudi King Salman is investigating the alleged torture of detained women’s rights activists, including accusations of waterboarding and electrocution, according to government officials and other people familiar with the activists’ situation.Victims describe threats of rape and death while tortured by electrocution and beating to the point that - according to one testimony featured by the WSJ - a detainee's "fingers resembled barbecued meat, swollen and blue." The treatment further included "lashing and sexual harassment" according to the testimony of one of more prominent detainees, 29-year old women's rights activist Loujain al-Hathloul, who was locked up in Jeddah’s Dabhan prison. “Saud al-Qahtani threatened to rape her, kill her and to throw her into the sewage,” an eyewitness interviewed by the Saudi commission said.
Saudi Crown Prince Mohammed Bin Salman’s Time May Finally Be Running Out — Neither Saudi Crown Prince Mohammed bin Salman nor his foreign minister, Adel al-Jubeir, take kindly to criticism of any kind. So it was unsurprising when on 16 December, Jubeir’s ministry released a lengthy statement attacking twin US Senate votes that had passed the previous week.The first called for an end to US participation in the Yemen war, and the second, unanimously accepted, held that Mohammed bin Salman was responsible for the murder of journalist Jamal Khashoggi in the Saudi consulate in Istanbul on 2 October.The statement rejects the Senate votes, saying they were based on “unsubstantiated claims and allegations, and contained blatant interferences in the kingdom’s internal affairs.”On the matter of unsubstantiated allegations, the CIA, Turkish authorities and just about anybody not connected to or controlled by Mohammed bin Salman begs to differ. Or, as Bob Corker, the Republican chair of the Senate Foreign Relations Committee, succinctly put it: “If the crown prince went in front of a jury, he would be convicted in 30 minutes.” That’s because Corker and a select group of senators heard the evidence provided by CIA boss Gina Haspel that Mohammed bin Salman was guilty beyond a reasonable doubt of Khashoggi’s murder.
Saudis Killing Civilians During Yemen Peace Talks - (GPA) — A statement from the spokesman of Yemen’s Armed Forces reported that the US-backed Saudi coalition dropped 38 airstrikes just over the course of Saturday. At least 12 of which targeted various areas of Hodeidah which constitutes a direct violation of the peace negotiations calling for a ceasefire. Airstrikes killed at least 15 civilians since the peace negotiations began last week — including seven women and three children. Meanwhile, 28 sustained injuries, eight of whom were children as well as five women. Yemen’s Ministry of Health pointed out that this displays the Saudi coalition’s unwillingness to engage in a peace process. “This expresses the unwillingness of these countries to stop the bloodshed and alleviate the suffering of the people of Yemen, which exposes the reality of these countries’ goals in their aggression against Yemen,” a statement from the MoH reads.
Yemeni Mothers Forced to Choose Which of Their Children Starve to Death -- (MEMO) — Mothers are being forced to leave their children to starve as they face a “catastrophic” shortage of food in war-torn Yemen, a humanitarian group said on Thursday, reports Reuters. As the warring parties pledged a ceasefire over a key entry port for supplies, Action Against Hunger said many civilians were struggling to survive in a conflict often described as the world’s worst humanitarian crisis.“We are very much aware that the situation right now is catastrophic,” Valentina Ferrante, the group’s country director for Yemen, told the Thomson Reuters Foundation.“If a family does not have the necessary economic resources to feed the entire family then they will select who to feed. Sometimes you get up to a point where a mother is literally forced not to feed certain members of the family, most probably the youngest one.” Yemen, one of the poorest Arab countries, is locked in a war that pits Iran-aligned Houthi rebels against the government backed by Saudi Arabia, the United Arab Emirates, and the West. The conflict and ensuing economic collapse have left nearly 16 million people, 53 percent of the population, in urgent need of food aid and famine was a danger if immediate action was not taken, the United Nations said this month. The warring parties on Thursday agreed to cease fighting for the Houthi-held port city of Hodeidah, which is the main entry point for both commercial imports and aid supplies.
US Airstrikes Kill 62 People in Coastal Somali Town — Over the weekend, US warplanes carried out at least six airstrikes against the coastal town of Gandarsh, Somalia. US African Command (Africom) says 62 people were killed in the strikes, and all were “terrorists” from al-Shabaab.34 people were killed on Saturday, and 28 more on Sunday. The identities of the slain are not clear, and there is no way to verify Africom’s claims. This is, however, standard operating procedure for them, to both label all slain as militants, and to say they don’t think any civilians were killed or wounded.This often doesn’t remain the case, however. When the US is striking a large number of people inside a populated area, it’s very unusual not to have some civilians killed along the way. Yet in remote places like Somalia, it often takes days to find that out.In the meantime, the Pentagon has virtually total control over the narrative, and sticks to formulaic releases meant to spin the strikes as legal, claiming they preempted a plot, without providing any evidence of such a plot.
Brutal crackdown on West Bank as Netanyahu pledges stepped-up land grab - Prime Minister Benjamin Netanyahu authorized a military crackdown on the Palestinian West Bank. The assault was calculated to appeal to Israel’s ultra-nationalist forces at the expense of his fascistic coalition partners, which are vying over who has a tougher policy against the Palestinians. In the days that followed, the Israel Defense Forces (IDF) carried out a series of military operations, killing six and arresting at least 100 more in protests that erupted over Israeli brutality in Nablus, Tulkarem, Ramallah, Hebron and al-Bireh. One of those arrested in the Hebron area was the Palestinian legislator Mohammed Ismail Al-Tal. The assault started after a drive-by shooting on December 9 near the West Bank city of Ofra that injured seven Israelis, including a pregnant woman whose baby was subsequently delivered by Caesarian section but later died. Settler leaders demanded to “see the blood of the terrorists.” Netanyahu’s son Yair joined the calls for revenge, following a series of posts on social media calling for the expulsion of the Palestinians and writing that he would prefer all Muslims to leave Israel. Facebook’s temporary ban on him for breaking its rule on hate speech only served to make him a martyr among Israel’s fascists. On Wednesday, Israeli security forces gave chase to 29-year-old Salah Barghouti, who lived near Ramallah, opening fire on his car before arresting and killing him. His family denied that he had any involvement in the shooting, pointing out that he had not gone into hiding. The next day, the conflict escalated after Palestinians shot and killed two Israeli soldiers and injured two others in a drive-by shooting at a bus stop near the illegal settlement of Ofra. Amid another media uproar, there were calls from several far-right figures for Israel to legalise the entire settlement in retaliation for the attack. . The IDF blockaded the city of Ramallah, the seat of the Palestinian Authority (PA), for two days, escalating tensions throughout the West Bank. They carried out a mass round-up, arresting 40 Palestinians, mostly members of Hamas, the bourgeois Islamist group that controls Gaza. The same day, Israeli security forces killed 23-year-old Ashraf Naalwa, whom they suspected of shooting and two killing Israelis in the Barkan settlement industrial plant last October. They had forced their way into a home in Askar al-Jadid refugee camp, near the northern city of Nablus, sparking a lengthy gun battle. Troops used live rounds or rubber-coated steel bullets on crowds of angry Palestinians protesting Naalwa’s murder, injuring at least 11. Soldiers shot Hamdan al-Arda, a 58-year-old resident of the northern town of Arrabeh, near his aluminum plant in al-Bireh, claiming that he had tried to ram soldiers with his car. Al-Arda died after soldiers refused to allow Palestinian medics to attend to him. On Friday, the IDF shot and killed 18-year-old Mahmoud Yousef Nakhla in the Jalazone refugee camp near Ramallah. . Meanwhile in Gaza, the IDF shot and wounded 75 Palestinians, including five paramedics and two photojournalists, during the weekly Friday protests—held last week under the banner of the “legitimate right of resistance”—ongoing since the end of March against the Israeli blockade. Since then, Israeli forces have killed 235 Palestinians and injured 7,000 more with live fire, at least 1,000 of whom face permanent disabilities.
Trump Publicly Admits His Middle East Policy Puts Israel First — Not America — In a recent interview with the Washington Post, U.S. President Donald Trump publicly stated that his administration’s Middle East policy – including the illegal U.S. military occupation of nearly a third of Syria, the administration’s adoption of aggressive Iranian sanctions, and Trump’s response to murder of Saudi journalist Jamal Khashoggi — is not driven by his country’s interest in oil but instead to benefit the interests of the state of Israel.Trump made the comment when asked by Post reporter Josh Dawsey about whether or not he supports tougher sanctions against the Saudi government for allegedly being responsible for the death of Khashoggi in early October. Trump responded by stating that he would “listen” to those calling for increased sanctions and then adding that the Middle East is a “dangerous, rough part of the world.” Trump continued, stating that Saudi Arabia has been a “great ally,” adding that “without them, Israel would be in a lot more trouble. We need to have a counterbalance to Iran.”Trump’s statements here seem to support the claims made in recent reports that Israeli Prime Minister Benjamin Netanyahu was responsible for Trump’s decision to stand by Saudi Crown Prince Mohammed bin Salman (MBS) during the fall-out from Khashoggi’s death, which several governments and U.S. intelligence have claimed was planned in advance with MBS’ approval. Netanyahu told the White House that MBS was a “strategic ally” and should be supported regardless of his alleged involvement in the death of the former Post columnist at the Saudi consulate in Istanbul.However, as Trump continued to discuss the region, he revealed that Israel is not just the reason for his continued support for the Saudi government despite the fallout from Khashoggi’s death but also the reason why the U.S. continues to be so heavily involved in the region. He stated: “It’s very important to have Saudi Arabia as an ally, if we’re going to stay in that part of the world. Now, are we going to stay in that part of the world? One reason to is Israel. Oil is becoming less and less of a reason because we’re producing more oil now than we’ve ever produced. So, you know, all of a sudden it gets to a point where you don’t have to stay there.”
America’s hidden war in Syria - WaPo -Raqqa, Syria — This ruined, fearful city was once the Islamic State’s capital, the showcase of its caliphate and a magnet for foreign fighters from around the globe. Now it lies at the heart of the United States’ newest commitment to a Middle East war. The commitment is small, a few thousand troops who were first sent to Syria three years ago to help the Syrian Kurds fight the Islamic State. President Trump indicated in March that the troops would be brought home once the battle is won, and the latest military push to eject the group from its final pocket of territory recently got underway. In September, however, the administration switched course, saying the troops will stay in Syria pending an overall settlement to the Syrian war and with a new mission: to act as a bulwark against Iran’s expanding influence. That decision puts U.S. troops in overall control, perhaps indefinitely, of an area comprising nearly a third of Syria, a vast expanse of mostly desert terrain roughly the size of Louisiana. The Pentagon does not say how many troops are there. Officially, they number 503, but earlier this year an official let slip that the true number may be closer to 4,000. Most are Special Operations forces, and their footprint is light. Their vehicles and convoys rumble by from time to time along the empty desert roads, but it is rare to see U.S. soldiers in towns and cities. The new mission raises new questions, about the role they will play and whether their presence will risk becoming a magnet for regional conflict and insurgency.
US Commits To Indefinite Occupation Of Syria; Controls Region The Size Of Croatia -- "We don't want the Americans. It's occupation" — a Syrian resident in US-controlled Raqqa told Stars and Stripes military newspaper. This as the Washington Post noted this week that "U.S. troops will now stay in Syria indefinitely, controlling a third of the country and facing peril on many fronts." Like the "forever war" in Afghanistan, will we be having the same discussion over the indefinite occupation of Syria stretching two decades from now? A new unusually frank assessment in Stars and Stripes bluntly lays out the basic facts concerning the White House decision to "stay the course" until the war's close:That decision puts U.S. troops in overall control, perhaps indefinitely, of an area comprising nearly a third of Syria, a vast expanse of mostly desert terrain roughly the size of Louisiana.The Pentagon does not say how many troops are there. Officially, they number 503, but earlier this year an official let slip that the true number may be closer to 4,000.A prior New Yorker piece described the US-occupied area east of the Euphrates as "an area about the size of Croatia." With no Congressional vote, no public debate, and not even so much as an official presidential address to the nation, the United States is settling in for another endless occupation of sovereign foreign soil while relying on the now very familiar post-911 AUMF fig leaf of "legality".Like the American public and even some Pentagon officials of late have been pointing out for years regarding Afghanistan, do US forces on the ground even know what the mission is? The mission may be undefined and remain ambiguously to "counter Iran", yet the dangers and potential for major loss in blood and treasure loom larger than ever. According to Stars and Stripes the dangerous cross-section of powder keg conflicts and geopolitical players means "a new war" is on the horizon: The new mission raises new questions, about the role they will play and whether their presence will risk becoming a magnet for regional conflict and insurgency.
Turkey threatens to invade Syria amid tensions with Washington -- On December 12, at the Turkish Defense Industry Summit, President Recep Tayyip Erdogan vowed to launch a new military operation east of the Euphrates River in northern Syria in coming days, targeting the Kurdish nationalist groups.He dismissed arguments that US support for Kurdish nationalists was necessary to fight the terrorist threat from ISIS: “There is no ISIS threat in Syria any longer. This is only a tale. We said before and we are saying now that we will start the operation in east of the Euphrates in a few days to save it from the separatist terrorist organization. It is clear that the purpose of US observation points in Syria is not to protect our country from terrorists, but to protect terrorists from Turkey.”This reflected longstanding concerns in Ankara over US support for the Kurdish nationalist People’s Protection Units (YPG) in Syria, an affiliate of the Kurdistan Workers’ Party (PKK), the Kurdish separatist movement against which Ankara has waged a bloody counter-insurgency for more than 30 years in Turkey. Ankara opposes Kurdish autonomy in Syria, fearing that it will provoke demands for Kurdish autonomy in eastern Turkey.To crush the Kurdish nationalist forces, Erdogan has twice ordered the Turkish army to launch its own bloody invasions of Syria: “Operation Euphrates Shield” (in August 2016) and “Operation Olive Branch” (in January 2018), directed against the US-backed YPG.Erdogan’s December 12 speech was a direct response to the announcement made by Department of Defense spokesman Rob Manning on December 11. “At the direction of Secretary (James) Mattis, the US established observation posts in the northeast Syria border region to address the security concerns of our NATO ally Turkey,” Manning said.Mattis had announced that Washington would establish observation posts in northern Syria near the Turkish border in order to share military intelligence on Kurdish movements into Turkey. Mattis’ remarks were framed as an attempt to reassure Turkey that US support for the Syrian Democratic Forces (SDF), which is comprised largely of YPG troops, would not harm Ankara’s interests. Ankara rejected this, however, seeing it as an unacceptable proposal to place US troops athwart a Turkish attack on Kurdish forces in Syria. As high-level talks continued, US-Turkish relations were nearing the breaking point. While Washington and its European imperialist allies had initially launched the Syrian war in 2011 using Turkey as a base to resupply Islamist militias fighting the Syrian regime, Turkey’s planned invasion threatened to provoke a direct clash with US troops in Syria.
Trump Supports Turkey’s Plan to Invade Northeast Syria, Erdogan Says — Turkey may start a new military operation in Syria at any moment, President Tayyip Erdogan said on Monday according to a report by Reuters, touting support from US President Donald Trump even though the Pentagon has issued a stern warning to Ankara.
Syria conflict: US withdraws troops after IS ‘defeat’ - The Trump administration says US troops are being withdrawn from Syria, after the president said the Islamic State (IS) group had been "defeated". The Pentagon said it was transitioning to the "next phase of the campaign" but did not give details. Some 2,000 troops have helped rid much of north-eastern Syria of IS, but pockets of fighters remain. It had been thought defence officials wanted to maintain a US presence to ensure IS did not rebuild. There are also fears a US withdrawal will cede influence in Syria and the wider region to Russia and Iran. Both the Pentagon and the White House statement said the US had started "returning United States troops home as we transition to the next phase of this campaign". The Pentagon said it would not provide further details of what that next phase is "for force protection and operational security reasons".
Report: U.S. To Leave Syria Immediately – Updated -- The Wall Street Journal just reported that U.S. troops prepare to leave northeast Syria:—In an abrupt reversal, the U.S. military is preparing to withdraw its forces from northeastern Syria, people familiar with the matter said Wednesday, a move that throws the American strategy in the Middle East into turmoil. The move follows a call last week between President Trump and Turkish President Recep Tayyip Erdogan, who has threatened to launch an assault on America’s Kurdish partners in Syria. Turkey had threatened over several week to invade and occupy an at least 10 miles deep strip of northeast Syria. The Turkish army brought heavy weapons to its adjacent borders areas. Some 15,000 foreign and Syrian 'rebels', paid by Turkey, are supposed to be on the forefront of the invasion. These were over the last month transferred from Idleb and other Turkish controlled areas of northwest Syria to the Turkish side of the eastern border.The U.S. military and the neoconservatives elements in Trump's administration wanted to hold onto the northeast of Syria for an unlimited time. They planned to establish a Kurdish entity and finance it with the Syrian oil fields they occupied. They had plans to arm and train some 40,000 Kurdish troops. For Turkey the perspective of 40,000 armed and U.S. protected YPK Kurds on its border, while the YPG's sister organization PKK is fighting a separatist guerilla war against the Turkish army north of it, was a real and existential threat. It seems that Erdogan made a deal with Trump, which is now turned into practical moves. Yesterday Turkey was suddenly offered to buy advanced Patriot missile defense systems. It had earlier decided to buy the Russian S-400 system. Now we learn the U.S. troops move out. What other surprises are in this deal? What does Trump get out of it? How does this change Turkey's relation with Russia?
US Syria pullout draws Kurdish condemnation and Putin’s praise --The Kurdish force that has led the ground war against Islamic State in Syria has condemned the White House’s surprise decision to withdraw US troops from the country and claimed it will spark a revival of the terror group. The Syrian Democratic Forces, a group of Kurdish and Arab units raised by Washington specifically to fight Isis, said the US’s move would have “dangerous implications for international stability”.Donald Trump has told the Pentagon to extricate its estimated 2,000 troops as soon as possible, with a target of accomplishing the task in less than a 100 days, according to officials in Washington, but defence staff are trying to make the argument for more time and leaving a residual counter-terrorist force of a few hundred.Reuters reported on Thursday that the Trump administration was also planning to cut short the air war against Isis in Syria. An official told the news agency that a final decision had not been made.Trump stuck to his decision in the face of fierce criticism from within his own party on Thursday, but changed his justification. On Wednesday, he had argued that Isis was defeated. But 24 hours later, the US president said the withdrawal was to save US soldiers’ lives and dollars. “Why are we fighting for our enemy, Syria, by staying & killing ISIS for them, Russia, Iran & other locals?,” Trump asked on Twitter. “Time to focus on our Country & bring our youth back home where they belong!” The SDF and the YPG, a partner Kurdish militia, described the move as a “blatant betrayal”. One Kurdish leader contacted by the Guardian said the fight against Isis in Syria’s far east would be abandoned immediately, and all SDF units on that front would redeploy closer to the Turkish border. The SDF responded to the announcement with a blunt statement. “The war against Islamic State has not ended and Islamic State has not been defeated,” it said. Any withdrawal would “create a political and military vacuum in the area, leaving its people between the claws of hostile parties”.
Russia, Turkey, Iran fail in push for new Syrian constitution - Russia, Iran and Turkey, supporters of the main sides in Syria's complex civil war, on Tuesday failed to agree on the makeup of a United Nations-sponsored Syrian constitutional committee but called for it to convene early next year to kick off a viable peace process. In a joint statement read out by Russian Foreign Minister Sergey Lavrov after the trio met the UN Syria peace envoy, Staffan de Mistura, in Geneva, they said the new initiative should be guided "by a sense of compromise and constructive engagement". The foreign ministers of the three nations had hoped to seal their joint proposal on a committee - which could usher in elections - and win UN blessing for it. But the statement by the three made no mention of the composition of the panel, pointing to lingering disagreement over lists of candidates submitted by Syrian President Bashar al-Assad and his rebel adversaries. The Syrian government, which is backed by Moscow and Tehran, has not yet agreed to the committee, saying it will only support a process that alters Syria's existing constitution. De Mistura, addressing a separate news conference, made clear the three powers had not nailed down a workable political forum yet, after years of abortive attempts at ending the bloody seven-year war.
Erdogan sees China as a partner for the future - "We are facing an economic war. Do not worry, we will win it,” Turkish President Recep Tayyip Erdogan said during the presentation of his 100-day action plan in August, as a currency crisis and economic showdown with the United States reached its height. Erdogan declared that China was the country’s economic partner of the future. That call resounded with Ismet Oztanık, the chairman of Asiability-Turkey, which seeks to capitalize on China’s Belt and Road Initiative and build new bridges linking the republic on the Bosphorus to the South China Sea. “The Turkish embassy in Beijing is finalizing the launch of a working platform to bring business people in the private sector from China and Turkey together,” Oztanık told Asia Times. The platform, which will soon be publicized, is expected to enhance mutual investments. In August, Oztanık announced that the China Entrepreneur Club – led by Jack Ma, the chairman of Alibaba – was considering a visit to Turkey to check out investment opportunities. It now rests on the Turkish private sector and quasi-government bodies to assemble the relevant counterparts and pave the way for a delegation of billionaires. A lender and investor The position of Turkey on the global stage has improved since Erdogan announced he would seek other partners over the summer. The murder of Washington Post columnist Jamal Khashoggi by Saudi operatives in Istanbul has put Turkey in a renewed position of influence, namely with the United States. But the appeal of China has not subsided – it is gaining influence as a lender and as an investor. In July, Turkey borrowed US$3.6 billion from the Industrial and Commercial Bank of China for investments in the energy and transport sectors. A debt-driven approach is bringing the two countries closer, with Chinese investments in Turkey on the rise. Between 2011 and 2016, the Bank of China provided $2.5 billion in financing for local projects and institutional companies in Turkey and more is expected to come.
North Korean Oil Smugglers Elude U.S. Military - North Korea is still receiving crude oil shipments despite the military presence of a U.S.-led coalition deployed to ensure UN sanctions against Pyongyang are being enforced. This was revealed in a top secret report, NBC News reports, citing U.S. government officials familiar with the document. Under the latest United Nations Security Council sanctions regarding oil sales to North Korea from December 2017, North Korea is allowed to import a maximum aggregate amount of 500,000 barrels of all refined oil products for 12 months beginning on January 1, 2018. The sanctions also introduced a limit of 4 million barrels—or 525,000 tons—per a twelve-month period as of 22 December 2017 for the supply, sale, or transfer of crude oil to North Korea. However, according to the report, more oil is going into the country after ship-to-ship transfers at sea. After the deployment of the military vessels in the area, however, the North Koreans have changed tactics, conducting the transfers further out at sea, sometimes in foreign territorial waters. Warships and surveillance aircraft were deployed near the Korean Peninsula in September, but since the aircraft has a certain range it can’t exceed, moving the tankers further into the sea has worked to avoid detection. Another tactic employed by the North Koreans is using small boats to transfer oil from vessel to vessel. Smaller boats, NBC News notes, are harder to detect by the surveillance gear. In other words, despite the military efforts of the United States and its partners in the coalition, it seems that the Pyongyang regime is still getting more oil than the limit agreed under the UN sanctions. Earlier this year, in a report to the UN, Washington said North Korea received at least 759,793 barrels of oil products between January 1 and May 30, well above the 500,000-barrel annual quota. The supplies were being made via ship-to-ship transfers with North Korean tankers that have called in port at least 89 times, the United States said in July. The United States also accused China and Russia of continuing to sell oil to North Korea.
Beijing orders manufacturing hub to stop producing economic data -- China’s central government has ordered authorities in the country’s export hub, Guangdong province, to stop producing a regional purchasing managers’ index for the manufacturing sector as it seeks to control the flow of sensitive economic data. The order by the National Bureau of Statistics (NBS) means the province will now not release purchasing managers’ index (PMI) data for either October or November. The move comes as Beijing looks to tighten its grip on the dissemination of economic news amid the trade war with the United States. Industry insiders and analysts raised concerns about what the move means for disclosure of the real impact of the conflict on local businesses. The demise of Guangdong’s PMI came unannounced as the Guangdong government just stopped releasing the data. When an individual inquired as to why Guangdong had stopped releasing its own PMI, the Guangdong Industry and Information Technology Department issued a brief statement on December 10, buried deep in the website, saying that it had received a notice from the NBS at the end of October and was told that all PMI compilations must be conducted by the NBS. Given this directive, it decided to stop compiling and releasing the provincial PMI from November 1 on. Phone calls to the NBS information office went unanswered on Monday and the bureau has not replied to faxed questions from the South China Morning Post.
Xi calls for China to 'stay the course': No one is in a position to dictate reform to us -- Chinese President Xi Jinping addressed his nation Tuesday morning in Beijing to commemorate the 40th anniversary of China's "reform and opening up" — and he struck a relatively defiant tone in response to international calls for changes to his country's economy.His remarks focused on how China's Communist Party guided the nation to its economic success and emphasized the country's right to pursue its own path going forward. In an address that lasted nearly 1 1/2 hours, Xi did not mention trade tensions with the U.S. and made only passing reference to market-oriented reform goals that previous speeches have discussed in detail.That idea of progress contrasts with other countries' increasingly vocal demands for less state control and could have significantconsequences for whether the U.S. reaches a trade deal with Chinaby the end of its 90-day tariff ceasefire. "No one is in a position to dictate to the Chinese people what should or should not be done," Xi said in Mandarin Chinese during the speech, according to an official translation broadcast through state media."What to reform and how to go about the reform must be consistent with the overarching goal of improving and developing the system of Socialism with Chinese Characteristics and modernizing China's system and capacity for governance," the Chinese leader added. "We will resolutely reform what should and can be reformed, and make no change where there should and cannot be any reform."
Investigation Reveals US Sportswear Made In Sweatshop By Re-educated Chinese Muslims -- Clothes made by detained Chinese Muslims living in a mass detention camp have been traced to a US sportswear company, according to AP, which tracked "recent, ongoing shipments" from a privately-owned, state-sponsored "internment" sweatshop. The Associated Press has tracked recent, ongoing shipments from one such factory — Hetian Taida Apparel — inside an internment camp to Badger Sportswear, a leading supplier in Statesville, North Carolina. Badger’s clothes are sold on college campuses and to sports teams across the country, although there is no way to tell where any particular shirt made in Xinjiang ends up.The shipments show how difficult it is to stop products made with forced labor from getting into the global supply chain, even though such imports are illegal in the U.S. Badger CEO John Anton said Sunday that the company would halt shipments while it investigates. –AP The CEO of Hetian Taida Apparel, Wu Hongbo, confirmed the existence of a factory inside of a re-education compound - one of many across China where some 1 million Muslims, known as Uighurs, are estimated to live in detention where they are forced to give up their language and religion as they are politically indoctrinated.
How McKinsey Has Helped Raise the Stature of Authoritarian Governments - NYT - This year’s McKinsey & Company retreat in China was one to remember. Hundreds of the company’s consultants frolicked in the desert, riding camels over sand dunes and mingling in tents linked by red carpets. Meetings took place in a cavernous banquet hall that resembled a sultan’s ornate court, with a sign overhead to capture the mood. “I can’t keep calm, I work at McKinsey & Company,” it said. Especially remarkable was the location: Kashgar, the ancient Silk Road city in China’s far west that is experiencing a major humanitarian crisis. About four miles from where the McKinsey consultants discussed their work, which includes advising some of China’s most important state-owned companies, a sprawling internment camp had sprung up to hold thousands of ethnic Uighurs — part of a vast archipelago of indoctrination camps where the Chinese government has locked up as many as one million people. One week before the McKinsey event, a United Nations committee had denounced the mass detentions and urged China to stop. But the political backdrop did not appear to bother the McKinsey consultants, who posted pictures on Instagram chronicling their Disney-like adventures. In fact, McKinsey’s involvement with the Chinese government goes much deeper than its odd choice to showcase its presence in the country.
Bangladesh to relocate Rohingya refugees on remote island --The Bangladesh government is planning to move hundreds of thousands of Rohingya refugees from Burma (Myanmar) into prison-like dwellings on the remote and geographically unstable silt island of Bhasan Char. Around 900,000 Rohingya refugees are currently living in bamboo shelters and other makeshift accommodation in flood-prone valleys in Bangladesh, having fled murderous attacks by the Burmese military and Buddhist supremacist forces since August last year.The refugees are from Burma’s north-western Rakhine state where they constitute an oppressed Muslim minority. Stripped of their citizenship rights in 1982, they have been subjected to systematic, state-sanctioned oppression and violence, including murder, rape, the destruction of whole villages and mass expulsions. A recent UN report estimates that almost 400 villages have been destroyed, and about three quarters of a million Rohingya have been forced to flee Burma.The Burmese government brands the Rohingya, who have lived in Burma for decades, or even centuries, as “Bengalis” or “illegal immigrants” and has called for their expulsion to neighbouring Bangladesh. About 200,000 Rohingya refugees were already living in Bangladesh before the latest exodus.The Rohingya have sought refuge in neighbouring Bangladesh in the hope that they would be sympathetically treated in the Muslim majority country. These hopes, however, have been cruelly dashed by successive governments in Dhaka.Despite widespread public sympathy for the refugees, the Awami League government initially used the military to block the entry of the latest wave of refugees. When this failed the government forced the refugees into squalid, over-crowded settlements and camps that lack clean water, proper sanitary and health facilities and inadequate supplies of food. The government now wants to shift them to Bhasan Char. The prison-like conditions, which the government is attempting to hide, were revealed in video footage published late last month by the British-based Guardian newspaper.
India’s Assault on Central Bank Autonomy Is Just Starting - After sending two pesky central bank governors packing in a little over two years, Indian bureaucrats have turned their attention to unwinding the monetary authority’s autonomy. Their first move, unveiled Thursday, is an innocuous – even laudable – infusion of 410 billion rupees ($5.9 billion) into troubled state-run lenders, bumping up this fiscal year’s outlay for bank recapitalization by 63 percent to 1.06 trillion rupees. The fresh capital partially replaces a shortfall in the 2.11 trillion rupee bank recap announced in October last year. 1 According to reports in Indian media, Allahabad Bank, Bank of India, Bank of Maharashtra and Corporation Bank are likely to be released from the Reserve Bank of India’s correctional facility for wayward lenders with depleted capital. It’s way too early. Take Allahabad Bank, one of the four lenders expected to be freed soon from the RBI’s lending curbs. Allahabad has made $730 million in loan-loss provisions so far this fiscal year, running through the entire $700 million of taxpayers’ funds it received as fresh capital during the period. Its capital situation is worse than it was a year ago. And while the government may be right in thinking not much more can go wrong with large corporate debtors (17.5 percent of Allahabad’s loan book is already nonperforming), it doesn’t mean other advances won’t go bad. Here’s what India Ratings & Research Pvt., a unit of Fitch Ratings, had to say while downgrading the lender by one level this month: “Although the fresh slippages from corporates are likely to be modest, the second wave of gross non-performing loans could be from agriculture and micro, small and medium enterprises and the situation may aggravate in light of upcoming elections.” But then, the general elections are precisely why the government wants an early release.
How Britain stole $45 trillion from India- There is a story that is commonly told in Britain that the colonisation of India - as horrible as it may have been - was not of any major economic benefit to Britain itself. If anything, the administration of India was a cost to Britain. So the fact that the empire was sustained for so long - the story goes - was a gesture of Britain's benevolence. New research by the renowned economist Utsa Patnaik - just published by Columbia University Press - deals a crushing blow to this narrative. Drawing on nearly two centuries of detailed data on tax and trade, Patnaik calculated that Britain drained a total of nearly $45 trillion from India during the period 1765 to 1938. It's a staggering sum. For perspective, $45 trillion is 17 times more than the total annual gross domestic product of the United Kingdom today. How did this come about? It happened through the trade system. Prior to the colonial period, Britain bought goods like textiles and rice from Indian producers and paid for them in the normal way - mostly with silver - as they did with any other country. But something changed in 1765, shortly after the East India Company took control of the subcontinent and established a monopoly over Indian trade. Here's how it worked. The East India Company began collecting taxes in India, and then cleverly used a portion of those revenues (about a third) to fund the purchase of Indian goods for British use. In other words, instead of paying for Indian goods out of their own pocket, British traders acquired them for free, "buying" from peasants and weavers using money that had just been taken from them. It was a scam - theft on a grand scale. Yet most Indians were unaware of what was going on because the agent who collected the taxes was not the same as the one who showed up to buy their goods. Had it been the same person, they surely would have smelled a rat. Some of the stolen goods were consumed in Britain, and the rest were re-exported elsewhere. The re-export system allowed Britain to finance a flow of imports from Europe, including strategic materials like iron, tar and timber, which were essential to Britain's industrialisation. Indeed, the Industrial Revolution depended in large part on this systematic theft from India.
Canada’s President Warned Against Canceling $12 Billion Saudi Arms Deal —A Canadian company shipping weapons to Saudi Arabia has warned Ottawa against cancelling the lucrative arms contract, a day after Prime Minister Justin Trudeau said he was looking for ways out of the deal. General Dynamics Land Systems-Canada said on Monday that Canada “would incur billions of dollars of liability” should it unilaterally cancel the contract, Reuters reported. “Terminating the contract would have a significant negative impact on our highly skilled employees, our supply chain across Canada, and the Canadian defence sector broadly,” the company said in a statement, according to Reuters. The warning comes a day after Trudeau said his government was looking into ways to cancel the deal, amid heightened pressure to stop doing business with Saudi Arabia in the aftermath of the murder of journalist Jamal Khashoggi and the ongoing Saudi-led war in Yemen. “We are engaged with the export permits to try and see if there is a way of no longer exporting these vehicles to Saudi Arabia,” Trudeau said on CTV News programme Question Period on Sunday. Trudeau’s predecessor, Stephen Harper, brokered the $12bn agreement ($15bn Canadian) to ship Canadian-made, light-armoured vehicles to Riyadh in 2014 and the Trudeau government later gave the deal its own stamp of approval. Human rights groups have for years called on Canada to cancel the agreement, arguing that the weapons could be used in human rights abuses inside the Gulf kingdom, as well as in Yemen.
Huawei to Hell: Globally Restricting PRC Tech --Wrongly or rightly, Huawei is now perceived as an extension of the People's Republic of China. More specifically, the Communist leadership is thought of as directing its commercial activities in pursuit of national objectives. To be sure, this prospect was always the likely one given that its founder is a former People's Liberation Army officer who has not exactly distanced himself from his former employer. In the wake of his daughter, Huawei CFO Meng Wanzhou, being detained in Canada on charges that Huawei violated American sanctions on Iran, many other countries have raised security concerns over using Huawei equipment in sensitive applications. The Japanese have effectively banned state purchases of Huawei gear without mentioning it directly:Japan decided on a policy Monday that will effectively exclude Chinese telecommunication equipment giants Huawei Technologies Co. and ZTE Corp. from public procurement starting in April next year, the government said.The decision comes amid concerns about security breaches that have already prompted the United States, Japan’s key ally, and some other counties to ban the two companies from supplying infrastructure products.“It is extremely crucial not to procure equipment that embeds malicious functions including information theft and destruction,” Chief Cabinet Secretary Yoshihide Suga said at a news conference after cybersecurity officials from relevant government ministries and agencies agreed on the plan.Nor are the French and Germans taking any chances in also overlooking Huawei equipment:Huawei faces fresh challenges in Europe after France's Orange said it would not hire the Chinese firm to build its next-generation network and Germany's Deutsche Telekom announced it would review its vendor strategy.The shift by the national market leaders, both partly state owned, follows Huawei's exclusion on national security grounds by some U.S. allies, led by Australia, from building their fifth-generation (5G) mobile networks.U.S. officials have briefed allies that Huawei is ultimately at the beck and call of the Chinese state, while warning that its network equipment may contain "back doors" that could open them up to cyber espionage. Huawei says those concerns are unfounded.
Chinese Media Deny WSJ Report About Global Banks Cutting Ties With Huawei - As the controversy over the arrest of Huawei CFO Meng Wanzhou rages (driven in part by Beijing's retaliatory arrest of three Canadian citizens living in China) and more US allies agree to limit their exposure to telecoms equipment manufactured by the Chinese giant in accordance with the wishes of the US, the Wall Street Journal has reported on yet another consequence of allegations that Huawei violated US and EU sanctions on Iran: The same global banks that helped facilitate Huawei's rise into a multinational giant that does business in more than 170 countries are now limiting or cutting their ties with Huawei. According to WSJ, HSBC (the bank that initially flagged potential sanctions violations involving Huawei and its subsidiary, Skycom, to US regulators) and Standard Chartered (another massive British bank with a large book of business in Asia) have decided that they won't offer any new business or funding to Huawei after determining that the company is too much of a risk.Two banks that helped power the Chinese company’s rise as a global technology supplier, HSBC Holdings PLC and Standard Chartered PLC, won’t provide it with any new banking services or funding after deciding that Huawei is too high risk, people familiar with those decisions said.While HSBC made its decision last year, Standard Chartered moved more recently as concerns about Huawei escalated this year from a Justice Department investigation into whether the company violated U.S. sanctions on Iran, some of the people said.Meanwhile, Citigroup, which continues to offer day-to-day banking services to Huawei, has decided that any new business would be "subject to review." A third key bank, Citigroup Inc. continues to provide Huawei with day-to-day banking services outside the U.S., people familiar with that relationship said. New banking business would be subject to review, and Citigroup is monitoring developments in the U.S., the people said.
Canada will ‘be on the losing end’ over Huawei arrest- professor - A Canadian business professor says our country will “be on the losing end” of a dispute between China and the U.S. over the arrest of a prominent executive from Chinese telecommunications giant Huawei. “I don’t think, maybe, Canadians really appreciate… (that) this company is their crown jewel of success,” Ian Lee, an associate professor of management at Carleton University’s Sprott School of Business, told CTV News Channel Saturday from Ottawa. “It is their Google and Microsoft and Apple all rolled into one,” he added. “It was as if… China had arrested the daughter or the widow of Steve Jobs from the Apple corporation.” On Dec. 1, Huawei chief financial officer Meng Wanzhou -- the daughter of the company’s politically-connected founder -- was detained in Vancouver at the behest of U.S. authorities, who want to see her extradited to their country to face fraud charges related to alleged violations of Iranian sanctions. While Meng is currently out on $10-million bail, two prominent Canadians have subsequently been detained in China. Lee, who has also spent more than two decades teaching in an MBA program in Shanghai, said there is “deep anger in China” over Meng’s arrest. More retaliation against Canada, he believes, could be coming unless the diplomatic spat is resolved. “They are not going to let go until they obtain the release of the CFO of Huawei,” Lee said of the Chinese government. “It will be relentless and they will continue to ratchet it up and we are going to be on the losing end of this.” Canadian businesses, he added, should be “very concerned” about their prospects in China, which is Canada’s second largest trading partner after the U.S.
Third Canadian detained in China as diplomatic feud escalates --Canadian consular officials are assisting a third Canadian citizen detained by Chinese authorities, as the row deepens between Beijing and Ottawa over the arrest of a Chinese tech executive. Global Affairs Canada spokeswoman Maegan Graveline on Wednesday confirmed that another Canadian national had been detained in China, without giving details of the person’s identity or the nature of the detention. “Consular officials are providing assistance to the family. Due to the provisions under the Privacy Act, no further information can be disclosed,” Graveline said. She did not suggest that the case was linked to the arrest of Huawei chief financial officer Sabrina Meng Wanzhou in Canada. Citing unnamed sources, the National Post reported that the third Canadian detained was not a diplomatic official or an entrepreneur operating in China.
US Pressures Germany To Ditch Huawei Over 'Security Concerns' - First it was Australia, New Zealand and Japan, now the US is pressing the German government to refuse to use equipment manufactured by Chinese telecom giant Huawei as Europe's largest economy seeks to build out its 5G infrastructure.According to Bloomberg, a US delegation met on Friday with German Foreign Ministry officials in Berlin to talk about the security risks presented by Huawei's equipment, which the US says is vulnerable to spying. The meeting in Germany follows a report from late last month claiming the US had launched an "extraordinary outreach campaign" to warn its allies against using Huawei equipment (while its vulnerability to Chinese spying has been cited as the reason to avoid Huawei, it's also worth noting that the US and China are locked in a battle for who will dominate the global 5G space...a battle that Huawei is currently winning). Germany is set to hold an auction early next year to find a supplier to help expand its 5G network. The Berlin meeting took place one day after Deutsche Telekom said it would reexamine its decision to use Huawei equipment.
How Huawei Could Divide the World - I’m an American journalist who lives in Beijing, but I just happened to be visiting South Korea when news broke that Meng Wanzhou, chief financial officer of Chinese telecom giant Huawei Technologies Co., had been arrested in Canada on Dec. 1. She was detained at the behest of the U.S. for allegedly misleading financial institutions about the company’s Iran business, causing them to violate U.S. sanctions. I called my wife, who works in the Chinese capital too, and joked about this ominous turn in Chinese-American relations: “Maybe it’s safer not to go back.” The quip turned out not to be very funny after I did return. Within days, Chinese authorities scooped up two Canadian citizens who, despite Beijing’s denials, were soon seen by the outside world as pawns in China’s attempts to extract Meng from Canadian—and potential U.S.—custody. In Vancouver, Meng received a public hearing in an independent court. That’s in contrast to China, where it’s still unclear why the Canadians were detained and where, more fundamentally, law can be contravened by power and judges are instruments of the Communist Party. Even foreign nationals can vanish into prison cells. For now, the detention of Michael Kovrig, a former diplomat who works for a policy think tank, and Michael Spavor, a businessman, have made expatriate Americans like me worry how much we’re at Beijing’s mercy. In a similar way, Chinese businessmen saw Meng’s arrest as a disincentive to traveling to and investing in the U.S. The detentions are the most frightening development yet taken in the widening confrontation between the U.S. and China. What started as a scuffle over tariffs and trade balances, then expanded into a battle for control of future technologies, may be degenerating into an intimate war against each other’s people.
China Accused Of Huge Hack Of Thousands Of European Diplomatic Cables - Step side Russia: the new global hacking bogeyman is now officially China. Just days after the US accused Beijing of hacking hundreds of millions of Marriott accounts and extracting the private data of countless Americans, even as the ongoing diplomatic feud over Chinese "intermediation" in western communications via the likes of Huawei escalates, moments ago the EU unveiled that China was now also the new Wikileaks, accusing hacker tied to China's People's Liberation Army of a "huge hack" of its diplomatic cables and reviving fears about vulnerabilities in the 28-country bloc’s data systems. According to investigators, hackers had accessed cables on a variety of geopolitical issues including terrorism, transatlantic relations, peace in the Middle East, arms control, the South China Sea and the Asia and Oceania working party. In a campaign dating back at least to 2015, the hackers gained access to more than a hundred organisations including the EU’s Coreu electronic communication network, the FT reported citing a report due to be published on Wednesday by cyber security company Area 1 Security, that exposed the breach. According to the report, Chinese hackers used the Cypriot foreign ministry as an entry point to conduct cyber espionage over several years throughout the block. Other targets included parts of the UN and the AFL-CIO, a confederation of American unions that may have been of interest to the Chinese because it was involved in trade negotiations. The EU Council secretariat said it was “actively investigating” allegations of a “potential leak of sensitive information”. “The Council Secretariat takes the security of its facilities, including its IT systems, extremely seriously,” it added. The revelations come as the latest embarrassment to the EU at a time of heightened concerns about the ability of groups linked to perpetual cyberwarfare bogeyman Russia and other powers to exploit weak links in its information and financial networks.
Hacked European Cables Reveal a World of Anxiety About Trump, Russia and Iran - NYT --Hackers infiltrated the European Union’s diplomatic communications network for years, downloading thousands of cables that reveal concerns about an unpredictable Trump administration and struggles to deal with Russia and China and the risk that Iran would revive its nuclear program.In one cable, European diplomats described a meeting between President Trump and President Vladimir V. Putin of Russia in Helsinki, Finland, as “successful (at least for Putin).”Another cable, written after a July 16 meeting, relayed a detailed report and analysis of a discussion between European officials and President Xi Jinping of China, who was quoted comparing Mr. Trump’s “bullying” of Beijing to a “no-rules freestyle boxing match.” The techniques that the hackers deployed over a three-year period resembled those long used by an elite unit of China’s People’s Liberation Army. The cables were copied from the secure network and posted to an open internet site that the hackers set up in the course of their attack, according to Area 1, the firm that discovered the breach. Area 1 made more than 1,100 of the hacked European Union cables available to The New York Times. The White House National Security Council did not have an immediate comment on Tuesday. The compromised material provides insight into Europe’s struggle to understand the political turmoil engulfing three continents. It includes memorandums of conversations with leaders in Saudi Arabia, Israel and other countries that were shared across the European Union. A portion of a cable describing a private meeting in July between European officials and Xi Jinping, the Chinese president. But it also revealed the huge appetite by hackers to sweep up even the most obscure details of international negotiations. The cyberintruders also infiltrated the networks of the United Nations, the A.F.L.-C.I.O., and ministries of foreign affairs and finance worldwide. The hack of the A.F.L.-C.I.O. focused on issues surrounding the negotiations over the Trans-Pacific Partnership, a trade deal that excluded Beijing.
European Auto Registrations Plunge Third Month In A Row, Down 8.1% In November - Automakers in Europe saw new car registrations plummet an ominous 8.1% in November according to ACEA data provided by Bloomberg. This is now the third month in a row that registrations have declined, as the overseas market - already in a precarious position – shows yet another indication of continuing weakness into 2019. Shares of automakers fell overnight after the November numbers hit the wire. The decline in November helped drag down year to date growth to just 0.6% in the European Union in the European Free Trade Association area. This downturn earlier this year began with the introduction of new emission standards across Europe. EY Consultancy had previously predicted that levels would pick up toward the end of the year this year, but now partner Peter Fuss believes that December is going to be negative also. He notes the fewer shopping days in the month as a convenient excuse for the tanking numbers. If December comes in similar to November, it could throw all of 2018 into negative territory. In order to keep pace with 2017, automakers would need to sell 1.05 million cars this month. If December registrations drop more than 8% – as the November ones did - the 1 million car mark will be impossible to hit.
Global Auto Industry Enters First Recession Since 2009 - It's official: auto market data has confirmed that the "boom" created by a decade of low interest rates following the global financial crisis is finally over. According to new estimates from RBC Capital Markets, the global automobile industry is heading into recession, as manifested by its first production drop in nearly a decade. RBC analyst Joe Spak estimates that worldwide light vehicle output will fall about 4% in the fourth quarter after falling 2.9% in the third quarter. This will be the first time this number has fallen for two consecutive quarters since 2009. Estimates for total vehicles produced have also fallen. Automakers are expected to produce 94.6 million vehicles this year, which is down 0.6% from 2017's numbers. Analysts also expect the recession to continue next year, with the production number in 2019 predicted to drop by about 0.4%. Just days ago, we highlighted the continuing collapse of auto sales in the Chinese market. November data confirmed a continuation of the ugly trends that we discussed last month. Passenger vehicle wholesales were down 16.1% on the year, according to the China Association of Automobile Manufacturers. This data includes sedans, SUVs and crossover utility vehicles. This should not come as a surprise to regular readers as we have been reporting on the anemic numbers coming out of China in both October and November, although the severity of the slowdown has caught even the optimists by surprise. Similarly, we just reported on European auto registrations falling for the third month in a row. Automakers in Europe saw new car registrations plummet an ominous 8.1% in November according to ACEA data provided by Bloomberg. Meanwhile, passenger car sales in another huge market, Japan, were down 3.4% over the first 8 months of 2018 compared to the year prior.
“We Made Mistakes”: France Changes Tone on Yellow Vests as Movement Goes Global — The Macron government has changed its tone after five straight weeks of violent “Yellow Vest” demonstrations across the country. On Sunday Prime Minister Édouard Philippe admitted to Les Echoes newspaper that mistakes were made in the handling of the protests, and that a dialogue is needed.“We made mistakes. We did not listen enough to the French people. I remain convinced that they want this country to be transformed,” said Philippe.Protesters donning yellow reflective jackets began filling the streets across France on November 17 – initially in protest to a fuel tax aimed at combating global warming – and morphing into a country-wide rebuke of the Macron government. There have been seven deaths, over 4,500 arrests and hundreds of injuries during the demonstrations – as protesters smashed store windows, looted, set fire to vehicles and defaced statues. In addition to a massive presence, Police have responded to the protests with tear gas and pepper spray to try and disperse crowds.In early December Finance Minister Bruno Le Maire called the economic impact of the protests a “catastrophe,” Meanwhile, the Yellow Vest protests have spread to multiple European countries – most notably the Netherlands and Belgium, while also spreading to Israel, Iraq and now Canada.
Chaos on French highways as 'yellow vests' torch toll booths (Reuters) - French “yellow vest” protesters occupied highway toll booths, setting a number on fire and causing transport chaos in parts of the country just days before the Christmas holidays getaway. France’s biggest toll road operator, Vinci Autoroutes, said there were demonstrations at about 40 sites along its network and that some highway intersections had been damaged, notably in tourist towns such as Avignon, Orange, Perpignan and Agde. Protesters set fire overnight to the Bandol toll station, forcing the closure of the A50 highway between Marseille and Toulon, said Vinci, whose network is mainly in southern and western France. The Manosque station was also torched. Some 20 people were arrested on Tuesday following the blazes, while four others remain in custody following fires on Saturday. Several people have died in roadside accidents at yellow vest roadblocks in recent weeks, mostly at the many roundabouts blocked by groups of demonstrators. The “yellow vests” protesters - named after the fluorescent jackets French motorists must have in their cars - have blocked roads and roundabouts across France since mid-November. The demonstrations began as a protest against fuel tax increases, but have morphed into a wider backlash against the liberal economic policies of French President Emmanuel Macron. Protesters angry about high fuel costs and new speed limits have also damaged or torched hundreds of traffic radars. Radars-auto.com estimated that by the middle of last week some 1,600 - about half of all French traffic radars - had been damaged. More than 250 have been entirely destroyed, it said. The French state will also lose several tens of millions of euros in revenues, it said, adding that in 2017 the radars had yielded on average 84 million euros ($96 million) per month. The interior ministry declined comment on the number of radars damaged, but said that minor damage cost on average 500 euros per radar to repair, with major damage costing up to 200,000 euros. Fines for damaging radars can run as high as 75,000 euros. “Even wrapping a radar in plastic or a yellow vest... without destroying it is an offense,” a ministry official said.
France Protests: Police Threaten to Join Protesters, Demand Better Pay and Conditions The French government is desperately trying to keep its exhausted police force onside following weeks of violent protests demanding economic reforms, improved living standards and the resignation of President Emmanuel Macron. On Wednesday, French officials met with police trade union leaders to work out a deal to soothe anger in law enforcement ranks regarding overwork, unpaid overtime and difficult working conditions, Le Monde reported. But some activists are calling on police to walk out on government negotiations, close down police stations and join the “gilets jaunes”—or yellow vest—protesters with whom they have been facing off since November 17. Negotiations between three unions—Alliance, UNSA-Police and Unity-SGP-FO—and Interior Minister Christophe Castaner on Tuesday failed to reach a settlement. As talks resumed on Wednesday, France 24 reported that activists were calling on forces across the country to commit to a “slowdown” and only respond to emergencies until the dispute had been settled. Police have accumulated some 23 million hours of overtime that is yet to be paid. According to The Local France, police union leader Frédéric Lagache explained, “Faced with this irresponsibility [of the government], we are forced to be irresponsible in our actions.” The Alliance and Unity-SGP-FO unions called for a “black day for the police” on Wednesday. The Alliance is using Twitter and Facebook to rally support for what it calls “Act 1” of the police protests, using the name given to the ongoing demonstrations held by the gilets jaunes. The group has also threatened to hold “Act II” and “Act III” if required.
Rolls-Royce to Switch Work to Germany Over Brexit - Rolls-Royce on Dec. 12 said it was switching to Germany from the UK its design-approval of large aircraft engines after Prime Minister Theresa May delayed parliament's vote on the Brexit deal. "Rolls-Royce notes the decision by the UK government to delay the vote on the proposed Withdrawal Agreement and political declaration," the company said in a trading update. May has postponed a historic vote in parliament over her EU withdrawal agreement because of its certain defeat -- and must now win a no-confidence vote by MPs in her Conservative party to be held Wednesday. In a statement, Rolls said it was working with the European Aviation Safety Agency (EASA) over the planned movement of work to Germany, repeating that it was looking at stockpiling parts in preparation for Britain's planned exit from the EU on March 29. "We will continue to implement our contingency plans," Rolls said. "Specifically, we are working with EASA to transfer design approval for large aero engines to Germany, where we already carry out this process for business jets. "This is a precautionary and reversible technical action which we do not anticipate will lead to the transfer of any jobs," Rolls added. The company said also that it had "begun to build inventory as a contingency measure".
Brexit- confusion reigns over Corbyn's call for confidence vote – as it happened -- Labour and the Conservatives were embroiled in a high-stakes row over whether to stage an immediate vote of no confidence in Theresa May’s government after the opposition chose not to table a binding vote on Monday night. The opposition accused No 10 of “running scared” because it had refused to allow time to debate an alternative, non-binding no-confidence vote in May as prime minister – while the Tories hit back, saying that Labour had “bottled it”. Jeremy Corbyn had demanded a “vote of no confidence in the prime minister” at about 6pm after May told MPs she would delay holding the Brexit vote – originally pulled last week – to the week of 14 January. The Labour leader said: “It’s bad, unacceptable, that we should be waiting almost a month before we have a meaningful vote on the crucial issue facing the future of this country.” At the heart of the somewhat disorientating spectacle in Westminster this evening is this relatively straightforward fact: The official opposition, Labour, can call a binding confidence vote in the government that, if won, would lead to a general election (provided no government commanding the confidence of the house was formed within two weeks). Jeremy Corbyn decided not to do so, but to table a non-binding motion of no confidence in the prime minister, which is not the form of words explicitly called for by the Fixed-Term Parliaments Act and does not force the government to allot any parliamentary time. Labour has attempted to engage in a game of brinkmanship with the prime minister, saying that refusing to hold the vote would show Theresa May is running scared. Behind this is, perhaps, the calculation that enough of those who have declared themselves dissatisfied with May’s leadership would take the bait and back Corbyn’s motion. Key players, however, have lined up behind the prime minister and it is now the government telling Corbyn he is running scared of a full no-confidence vote. Where Westminster goes from here is unclear.
Brexit: feeding the beast - When reviewing the media coverage of the European Council meeting just gone, one is treated to narratives such as this from Tony Connelly, RTÉ's Europe editor, which offer extraordinarily detailed blow-by-blow accounts of events. We have to remind ourselves, therefore, that there is no media presence during the Council meetings. The proceedings are conducted without officials in attendance and, traditionally, such is the level of confidentiality, that interpreters' notes are collected up after each session and burnt. Other than the pre-prepared (and approved) Council conclusions, there are no official records kept of the meetings. In current practice, the leaders are routed into the building past a fenced-off area, known irreverently in some quarters as the pig-pen. Here reporters (including their television paraphernalia) are corralled and, in terms of contact with the politicians, this is as far as they get, except for carefully managed (and controlled) press conferences. As the politicians arrive, the reporters call out to those to whom they want to speak, each national corps tending to give preference to their own. The process, officially called "doorstepping", allows the leaders to give "impromptu" briefings to journalists, and for officials during the proceedings to keep the press corps appraised of developments. In many respects, the procedures constitute the politicians' "revenge" on the media, putting them in their place and reinforcing the already over-inflated egos of the politicians. Corralling them in their pig-pen is a demeaning way of treating the press, and by no means an ideal way of conveying information.
Party activists pile pressure on Corbyn to back second vote Labour activists who want to ditch Brexit because they believe it will make it impossible for the party to implement a leftwing manifesto have launched a fresh campaign for a second referendum. The move puts Jeremy Corbyn under increasing pressure to drop his resistance to a new public vote. A “model motion” stating that Labour should campaign to put the issue to the people again and then back Remain is being circulated to all constituency Labour parties by Corbyn supporters. They hope most local parties will sign up to it before Theresa May returns her Brexit deal to the House of Commons some time next month. The campaign is being run by young leftwing Labour activists headed by Michael Chessum, a former member of the steering committee of the pro-Corbyn grassroots movement Momentum. He now heads the group Another Europe Is Possible, which helped shift party policy in the direction of a second referendum at its annual conference in Liverpool in September. Chessum said activists in all constituency Labour parties were being contacted by phone to urge them to back the motion, which he believes could be supported by more than 100 local parties by the middle of January. The motion says: “The Tories’ Brexit agenda will deregulate and destabilise the economy, attack our rights and freedoms, and undermine our ability to implement a radical manifesto. “Any public vote on Brexit must, to be meaningful, include an option to Remain.” It adds that “Labour must campaign for a public vote on Brexit with an option to Remain, and include such a vote in our manifesto”.
Theresa May’s team plots new EU referendum Two of Theresa May’s most senior allies are preparing for a second EU referendum behind her back, The Sunday Times can reveal, opening up another Tory civil war. David Lidington — May’s deputy in all but name — held talks with Labour MPs on Thursday in an effort to build a cross-party coalition for a new vote as the prime minister faced a week of humiliation at the hands of MPs and European Union leaders. Gavin Barwell, the No 10 chief of staff, told a cabinet minister last week that holding a second referendum was “the only way forward”, having concluded the prime minister has little prospect of persuading MPs to back her deal with Brussels. The Sunday Times has also learnt that May war-gamed her options during a recent conversation with David Cameron. Her predecessor told friends that May — while personally opposed to a referendum — was a “servant of the Commons” and would back a second vote if MPs voted for it. Last night May sought to kill the referendum talk, denouncing those backing a “people’s vote” for seeking to “subvert the process for their own political interests”. She said: “For Tony Blair to go to Brussels and seek to undermine our negotiations by advocating for a second referendum is an insult to the office he once held. I have never lost sight of my duty, and that is to deliver on the referendum result.” But The Sunday Times has learnt that Cabinet Office officials under Lidington are discussing plans to offer voters a choice between May’s deal and a no-deal Brexit. Officials then expect the Commons to amend the necessary legislation to include on the ballot paper the option of remaining in the EU. “The prime minister can tell voters she tried to honour the referendum result, but parliament has spoken,” a source familiar with the work said.
Brexit: no lessons learned - There are four possible options for Brexit. Mrs May's deal is the highest profile of them all, but that has been put on hold until after the Christmas break, leaving the media with nothing to play with.Of the three other options, the unilateral revocation of Article 50 has been given an outing recently, with the full ECJ ruling. But, for the moment, it has no political traction. Its moment may come, but it's not just yet. And, by the same token, the "no deal" Brexit is not consciously on the agenda, despite attempts by The Sunday Telegraph to make it so. That leaves the fourth option, the favourite of the continuity remainers who have been pushing it as a means of reversing the result of the 2016 referendum. And that, of course, is the so-called "second" referendum, although some would prefer to call it the third referendum, the first dating from 1975. Had things been different, the media at the moment would be immersed in the Tory party leadership challenge, having already worked up their copy on the runner and riders, ready to assail us with a blow-by-blow account of their doings. That would have kept the political hacks gainfully employed until well past Christmas but, deprived of that gainful employment, they have been reduced to rooting around for a replacement. And, with the other three Brexit options more or less on hold, this leaves the second/third referendum as the hot favourite to fill the looming empty spaces. Then, over the weekend, we've had a steady build-up of publicity on this option, with Tony Blair making the running after he had intervened in the public debate by predicting that there could be a majority in parliament for a "final say" referendum. That gives us two high profile protagonists: Blair in the red corner, and Mrs May in the Blue – just the ingredients the media have needed to run a "biff-bam" confrontation narrative, which they've kept going into this week as the fight apparently spills over into the cabinet.
Brexit: EU immigration to UK ‘to be slashed by 80%’ after we leave bloc - The home secretary is said to have plans to cut European immigration by 80 per cent under stricter entry conditions after Brexit. Sajid Javid is expected to publish plans to end free movement and preferential access for EU migrants after December 2020 – which will see net immigration from Europe reduced to as little as 10,000 a year, according to the The Sunday Times.Official figures published last month revealed EU net migration has hit a six-year low at 74,000 in the year to June 2018 – 60 per cent lower than in June 2016 and the lowest level since 2012. The government’s immigration white paper, expected to be published next week, will reportedly state this figure will be slashed further, to between 10,000 and 25,000 long-term migrants each year by 2025.A source told the newspaper: “We are going to take full control over who can come to the UK, prioritising those with the skills the UK needs rather than on the basis of which country they come from.”
Europe To May- 'Drop Dead' - Support For Second People's Referendum Grows -- Any confidence boost that might have followed Theresa May's triumph this week over her party's implacable Brexiteers has probably already faded. Because if there was anything to be learned from the stunning rebuke delivered to the prime minister by EU leaders on Thursday, it's that the prime minister is looking more stuck than ever.This was evidenced by the frosty confrontation between the imperturbable May and her chief Continental antagonist, European Commission President Jean Claude Juncker, which was caught on film on Friday shortly before the close of a two-day European Council summit that descended into bitter recriminations. After offering token praise of May's leadership, Brussels' supreme bureaucrat criticized her negotiating strategy as "disorganized", provoking a heated response from May.Earlier, May desperately pleaded with her European colleagues - who had adamantly insisted that the text of the withdrawal agreement would not be altered - to grant her "legally binding assurances" May believes would make the Brexit plan palatable enough to win a slim victory in the Commons.If there were any lingering doubts about the EU's position, they were swiftly dispelled by a striking gesture of contempt for May: Demonstrating the Continent's indifference to her plight, the final text of the summit's conclusions was altered to remove a suggestion that the EU consider what further assurances can be offered to May, while leaving in a resolution to continue contingency planning for a no-deal Brexit.Even the Irish, who in the recent past have been sympathetic to their neighbors' plight (in part due to fears about a resurgence of insurrectionary violence should a hard border re-emerge between Northern Ireland and the Republic of Ireland), implied that there patience had reached its breaking point. Here's the FT:
Brexit: “Managed No Deal” and Referendum Unicorns Dispatched, but How Long Before Anyone Notices? - Yves Smith - It’s disappointing to see Corbyn make such a hash of things. I really would like to be able to cheer Labour on, but the party isn’t looking any more competent that the Tories. Yesterday, Corbyn threatened the stunt of a vote of no confidence in May, as opposed to the government, which would have no practical effect even if he were to succeed. Then this happened: Breaking news @theSNP together with @LSRPlaid @CarolineLucas & #libdems table amendment to convert @jeremycorbyn motion into a proper motion of #NoConfidence #brexithttps://t.co/WNyN0C7mOa — Joanna Cherry QC MP (@joannaccherry) December 17, 2018 This is where things appeared to stand at the end of the day per the Guardian:Labour and the Conservatives were embroiled in a high-stakes row over whether to stage an immediate vote of no confidence in the government after the opposition chose not to table a binding vote on the issue on Monday night.The opposition accused Downing Street of “running scared” because it had refused to allow time to debate an alternative, non-binding no-confidence vote in Theresa May as prime minister.The Tories hit back, saying that Labour had “bottled it” by failing to exercise their right to force a no-confidence vote in the government when it looked like they might not win it.Corbyn appears to be way too eager to be Doing Something when he should be following the maxim attributed to Napoleon: “Never interrupt your enemy when he is making a mistake.”On top of that, the very last thing Corbyn wants to do now, or in January, is win a no confidence vote. That would virtually guarantee a crash out. We’ll go through the timetable in a post soon, hopefully later this week, but the drill is:14 days to try to form a new government. If not, then the general election process starts.The election process is twenty-five working days, or a minimum of five weeks, per statute. That means seven weeks on the tightest possible timetable.
Facing opposition, UK’s May will bring Brexit deal back to parliament (Reuters) - Prime Minister Theresa May said on Monday she would bring her Brexit deal back to parliament for a mid-January vote, pledging to get assurances from the European Union before then to break a deadlock over Britain’s fraught efforts to quit the bloc. With just over 100 days until Britain is due to leave the EU, May faced accusations from some lawmakers that she was trying to force a deeply divided parliament into backing her deal by running the clock down to exit day. A mid-January vote could oblige lawmakers to make a decision between her deal or leaving without one on March 29, a nightmare scenario for many businesses. May is pressing on with her deal to leave the EU, rejecting calls for a second referendum or to test support for different Brexit options in parliament, despite hardening opposition to the agreement to maintain close ties. May said parliament would debate the deal in January, before a vote in the week beginning Jan. 14 - more than a month after an original Dec. 11 vote which she cancelled after admitting she faced a significant defeat. After a tumultuous week in which she survived a confidence vote within her Conservative Party and sought last-minute changes to the Brexit agreement reached with Brussels last month, May said again that the alternatives to her deal were leaving without an agreement or no Brexit at all. “I know this is not everyone’s perfect deal. It is a compromise. But if we let the perfect be the enemy of the good then we risk leaving the EU with no deal,” she told lawmakers, her speech punctuated by loud shouts of protest.
Series of Commons votes on Brexit deal unlikely to bring much clarity Jeremy Corbyn’s motion of no confidence in Theresa May will give MPs an opportunity this week to register their displeasure at her refusal to put her Brexit deal to a vote before Christmas. If the DUP and some Conservative Brexiteers take the bait, it will provide another embarrassment for the prime minister. But it is not a vote of no confidence in the government and it cannot oblige May to bring forward the vote on her Brexit deal from the date in mid-January she announced in the House of Commons on Monday. Nor does it move Labour closer to a position of advocating a second referendum, as many of the party’s anti-Brexit supporters would like. The prime minister gave an improbably upbeat account of last week’s summit in Brussels, when other EU leaders rejected her call for legally binding assurances that the Northern Ireland backstop would be temporary. And she made clear that she still believes she can extract from the EU the reassurances she needs to win a majority for her deal in parliament. Her confidence is not shared by all her cabinet colleagues and some of them, emboldened perhaps by the prime minister’s loss of authority after last week’s confidence vote, have started musing in public about what should happen if her deal is rejected. Business secretary Greg Clark on Monday followed work and pensions secretary Amber Rudd and education secretary Damian Hinds in endorsing a series of “indicative votes” on Brexit options. This would give MPs a free vote on a succession of options, probably including May’s deal, “Norway plus”, no deal, and a second referendum to test the mood of the House. The last time such a process was used was in 2003 when Tony Blair allowed MPs to vote on seven options for reforming the House of Lords.
EU to Rule Out ‘Managed No-Deal’ as Bloc Boosts Brexit Planning - The European Union stepped up pressure on Britain to approve its Brexit deal by ruling out the prospect of piecemeal negotiations on aspects of the divorce to avoid the U.K. crashing out without an agreement. If the U.K. Parliament fails to ratify the withdrawal treaty before the country’s scheduled leaving date of March 29, the EU won’t seek a “managed no-deal,” according to an EU official. Instead, it will take unilateral steps to protect its interests, putting in place a bare minimum of emergency measures, and only if the U.K. reciprocates with its own actions, the person said. Some of the plans are due to be published later this week. With Prime Minister Theresa May struggling to get lawmakers’ approval of an agreement that’s taken 18 months to negotiate, some pro-Brexit members of her cabinet have suggested that a managed no deal could be a workable alternative. Others say it would be catastrophic. Foreign Secretary Jeremy Hunt told the Sunday Telegraph this weekend that the U.K. would “flourish and prosper” even in the case of a no-deal Brexit. Ministers are due to discuss contingency plans on Tuesday. The EU is preparing no-deal measures in eight areas. The European Commission will say that steps generally won’t last longer than until the end of 2019, when it publishes details of proposed EU legislation on Wednesday.
Brexit: a taste of chaos - If anything makes sense of Brexit at the moment, it is the sudden focus on preparations for a "no deal" exit. Whether intended or not – and I rather think it was intended – this has had the effect of raising its profile on the media agenda, to the extent that it is being talked about as never before. Not least, with the headline figure of £2 billion being allocated to the preparations, the public is being presented with the spectre of much-needed domestic policies being abandoned to make the funding available. Something, though, must give if we are to break out of the stalemate that's been gripping the Brexit process. For a long time, I've been saying that it is not until people have a better understanding of the dangers will they realise that a "no deal" Brexit is to be avoided at all costs. And only then will they start looking at Mrs May's deal in a new light. But, as long as they believe a "no deal" scenario to be a tenable option, there will never be the pressure needed to ensure it won't happen. If, on the other hand, people begin to realise that "no deal" comes with an unacceptable cost, then that could be enough to tilt sentiment in favour of doing a deal. However, the idea that the UK government can make any meaningful preparations for a "no deal" Brexit, with the expenditure of a mere £2 billion is absurd. Apart from anything else, there are 320 workstreams across Whitehall on "no-deal" with each workstream likely containing numerous plans. In government terms, the amounts are trivial. That amount of money, therefore, is likely to be only a down-payment – with no top limit. And government expenditure will doubtless be only a fraction of the amount borne by businesses and the population at large, in lost opportunities and additional costs.
Bank of England Warns Brexit Uncertainty Has "Intensified Considerably" In Past Month As It Keeps Rates On Hold - Unlike Sweden's Riskbank, which surprised this morning with its first rate hike in 7 years, a move that was expected by only 10 of 24 analysts polled by BBG, the Bank of England had nothing up its sleeve when its Monetary Policy Committee voted unanimously (9-0) to leave rates unchanged at 0.75% and warned that Brexit uncertainties had "intensified considerably" since its November meeting. “The broader economic outlook will continue to depend significantly on the nature of EU withdrawal,” the minutes of the meeting said. “The monetary policy response to Brexit, whatever form it takes, will not be automatic and could be in either direction.” With little idea whether the UK is going to leave the EU smoothly or crash out with no deal in March, the bank's Monetary Policy Committee for the first time gave no indication of how recent data were shaping its thinking on monetary policy, the FT noted. Instead, the central bank merely repeated what it had said at its November meeting — that if there was a smooth Brexit with a transition period, the economy was likely to need roughly one quarter point interest rate rise a year to keep inflation anchored to its target of 2 per cent. But turmoil since then puts that assessment in doubt. As the FT notes, the MPC’s reticence in providing markets with any guidance was even starker because it noted that there had been significant changes in the UK and global economies since it last met to discuss interest rates in early November. The BoE said it now sees inflation slowing below the 2% target as soon as January after oil prices fell. Nevertheless, stronger-than-anticipated wage growth and weak productivity suggest that underlying inflation pressures are building.
Brexit: ‘Horrified’ firms warn time is running out - British business groups have criticised politicians for focusing on in-fighting rather than preparing for Brexit, warning that there is not enough time to prepare for a no-deal scenario.With 100 days to go before the UK leaves the EU, the groups say firms have been "watching in horror" at the ongoing rows within Westminster.The cabinet met on Tuesday to ramp up preparations for a no-deal departure.But the groups say the idea that "no-deal" can be managed is not credible.In other Brexit developments:
- The EU is to push ahead with its planning for Brexit, including if there is no deal, with the European Commission set to publish legislation to ensure continuity in some sectors on a temporary basis
- The SNP and other opposition parties table a vote of no confidence in the UK government - but it is understood the government only has to give time to motions tabled in the name of the Leader of the Opposition
- Prime Minister Theresa May is to urge the first ministers of Scotland and Wales to back her Brexit deal at a summit in London
- The Public Accounts Committee of MPs says the government has not done enough to secure the supply of medical equipment in a no-deal scenario.
In a joint statement, the British Chambers of Commerce, the Confederation of British Industry, manufacturers' organisation the EEF, the Federation of Small Businesses and the Institute of Directors said: "Businesses have been watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward. "The lack of progress in Westminster means that the risk of a no-deal Brexit is rising."
Troops to be deployed in case of no-deal Brexit - Theresa May’s Conservative government announced yesterday that 3,500 soldiers were on standby to deal with economic disruption and to confront social unrest in the event of a no-deal Brexit.The UK faces crashing out of the European Union (EU) if no agreement can be reached by Parliament before a January 21, 2019 deadline. May refused to put the agreement reached with the EU to a vote in Parliament on December 11, knowing that it would have been voted down. The UK is scheduled to exit the EU on March 29, 2019.Defence Secretary Gavin Williamson told Parliament that his department “will have 3,500 service personnel held at readiness, including regulars and reserves, in order to support any government department on any contingencies they may need.”The announcement that ministers were to “ramp up” preparations for a no deal came after the Cabinet met Tuesday morning. The Guardian reported, “Downing Street said delivering the prime minister’s deal ‘remains the top priority,’ but when presented with three options on whether to increase, maintain or wind down preparations, there was unanimity in cabinet to implement all no-deal contingency planning across departments.” The decision was made after Labour Party leader Jeremy Corbyn once again refused to move a motion of no confidence in the government, after a day in which Corbyn’s political prevarication descended into farce.
No-deal Brexit will raise food prices, says Michael Gove - Food prices will rise in the event of a no-deal Brexit as friction on the border and tariffs cause rising costs for the British public, Michael Gove said. The environment secretary, under questioning by MPs on the environmental audit committee, attempted to reassure farmers that there would be no mass slaughter of sheep in queues at UK ports such as Dover, because of delays created by a no-deal Brexit. About 4,000 sheep are exported to Europe each year for slaughter, and concerns have been raised that 20-mile queues of lorries at ports could lead to the government having to carry out a mass slaughter of livestock held in lorries. But the environment secretary said this was one of the more “lurid” scenarios and denied that he was in talks with the army to prepare for such a slaughter. “We are not going to have a mass slaughter of lambs and sheep in lorries en route to EU member states,” he told MPs. But he said farmers were right to be worried about the impact of a no-deal Brexit, given the delays and frictions it would create on the border and the tariffs they would be subject to, which would hit livestock and food producers significantly. Asked by Philip Dunne, Conservative MP for Ludlow, if no deal would increase food prices for consumers, given the UK imports half its food, Gove said the existence of additional checks at the border in a no-deal scenario and tariff barriers would affect prices. “If you have friction and disruption – and we are trying to minimise that – between Dover and Calais, then the ability to get food, particularly perishable items on to the market, will be impeded,” he said. “That is likely to drive some price increases. It is also the case that some of the alternative routes by which food will reach our shores will add additional costs, for example Spanish produce being rerouted … rather than going through Dover/Calais can increase costs. “So I do think there is a real risk in the event of a no deal of price spikes in certain foodstuffs.”
Brexit migrant salary cap would be devastating for NHS and schools, experts warn --A £30,000 salary threshold for migrants would be devastating for the NHS and other public services, experts have warned. Proposals for a minimum annual wage could see the UK without tens of thousands of doctors, nurses and teachers. Industry leaders have stressed ‘high skills do not equal high pay’ as the government seeks to curb immigration after Brexit. The NHS is already short of 108,000 staff and recruitment will get worse once immigration rules change (Picture: PA)More than 12.5% of NHS staff are foreign-born and there are warnings lives could be lost because of Home Office bureaucracy. Dr Mike Galsworthy, co-founder of NHS against Brexit, said: ‘We are absolutely reliant on every last nurse and doctor we can get. ‘Nurse and doctor to patient ratio is particularly vital for patient safety. If we don’t have that you have avoidable errors and avoidable deaths.’ With 100 days to go until we leave the EU, Sajid Javid unveiled his plans for a post-Brexit immigration system. The Home Secretary said he planned to create a ‘skills-based immigration system built around the talent and expertise people bring, rather than where they are from.’ At present, all EU nationals can live and work in Britain under the bloc’s freedom of movement rules. However once the post-Brexit transition period ends in 2021, the same rules will apply to all immigrants regardless of where they come from – ending preferential treatment of EU citizens. Mr Javid confirmed the Government would be scrapping the current 20,700 annual cap on ‘highly skilled migrants.’ It will now set a minimum salary for workers applying for five-year visas and they would need to be sponsored by a company. The Migration Advisory Committee (MAC) have recommended a £30,000 threshold.
Corbyn- Brexit would go ahead even if Labour won snap election - Jeremy Corbyn has defiantly restated Labour’s policy of leading Britain out of the European Union with a refashioned Brexit deal, shrugging off intense pressure from Labour MPs and activists for the party to throw its weight behind a second referendum. The Labour leader insisted that even if his party won a snap general election in the new year, he would seek to go to Brussels and try to secure a better deal – if possible, in time to allow Brexit to go ahead on 29 March. “You’d have to go back and negotiate, and see what the timetable would be,” he said. Corbyn underlined the fact that he cannot set Labour’s policy unilaterally, saying: “I’m not a dictator of the party.” In an exclusive interview, Corbyn also:
- Admitted to being “extremely angry” in the House of Commons on Wednesday, when he denied calling Theresa May a “stupid woman”.
- Pledged an end to the selection process that led to the Peterborough MP, Fiona Onasanya, who has been convicted of perverting the course of justice, emerging as a candidate.
- Announced that Labour would repeal the 1824 Vagrancy Act that is used by the authorities to target beggars and rough sleepers.
Twenty-four hours after the furore in the House of Commons in which he was accused of insulting the prime minister, the Labour leader appeared much more relaxed on a visit to the Hope Centre, a homelessness charity in Northampton whose campaign against eviction he is supporting. He admitted he had lost his temper when confronted with a wall of jeering Conservative MPs at prime minister’s questions after May had accused him of lacking a clear Brexit policy. “I was extremely angry: the last point I’d made was, they’d suddenly found £4bn to prepare for no deal. £4bn. At the same time, police officers have lost their jobs; 100,000 vacancies in the NHS, a housing crisis; a homeless man dies on the steps of Westminster; and she and the Conservative party turned the whole thing into some pantomime joke,” he said. “Where is their concern about the homeless people of this country?” he said, repeatedly jabbing a finger on the table to emphasise his point. “Where is their concern about universal credit? Where is their concern about 200,000 children living in poverty in this country?”
Retail Melts Down Before Christmas in the UK, Spreads to Continent --Don Quijones: With just one week left before Christmas, Europe’s fashion retail sector is showing little sign of yuletide cheer. On Monday, the shares of UK-based online fashion and cosmetics retailer Asos Plc plunged 37% to £26.14 after the company warned that Christmas shopping on its web platform had got off to a disastrous start. The stock rout, the company’s worst in almost five years, wiped more than £1.4 billion of its value and raises fears that Europe’s high street malaise may be spreading from bricks-and-mortar stores to e-commerce. Since its peak in January 2018, shares the stock has plummeted 65%.Asos slashed its full-year sales-growth guidance for the year to August 2019 from 20-25% to 15% on the back of a “significant deterioration” in sales in November, which was followed by just a slight uptick in December. The company laid much of the blame for its weak performance on big price cuts across the market, which had forced it to sweeten its promotions to attract customers.“In fashion we are seeing an unprecedented level of discounting, certainly something I have not seen before, and that’s across the board,” said Asos chief executive, Nick Beighton, adding that the disposable incomes of Asos’s twenty-something customers were still well below the levels they were at a decade ago. “It’s more than just the Brexit-related factors,” he said.Another possible reason for Asos’ shrinking sales is the over-indebtedness of consumers in its domestic UK market. British household finances, among the most solvent a generation ago, are now among the most indebted of the Western world. According to official data, unsecured consumer debt (not including housing related debt) last year reached a record high of more than £205 billion (€227 billion). PwC says that by its measure, it’s almost £100 billion higher. This summer the Office for National Statistics (ONS) warned that the accumulated deficit of UK households was equivalent to 1.2% of GDP. That compares with a surplus in France equivalent to 2.7% of GDP and a surplus equivalent to 5.1% in Germany. But that’s scant comfort for Asos, whose sales in France and Germany, which account for over half of its EU sales, are also languishing. On Black Friday, the company knocked 20% off everything, as it did in previous years, but to little avail. Its rivals went lower.
Universities watchdog threatens fines over grade inflation – Guardian - The higher education watchdog has issued a stark warning to universities that they will be fined or even removed from the official register if they fail to tackle spiralling grade inflation at degree level. Research by the Office for Students reveals for the first time the scale of the problem, which is virtually sector-wide with 84% of universities seeing significant unexplained increases in the number of first-class degrees awarded.Overall, the proportion of first-class honours awards has risen from 16% of all degrees awarded in 2010/11 to 27% six years later, according to OfS analysis of results at 148 universities and higher education providers.At the University of Surrey the proportion of firsts has more than doubled, from 23% in 2010/11 to 50% in 2016/17, while at Bradford University it has almost tripled, from 10.6% to 30.9%.The OfS, which is the new regulator of the higher education sector in England, called on universities to take urgent action to address the problem and warned of severe sanctions if they failed to do so. Nicola Dandridge, the OfS chief executive, said: “This report shows starkly that there has been significant and unexplained grade inflation since 2010-11. This spiralling grade inflation risks undermining public confidence in our higher education system.”
Boys can have periods too, primary pupils are taught --Teachers are being encouraged to tell primary school children that boys can have periods to avoid upsetting transgender pupils. Advice on sex education lessons issued by a local authority states that teachers should discuss menstruation in a way that is inclusive of all genders. The guidance, published by Brighton and Hove city council, on which Labour is the largest party with minority control, was criticised as sacrificing clear information for girls in favour of political correctness. It states: “Trans boys and men and non-binary people may have periods.” The guidance advises teachers that language used to talk about menstruation should be inclusive of all genders and that bins for tampons and other period products should be provided in male and female school lavatories. Brighton and Hove council defended its guidance, saying: “By encouraging effective education on menstruation and puberty, we hope to reduce stigma and ensure that no child or young person feels shame in asking for period products inside or outside of school if they need them. We believe that it’s important for all genders to be able to learn and talk about menstruation together.” It added: “Our approach recognises the fact that some people who have periods are trans or non-binary.”
Compulsory Indoctrination- In UK Schools, Boys Have Periods Too - Transgender rights activists are celebrating with cosmopolitans, dark chocolate, and passing around palette loads of Midol, because the U.K.’s Brighton and Hove city council has declared that boys also menstruate. The East Sussex city’s local government brain trust issued guidelines earlier this month, under the heading “Taking a Period Positive Approach in Brighton & Hove Schools” and will be compulsory inside the classrooms of all primary school children.The council, which is far beyond the label of extreme and lunatic left, issued the statement:“Trans boys and men and non-binary people may have periods ... and menstruation must be inclusive of all genders.”Yes, these people are seemingly bat-dung nuts. And although women worldwide would be ecstatic for men to have cramps, bloating, and irritability for several days a month, alas, this report is devoid of, well, science. In short, it’s completely whackadoodle. Health class for school children is about to get a bit more interesting in the Green Party bonkers bastion by the sea as the guidelines require full compliance in or before 2020, and will be included in the curricula for children enrolled in grades one through eight. The prospectus has come under fire from Member of Parliament for the Conservative Party, David Davies, who told reporters the plan was insane: “Learning about periods is already a difficult subject for children that age, so to throw in the idea girls who believe they are boys also have periods will leave them completely confused.”But the city council believes otherwise. Heck, in 2016, they sent letters to parents before class enrollments requesting that children, as young as age four, choose the gender “they most identify with.” They also make teachers use a Trans Inclusion Schools Toolkit, one of the aims being “developing understanding of trans and gender questioning children and young people.”
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